Mung Ki Woo is an Executive Vice President for MasterCard. He is a seasoned international executive with experience in international program management and IT consulting. He also has extensive experience in digital commerce (mobile, e-commerce, smartcards) with experience both as a telco and a financial institution, and in all market types (emerging as well as developed countries).
In an exclusive interview with Let’s Talk Payments and The Money Event Team, he talked about his take on the latest developments in electronic payments, mobility, technological prospects, financial services and market challenges.
1. What are the issues in Online, P2P and merchant payments that we need to solve as an industry?
- For online transactions, we want to improve 2 areas.
o (1) The Consumer Experience: our traditional consumer experience requires the manual entry of the 16-digit card number + numerous other pieces of information – this does not always work well on connected devices that have small screens and/or no full-fledged keyboards.
o (2) The robustness of transactions (use of dynamic data, encryption) could be improved to reduce fraud and transaction declines.
- For person-to-person (P2P), we would like to provide an easy way to conduct universal transactions, meaning transactions to and from any type of accounts and payment instruments (e.g. cards, bank accounts, cash outlets, etc.)
- For merchant payments in the physical world, we want to enable all types of device-based consumer experiences, both in-aisle and at the register.
2. Are the days of the credit cards coming to an end? What can we expect from proximity payments in the future?
If you look back in time, all new payment instruments have been added as another complementary method: after coins, we got paper bills, then paper checks, then plastic cards, etc. None completely disappeared. Today, 85% of the world’s transactions are still conducted via cash and checks. With this in mind, I believe that plastic cards, in all their different flavors (debit, credit, and prepaid), will be with us a very long time.
Having said that, it is important that we prepare ourselves for a more digital future. From PCs to smartphones, tablets, TVs and game systems, wearables – and even appliances like refrigerators – are getting connected. Connected devices have moved us into a connected digital environment, where approximately 40 percent of the global population is online. And these fundamental changes in how consumers interact and use these smart, connected devices – for research, or communication or consuming media – will also transform how they transact. The digital shift is the biggest change in payments since the introduction of plastic. And to address this shift to digital, shopping and payment experiences need to evolve as connected devices provide more opportunity for engagement – and commerce – before, during and after a purchase.
3. Do you see enough traction now in mobile payments? Has it reached the critical mass?
We are convinced consumers want to conduct transactions on their mobile devices. In February, we issued the 2ndAnnual Global MasterCard Mobile Payments Study, which tracked more than 13 million social media comments across Twitter, Facebook, Online Blogs and Forums around the world. The study showed improved sentiment toward mobile payments and rapid growth in consumer use and merchant acceptance. While some security concerns around mobile payments existed, the study demonstrated that consumers and merchants have moved from ‘why use mobile payments?’ to ‘which mobile payment option should be used?’
In fact, two types of mobile transactions have already reached critical mass: (1) web-browsing ecommerce transactions from smartphones and tablets are estimated to represent more than 10 % of all eCommerce in most developed markets; and, (2) in a few emerging markets like Africa and South-East Asia, mobile money services have reached critical mass.
4. What are some of the learnings from the pilots and rollouts in contactless payments that MasterCard has supported/done?
Over the past ten years, MasterCard has pioneered mobile commerce – including the world’s first contactless solutions – making lives easier for consumers around the globe. Today, we’re proud to be considered the gold standard” in contactless technology, with MasterCard contactless available at more at 2.5 million locations in 66 countries around the globe. Alongside partners, we’ve launched several contactless solutions for consumers. Whether enabled via a phone, card, key fob, mobile payment tag or other device, MasterCard’s contactless technology offers consumers a simple, easy and convenient way to pay.
During this time, we’ve come away with several key learnings for commercial success:
- The need for easy and instant consumer registration / activation of the “digital” card in the device.
- Being able to address most, if not all, consumers at launch.
- The creation of a sleek and easy consumer experience.
5. MasterPass is already available in 10 countries. Do you have a timeline on the future rollout across the world?
Following July launches in Poland and South Africa, MasterPass is now enabling consumers in these and 8 additional countries – Australia, Canada, China, Italy, New Zealand, Singapore, the United Kingdom and the United States – to breeze through checkout at their favorite merchants confidently and conveniently. In addition to global market expansion to markets like Brazil, Spain, and Sweden and ongoing growth in global merchant acceptance, we’re also building toward a mobile device-based payment future. We’re extremely excited about these new capabilities, and delivering on the MasterPass vision of a fully integrated digital payments ecosystem that enables convenient, simple, fast and secure payments anytime, anywhere.
6. Which alternative technology do you think will make major in-roads in payments at merchant location - NFC, Beacons (backed by Apple, Paypal), QR codes, Dynamic Magstripe like Coin/Loop, Mobile/web apps...
It is still too early days to say, however contactless has a very good chance – it is fully standardized, already deployed at 2.5 million merchants worldwide, and already supported by many major smartphone makers.
7. What are the challenges for networks such as MasterCard?
I feel that MasterCard is in an excellent position and is leading this transition to digital, moving beyond a simple transaction to:
- create better shopping experiences for consumers;
- generate more value and increased sales for merchants; and,
- deliver new revenue streams and competitive advantages for MasterCard and our partners.
Mung Ki Woo would be part of the panel “LD5: Mobile Payments Rewriting the rules of commerce” on Day-1 at The Money Event.
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