Post #60: The view from the Research Hub - Heptagon Capital – Production

Research and development matters. It’s what helps to differentiate businesses. To get one insight into what’s going on at the cutting-edge, we spent some time…

Post #60: The view from the Research Hub

Research and development matters. It’s what helps to differentiate businesses. To get one insight into what’s going on at the cutting-edge, we spent some time last week in MasterCard’s Customer Experience Centre at its Manhattan Research Hub. The business has five of these Hubs around the world and is in expansion mode; a larger New York Hub is set to open before year-end and a Toronto venue should be live within the next two years. Beyond these locations serving as centres for ongoing research and development, MasterCard also uses them for pitches, customer workshops and as an accelerator forum for fintech businesses.

What impressed most was the broad suite of products and services available. MasterCard has over 250 offerings currently live in the market, with a plethora also under development. To provide three examples of what struck us a novel –

1: Brighterion: Analysing transactions makes sense – to avoid fraud and to prevent potential money laundering. Additionally, transaction analysis can help businesses pre-empt potential early-delinquencies in their customers. Brighterion provides all the above. Think of it effectively as in-transaction data analysis using artificial intelligence to offer what can effectively be thought of as mass personalisation. Over 100bn transactions are already processed annually using the software.

2: Retail Location Insights: Using a combination of its own data and third-party data, MasterCard has recently launched a service where it is possible to conduct block-by-block analytics of retail patterns. Seen on a large screen, the granularity is highly impressive. There are clear use cases for retailers considering where to site new stores, what opening hours to consider and even what mix of items to offer. Landlords and tourist boards could also benefit from this solution.

3: Bill Pay Exchange: Paying bills is cumbersome and time-consuming, especially for small businesses. Apparently 4 in 10 bills in the US still arrive in paper format (per MasterCard) and three-quarters of these payments are made direct to the company sending the bill rather than to a bank where the money might logically need to go. The premise of Bill Pay Exchange is to provide a platform solution where bills and payments are in one place, can be paid in real-time and ‘pulled’ directly to banks. The service is currently being rolled out in the US.

This is just the tip of the iceberg. With much payment globally still done physically using cash (at least in terms of volume), the potential for further innovation looks significant.

Heptagon Capital is an investor in MasterCard. The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.


The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document. 

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