The technology master

FST. With IT so intrinsically linked to your operations, can you put into words the role that technology plays?

RR. On a typical day, MasterCard processes millions of transactions and settles billions of dollars. But to understand what that means, it’s important to understand what a transaction is and how it works. When someone goes to into the checkout line and pays with a MasterCard, a transaction occurs. When you think about it, every transaction is a series of ‘handshakes’. And those handshakes represent ‘agreements’. The merchant agrees to provide the person with goods or services; the person agrees to pay the bank that issued them their MasterCard card; that issuing bank agrees to pay the merchant’s financial institution, who in turn agrees to pay the merchant – completing the cycle.

At the center of all of those handshakes is MasterCard and our vast IT operation. To make sure every transaction goes smoothly, managing the software and hardware that makes all of these handshakes possible. This is the brand promise to our customers and what MasterCard is all about. Our processing platform, the system that makes this possible, represents many years of hard work, dedication and investment in the latest technologies to validate that brand promise and cement MasterCard at the heart of commerce.

FST. The MasterCard network has the capability to handle 140 million transactions per hour (with each transaction taking 120 milliseconds) and can process payments in more than 160 currencies. These are impressive figures that you must be proud of?

RR. The unparalleled speed of MasterCard’s network is crucial for next-generation reward programs and more robust security systems that require ultra-fast and complex back-end processing. With an average network response time of around 120 milliseconds – MasterCard’s network has spurred efficiency and convenience in the checkout line and has saved banks and merchants more than 1000 years of processing time. To put that into perspective, a single card transaction – or that series of ‘handshakes’ I just described – can happen around the world in about half as much time as it takes you to blink your eye. At the same time, we’ve engineered a hybrid network that provides the best of both worlds – supporting peer to peer for speed and efficiency as well as centralized processing to support value added services.

FST. Today, customers are able to pay for goods and services online, through mobile devices, prepaid cards and contactless payments, to name a few. How important are these new platforms and how much time and effort is put into developing and refining new payment channels like these?

RR. Consumers are always looking for more convenient and more secure ways to pay. The growth we’ve seen with our PayPass offering – our ‘contactless’ payment feature based on the ISO 14443 RFID standard – is evidence of this. To date, there are more than 16 million PayPass cards in the market that can be used at more than 55,000 merchants worldwide. Behind the scenes, MasterCard’s technology fosters innovation and facilitates customization. With the flexibility to handle transactions from any source, we are already ready to integrate new forms of payment when they emerge. This has a competitive advantage for instant rebates at the point of sale because our technology infrastructure is already integrated with every POS device, limiting development time.

We also have begun to focus on making rewards available through mobile phones and other wireless devices, which will bring further convenience to consumers. Also, earlier this year, we announced our intention to work with the GSMA to pilot a new groundbreaking mobile payment and remittance system that would serve the world’s overseas foreign worker (OFW) population. This program is just another example of how we’ve tapped into the incredible power in our processing capability, and how we can leverage that capability to offer additional services, data, and insight to make each and every MasterCard transaction more valuable.

Could you discuss the core processing platform that was implemented in the last few years and the advantages that this brought to your operations, as well as your customers? Has it performed how you predicted it would?

RR. Since Y2K we have invested in completely overhauling and enhancing our core processing platform and we couldn’t be happier with the result. We now have best-of-breed technology that enables us to process transactions in ways never before possible. Last year, we upgraded our processing platform to help our customer banks expand across borders and offer customers new services through emerging payment technologies.

FST. How much of your operations are outsourced – and how important is it to select the right vendor, especially in an industry where millions of customer accounts could be compromised?

RR. I can’t go into specifics, but I can tell you that we have IT professionals working around the clock in almost every part of the world so that we can deliver on brand guarantee that a MasterCard payment card will work virtually anytime, anywhere. Because of this guarantee, picking the right vendors and partners is extremely crucial so we can maintain our extremely high standards of reliability and security. MasterCard is the only payment card company that can truly offer issuers and merchants a global solution, which is critical in a global economy.

