When many people think of cities, they think of centers of population or culture. For MasterCard, cities are centers of commerce, says Ed McLaughlin, the company's Chief Emerging Payments Officer.
McLaughlin, along with MasterCard President & CEO Ajay Banga, spoke at the Council's Smart Cities Now! forum held last week in Purchase, N.Y. The quarterly event brings mayors and other regional government leaders together with Council partners and other smart city experts from around the world.
With Council Lead Partner MasterCard hosting the gathering at its worldwide headquarters, there was considerable focus on how smart payment solutions can benefit both cities and their citizens.
Out with cash, in with digital commerce
If you accept that the foundation of a city is commerce, McLaughlin said during his Smart Payments, Smarter Cities presentation, then the foundation of a smarter city is digital commerce.
One reason for that, as CEO Banga noted, is that cash costs money – it costs money to print it, to secure it, to distribute it.
It is also inconvenient, as anyone who has had to scramble to find the right amount of change to feed a parking meter knows all too well. But it gets worse. Handling all of the coins that people load into parking meters can be ridiculously inefficient for cities that have to collect them, count them and deposit them.
But that is changing.
Inside and outside cities, McLaughlin said, we are at a point of profound change in how we interact and transact. That's because we are ushering in a world where everyone can be connected. With that, he suggested, we -- meaning cities and technology providers -- can help people in ways we never could before.
Banga talked about how digital payment solutions can promote inclusivity for the huge numbers of people in the world who are unbanked or under-banked. He mentioned the biometric identity cards that are giving many residents of Nigeria access to financial services for the first time.
Whether it's a plastic card or an iPhone 6, McLaughlin said every device as it is connected can be used to enable commerce. "So that is a huge opportunity for all of us as we move to a future where everyone is connected."
From cashless to contactless
Contactless payment options – those that use near-field communications (NFC) technology – will become increasingly common as cities, transit operators, etc. modernize their operations. McLaughlin noted that just last month Transport for London, which runs the UK city's subways and other transport modes, moved to contactless payments to make riding public transit easier, faster and more convenient.
But he said there's more than convenience involved. He pointed to reduced crime rates due to our increasingly cashless society.
As CEO Banga put it, referring to drug dealing and other illegal pursuits, "Electronic payments are not the friend of the person who is playing a game."
Read more about smart payments…