Welcome to Future of Finance, where Fortune asks prominent people at major companies about their jobs, how their firm fits into the crypto ecosystem, and what it all means for how we'll use money.
The following is from a recent conversation with Chief Product Officer Craig Vosburg of Mastercard.
(All interviews are edited for length and clarity.)
What does a chief product officer do at Mastercard? How do you describe your job to people?
At the end of the day, I look at the role I have as chief product officer as being about helping to fulfill our mission around powering economies and empowering people, by creating payment products that meet the needs of consumers and businesses, that are convenient and safe and secure to use, that are ubiquitous in their availability and application. And a lot of that revolves around continuing to deliver great card products in the debit and credit space, which has obviously been core to our business for many, many years.
But it's also about enabling a much broader degree of choice than you might typically associate with Mastercard, given our close connection with debit and credit cards—enabling choice in the form of different kinds of payments, real-time payments, account-to-account payments, push payments, blockchain-enabled payments. Cards represent a tremendous value proposition, and we still see them as a great growth opportunity. But cards aren't fit for purpose for every kind of transaction.
I have a related question: On a scale of one to 10, how annoying is it when people call Mastercard a “credit card company” and not a “payment processor”?
(Laughs) I won't give you a hard number—because I'm afraid you'll hold me to it—but, yeah, it’s an understandable thing because of our longstanding association with credit cards and debit cards. But we're not a credit card company. We're a technology company, primarily the application of technologies in the payment space. There's so much more to us than just credit cards.
What’s something else Mastercard is doing in terms of blockchain or crypto that many people don’t know about? Orsomething that’s misunderstood?
I see us sort of at this interesting juncture in history where we're sort of sitting at this confluence—sort of this inexorable migration towards digitization—the introduction of new technologies of which blockchain is one. But also other kinds of new technologies, whether that's devices that we as consumers engage and interact with, or it's a different sort of payment-related technology, creating a whole new wave of consumer experiences.
As an example of that, the trend towards digitization has enabled an upside, that of creating this incredible expanding array of use cases where payments play a role. And electronic digital payments, in particular, have also introduced new risks into the payment ecosystem, because digitized credentials are easy to move around. And when they're moving around, and they're residing in lots of different places, it's easier to compromise them, steal them, and use them for the wrong thing. That, for us, has led to innovations around creating token technology, and encrypting those credentials in ways that they're secure.
And just to be totally clear, are those things on a blockchain now, or might some of them be soon?
All of the examples that I mentioned aren't necessarily on the blockchain, but blockchain becomes a really interesting and potentially valuable technology to enhance the value of some of these same kinds of transactions. So I talked a little bit, for example, about cross-border payments and remittances. This is a perfect example where there is an existing way to move money across borders—send money to a family member, for example, overseas—but we all know that it's rife with inefficiency. It can be slow, it can be costly, it's hard to know sometimes exactly how much it's going to cost, how much is going to get there, when it’s going to get there.
We've been experimenting with blockchain for use cases like that, to make that kind of process much more efficient. Similarly, with B2B payments, as another example of another area that's pretty inefficient, blockchain technology can add a lot of value, not just in terms of speed and transport transparency, but also the programmability of a payment that resides on the blockchain. Now, these are areas where we're not at scale today, but they are areas where we're experimenting because we see the promise and the potential of that technology.
You mentioned scalability, and for many things in the crypto ecosystem that's kind of been an issue—it’s too quick with not enough safeguards, or it's just kind of lagging—so what are realistic time horizons for established firms like yours?
In the evolution of crypto timeframes, roles and responsibilities are going to largely be a function of what is an evolving regulatory environment. That is, we think, a much-needed regulatory environment. Something we've been engaged with regulators and policymakers to try to influence and educate and create awareness around, in part, is the distinction between crypto as an asset class and crypto as a payment instrument.
We don't have a view on the asset class—just like we don't on commodities or securities or any other asset class—but to the extent consumers want to buy and sell, we want our products and our network to be in a position to easily and securely facilitate that movement of money into and out of fiat currency and crypto, and vice versa. We are also working with partners to make buying, selling, holding cryptocurrencies more broadly available through financial institution partners. That's the kind of thing we're looking at, while also investing in things to enhance trust and security, and reduce risk.
Maybe some examples?
It's CBDCs. It's stablecoins. It's tokenized bank deposits. Deposits sort of adhere to our standards around stability of value—with a payments instrument, you have to have some idea of what the currency is actually going to be worth when the counterparties agree on an exchange. And what happens in the case where something goes wrong with a transaction, their dispute rights, is there a chargeback process, regulatory compliance?
So, knowing that, and much more broadly, what’s the future of crypto when it comes to Mastercard?
Crypto’s future is going to hinge on a couple of very important factors. One that we've already touched on is the regulatory environment, and establishing clear rules of the road and guidelines for all participants, whether we're talking about crypto as an asset class or as a payments instrument.
The second is, we believe for crypto to achieve mainstream adoption—in use cases related to payments—there needs to be a clear framework for creating trust around the transactions. This includes clear consumer protections—what happens when something goes wrong, a better means of authenticating individual identities. Likewise, it means ensuring it’s not being used for money laundering or other kinds of negative uses.
And, ultimately, there needs to be a degree of interoperability between different currencies, cryptocurrencies, so that it increases the utility of those individual currencies to be able to be used anywhere. All of those things are going to be important, I think, to having crypto evolve beyond being the realm of the enthusiasts into more mainstream adoption and commercial applications.
Even more broadly: What do you see as the future of finance? Like 50 years ago, people weren’t going to an ATM, we didn’t have autopay, etc. What’s next?
(Laughs) I wish I could predict that—what the next ATM equivalent 20 or 30 years from now would be. But I can’t. It's hard to say exactly what it's going to be, with so much happening in terms of new technology. But my view is, it's going to involve more choice. For consumers, it's going to be more digital, it's probably going to have, on the surface, a simpler sort of user experience but more complexity behind the scenes.
And so, with those things in mind—choice, digitization, increasing complexities—the one thing I think that’s not going to change is the need for trust. And that applies to anything of value, whether that’s money in the form of payment or the purchase or sale of an NFT.
