MasterCard executives today said the card company is going to spend "tens of millions per year" on people and resources for a new research and development arm called MasterCard Labs. To start with, the Labs will be based in existing MasterCard facilities in Singapore, Dublin, Purchase (N.Y.), and St. Louis (where much of MasterCard's technology operations are based).
"The fact that we support 210 countries around world with an integrated global processing platform means we've got assets all over the world," notes Rob Reeg, MasterCard's president of global technology and operations, who spoke to Bank Systems & Technology in an exclusive interview today. "It's a unique footprint. The linking of the lab is key for us because it gives us a playground where we can let things happen in a standalone environment, test them out quickly and bring them to market quickly."
The Labs will be staffed by a global virtual team, Reeg says, although he would not divulge numbers of current or future employees who will be dedicated to the effort. MasterCard has already begun hiring for the team and is looking mostly for engineering talent, according to Josh Peirez, MasterCard's global head of innovation, who spoke in the same interview. The positions will all be posted on MasterCard's website, he says. "We're looking for creative development engineers and programmers, people who know how to turn an idea into something that works, people who can manage outside vendors and integrate different technologies — because often the innovation is in how you bring certain technologies together — and people who can quickly understand how to build these things in a way that could be commercialized, so when we build products and bring them to market, we can rapidly scale them."
The Labs are indeed a new initiative and not marketing spin, Peirez insists. "What we run today are a series of networks," he says. "This is different, this is an R&D center looking at technology from a consumer, merchant and bank perspective." The innovations will be not in the existing networks but in the front-end user experience, he says.
Recent innovations from Peirez's group have included MoneySend (a program that lets cardholders transfer money from one MasterCard or Maestro card to another via ATMs, and can be expanded to include the Internet, bank branches and mobile phones); inControl (a program that offers authorization, transaction routing and alert controls; and Marketplace (which provides a personalized shopping experience for cardholders).
"Today we have no dearth of ideas," Peirez notes. "If anything, we have more ideas than we could possibly action."
Reeg adds that one goal of the new Labs is to quickly find the ideas that aren't going to work. "We want to do a fail fast," he says.
The three areas of focus for the R&D lab this year will be mobile, ecommerce, and person to person payments, Peirez says. The lab staff will work to enhance existing products and develop new ones.
MasterCard also announced today the appointment of Garry Lyons as group executive, research and development, who will oversee MasterCard Labs.