Many payment companies are hosting hackathons to attract developer talent from outside their own ranks; MasterCard found that its own people are just as eager to bring their ideas to life.
The Take Initiative, a hackathon series for MasterCard employees, gave about 400 staffers at different locations access to the card network's application programming interface to develop concepts that could later turn into products. When it was over, MasterCard had developed a new way to digitize donations.
"It is common to see schoolkids asking for cash donations at public places such as the MRT [Singapore's public transit system] stations, as part of their volunteering activity," said Krishnadas Mohandas, an assistant vice president of mobile transaction solutions for Asia Pacific at MasterCard. "This led us to create an app to digitize such transactions."
The team's app, called Mo-daan (an adaptation of "mobile" and the Sanskrit word for "donations") is available to charities and is designed to appease government regulators, collectors and consumers.
"Consumers won't have to fiddle around with cumbersome cash or worry about not having enough change," Mohandas said. "At the same time, they are assured of the legitimacy of the charity."
Charities use the app to obtain a unique government-vetted ID. This process reduces fraud and enables them to digitally collect donations via MasterCard. It also enables donors to track tax benefits from their donations.
An additional feature allows users to receive offers and coupons from merchants as a marketing play, Mohandas said.
"In Singapore, fundraising ranges from volunteers appealing for donations on the ground with a coin box, to donations that are auto-deducted via your banking accounts, or even donations via monthly installments on your credit card," Mohandas said.
The app will work primarily in Singapore before the model is considered for export.
This project is one of several ways MasterCard is working to advance payment services for donations. Mobile technology is quickly being applied to charitable giving, as companies such as Sionic Mobile are also working reduce the amount of cash that's involved in fundraising. Separately, some Girl Scout and Boy Scout troops have used mobile card readers to facilitate fundraising efforts such as cookie sales.
Mohandas and his team do not have direct experience in using cards as part of fundraising, but they do have experience in product management and mobile technology, giving them a perspective that events such as hackathons are designed to nurture.
The pace of payments technology development, particularly around apps, has pressured traditional companies to find new sources of innovation that exist outside traditional research and development project management models.
PayPal, for example, has run a global hackathon program, while The Members Group has an innovation lab structure to find new uses for wearable technology. And Citigroup is using a World War II-era product development model to build new financial services technology.
"We don't believe innovation has to be in an innovation arm. Most ideas are buried out there with people who are working day in and day out in the business," said John Sheldon, senior vice president of innovation for MasterCard Labs, adding MasterCard also conducts tournaments for internal staff to develop new ideas. The winning teams from these events are given the opportunity to take their products to market.
The concept of giving internal staff tools to develop payment products has proven popular, Sheldon said. "Ninety-three percent of the participants said they would do it again," he said. "And for something that comes out of their personal time, that's a remarkable rate."