Case study: How MasterCard is disrupting the disruptors

VR and mobile payments have the potential to completely alter the way we watch videos and make purchases. MasterCard plans to disrupt both disruptors, at the same time.

Mobile payments and virtual reality (VR) are two disruptors in their own right, with huge potential to change two things we spend a lot of time doing: watching videos and buying things. However, while one continues to increase in popularity and the other is frequently cited as the next big thing, neither of these technologies has taken off just yet, at least in the U.S.

MasterCard plans to disrupt both of these disruptors simultaneously. Yesterday at the Arnold Palmer Invitational, the annual golf tournament it’s sponsoring in Orlando, Florida, the financial services giant unveiled a new way to make payments: virtually.

“When you look at an item within the VR space and focus on it, a screen pops up to give you details about that particular item. It’s built-in; you can make the purchase right within the experience,” explains Raja Rajamannar, chief marketing officer for MasterCard Worldwide.

In Cannes over the summer, SapientNitro debuted “The Apartment,” which demonstrated the way VR experiences could tie in with commerce. Lowe’s has a VR experience that allows users to walk around in their dream kitchens before committing to them, monetizing VR in a more concrete, albeit still indirect, way.

Within MasterCard’s VR experience, users can hang out on the 17th hole with Northern Irish golf pro Graeme McDowell. But the ability to look at, and immediately buy, his shoes or shirt makes the experience shoppable in a way no other brand has before.


“Adding that layer of augmented reality and blending it with VR is what allows us to bring commerce on the spot. It’s also how we bring it back to our core business model, which is all about commerce,” says Rajamannar.

Monetizing a VR experience can be technologically complicated, but the fact that commerce is MasterCard’s space makes this endeavor more promising for the brand. Additionally, as a universally-recognized symbol of payments, MasterCard is a natural partner for any retailer that crosses over from VR content to VR commerce.

Conversation of disruptors inevitably comes back to Netflix. And then from there, it’s natural for one’s mind to wander over to Blockbuster, the once-video rental giant that scoffed at the idea of buying it. Like many companies that failed to see the digital writing on the wall, Blockbuster is now defunct.

MasterCard is avoiding the same fate by staying on top of technology. Apple Pay and Google Wallet don’t quite have widespread adoption, leaving the mobile payments space still ripe for the taking. The financial brand aims to be a heavy hitter there, beyond its virtual commerce.

“We certainly want to play a key leadership role [in mobile payments], not only from a point of market share, but also in terms of thought leadership,” says Rajamanner. “Mobile payments are going to be here, big time. Even within mobile payments as a category, it is not just based on your telephone.”

At the Consumer Electronics Show in Las Vegas, MasterCard debuted a refrigerator with Samsung, on which people can place and pay for food orders. In Orlando yesterday, the brand also released the early edition of a payment-enabled glove specifically designed for golfers. Tapping the glove with your other hand makes a payment, eliminating the need to fish out any money, your card or even your phone.

MasterCard is factoring mobile into payment authentications, as well. The brand has experimented with selfie payments before, in which people use self-portraits in lieu of passwords when online shopping. In February, the company announced that in the coming months, the authentication alternative will be rolled out by some of the biggest banks in the U.S., Canada and Europe. It will also require the user to blink, to ensure that you’re not simply holding up a picture of someone else.

“If you look at the evolution of the credit card, not a lot has evolved in the past 35 years. We’re looking at this as the right opportunity to advance and stay ahead of the curve,” says Rajamannar. “The way we look at it, every device that’s connected can be a device for commerce. That is our credo.”

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