Launching Global Fintechs

Ankur Joshi:

Hello, everyone. I'm Ankur Joshi, the founder and CEO of Nuclei, a B2B Fintech company. We primarily work with banks and telcos, developing multiple products across South Asia, Middle East, and Southeast Asia. Today, I'm privileged to welcome Shyam Mohan from MasterCard to this podcast. Shyam and I have known each other for many years. He's in-fact our sponsor for the Start Path program, which we enrolled in back in 2019. He has been a great mentor and a very good friend, especially to me personally, over the years.

Welcome, Shyam, to the podcast. It's a pleasure to have you here.

Shyam Mohan:

Thanks, Ankur. Likewise, it's great to be here with you. What started as an engagement through the Start Path program has turned into a good friendship, which I think is one of the great outcomes of our collaboration.

Ankur Joshi:

Good to hear that. So, Shyam, let's begin with your background first. You completed your engineering and MBA. You originally hail from Calicut and then transitioned to primarily working in the Middle East region, most of the time with Mastercard. I'd like to understand your background, journey, key driving forces in your life, and what motivates you to continue performing with the same passion you've demonstrated for so many years.

Shyam Mohan:

So yeah, in terms of background, Ankur, I come from a typical middle-class Indian family. I pursued engineering and then went for an MBA. I graduated from my MBA institution in 2009, which was at the peak of the recession. At that time, my aspirations were entirely different from what I'm doing today.

Initially, I aimed to enter an investment bank and secure a lucrative job abroad. However, as luck would have it, I found myself in the field of payments. After completing my MBA, I joined a company where I managed payment products, leading me to UAE, Abu Dhabi. I worked with a company called UAE Exchange, where I focused on launching prepaid card programs and other payment-related solutions. This experience was eye-opening for me, as I discovered the dynamic and challenging nature of the payments industry. Working on remittance solutions and prepaid card solutions exposed me to a range of innovative solutions deployed globally to address real-life problems, even before the term "fintech" became popularized. Realizing the potential of leveraging technology and new business models in the payments and transaction space, I decided to stick with this industry. While working on launching prepaid programs at that company, I began interacting with Mastercard, as we were launching those programs on the Mastercard platform and brand. Eventually, I seized the opportunity to join Mastercard in 2013, where I've held multiple roles over the past eight or nine years.

I initially focused on prepaid business development, engaging with banks, non-banks, retailers, and other merchants across the Middle East and North Africa to launch issuing programs. After that, I transitioned into the merchant space, where payments innovation within merchants was gaining momentum. Many merchants recognized their influence on consumer spending behavior and began exploring payments innovation. I had the opportunity to work with large digital merchants in the Middle East and Africa, managing relationships and fostering innovation. Subsequently, I delved into the startup ecosystem, leading the Start Path program for Middle East and Africa.

Ankur Joshi:

So, let me just get this straight. Having known you for so many years, I know that you are very, very passionate about startups. Where does this passion come from? Obviously, there is some backstory there which led you to start working with startups and get into the Start Path program, right? What is driving this passion of yours?

Shyam Mohan:

To put it simply, I think I'm one of those people who you could probably define as risk-averse. In an ideal world, I would be running my own startup. But knowing myself, I probably don't have enough guts to do that. However, I understand how exciting this world is. I recognize the value that startups bring to the ecosystem and the world in general: how they solve specific pain points that others have not been able to address, and how nimble, agile, and flexible they are. All of these factors are exciting to me.

Working within a corporate environment and being able to collaborate with the startup community is what led me to take up this role. I realized that there is a lot I can contribute even from my position on the sidelines. Enabling startups, assisting them in growth, helping them find the right solutions and partnerships—this is where I can add value.

However, I don't necessarily have to take significant risks to do so. By no means am I against those who do take risks; as I mentioned, in an ideal world, I would be among them. But I am someone who is slightly more conservative than many of my friends and peers, including yourself. This is why I feel I can work with this community to support them, help them grow, and assist them in delivering results. Enabling them gives me a great deal of satisfaction.

