Meysam Moradpour: Why Millenials want a one-stop financial shop
What do Albert Einstein, Thomas Edison, and Marie Curie all have in common?
They were all luminaries. They shared their knowledge and insights about the way they see the world in order to empower the rest of us.
It’s because of individuals like this that we were inspired to create this Luminaries series. Every week, we’ll climb inside the minds of the folks at the very top of their industry as they share their invaluable knowledge with us.
Today, we dive into the second instalment of the series with Meysam Moradpour, VP, Global Merchant Strategy at Mastercard.
Here you have someone who has visited 50 countries in just under two years and has built empathy for users of financial services products all over the world, from M-Pesa users in Africa to QR payments in Asia. Meysam has taken all of that knowledge about what works for different cultures and markets and distilled it down into specific digital strategy recommendations.
I love these types of interviews because they lay bare the similarities between people all over the globe. Whether you live in Kenya and lack a bank account but still need to buy food at a market or you’re from South Korea and have all the latest tech, you still need to accomplish your goals with minimal friction within the resources you have available.
Meysam does a phenomenal job of helping us see that it’s a small world after all.
JARED JOHNSON: You’re an avid traveler and are on track to having visited 90 countries in total by the end of this year. What are some of your favorite learnings that you’ve brought back to Mastercard?
MEYSAM MORADPOUR: Traveling is my big passion. I was lucky — when I did my sabbatical year, I was actually paid by Business Insider to provide country reports on payment and retail innovation, so that kept my brain working even while I was not working that year. With Mastercard being a global company and my role being in a global capacity, [my travels informed my thinking] about financial inclusion.
When you talk about innovation, when you talk about how people check out in one region versus another, there is a significant difference in [how each] market serves [its customers], depending on how mature the market is. You got the very mature market like the US, South Korea, Japan, and most of western Europe, and you got a lot of these emerging markets like Africa and Southeast Asia. What I brought back to Mastercard was the understanding of how people in all these different regions pay, how they bank, and how they approach retail and e-commerce.
In South Africa, they have two or three local apps that are our Apple Pay version with a PayPal and a Stripe in one package and they have their local versions that are usually based on QR payments — so fairly cheap, easy, and approachable methods that work very well in those markets because most people don’t have a bank account. In Japan and South Korea, [they have] NFC tap and pay payments, universal wallets exceptions, VR and AR cafes, where people can spend half the day there.
JJ: Have you seen any immature market technologies or applications that could work in a mature market or vice versa?
MM: That’s a good question. Let’s take the M-Pesa example. It was really successful because most people who use M-Pesa do not have bank accounts or smart phones — they have simple phones that allow you to text or call. The whole mystique and appeal of M-Pesa is that you can transfer money through text messaging, so it’s very easy and not very advanced technologically. When we saw this, [we said], this is getting a lot of transaction volume, it’s getting a lot of popularity in this market, how can we replicate this in regions where we know people are under banked? I’ll give you an example.
We knew that South Africa has the larger adoption of bank accounts, though nowhere near where we are in the US or Europe. So what we said is let’s not use our Masterpass or digital check out payment options that we have in the US, but let’s go with something that we know works with other solutions and that was QR payments. We basically then came up with our MasterPass QR solution, which works very easily. Any vendor can pull up a little sticker where users scan the code and link it up with their bank account because they usually don’t have a credit card or debit card, and basically transfer money through that approach fairly easily. Usually, if you want to start with a whole new payment method, it’s going to take education and a lot of marketing budget, but if they are used to QR payments with other local vendors, then it made our solution very easy.
An example of that was we partnered with KFC in South Africa. KFC would paste huge QR banners everywhere in its stores and people went with their phone, scanned those codes, and made payments without having to actually bring cash with them. That was a solution where we saw it worked in other African markets and how we transferred it over to another African market with lower technology.
JJ: Speaking about financial products and ways of paying, there’s a trend where large banks bundle their financial products together or have promotions that stretch across products. For example, if you open up a money market account with this bank, you’ll get a better rate on auto loans. Have you seen financial services companies trying to think in a more cross-product way or is a siloed product approach here to stay for the short term?
