As part of the WARC Marketer’s Toolkit 2023, Kauveri Khullaar, VP – Consumer Marketing and Sponsorships at Mastercard APAC, spoke to WARC’s Rica Facundo about how consumers are changing their spending amid global economic turmoil, encouraging sustainable choices, and opportunities in gaming.

WARC subscribers can access the full Marketer’s Toolkit 2023 here. Non-subscribers can access a sample version here.

Kauveri Khullaar

Kauveri Khullaar, VP – Consumer Marketing and Sponsorships, Mastercard APAC

How has the economic climate impacted the financial services category? What are the key challenges or opportunities that you’re seeing?

The pandemic led to unprecedented disruption in the lives of people, and the uncertainty it caused has only been amplified by geo-political tensions, supply chain constraints and fears of an impending recession.

Consumers are anxious about their future but also mindful of the choices they are making in the present to (re)shape the rest of their lives.

This has meant that brands across categories have had to pause and reflect on the role they play in this ever-changing world, and how best to create genuine and enduring value for their consumers.

In the financial services industry, the well-documented acceleration in digitisation has meant more people have transitioned online than ever before – to learn, shop, pay and play - and the drive to cashless means of payment has been a natural and welcome outcome.

They’re tapping into the more convenient ways to pay digitally, and are more open to emerging forms of payment, such as cryptocurrency, biometric, contactless or QR codes.

Whilst this has meant relative ease of access to education, recreation, and commerce, it has also generated concerns among consumers about the safety of their digital identities and payment credentials, especially with cybercrime on the rise.

These developments have placed the onus on the financial services category to ensure everyone is included and everyone feels safe, by giving consumers and businesses access to onboarding tools, and an understanding of how to engage and transact online, safely, and securely.

What impact have you seen on consumer behaviors and attitudes towards money?

The uncertainty has created a moment of recalibration, making consumers reassess not only their approach towards money, but what it is they want to prioritise in their lives, who they trust and what trade-offs they are willing to make to live a fulfilling life.

Add to this the many technological advancements coming at us, and we are looking at a world that is more connected than ever before.

This has led to a few paradigm shifts in consumer behaviour.

On the one hand, they are anxious about the uncertainty they are experiencing, and on the other, determined to live more intentionally and in the moment.

While in the past, they waited for milestone moments to celebrate, now even weekends give them an opportunity to slow down and extract the most relaxation and enjoyment they can. This is reflected in the consumer spend data that continues to look strong compared not only to last year but even 2019. This is, in large part, due to quantitative easing during COVID-19 that led to incremental cash and household savings, as well as a desire to make the most of the now.

What's different about the nature of spend is that it's not just about buying, it’s about maximising the money that you have, to cultivate experiences that bring happiness.

There is also a growing desire to drive collective impact; consumers want to play an active role in addressing the growing social inequities and environmental concerns that surround us.

So, are you saying that a key way to understand consumer behavior during this time of uncertainty is to move away from binary thinking such as “prices are more higher therefore I’ll pay less” to rethinking the motivations and intentionality of the what and the why?

It depends on the means one has, because if you’re struggling to make ends meet, then of course, pure economics will take precedence. However, for those who can step back and recalibrate their lives, it is what creates the most emotional return on investment that becomes the focal point alongside balancing one’s financial goals.

Hence our continued focus on creating priceless moments and memories by connecting people to their passion points, be it sport, music, cinema, e-sports, the environment or culinary.

And we have believed in this since the launch of our Priceless campaign in 1997, that experiences matter more than things, and in the post-pandemic era, consumers are seeking out experiences that are not only enjoyable but also meaningful in that they create lasting value – enriching them on a personal, familial and community level. This is the era of intentionality – intentionally living your best life and creating value for communities because every bit matters.

How has the economic climate impacted your brand's commitment to sustainability?

Mastercard has doubled down on its sustainability goals, accelerating its commitment to reach net-zero greenhouse gas (GHG) emissions by a decade, from 2050 to 2040. We are aware that we cannot solve for economic crises without solving for the climate crisis.

We have rallied more than 100 partners to join the Priceless Planet Coalition to restore 100 million trees and launched the Global Sustainability Innovation Lab to co-create sustainable commerce solutions, such as the Carbon Calculator, to help consumers understand the environmental impact of their purchases.

Excessive and mindless consumption is a threat to the planet. This is the existential crisis for anyone working in marketing because it’s our job to sell. And credit cards are an enabler of that consumption. How does a payment brand balance that tension and enable more conscious consumption?