Ankur Joshi:

But to be honest, I wouldn't describe you as risk-averse. Over the past three or four years, I've seen you personally back us on so many occasions, and having worked with Deutsche Bank for 3.5 years, I understand how big organizations operate. I know it takes a lot to put your neck on the line for a startup, right? Let's be honest, not every startup is going to survive. They pose significant risks for you to endorse them. It's not just us; there are numerous startups you've supported both internally and externally, in front of banks. Based on what I've heard about you from many banks and internally from numerous people within Mastercard, I don't think you're risk-averse.

In fact, if you look at the ecosystem within Mastercard, you're on one end of the spectrum where you're taking the most risk. Probably, that's what is driving your passion to work with startups.

Shyam Mohan:

I agree. So, again, it's passion that drives a lot of these activities and the work that any individual does, right? Yes, and the good thing about Mastercard as an organization is that it enables you to do that. It has enabled me to do that. It has given me the freedom and flexibility to do so, right? So, it's not like, "Okay, you work with a startup, let's go through millions of documents and hundreds of days of evaluation to really figure out what it is." Yes, obviously, due diligence and risk assessment, all of those things are important and we do that rigorously. But at the same time, we understand how we can enable the ecosystem.

The fact that the program exists in an organization like ours is testament to the belief that the organization is putting in the ecosystem. And then, I kind of draw my energy and passion from what the organization is enabling me to do. So, that's actually allowed me to do that. In a personal capacity, I would say that I'm risk-averse. But what enables me to take these risks is, yes, the passion that I have, but also the support that I get from the organization across levels. And so, yes, essentially, it's about demonstrating what we can do.

You demonstrate a few tangible wins, then you have the backing and the belief from the rest of the organization. That's what I try to do—to get those wins, to demonstrate some tangible results, so that the belief will follow. That's essentially how I would put it.

Ankur Joshi:

From personal experience, specifically with respect to Nuclei, I know we have benefited a lot from our Start Path experience, as well as our overall relationship with the Mastercard team across geographies and product lines, and now hopefully across industries as well, right? I'm sure a lot of people, specifically fintech founders, would want to understand, at a high level, on what basis or parameters you judge particular fintechs when assessing them to be part of the Start Path.

Given that it's a global program and you only select a handful of fintechs across the globe and multiple geographies, this is relevant for almost every fintech across the globe, right? Could you please describe that at a very high level?

Shyam Mohan:

As a program, we've been running this for almost eight years now, and it started within the innovation unit of Mastercard called Mastercard Labs. The idea was to figure out what's happening outside our own four walls, right? Because it's important not to be narrow-minded and go with blinders and to doing things, it's important to see what's happening. But at the same time again, Mastercard has a brand name, to keep up and something within the industry, the product that we've built over the past 60 years. So we need to weigh the pros and cons against how you engage and what are the types of engagements that you do.

The selection process itself is quite diligent because we get a lot of applications and, as you said, only a handful gets selected. It's a global program. We deliberately want it to be global because that's what gives us insights into what's happening in other markets, right? We need to know what is happening in every corner of the world. But that also limits the amount of time and the amount of reach that you can get or the number of companies that you can bring into the program as opposed to focusing on a specific geography.

So the type of companies that we select into the program or the qualities that we look for are typically, what is the problem that the company is trying to solve for? Is that something that is relevant for us as Mastercard or is that something that is relevant for our customers? Because customer centricity is important for us.

At Mastercard, we have our own kitchen where we build our products and solutions, deploying them with our customers. However, in certain scenarios, it's not sufficient to solely offer our capabilities to our customers; there are gaps that need to be filled externally. Therefore, we examine the end-to-end value chain, assessing what we need to solve for. If internal capabilities are lacking, we explore external options. We seek a strategic fit in terms of the company's activities and whether they align with our organization, industry, or customers. Our considerations extend beyond payments; we do not exclusively focus on core payment solutions.

We consider all adjacent and complementary technologies when evaluating them. In terms of the company's stage or level, we typically avoid working with too many early-stage companies because our focus is heavily on commercialization and actual deployment. It's not merely about finding an interesting company and seeing what they can do; it's about identifying those that have already proven their ability to address specific problem sets. Our goal is to assist them with relevant connections and solutions tailored to their needs.

