MasterCard has taken a broad view of the "smart cities" concept, working with multiple organizations toward a common goal.
MasterCard places itself in the role of an advisor for digital payment adoption, while also emphasizing its network infrastructure and technology solutions for a city's day-to-day operations. It has worked with the Smart Cities Council based in Washington, D.C., and most recently partnered with the Rockefeller Foundation's 100 Resilient Cities organization to address modern physical, social and economic challenges.
Such work has some crossover with MasterCard's financial inclusion programs to bring digital payments to consumers with little access to banks.
"With over two billion people lacking access to basic financial services, many of them live in cities," said Craig Driver, vice president of government services and solutions for MasterCard.
"We're committed to working with national and local governments to advance financial inclusion, which can be a key component of a city's resilience strategy," Driver added.
Mostly, Driver said, it is important for MasterCard to offer its expertise in "creating digital payment solutions for governments to help cities achieve greater cost-savings and efficiencies, drive revenue, reduce crime and establish digital identities for citizens."
MasterCard is participating in the World Cities Summit in Singapore this week, building upon its current engagement with more than 1,300 programs in more than 60 countries to reduce reliance on cash and address payment needs such as social benefits, government payroll, procurement, government receipts and transit system payments. At the summit, MasterCard revealed it had entered an agreement with the Singapore Economic Development Board to improve technology for tourism, transportation and business-to-business digital payments.
"It covers a wide span of issues that governments need to think about, and it's not unusual for payments companies and banks to be involved in payments and identification aspects," said Tim Sloane, director of emerging technologies advisory services for Boston-based Mercator Advisory Group. "For example, it is critical in an emergency to get payments to people impacted in that emergency."
Visa, MasterCard and others have long been working with biometrics to identify cardholders, and that type of technology can be tied into government data to help manage payroll and other payment systems, Sloane said.
"In broader terms — and specific to payments — would be data to identify people and mobile devices in a city through voice or fingerprints," Sloane said. "Payments companies can provide input into discussions like that."
MasterCard points to its work in establishing MasterPass digital wallet checkout on taxis in Singapore as an example of the positive impact of its technology. It also supports digital payments workshops throughout Asia; launched a mobile phone ordering and payment app in Australia; and helped establish financial accounts for government employees in Indonesia with ID cards with payment capabilities.
In addition, MasterCard has worked with the Transport for London to add contactless bank card acceptance to its fare collection system.
As a way to illustrate digital technology advancements, proponents of the smart cities concept have often pointed to the Olympic Games and its surrounding Olympic Village as an example of "smart" technology in use.
The rival card network Visa has long been a major sponsor of the Olympic Games and has used the setting as an opportunity to test new payments technology. It is doing so again at the Olympics in Rio next month, showcasing payments wearables.
"One approach is you go at it on a use-case basis, so MasterCard finds transit authorities and government officials and they work together to understand how MasterCard can contribute to their initiatives," Mercator's Sloane said.
Companies contemplating communicating with consumers through geo-location would consider using an application programming interface, and Visa recently opened up its APIs to support such efforts, Sloane said. "Then you get that data registered with Visa and banks, in hopes they agree to that use."
Such a process would lead to many companies, government agencies and service providers within a city thinking in entirely different terms about digital technology and what the payments providers bring to the table, Sloane added. "They would be thinking, can I use that data in some way that no one has thought about before?"