 It is our job to sell but in times of such economic and environmental uncertainty, our first order of business is to equip ourselves and our consumers and partners to make conscious choices.

An example of this is the Doconomy calculator, through which we give consumers a snapshot of the carbon emissions generated by their purchases and help them optimise their choices towards sustainability by offering ways to offset the emissions. This leans into the understanding we have from research that consumers want to take personal action to combat environmental and sustainability issues the world is facing. Banks can seamlessly integrate the Carbon Calculator into their mobile apps through an API and consumers can also use reward points to plant trees.

What’s a tangible way to measure performance or hold the brand accountable?

We can talk sustainability metrics, but nothing compares to taking individual ownership and accountability as every employee has done at Mastercard. Each employee’s bonus is determined in part by the company’s performance on three Environmental, Social and Corporate Governance priorities: carbon neutrality, financial inclusion and gender pay parity. This is a shared responsibility, and we know that when we put our collective might behind our goals, we will leave a better world for the present and future generations.

Let’s move to trends in media platforms. Gaming seems to be a key focus for Mastercard, especially with Mastercard Gamer Xchange (MGX) being launched in APAC. What excites you the most about this platform?

In 2020, people were confined to their homes for months on end, an unwelcome reality that gave impetus to stay-at-home activities. The greatest beneficiary of this trend was gaming that delivered USD 178bn revenue in 2020 (Top Dollar Survey, 2020), becoming bigger than the music and movie industries combined.

We were curious to see where this revenue was coming from and found that 75% of it was in-game spend concentrated in the 35–44-year demographic. This led to the creation of the Mastercard Gamer Xchange, a conversion engine that gives loyalty platforms the ability to let their users burn their loyalty points for gaming currency.

 What excites us about this platform is that it’s a first-to-market product that gives loyalty platform members access to thousands of gaming titles through a simple API connection. Gaming is especially significant in Asia-Pacific, home to more than 50% of the world’s three billion players, who are always on the lookout for new gaming experiences. For these avid enthusiasts, being able to use rewards points from other programs to ‘get their game on’ is a priceless possibility. And for owners of reward programs, this presents a chance to not only connect with the world’s fastest expanding entertainment market, but also to target its mass affluent demographic in ways that matter to them.

The response we have received has been really encouraging and it strengthens our leadership in the gaming industry that began when we became the first global sponsors of League of Legends through a multi-year partnership with Riot in 2018.

What could marketers risk losing sight of in all the hype in emerging technologies and platforms? But also on the flip side, what opportunities does it provide marketing?

Firstly, marketers need to cut through the hype and return to the fundamentals of marketing. What can we do that would appeal to consumers, not because it’s a shiny new toy but it makes their lives simpler, helps them connect to their passions, and, in the case of Mastercard, helps them transact simply, safely and securely.

Let’s look at Web 3.0 as a case in point. While it may seem that this disruption is a one-way ticket to a wholly digital existence, it’s not. It is the logical evolution of the internet; one that offers a continued blending of the digital and the physical, powered by Blockchain technology, 5G, cloud computing, edge computing, and IOT that render rich fluid and immersive experiences.

The Gartner Hype Cycle says we're still about eight to 10 years away from Web3 going mainstream, and this gives us a virtual playground to test and learn, by creating immersive experiences, and influencing how people socialize, learn, play, engage and pay.

One use case is our recent partnership with the mayor of Miami, who was looking for a way to drive revenue to local businesses and non-profits in Miami. Together with TIME and Salesforce, we worked with 56 local Miami artists to launch a unique collection of 5,000 NFTs on the Ethereum blockchain – 56 to represent the city’s 56-square-mile area. Holders of these NFTs would gain access to Mastercard’s Priceless Miami program, which allows them to unlock all sorts of exclusive experiences, from one-of-a-kind events at local Miami restaurants, to private tours of Miami’s most famous cultural institutions. 

As we iterate and innovate in the virtual worlds, we must be mindful to not replicate the inequities that exist in the real world. To this end, Mastercard recently announced the Belle Block, a new Web3 and crypto community that promises to make emerging tech more accessible to women and non-binary individuals. We will do this by prioritising education to empower women so that they benefit from Web3 technology and crypto.

Amidst all of these opportunities and challenges, what’s the one measure of effectiveness that you think will be the most important in this new world?

I consider ‘Brand I Trust’ one of the primary measures of effectiveness. It is somewhat all-encompassing in that it ranges from safety and security (for a payments technology brand) to the faith consumers place in it to do right by them, the society, and the environment. If trust is strong, a brand resonates with its consumers, generating affinity and preference.