MM: I’ve definitely seen that trend. If you look at big banks, they’re fighting with these popular fintechs. Every day, it feels like some other fintech is coming out with a more streamlined, more beautiful, more frictionless solution than what [big banks] have. So [that’s why] you see a lot of banks bundling their products and product offering together to offer consumers something that they cannot get from other vendors or fintech startups.
Every day, it feels like some other fintech is coming out with a more streamlined, more beautiful, more frictionless solution than what big banks have.
By combining those things, they’re going to get a lot more data insight that they can then use to personalize the offerings to these users, and therefore keep them engaged, and keep coming back to these banks. Look at the more agile, more new tech players like Stripe and Square. Stripe is now issuing virtual credit cards. Square is offering a cash cardthat you can use in store and online as well. All these players are adopting new product offerings that go beyond their core product.
They are going to be one-stop financial offerings for consumers because if you look at it, consumers don’t like to use five different financial players to do whatever they want to do in their daily lives. You want to keep them engaged, you want daily usage, you want them to come to you.
By offering all these extra services on top, you become a one stop place, and that’s where you become dangerous to all the other banks and players because you capture the attention and the needs of the customer more than just one way. You’ll then be able to have more personalized data and that’s how you capture those customers.
JJ: I think it’s interesting to think about the ways that incumbent players can use all their existing resources, the brand, and the footprint to do the things fintech can’t do. Fintechs can be agile, they can move quickly, but they don’t have the brand recognition or the ability to play in so many different markets and parts of consumers’ financial journeys. Do you feel like consumers are willing to have one brand own their financial life or do you think consumers are always going to want to pick and choose different brands?
MM: I like that question. The older generation grew up with a certain bank that they used to open up their checking account, to give them a house loan or even a car loan. [But] for newer generations, it’s just convenience that they really care about. They don’t care where their checking account is located. They don’t care which ATM [they use] or who will give them a house or car loan. If they can get it all in one place, it’s going to be more convenient for them. For the millennials of today, it’s all about convenience and demand. “I need whatever I need in that moment and I need it fast, easy, and cheap.”
For the millennials of today, it’s all about convenience and demand.
I think for them it’s not necessarily about who is going to do that or what the brand is, but is there a one-stop shop that I can use for all my different needs? If you look at it, it comes back to the old question of how many apps can one person use or how many we can push them to use. Usually, the number of apps that a person uses on their phone is limited. For this service you’re going to have Mint. For this one you’re going to use Robinhood. For this one you’re going to use Lemonade. For this one you’re going to use Citi. At one point, people stop adding new apps to their daily lives, so I think it’s a valid point to say, alright, we’re going to help you with that by creating all these additional services, so you don’t have to have seven different financial institutional apps on your phone installed for each of these different things.
On top of those merchants and service providers is the data expedition to personalize the [experience]. No consumer would hate if you gave them a more personalized offer in terms of auto or car loans, or stocks that might be interesting [depending on] what they’ve invested in in the past. Anybody would appreciate that, but I think the main points here is convenience versus brand affinity.
I saw a commercial — I think it was Capital One — that said, “We’re changing our banks to make them into cafes, where you can just come, chill, drink your coffee, and no one is trying to upsell you. We just want to be consultants and part of your life.” I think that’s the way to go. Go away from the old school, “These are the five things I’m going to pitch you when you come into the bank,” and start offering them extra services, so they don’t have to have seven different apps but one partner.
JJ: Yeah, so it seems like convenience trumps all, and if you can give me something that is seamless across my whole life, folks would be open to it.
JJ: You start using these different apps because they’re faster, more beautiful, easier, and more convenient, but then you have to use so many different ones. I think I have 12 different apps that I check on three levels of frequency, but it’s overwhelming.
MM: Right. At one point you’re going to ghost them. You probably might not delete them, but you might not use them at all because it’s just too much.
