Microsoft and Mastercard Team Up for Inclusive Commerce R&D

This is the latest in Localogy’s Skate To Where the Puck is Going series. Running semi-weekly, it examines the moves and motivations of tech giants as leading indicators for where markets are moving. Check out the entire series here, and its origin here


Two giants have teamed up to cultivate more innovative and inclusive commerce tech. Mastercard and Microsoft Corp. announced a collaboration that has several layers (each broken down below). At a high level, the partnership is meant to build a fintech platform that’s used to develop inclusive commerce.

One component of the deal is to accelerate Mastercard Labs’ “cloud native” R&D activities. Mastercard Labs’ mission is to “de-risk and commercialize emerging technologies and platforms for digital commerce research.” This means it’s about building intellectual property and future-proofing the company with emerging tech.

Microsoft comes into the picture in being the vendor of record for Mastercard Labs. It will fuel the division’s R&D work through Azure’s secure infrastructure — a critical attribute for financial products. This works on a few levels: the internal R&D work involves Azure, while its outputs will likewise be Microsoft infused.

“We are thrilled to deepen our longstanding relationship with Microsoft by advancing the research, development and scaling of new technologies and business models,” Mastercard Labs’ lead Ken Moore said in a statement. “This strategic collaboration will strengthen and extend our cloud services and capabilities for clients and fintech partners, sparking innovation and creativity for the ecosystem.”

Outputs of this R&D will be two-fold. It will include new hardware and software products, as well as platforms that fintech companies can run with and innovate further. In that way, it can be seen as a platform play for Mastercard and Microsoft — a model that’s central to the playbooks of both companies.

As for the types of innovations intended, the companies have emphasized commerce and inclusion. The former will include research to develop hardware and software that enables digital payments in new ways. Microsoft provides the software while Mastercard taps into its channels and fintech partners.

Inclusion goals are infused into these systems in that they’ll serve underbanked individuals globally. The rather vague language in the announcement adds that AR, VR, and IoT will be used for user experiences that are more inclusive. IoT makes sense in atomizing transactions with sensor-based devices everywhere.

The collaboration will also build on Mastercard’s Start Path program, which is a sort of accelerator for fintech companies. Through the program, it has assisted with the development of more than 230 fintech companies that are specifically developing technologies that democratize access to financial services.

“The collaboration will advance Mastercard’s vision to improve the lives of people by building pathways to financial security and access to critical services,” the announcement states.

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