Mastercard and Zeta partner on credit card issuing

Mastercard has entered into a new partnership in the FinTech market, this time with Zeta, a unicorn that has made its mark by helping financial services players launch innovative payment products. The aim of the 5-year partnership is to bring Mastercard Zeta's cloud-based issuing technology and APIs to make payment "invisible".

FACTS

• The partnership agreement signed between Mastercard and Zeta, the Indian-origin unicorn, binds the two new partners for the next five years. During this period, the US payment giant will be able to leverage Zeta's API to launch cloud-based credit card programmes in a simplified way.

• Zeta pre-configures offerings and promises to optimise and customise credit card programmes to the fullest extent through its APIs and SaaS billing.

• Zeta's services cover the entire range of card programmes: issuing, but also payment processing, deployment of Buy Now Pay Later solutions, implementation of reward programmes and risk and fraud management.

• All players in the banking and global FinTech sectors are targeted as potential customers for this new offering.

• Mastercard is providing financial support for this project through an unspecified investment in Zeta.

CHALLENGES

• Keeping up with e-commerce: Mastercard says that its association with Zeta should enable it to provide modern credit card transaction processing capabilities on a large scale, especially for transactions on e-commerce sites, given the explosion in payment facilities.

• Adapting to new issuing paradigms: Zeta's APIs and simplified technology integration will provide Mastercard customers with greater flexibility by enabling them to implement new sales programs faster, reduce costs through SaaS pay-per-use billing, or improve customer satisfaction by launching self-service cardholder experiences.

• Extending a partnership: The collaboration between Zeta and Mastercard began long before the agreement was signed. The two companies came together in 2018 in Asia Pacific when Zeta joined Mastercard's Start Path incubator. Zeta has also recently joined the Mastercard Developers partner network. For a player such as Mastercard, the challenge is all the more important as Buy Now Pay Later is gaining ground worldwide against the credit card. Mastercard had already positioned itself by presenting its own programme last September.

MARKET PERSPECTIVE

• The API model is more relevant than ever. When Qard relies on this software interface to participate in the advent of Open Finance, Mastercard opts for the partnership to benefit from the expertise of an API specialist for the credit card segment.

• Previously, Sodexo had invested in Zeta via a minority stake, as the start-up has long been working on invisible payment in the restaurant industry, a skill that Sodexo is particularly interested in.