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Business News/ Companies / People/  There is a positive energy around resurgent India: Ari Sarker
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There is a positive energy around resurgent India: Ari Sarker

MasterCard's Ari Sarker talks about India's changing role in its operations and what it expects from PM Narendra Modi's visit to the US

MasterCard’s Ari Sarker says the company is extremely bullish with the government’s push to financial inclusion. Photo: BloombergPremium
MasterCard’s Ari Sarker says the company is extremely bullish with the government’s push to financial inclusion. Photo: Bloomberg

New Delhi: MasterCard Inc. is in process of making India a global delivery hub to serve other emerging markets. The credit-card issuer plans to increase its workforce in India to 15% of the global total in the next few years from the current 10%, which will include a specialized team of people to work on new technologies and find new market opportunities. In an interview, Ari Sarker, division president for South Asia at MasterCard, talked about India’s changing role in its operations, what it expects from Prime Minister Narendra Modi’s visit to the US and how the Indian government’s focus on the domestic card-payment network RuPay for its financial inclusion scheme has discouraged the company. Edited excerpts:

MasterCard has been in India for three decades. With new government coming in and its emphasis on strengthening ties with the US, how has the role of India changed for the company?

During the course of 30 years’ journey in India, we have become true insiders in this industry. We have been a critical stakeholder in building the payment ecosystem in India. 2014 has been an extremely eventful year for us. There is a positive energy around resurgent India that we are seeing, (it) is enabling us to take some bold calls with respect to India as well as India as a country where it could become a global hub for us to service other markets.

In 2014, we have made some acquisitions. We are now about 1,000 people in India, which is about 10% of our global workforce. We are using a lot of these acquisitions to essentially make India a global operating hub to service other markets around the world and that’s the huge change. You will see a lot more (of acquisitions) over the course of next few years. It is giving us technology and people with the right skills to develop solutions which are emerging market-centric. That is why a country like India, which is thousands of miles away from our parent company’s hub, is a game changer for us. We are getting closer to developing markets, creating delivery centers and therefore we feel confident that as emerging markets like India throw up challenges and opportunities, we are probably extremely well placed.

What is you roadmap for India?

In the immediate term, we are looking at integration of all the assets that we acquired this year in India, which is giving us this ability to create an operating hub out of India. If you look few years down the line, we remain open to acquisitions in various places which is creating reach, distribution in the Indian market and bringing new capabilities. If there is technology or an IP (intellectual property) which is sub-scale in the market, and MasterCard acquiring such a company can create scale for such a company. It is a fairly broad system and we are not constricted by investment limits. If ideas that are put on the table are attractive, then we will continue to invest in India.

The journey of electronic payments in India has just started. If you look at personal consumption expenditure, we only have 3 to 4% penetration in overall market. We are very much a cash-centric economy. So the opportunity is huge. We keep an open mind regarding acquisitions and who we partner with.

Which are the areas you are looking for acquisitions?

This year we have acquired C-SAM, Inc. , which is into mobile payments and mobile payment platform business. That is giving us a very strong capability in delivering mobile payment solutions. ElectraCard Services Pvt. Ltd is delivering us technology platform for hosted payment processing services. Such IPs and technologies are locally relevant, locally hosted, near the customers and create the localized version of services. We are looking at a bottom-up approach, where the emerging world and emerging market opportunity will enable us to develop solutions with emerging market customers in mind and not necessarily thrust products that are coming from the developed world.

We don’t disclose the investment that has gone into the acquisition, but it is safe to say it runs into hundreds of millions of dollars. We continue to look at opportunities.

We are here for the long haul; we are making investments and putting hard assets on the ground, we are putting people on the ground. We are actually in the process of moving some very high-end technology roles into India, these hubs we have built (in India) are actually attracting more IP (intellectual property) and capabilities, which we are going to bring in here to develop. That’s the part that is creating an excitement and buzz in the market.

What kind of technology roles are you planning to bring in to India?

You will have big data scientists, networking engineers, highest level of security developers...So we are bringing capabilities which are very high end. India is not a place where we will do low-end development only to hand over to the US team. When you operate with a headset of global operations, which has centers in St. Louis or Dublin or Singapore, India just happens to be a very significant hub that will work on technologies, platforms and solutions will be as cutting as those in our other centers. We are also learning.... As we made those acquisitions in India, we are finding interesting new spaces and opportunities. Our team in India will be 1,000 people by the end of this year, which is 10% of our global workforce, but we could 15% of our total workforce in next few years. There is no differentiation on the capability sets in our US centre and what we are putting up here in India. We will be using the companies we acquired in India in some of our core technologies developments and platform. These capabilities are already being integrated with the some MasterCard solutions. A product called Master Pass, a digital checkout solution which we are launching this year, is a MasterCard solution; however our team sitting out of Baroda is actually working on the Master Pass platform making sure it is commercially viable in emerging markets.

The government has been pushing financial inclusion through RuPay (the payment system floated by National Payment Corporation of India). How do you see it?

India needs financial inclusion at a much larger scale than ever before. We are extremely bullish with the government’s push to financial inclusion. We are doing financial inclusion in other parts of the world, like in Nigeria, South Africa, US, Egypt. So we have a lot of know-how, capability for both developed and developing markets for financial inclusion, for government benefit transfers, and we would like to be partners in the space. We have done a few projects with government, but in the current context of Jan Dhan Yojna, which has been a RuPay-driven initiative, we commend the government, but we feel we have strong payment capabilities with our global hub in India and we can bring a lot to the financial inclusion story in India.

The sheer magnitude of financial inclusion in India market is so huge, so the more the better is the answer. In that context RuPay is a very good thing for the government. It is helping solve an extremely large gap in the economy which is mainly the cash economy. But government focusing only on RuPay to bring in the financial inclusion, there we feel a little discouraged. We feel this is such a significantly large opportunity that all stakeholders who have skills and technology, assets, know-how and ideas for solving this national problem should have a seat at the table. Competition leads to the best products, services and solutions for the consumers. We hope it will not be a mandate and it will be an environment, the competitive forces will be able to survive.

What are your expectations from PM Narendra Modi’s visit to the US?

There is a lot of build-up to this visit. Our company’s president and CEO Ajaypal Singh Banga is also the chairman of US-India Business Council. He has been spearheading this partnership. We feel very encouraged there are lots of supporters of India on US side. We are extremely bullish, there are always issues on the table, but it is very safe to say these two mega democracies in the world are natural partners.

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Published: 25 Sep 2014, 10:54 PM IST
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