Our global processing platform is accessible through a single point of connection, enabling banks and merchants to cross borders and market segments efficiently and rapidly, rather than requiring them to deal with a series of disparate systems in different markets around the world.  However, we also understand that even multi-national institutions must at times operate different platforms under different legal and regulatory environments. MasterCard can customize programs for any region and our platform also features international language support, which is highly scalable and easy to deploy.

FST. One thing that is extremely important for customers is trust. They want to know that their information is secure as possible and won’t fall into the hands of criminals. How do you strive to stay one step of the bad guys, who are becoming ever more cunning and determined, especially with the rapid rise in phishing frauds?

RR. We constantly are working with the best in the business – security firms, law enforcements, our banks and other entities – to collaborate and communicate best practices. We are also constantly improving the technology that we utilize to protect our own networks, but also the networks throughout the value chain of a transaction – from the Point of Sale through processing. Meanwhile, we are working with our industry partners to educate consumers about phishing and other scams, but also to educate merchants and others about how to protect data from compromise.

FST. How has the issue of security intensified since you have been with MasterCard and what is fuelling the threats to your business and its customers?

RR. Security has intensified as an issue, and we continue to work hard to stay one step ahead of the curve. We enhance our systems so that they can quickly and reliably handle transactions as they become more complex, in part because of additional protective safeguards, such as dynamic codes that can be attributed to a single transaction – which in effect, makes it a unique transaction that cannot be fraudulently replicated.

FST. Another area of importance for global businesses like MasterCard is sound business continuity/disaster recovery planning. What sort of measures do you have in place to ensure that your IT infrastructure can survive a major incident(s)?

RR. We want our payment cards to be ‘top of wallet’ for consumers. In return, we promise that the cards will work virtually anywhere, any time, and every time. But it's that every-time commitment that our technical personnel and business-continuity planners on call around the clock. In the global economy, the payments industry is mission-critical for businesses of all sizes and consumers on every continent. MasterCard's track record of virtually 100 percent availability is the envy of many industries, and it reflects the importance of a strong business-continuity program. But it's a moving target. Data availability isn't a new focus for MasterCard, but it's always changing. For more than a decade we've had a strong, formal, and comprehensive business-continuity program in place.

Our program reaches far beyond protecting the company's operations; we take the new world environment and new technologies into account all the time. For instance, significant portions of our transactions are made electronically through mail order, telephone order, and PCs. And e-commerce transactions are growing. But at the same time, the expectations of consumers have never been higher. They demand around-the-clock and around-the-world access to their accounts. People no longer tolerate 24-hour or even four-hour recovery windows; we have to recover almost immediately with little or no loss of data.

FST. Finally, what targets have you set yourself, as well as the business from an IT/technology standpoint, for the next 12-18 months?

RR. One of our key activities is continuing to stress a mindset change for our technology employees. Our goal is to move from IT (information technologists) to BT (business technologist). Technology is a big part of our business and we have to work in tandem with our business partners to achieve our goals. From a technology standpoint, our key initiative is the continued exploitation of our hybrid network. We are moving to MPLS technology that will continue to enhance our advantage in speed while developing additional value-added services to enhance the customer experience. We see additional opportunities leveraging IT infrastructure library (ITIL), service-oriented architecture (SOA), and portfolio management tools and processes. And from a business standpoint, we want to continue to grow our transaction processing business. We believe that a transaction is more valuable to us and our financial institution partner if it carries the MasterCard brand and is processed by us.

Fast Facts

The MasterCard data center under the spotlight

Built in 2001, MasterCard’s data center is a highly secure facility, designed to be earthquake-, fire-, flood- and tornado-resistant, and can operate indefinitely on back-up generators. MasterCard has an alternate recovery site also in the Midwest to assume data center operations in response to any emergency.

• The facility has the capability to process 4.1 billion instructions per second, while the back-up facility can process 835 million instructions per second.
• It makes use of the most sophisticated security protocols, and is protected by a security staff that also are certified firefighters.
• The data center is designed to withstand direct winds of 125 mph. It also has enough power-generating capability to support a city of 30,000 people.
• It houses 743 miles of conduit, 160 miles of optic fiber, 360 data cabinets, and can store more than 652 terabytes of data.