Why MasterCard’s Rugby World Cup decision is stupid

Commercial issues
Sales will be lower at RWC venues than before this move, particularly sales of expensive merchandise. No credit cards means that only people with cash or worse, with enough cash and foresight to load a pre-pay card will be able to buy. Impulse buying of a $150 rugby shirt will be essentially impossible to occur for many.

Eftpos machines are in fact available at some venues – such as the Deloitte lounge in Westpac stadium. If this move means removing those terminals then, arguably, this is restraining Visa (and MasterCard’s own) trade, as well as debit card transactions. I’m sure Mastercard has done its homework and is on solid legal ground but tell that to the punters.

Not rechargeable; high transaction fees
The cards are not rechargeable and cost money to buy and unknown costs to charge. This means consumers are paying high transaction fees. Firstly that $5-10 represents over 1% (probably more like 2-4% with average balances) to obtain a one-shot card, and secondly the inability to recharge means that residual balances will be unspent. The opportunity to launch nationally a new credit card while also spearheading the product launch of the near field technology is beautifully avoided.

Brand issues
The instant reaction to this is near universal. Mastercard is making things expensive, more complicated and asserting its market power. Eftpos, which is universal in New Zealand and has been since the early 1990s, is being put aside for a technology that seems to be a dead end street. The terminals will not be eftpos terminals but will only accept a prepay card, and worse yet they won’t even accept existing MasterCards.

We are unsure of the requirements when we buy the pre-pay cards but there are some hooks here as well. What sort of information will Mastercard require from us if we buy a pre-paid card? Will this comply with know your customer law or are these going to be a great way to launder money? (this one is difficult to win). If we do provide information, then will we be forced to provide details that create a business relationship that ends in spam and so forth? Will this be a slimey way to obtain marketing information and pitch other deals to us?

Point of difference for Visa
This morning there is no perceived difference between Visa and MasterCard but now in my mind there is. Visa works everywhere. Mastercard works everywhere but is the company that made things harder for us with stupid restrictions at the Rugby World Cup.

Dubious decision made outside NZ?
Overall this feels like a dubious decision made from outside New Zealand and accepted by local staff who don’t have the political clout to change things. It’s perceived as a dumb decision locally and will make people angry at MasterCard – angry enough to write blog posts, complain to media, write articles and avoid using the product, buying merchandise or even going to the games. It needs to be rethought.

Three suggestions on how to rethink the offer
Firstly – get eftpos into every venue, and make it super-easy for customers to buy merchandise and overpriced food and drink. That’s part of Mastercard’s overall vision – to advance commerce globally, and should be the most basic part of their offering. Brand the terminals with Mastercard logos but accept as many forms of payment as possible.

Secondly – Do offer the pre-pay cards, and do offer them with the near field capability. But make the cards free so that we will be tempted to actually use them, and make it easy for us to remove the cash at the end. If we fill in an online form, then make a particular card rechargeable, so you can instantly roll out a new credit card. This means associating the card with a particular bank, or maybe you can allow customers to choose that bank with the online form.

Thirdly – roll out the NFC (near-field communication)/eftpos terminals across New Zealand so that tourists and locals alike can experience the technology.