How Mastercard leveraged its business ecosystem to identify new revenue opportunities  

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Spend Matters welcomes this guest post from John Thielens, the CTO of Cleo, an ecosystem integration software company that keeps its eye out for developments like Mastercard’s partnerships.

Recently, Mastercard unveiled a series of partnerships targeting an array of industries and services in an effort to further push its business ecosystem beyond the realm of electronic payments. One of these initiatives included a blockchain-enabled partnership designed to increase the transparency of companies' supply chains. Let’s take a look at the strategy behind this partnership and the value it brings to Mastercard’s customers.

The strategy behind Mastercard’s recent partnerships

Mastercard is just one of a number of companies that has recently made efforts to expand beyond its traditional industry and identify new opportunities to create value by leveraging an already thriving ecosystem. In this case, Mastercard’s extension into the supply chain market, via the company’s partnership with Envisible, demonstrates the company’s functional understanding of its current business ecosystem.

Once Mastercard took stock of its existing ecosystem from a business strategy perspective, it identified a differentiating service it could uniquely deliver, and engaged the partners needed to make it come to fruition. In the same way that Mastercard is using its new blockchain partnership with Envisible to expand beyond the electronic payments space, companies like Apple, Amazon and Costco are expanding from their current mobile, retail and e-commerce sectors to the electronic payments industry.

Just as the Apple Card partnership with Goldman Sachs launched Apple into the payments market, Mastercard has used the same tactic of identifying and executing on new revenue streams by initiating partnerships with companies outside of the electronics payments market that simultaneously add value to the company’s current customer services — a perfect example of creating value through ecosystem enablement.

How this blockchain-focused partnership benefits Mastercard

This partnership may not appear to directly relate to Mastercard’s core business drivers, but the partnership with Envisible is actually a very calculated business decision.

By reviewing the needs of their current customers, Mastercard saw an opportunity to support those customers by adding value to its offerings. In September 2018, Mastercard announced the launch of Mastercard Track in collaboration with Microsoft, a global trade platform aimed at helping streamline and automate the procure-to-pay process. The company’s recent blockchain-based partnership with Envisible furthers Mastercard’s initial positioning in B2B payments and supply chain markets.

Modern approaches to supply chain management leverage a large set of well-established tools and relationships with reasonable efficacy. One of those tools is blockchain. Blockchain technology itself can solve many existing problems that involve trust across partners within the supply chain.

One of the most-discussed uses for blockchain in the supply chain has been the potential for the crypto-based technology to increase traceability, visibility and transparency — all of which can provide supply chain network participants more time to react and optimize operations in the face of disturbances. When a company takes an ecosystem-wide view of their integrated operations, they can more quickly identify these disturbances in the supply chain, further reducing the time needed to react.

Thanks to the increase in trust and traceability provided by blockchain, products moving through the supply chain reach their destinations much faster. In this regard, the value created through blockchain often percolates to consumers, as they receive the end-product quicker and can trust that the goods are sourced, created and transported as advertised.

Leveraging ecosystems to drive value

The businesses that are adopting technologies like blockchain and sophisticated integration platforms that facilitate the extension of existing trust networks will reap the most opportunities — increasing loyalty and the level of trust in their brands, as well as improving the trust and transparency among organizations whose business models predominantly require operating in supply chains. By embracing this blockchain partnership, Mastercard has instituted itself as a means of establishing trust within its customers’ ecosystems.

We are beginning to see companies push beyond the boundaries of their industry silos by leveraging their existing ecosystems to generate new sources of revenue and value for their customers, without reinventing the wheel — restructuring their entire business model and operations. Organizations that hope to expand and provide unparalleled value to their customers within their industry will, ironically, need to follow suit and explore supplementary means of creating value and revenue by integrating with their ever-expanding ecosystem in new and innovative ways.

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First Voice

  1. Jason busch:

    Track has not come up in one discussion with vendors, practitioners or consultants since the launch. Waiting for evidence of adoption.

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