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Why Mastercard is 'playing a long game' in smart cities

A year after it launched, Sarah Wray gets the lowdown from Sapan Shah on the progress of Mastercard’s City Possible initiative.

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Image: City Possible Plaza at Smart City Expo World Congress
Image: City Possible Plaza at Smart City Expo World Congress
Sapan Shah, Mastercard/City Possible
Sapan Shah, Mastercard/City Possible

At Smart City Expo World Congress in November 2018, Mastercard launched its City Possible network with 16 cities on board. Just over a year later, the initiative has over 40 city members, including Athens, Baltimore, Dubai, Dublin, Helsinki, Kansas City, New Orleans, Melbourne and Wellington. It also has some pretty big plans in the pipeline.

 

At this year’s event, City Possible hosted a huge City Plaza booth close to the conference space and made a raft of announcements, including the expansion of its City Insights tool which aims to help cities harness data analytics to better understand the economic health of their communities.

 

Sarah Wray talks to Sapan Shah, Vice President of Enterprise Partnerships for Mastercard and lead for City Possible, about what’s driving the programme, what’s been achieved so far and what’s next.

 

SW: What made you set City Possible up and how did you think about Mastercard’s role in smart cities?

 

SS: Mastercard started in this space by looking at transit as a vertical and figuring out how we could bring more efficiencies into how people access transportation, and help cities reduce some of the costs associated with it.

 

We were very successful with that and, as we engaged with cities, we realised we could offer more of the convening power that we have.

 

If you think about what we do in the payment space, Mastercard is not a bank; it’s a network. We connect entities that is our core DNA.

 

We realised that cities were trying to do things in isolation, creating solutions without knowing what other cities with similar problems may have done or be doing.

 

So we wanted to enable a network which facilitates that sharing of information – not for us to charge any money for it but because we felt we had that natural role as an orchestrator.

 

We realised that cities were trying to do things in isolation, creating solutions without knowing what other cities with similar problems may have done or be doing.

 

Mastercard cannot provide everything – if cities are looking for a solution on waste management, for example, we might have a view but it is not our core business so we also invited like-minded corporate partners, who are not looking to just sell stuff.

 

A fundamental issue is that people go to a city and say: “This is what I have: how can you use it?”. For us, this was the wrong way to look at it. The right way is: “Tell me a problem statement and let’s create a solution together.”

 

That’s what we do in our core business so we wanted to bring that thinking.

 

SW: Mastercard doesn’t sell directly to cities. How does City Possible drive business/revenue for Mastercard?

 

SS: There are some elements of our solution embedded in vendor products but there is a broader holistic thinking here. If you talk to any mayor, their long-term goal is to drive prosperity and inclusion.

 

If we can help them achieve that goal, people would have more stable jobs, people would be more prosperous. They would move away from cash and towards electronic means; they would spend more. If society spends more, the GDP grows and if the GDP grows, Mastercard wins.

 

If society spends more, the GDP grows and if the GDP grows, Mastercard wins.

 

We are playing a long game a rising tide lifts all boats. We want to be the enabler, ‘the moon’ that helps that rising tide.

 

SW: You now have over 40 city members. How do you see this developing?

 

SS: Our objective is to get to 500 cities in the next two or three years, not in five or ten years.

 

Right now, it’s a generic network to talk about everything. Now, we’re looking at moving into specific verticals so that members can have better conversations on specific topics, such as transportation, tourism or use of data.

 

SW: What are the outputs? Are you creating standards?

 

SS: That’s the hope that we will create technical standards and operating model standards.

 

One of the biggest challenges is that everybody is trying to do things in their own way in smart cities.

 

The stuff that we do in our core Mastercard business is interoperable [with merchants and competitors] so the hope is that we will be able to bring that thinking into these other verticals too.

 

We have already done that in transportation. Around 200 cities are already embracing tap-and-ride contactless transit ticketing [using Mastercard solutions].

 

SW: What about standards beyond things that Mastercard wouldn’t technically be a part of?

 

SS: Because we are bringing together this network of like-minded corporates, if there is a standard which is not related to Mastercard then we can still be the convenor for agreement on common standards.

 

That’s the power of having this critical mass of cities agreeing on how they want to do things. If you have that critical mass agreeing on one thing, that drives [wider] interoperability.

 

Cities don’t pay anything to join the network but we ask them to participate in the solution co-creation process.

 

SW: What do you think are your key successes over the first year of City Possible?

 

SS: We launched a new platform called City Key [which combines identification, access to city services and payment functionalities].

 

One of the key impediments to inclusion is identity. If I can’t prove who I am, then how do you include me into the broader economic ecosystem?

 

One of the key impediments to inclusion is identity. If I can’t prove who I am, then how do you include me in the broader economic ecosystem? Identity is also a means to receive payments from the government, such as subsidies, as well as being able to make payments.

 

[City Key] offers a way to transparently provide people with funds and put [the funds] to good use.

 

We’re about to launch a City Key initiative in San Jose, with a small set of people initially, related to the city’s homelessness challenge and its ’Cash for Trash’ programme, allowing people to receive payments.

 

You can start to make people feel more part of society and that they are contributing.

 

SW: What’s next for City Possible?

 

SS: We will continue expanding all aspects of the programme across three broad verticals: transportation, identity and data. Data is an important area.

 

We are looking at how we bring in the macro trend insights that we have from our data, with insights from others and the cities to help them make better decisions, measure the efficacy of the decisions that they have taken, and plan better.

 

The interview has been edited for clarity and brevity.

 

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