This is the narrative we present to our customers. Therefore, it typically involves later-stage companies. However, there are instances where we engage with early-stage companies for various reasons. As mentioned, our program provides insight into emerging technologies and developments. If there's a new technology that hasn't matured yet, we prefer not to wait until it's fully matured before engaging. We see value in early engagements for our own learning and experiences, so we're willing to collaborate with such companies. At a high level, the majority of our work involves companies with real-life use cases that have successfully addressed customer problems, implemented solutions for customers, and secured sufficient funding to ensure sustainability. We aim to avoid situations where a startup we introduce to a customer runs out of funds or undergoes strategic or management changes that could set us back. Therefore, we strive to strike a balance in our engagements. These are the key criteria we consider. Working with Mastercard provides startups with the significant advantage of accessing our extensive global network.

We are particularly interested in solutions that can be deployed across multiple markets, leveraging our extensive network as one of our greatest strengths. For instance, if a company in Vietnam addresses a problem relevant to a market in Africa, facilitating connections between them allows us to assist both the African customer and the Vietnamese startup in collaborating effectively. Thus, leveraging our global network is crucial. We actively seek out companies with global aspirations that aim to address challenges in multiple markets, aligning with our strategic priorities.

Ankur Joshi:

Awesome. That's a very good answer. Now, I might be putting you on the spot because the list could be long. But could you briefly provide one or two examples of startups that have collaborated with the Start Path team? Given the emphasis on commercialization, it would be great to hear about some success stories or perhaps a couple of startup names that people would find interesting.

Shyam Mohan:

Sure. One example is you yourself, right Ankur? We've collaborated with numerous customers in the Middle East, not merely introducing you, but actively working together on solutions. That's one instance.

A couple of others come to mind. There's a company in South Africa developing both B2C and B2B products for consumers and merchants. We closely collaborate with them, providing technology and co-creating solutions to meet the needs of banks and enterprises across various markets.

Another example involves a company that initially focused on Digital Identity Solutions but later shifted towards the issuing side. We assisted them throughout this transition, addressing digital identity and E-KYC challenges, and supporting their evolution into a Neo Bank. We guided them on specific use cases, provided appropriate capabilities, facilitated introductions to relevant partners, ensuring their success, as their successes are ours.

Ankur Joshi:

Awesome. I'm sure there are many more, and we probably wouldn't have enough time to cover all of them. But I also understand, and you were speaking about this before we started recording, that your role within the organization has changed, and the way the Start Path team was earlier structured across the globe has now been split into two verticals. Could you shed some light on how the teams are structured now and what the overall objectives of the various teams are?

Shyam Mohan:

Sure. So, yeah, essentially what we have done at Mastercard is we are now focusing heavily on what we can do for fintechs. The way we have set up our processes and technology, has been kind of driven by the needs of our traditional customers. Now, there is a timely requirement to think about how we can be more fintech-friendly, be more fintech-fit in terms of our solutions. So the way we are thinking about it is through programs like Start Path and another program that we have within our organization called “Engage”, where we focus on those fintech or capability partners who are able to deploy our solutions at scale with customers. So they essentially become distribution partners for our solutions. And that is again an important aspect of how we are able to achieve scale.

While programs and engagement are important, we've now realized that we need to think about a different set of product capabilities and platform capabilities. So I'm now going to focus a lot more on the product and platform strategy in terms of how we work with fintechs. Still in the early days, but essentially what we are trying to do is appeal more to developers because developers are now important decision-makers in the fintech community or any other tech startup that you look at, right? Traditionally, we would engage with a business person or a product person. But now we are seeing that developers hold a lot of influence in terms of buying decisions of technology. And so we want to be in that space where we work closer with the developer community.

If you've seen in November of last year, we announced the launch of Mastercard Developers as the umbrella fintech program. So all these programs like Start Path, Engage, etc., would fall under the broader Mastercard Developers brand that we are now putting out there. So within this new role, I'll be focusing more on how we can make ourselves more digital-first or, as I said earlier, fintech-fit. Now, what does that mean? It means that our solutions should be digitally discovered. That's what developers are doing. They would go and look for solutions, they would want to test them out, they want to see if that solution is something that is fit for themselves and something that they can consume. And then the conversation on how to structure the pricing and the contract and everything would happen. So we need to focus on digital discovery.

