Fintechs see Mastercard-Google data deal as a call to arms
Technology developers have little choice but to see big data deals like Mastercard’s reported collaboration with Google as an opportunity for deep, actionable analysis, setting aside the chilling effect of privacy concerns and a consumer buy in.
Mastercard and Google’s reported deal deal gives the search giant the ability to track card sales data to ostensibly measure the effectiveness of marketing and search. This can more closely match consumers’ shopping and payment habits to retail technology and business decisions and give Mastercard technology cred beyond card payments.
The news sends a clear message to fintechs: There is a demand for consumer data that outweighs the privacy concerns that would hinder many data-sharing partnerships. And this, in turn, creates a demand to enable consumers to put the brakes on their involvement in any such deals.
“The [Mastercard-Google] deal makes it harder to ‘own your own data,’” said Gee Chuang, the co-founder of Listia, a Sunnyvale, Calif.-based digital marketplace. “But there is also a lot more power for that data.”
Listia just launched the Ink Protocol, which decentralizes marketplaces by allowing users to establish a credibility record for online sales that’s portable. The seller has more control over the credibility record than the individual marketplace. “We’re decentralizing the reputation so sellers can control their reputation and chose any marketplace, and we’re adding a P2P system to that,” said Chuang in an interview at the TechCrunch Disrupt San Francisco event.
The impact of big data deals such as the collaboration between Mastercard and Google is to give users at all levels pause when engaging in digital commerce, heightening the concern that information is “being used” without their knowledge.
That’s a mixed blessing for a company that wants to decentralize a buying and selling ecosystem, since its nature is to be an alternative to central control. Smaller sellers and buyers may be more concerned about sharing data, but once they do, the power unleashed by combinations of purchase data, web search, shopping and social media improves the overall experience, according to Chuang.
"There has to be a lot of value in that data in order for people to give it up," he said.
For technology companies demonstrating their wares in Disrupt's exhibition hall, the impact of Mastercard and Google's reported deal is more about the other deals among large companies that are sure to follow.
The smaller technology companies are at Disrupt San Francisco to demonstrate how myriad apps and new tools can change everything from freelance work to estate planning. But they share a nervousness over power of incumbents to shape who owns data and how its used.
"Frankly, the more data access there is and the more data is analyzed, the better it is to inform transactions and be helpful to the people we are serving," said Hussein Ahmed, founder and CEO of Oxygen, a San Francisco startup that serves workers in the gig economy with a mix of financial services and payment cards.
As more work transfers to contractors, or in the event of an economic downturn, there's an opportunity to match data with services tied to payroll that could counter privacy concerns, according to Ahmed.
"We'll be able to have a greater insight with more data," said Markus Wunsch, founder, chairman and CEO of Mount Wish, a New York-based risk management firm that has clients in financial services, fintech and insurance. Wunsch sees an opportunity from the greater flow of data as companies shore up protections.
Others were angered by news of Mastercard-Google deal.
For Vytautas Basys, sales and account manager for Coingate, a Vilnius, Lithuania-based payment gateway for bitcoin and other cryptocurrency, any move by Google or any other search engine or social network creates an extra challenge to working with alternative currencies.
"It's a pain," Basys said, adding any data sharing deal between Google and a payment company would join other issues he has with Google, such as its cryptocurrency policies. "Google has already cracked down on crypto and this makes it even harder."
Basys' response will be to push cryptocurrency payments as a fee-avoidance strategy. Cryptocurrencies have have traditionally lagged as payment instruments even as they thrived as investments. "There's already been some traction in Europe with merchants," said Basys, adding Coingate has more than 60,000 merchant clients globally. "People are getting more comfortable using crypto to actually buy things."
Mobidoo, a Seoul-based technology company that sells an alternative to NFC for transactions, is choosing to view large data sharing collaborations as a market opportunity.
The company contends its technology protects consumer and merchant data with less need for a tech overhaul. Mobidoo transmits data over audio waves. This requires less of an upgrade to accept payments and encrypt data, and can be sold as a security and privacy-protection system, according to Mobidoo, which reports it has about 30,000 clients in South Korea.
"We see the Mastercard and Google deal as a potential for partnerships, not as a competitor," said David Lee, CEO of Mobidoo.