MasterCard Gets a New Boss, Signs E-Commerce Pact

MasterCard Inc. announced a notable pact with a technology company Friday that the No. 2 payment card network says would drive e-commerce transaction volume. That news, however, was overshadowed Monday morning when MasterCard announced that Ajay Banga, the company's president and chief operating officer, would replace long-time chief executive Robert W. Selander effective July 1. Selander, MasterCard's boss since March 1997, plans to retire Dec. 31. Banga, 50, who hails from India, has been a fast-rising star in the banking and payments worlds. Before joining MasterCard last August, he spent 13 years in a variety of senior management roles at Citigroup Inc., the same giant bank where Selander worked. He was named chief executive of Citi's international global consumer group in 2005 and most recently was chief executive of Citi Asia Pacific, responsible for all of the bank's business lines in that region, according to a MasterCard release. He graduated with a bachelor's degree Economics Honors from Delhi University and is an alumnus of the Indian Institute of Management. Initial reaction indicates a probable smooth transition. “Mr. Banga's appointment as [chief executive] is not a surprise to us, as Mr. Selander's current term was set to expire at the end of the calendar year,” says a research note from Goldman Sachs & Co. analyst Julio C. Quinteros Jr. “We believe that the transition will not materially affect [MasterCard's] operations.” Quinteros added that Banga's appointment could strengthen MasterCard's relationship with Citi, the network's largest U.S. card issuer. Selander, 59, guided MasterCard through some major changes, especially its groundbreaking May 2006 initial public offering that transferred ownership from its financial-institution members to public investors. “Bob is a true visionary?responsible for the transformation of MasterCard into one of the world's leading companies, and instrumental in shaping today's payments industry,” MasterCard board chairman Richard Haythornthwaite said in the release. “We are extremely thankful for his 13 years of leadership as [chief executive], and look forward to his continued guidance as executive vice chairman.” Banga will retain the title of president at MasterCard and immediately join the company's board of directors. Following the leadership transition, Selander will serve as executive vice chairman and remain on MasterCard's board of directors through Dec. 31. Meanwhile, MasterCard is beginning a three-year alliance with e-commerce data-analysis company Next Jump Inc. aimed at driving online charge volume on MasterCard credit, debit, and prepaid cards by predicting what consumers would like to buy. Part of the pact includes the launch of the MasterCard MarketPlace, an online shopping mall that offers MasterCard cardholders a host of discounts and other perks from thousands of merchants. Founded in 1994, New York City-based Next Jump survived the so-called tech wreck of a decade ago and quietly went on to work with thousands of corporate clients and 28,000 merchants representing 1 million locations. Founder and chief executive Charlie Kim tells Digital Transactions News that users of his company's systems convert one of every 11 online window shoppers into buyers, a conversion rate he claims is close to “100 times better than anything out there today.” Yahoo! Inc.'s shopping portal uses Next Jump, as do a number of corporations that offer discounts to employees on purchases. The MasterCard MarketPlace platform offers consumers the ability to set shopping preferences and receive e-mail notifications from merchants they like. It also gives MasterCard cardholders access to exclusive in-store events at preferred merchants. On the mastercardmarketplace.com Web site, cardholders can set preferences by naming which merchants they want to hear from by dropping their logos into “like” or “don't like” baskets. The platform uses those preferences in conjunction with other data to send notifications consumers are likely to respond to, according to Kim. Next Jump developed its marketing system as it helped corporations handle their employee-discount programs on merchandise orders. It learned that many employees were highly responsive to marketing messages about upcoming, short-term discounts or offers, because workers often asked to be reminded of the next deals if they had missed the most recent one, Kim says. “We actually call it customer-service messaging,” he says. “We're not guessing, we're responding to customer requests.” Next Jump went on to build a database system that used knowledge gained from the employee programs in combination with information shoppers voluntarily provide.