We need to focus on APIs as the forefront of our product strategy. So those are the new aspects that I would be working on. And this is the direction that we want to pursue. As I said, we don't want to be bogged down by what we have been doing over the past 60 years. We really want to be innovative as we go along, and that's what we've been as an organization. So one of the interesting things about Mastercard and the way we have been doing business is innovation has been at the core of our culture and our organization, right? And this is what has been exciting for me to do, you know, different roles across different segments and stick along for such a long time and see what we are able to bring as changes in the industry. So making sure that as an organization, we do that is important, and this function will allow us to do that.

Ankur Joshi:

Awesome. That's a good answer. We understand that now within this particular role, you will be building up a platform on which fintechs and banks can build. In addition to that, let me ask you a very pertinent question regarding fintech and banks. There has been a lot of noise and numerous articles written about whether fintechs are going to disrupt banks, whether it's a zero-sum game, and banks might essentially become just the pipes while fintechs might become the interface through which customers interact for various financial products.

Do you believe it's a zero-sum game, or do you believe it's a combination of fintechs and banks collaborating together and moving forward?

Shyam Mohan:

So, I believe it's the latter, and essentially what the fintech revolution has enabled is choice for consumers, right? As consumers, you now have a lot of options. What we are seeing is banks definitely are not going to sit back and wait for all of these changes to happen. We've seen a lot of banks innovating; they are undergoing digital transformation themselves, and much of it has been generated by the fintech activity that has been happening around them.

So, I don't think it's going to be a situation where a bank would just sit on the back end and provide the pipes. They are also trying to rediscover; they are also trying to evolve. But at the same time, fintechs are also competing with banks; they are also competing among themselves. In the end, many of these players will start co-existing. Earlier, we would always think that a consumer would trust a bank with his or her money. Now, we are seeing that the options they have, the confidence they have, are becoming broader. It doesn't take away the trust element from banks.

But with new technology, with new capabilities, the ability to consume services from multiple providers is only going to grow. And if you look at open banking, now, what started in Europe and is spreading across all the markets pretty much, is around how you can leverage the data that you have and the details of consumers that a bank has to enable new capabilities, new use cases. So we will see an ecosystem where fintech and banks will start flourishing. And in the end, it's about how we can enable that growth as Mastercard, that's what we would be focusing on. So I don't think it's going to be a zero-sum game; in the end, banks do have a lot of trust in the ecosystem. They do have large amounts of consumers, or merchant partners that they have that other fintechs can collaborate and work with. And this is something that we have been facilitating through the Start Path program. This is what we've been seeing as a quick proposal of a situation where the banks are able to leverage new technology from the fintechs and fintechs are able to leverage the scale that the banks have, and it will coexist. So I don't think it's going to be the end of banking or something like that. It's just about all of the banks trying to rediscover themselves. Fintechs, again, trying to be more competitive, come up with new use cases, new solutions, and it will essentially lift all boats.

Ankur Joshi:

So essentially, the market is going to become deeper. Fintech will help the banks engage more deeply with their customers. And then, of course, within your new role, you will create a platform on which Fintech and banks can together collaborate and build on top of. So that's going to be a really good ecosystem. I'm really excited to see that come through.

Shyam, this has been a very interesting conversation. Wish you the best with this new role and I'm sure that the amount of passion which you brought to the Start Path team, something more you're going to bring to the platform team as well. And I look forward to working with you for many, many years and as I said earlier, wish you the best for your new role.

Thank you so much for coming on this podcast.

Shyam Mohan:

Thank you very much, Ankur. Likewise, it's been a great experience of working with you. I really like the way you are building your company and the way you are supporting your employees and giving them the freedom and flexibility to experiment with new ideas, something that I don't see very often. So I really think that's a very important cultural aspect that you bring to the table and again, all the very best to you too and the entire Nuclei team.

Ankur Joshi:

Thank you, Shyam. That's very kind of you. Thank you.

Shyam Mohan:

All right. Thank you. Take Care.

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