By KIM S. NASH – The Wall Street Journal
MasterCard held a 24-hour hackathon in Tel Aviv starting on June 11.
MasterCard International Inc. held a 24-hour hackathon in Tel Aviv Thursday and Friday to identify coders using emerging technology, such as wearables and biometrics, for digital payments systems. The event is part of a 12-city contest from MasterCard’s innovation lab, where startups are nurtured with cash and mentorship as the financial services company seeks to advance cashless transactions – especially those that use its own application programming interfaces.
The market for digital payments technology is highly fragmented, with startups and stalwarts, such as Apple Inc. and Google Inc., competing to get customers to use their systems.
The hackathons are part of MasterCard’s program to cultivate new companies or products in payments and other customer experience technology. Late last year, the company invested an undisclosed sum in Nymi, which makes a bracelet that uses cardiac rhythms to authenticate users. In Tel Aviv, nine teams pitched tech ideas. The winning team, weBusking, entered a system for self-broadcasting live performances. Runner-up Rav-Kav submitted a payments smart card. Other entries included a smartwatch wallet and a fitness app tied to charitable giving. Winners will later compete for $100,000 to develop their technology, as well as six months of coaching from MasterCard.
Tel Aviv is a hot hub for startups, attracting foreign bankers, venture capitalists and executives on the lookout for the next big thing in technology.
In any innovation program, companies should investigate new technologies and emerging business models, even if they seem threatening, said Steve Hill, vice chair of strategic investments and innovation at KPMG. Experimentation helps a company stay in control, he said.
Also part of MasterCard’s startup strategy is an effort to introduce its own customers, such as banks and merchants, to young technology companies. Some MasterCard customers don’t normally deal with startups and want help figuring out how to get into that world, said Stephane Wyper, global lead of MasterCard’s Start Path startup program.
Plus, MasterCard wants to help advance the technology at their customer locations, so they can keep pace with MasterCard itself, Mr. Wyper said. “We want everyone to understand the space,” he said. He is interested “in having as many startups as possible build with what we have in terms of APIs,” he said.
Keeping technological parity among financial powerhouses and smaller partners can help avoid cybersecurity problems. The financial services supply chain can include hundreds or thousands of handoffs – openings that can present security risks, as CIO Journal reported last month.