JJ: I was interested earlier when you were talking about VR cafes. There was a report this summer that stated there are 50 million Alexa users in the US, but only about 100,000 of them have used Alexa to buy something with voice more than once. It doesn’t seem like voice commerce is mainstream yet, but from your global perspective, do you feel like voice is further ahead in other countries? When do you think voice commerce will become mainstream and where is it already mainstream now?
MM: That’s a good point because everybody brags about how many Alexas they have, but if you think [about] it, people only use it on three or four applications — weather, playing music, asking about traffic, and sports. I think those things might be easy, but there are a lot of security and regulation issues still left.
There’s not much of voice commerce going on. I think one hard thing is voice commerce usually only works when you’re at home and it’s fairly quiet. You can’t really do it on the go because it’s too loud. It is hard to distinguish which voice it is amongst all the voices that we hear in a noisy environment. I think even if you look in Korea and Japan, where you have a lot more voice commerce than you have in the US, it’s usually in a one person household. The moment you have multiple people living in one place, that’s when it gets very dangerous or very difficult for Alexa to do multiple transactions and associate each voice to the right person.
I would say regulation wise it’s too early stage at this point. Most of the governments will not allow this [and] security-wise we’re not there. We don’t have the technology yet to make this wide stream. You want to see the product. You want to ideally taste it, smell it, at least see a picture of it, [and it’s] very hard to do this purchasing just on voice alone. We’re still miles away from doing voice commerce on a grand scale because it’s still a new technology and you see most people who use voice gadgets usually use it for informational reasons versus purchasing reasons.
JJ: It seems there are quite a few blockers from regulatory blockers to cultural blockers, and the mental model that people have around buying things still does not encompass using their voice — at least not yet in the mainstream.
MM: No, not mainstream yet. Even if you look at the very advanced places like Korea and Japan, it’s not mainstream yet. It’s just in certain categories like gaming — making an in-purchase gaming, adding that sword and saying yes, I want that sword for $1 or $2. Those things work, but people don’t make their groceries or their travel bookings on voice commerce either. If you want to book a flight through Alexa, it’s going to take way longer than just doing it on your phone quickly because there are so many things that Alexa has to tell you because you can’t see anything. That’s going to drag the whole process and most people would give up at one point.
JJ: That sounds like a nightmare having to book a flight through Alexa. There are flights at 3:00 PM and 3:30 PM, and …
MM: Yeah, that would take forever. At one point you’re going to say, “I’m just going to book it on my phone.” With groceries, it would have to give you every single brand, the discounts — it would take a lot longer. Only certain categories [would work], like pizza. You have your default order, your default drink, and you’d say, “Hey, order me my default pizza.” Then yes, but everything needs customization.
JJ: Are there any customer experience or B2B trends that are under-hyped? Anything that you would tell a digital product manager, “Hey, this is something we should take a second look at. There’s more there than it seems at first glance.”
MM: When it comes to B2B, we see a lot happening in terms of streamlining APIs, reducing the number of APIs, how businesses work together, how they offer their product and services, and how they streamline different services to one mutual API. It’s sort of a given, but a good API should be very simple, with few lines of code. So if you want to offer something or bundle products together, make sure the API calls are lean and fast, and you reduce all the unnecessary code that you used to have in the past. Otherwise, you’re not going to be as fast and frictionless for those millennials or Gen-Z guys who are accustomed to business.
From a consumer standpoint, depending on the market and culture of where you are, there is this openness of doing the trade between privacy and personalization. That’s something people should be aware of — there are markets like China, where people are super willing to give up any privacy, but then get 100 personalization customization and personalization in return.
From a consumer standpoint, depending on the market and culture of where you are, there is this openness of doing the trade between privacy and personalization.
If I am a startup or if I am a company who wants to launch a certain product, I would take advantage of that. I’m not going to do that ideally in Germany, where the openness to share privacy is very low. So I would say companies that we deal with have to be more aware of these different tradeoffs between privacy and personalization, and then focus their initiatives and product in markets and areas where this cultural behavior is either accepted or [not]. We see that happen when we launch joint partnerships, where people don’t really pay attention to the cultural tradeoffs in certain markets the way they should.