Article by Forbes: Darryn Pollock
Mastercard, so long one of the biggest names in payment networks, is venturing into a new avenue which, at first, sounds far removed from its primary business model. Announced on Sunday, Mastercard will be looking to the blockchain to bring visibility to food systems and supply chain, with the integration of Envisble’s Wholechain system.
A growing desire from consumers to know the story behind what they eat has prompted Mastercard to go down this burgeoning market. Additionally, the want of dependable and visible supply chains in the food system for producers is the other edge of the sword driving the payments company in this direction.
The blockchain has been identified as a powerful tool in the track and track of food supply chains, and now Mastercard believes they can take the isolated technology, and combine it with their additional expertise, to create a product that will be beneficial to both consumers and producers.
Already, through their partnership with Envisible, they are taking their solution to scale with Topco Associates, LLC, a leading United States food cooperative, using the system to help its member-owners’ supermarkets trace and highlight the origin of seafood.
Topco is working with its member grocery chains, starting with Food City, to pilot the use of the technology to provide better line of sight into ethical sourcing and environmental compliance of the seafood selection sold at their stores. The first of several species to be tracked will be salmon, cod and shrimp.
It appears that this move towards food production, supply chain, and ethical traceability is fairly far removed from Mastercard’s core business of payments, but they feel their 50-plus years of experience in that space can only benefit them in this pivot.
“Innovation is part of our DNA”
I spoke with Deborah Barta, SVP, Innovation & Startup Engagement, Mastercard Labs, about this pivot and what Mastercard has gone down such a different path to their usual business.
“It is not actually a great departure from existing Mastercard capabilities,” Barta told me. “Overall, Mastercard is moving to a world beyond cards, so for us, it is about building alternate businesses, alternate networks are part of our DNA. Innovation is part of our DNA.”
Barta then explained the challenge that Mastercard had identified and why they were entering the arena of blockchain food track and trace.
“So the challenge we are going after with this move… If you look at consumer relationships over time, now consumers are demanding businesses with value alignment, they are looking at how things are made, where they are made, what they are made from,” she began.
“Then, if you flip it onto the other side and look at what brands and companies are going through, they are living in these complex, fragmented supply chains that often are difficult to examine and look at individual items. So, what we have done is said, what if we take the blockchain as the foundational element to enable unprecedented visibility, to track and trace items from origin all the way through to the consumer’s hand, or plate.”
“That gives us the ability to convey the sustainability practices and the ethical sourcing and environmental compliance, but also give us the opportunity to engage the supply chain with improvements and back-end decisions, and even AI. Then on the consumer end, they are also empowered to see that product journey to discover where it came from, how it was made with data that has irrefutable been posted onto the blockchain, so it builds that trust.”
This issue is being addressed in a number of different ways, by a number of different companies and blockchain consortiums. However, that does not perturb Mastercard, who believes that with their general payment network infrastructure and blockchain experience, they can provide a world-class platform.
“When you look at the capability of blockchain, we have our own private, permissioned blockchain that we built from the ground up about five or six years ago,” Barta added. “It mirrors the main tenets of our payment network, which means that when we go to market, we go at scale.
“So, we already have that. But blockchain alone is just a technology; you have to have what we call franchise capability. As well as off the shelf services from Mastercard are also layered into these networks.”
“The way we look at this is that we need a complete system to make the market successful, so again, the difference between the basic technology of blockchain vs. the consortium of what you bring to make that network work is the critical difference here.”
“We bring over 50 years of franchise experience, and that comes to the table on day one. Then also the layered services which come with it, if our partner comes in and says we need a financial inclusion play, or even b2b payments leveraging blockchain, we can do it. It is the package of that, that is huge.”
A step in the right direction
Mastercard is no strangers to the blockchain, nor payments, and even cryptocurrencies; however, this move to food track and trace is a little different from them. That being said, it is also a step in the right direction for a company that is aware of the need to innovate.
They have latched onto the necessity of blockchain technology, and they have now taken it a step further to isolate the importance of food track and trace. With this, they can be at the forefront of the blockchain revolution, but they can also utilize their valuable experience and payment network expertise to make this a success from the outset.