Mastercard president and CEO Ajay Banga, says ‘rural is the new urban’ now

indica News Bureau-

Talking to a noted US daily, Mastercard CEO Ajay Banga says that while not everything will go back to pre-COVID kind of level, domestic tourism, travel, and home-decoration will gain momentum as people will go by ‘rural is the new urban’ and try to travel as close as possible, until such time a vaccine is developed.

Now the way we’ve defined the stages of this crisis for the company and for our investors and every employee. It is said that there are four stages. The first stage is containment, second phase is stabilization, third phase which, for want of a better word, we call normalization and the last is growth, he said.

“It’s not really normal in the sense that not everything will go back to pre-COVID kind of level. It’s actually lower than pre-COVID-19, but it’s coming off the bottom, and you probably won’t get the same recovery in long-distance travel or in mass entertainment. But you will in pent up demand for certain things. And it could be something as simple as hair and beauty pigments or gym memberships. Or like I said, home improvement,” Banga said to The Hill. “And maybe intraregional travel or domestic travel. Or as I say recently, “rural is the new urban” for tourism, in the U.S. as well. People will drive to nearby hotels to give themselves that weekend treat that they have wanted.”

Adding that things will not be like before until a vaccine is developed, he said “I think that’s going to need a vaccine, things that build back consumer confidence and business confidence to what it felt like prior to COVID-19. I would say nobody’s back at that phase. Obviously and it’s not linear. Some countries have moved from containment to normalization and have gone backwards”

Commenting on the financial crisis that accompanies the crisis, he said that it was mostly because institutions had lost trust.

“The fact is, even before the crisis, multilateral institutions that had been created in the last century were created to enable economies to operate on a platform that generated trust by the outside interpretation of those rules by third parties who were meant to be impartial. Now we’ve seen those very multilateral institutions over the last decade or two slowly begin to break down from their level of operation prior to that. So I would argue that they’ve already worn down the trust environment of big economies on a number of the issues.” he said.

“…you look at the United States, what’s our strength? Our strength is human capital and our strength is our innovation and ingenuity and economies of scale, which allow us to benefit from an open trading environment. If you don’t manage and nurture our human capital, if you don’t manage and nurture an open trading environment. Level playing field — not an open trading environment where we operate with both hands tied behind our back, but a level playing field, open trading environment, then I think we can be leaders in the space of helping to rebuild this trust across the quality of nations to make sure that we can keep an open trading system going.”

The fact is, the last 20, 30 years, the growth in the world’s economies would not have happened. The reduction in poverty would not have happened without an open trading environment, he said.

He further stressed upon putting the consumers first while talking about developing digit spaces for economic growth, keeping cybersecurity and the consumer’s privacy as a priority. He further said that there was a dire need for data responsibility principles.

He said, “Now in the digital space, trust is a very much more interesting conversation. I think it starts with being careful about your identity, about individual consumers feeling safe about their identity online.”

“And that leads to the whole conversation about digital identities that are secure with distributed platforms, cybersecurity efforts, that whole space. But I think way beyond that is the whole issue of ethical innovation. If you’re going to use artificial intelligence, if you’re going to use data for the right purposes of giving consumers and businesses better service, it is really important that we put the consumer and the business first. It’s really important that you say to a consumer: ‘This is your data. You deserve to benefit from it. You have the right to be forgotten. You have the right to have it deleted, and you must be able to feel safe when your data has been used by others.’”

“I think that kind of principle, simple principles on data, something we call our “data responsibility principles,” our data imperative, that we issued a short little while ago — I think we really need to embrace all that when we go forward in this world of 5G and IoT and interconnected devices to rebuild the trust that’s going to be important in this coming decade,” he added.

He further spoke about the decentralization and distributed databases to protect digital ID of people.

“The fact is that if you have a digital ID where the government controls every aspect of that identity, most economies like ours will feel uncomfortable with that situation. Citizens in a country like ours and parts of Europe and a number of other countries around the world are uncomfortable having the government be the be-all and the end-all of everything to do with you. Yet, the government gives your driving license. They give you a passport. Your banks have information about you when you open an account with them. Or “know your customer” for anti-money laundering. Your cellphone companies have information of where you are because of me having a GPS tracker. So, the best form of digital identity to me is a distributive platform where companies do not keep all that information with them. Neither does the government. Instead, you the consumer empower this trusted identity system to say, “Hey, can you prove to so and so I am Steve; or I am above the age of 18; or I am male,” or whatever it is you wish to prove. And that trusted player can go into those distributed identity records and only bring back that information, which is necessary to answer the limited question that you wanted to have answered.

Citing an example of a person buying alcohol from a home delivery service, to prove that the seller only needs to have the buyer’s age proof to deliver the liquor and not every last detail of the person’s life.

“Let’s say you’re buying alcohol on the web. And today a lot of people are doing that in coronavirus times, right? Home purchases of alcohol are much higher than they used to be. When they get delivered to your house, they have to make sure that you’re adult and you are the person who ordered the alcohol. You either got to sign for something, give them proof of identity. In some countries, you have to give them a driving license. And this young kid from a delivery company, take’s the photograph of your driving license. Now, on their phone, is your photograph, your full name, your exact date of birth, of course, your address. They knew that. But sometimes also the vehicle you’re allowed to drive. And, of course, your driving license number. In a number of countries, that is enough information to open a bank account in your name. I’m saying don’t do that. You only needed proof you’re above the legal age of drinking. You could do that by going into the driving license authority and bringing back the fact that Steve’s above 21. Going to the bank and having a second place to check it from. And then going to your cellphone operator and bringing back the fact that you are physically where you claim to be. Put those three points together and you can tell the delivery company, ‘Go ahead and deliver the booze, this is the guy who bought it.’”

“In fact, I give you back your privacy. I give you back your identity. But I proved to everybody in the ecosystem that you are who you are. That, to me, is the form of digital identity — distributed databases, not centralized, no honey pot which people are going to break into. And create a cooperative system where nobody owns everything, but you kind of go in and work on this together. We’ve actually built this and launched this in Australia already.”

Speaking about the sort of cash flow in the commerce side of small businesses he said that small businesses will be engines of growth around the world.

“I think, first of all, small business is the engine of growth of economies around the world, including in the U.S. I think supporting them and finding ways to make them come out of this the right way is the single best thing we can all do for the economic vitality and, frankly, the social vitality of our economy. So, I’m all-in for that one.”

He added that however, with the pandemic striking across the world, many small businesses are suffering and philanthropists should help them rise. “There is no doubt that a number of them have struggled and are struggling right now through this period. But there are those who are being innovative and creative, and they will come out in the natural process, they will probably come out stronger. And it ranges from restaurants in Brooklyn who, being unable to be open, have now repositioned themselves.”