Case hands on the data warehouse concept

Case Study 3

MASTERING
MASSIVE DATABASES AT MASTERCARD INTERNATIONAL

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1.      
MasterCard managers are motivated to increase
(1) the number of individuals who have and use a MasterCard credit card, (2)
the number of banks and other clients who issue Master Cards to customers
and/or employees, and (3) the number of locations that accept MasterCard
payments. Discuss how MasterCard could use its data warehouse to help it expand
each of these customer bases.

Answer:

Credit cards are one of
the biggest businesses in the market since several years. MasterCard’s data
warehouse has emerged to play an important role in the company’s competitive
strategy. This global data has turned into a business knowledge (BI) motor that
enables the credit card giant and its customers settle on more powerful
business choices. Master Card’s executives quickly got hands on the data
warehouse concept suggested by the IT division as a potential distinct
advantage. MasterCard administrators normally required a detailed business case
legitimizing IT venture suggestions, yet for this situation, the officials
right away perceived the proposed information distribution center as a vital
move to give MasterCard a focused edge. MasterCard needed to enhance piece of
the overall industry. At the time, MasterCard represented just around 25% of
charges for products sold overall utilizing MasterCard, with Visa representing
half. Since the production of the information stockroom, MasterCard’s piece of
the overall industry expanded to 31%. Even though Visa keeps on being the
business pioneer, MasterCard’s part as a worldwide pioneer in charge card
preparing has reinforced. Financial institutions that use MasterCard depend on
the historical backdrop of Visa

2.      
MasterCard makes its analytics tools available
to all of its member banks and other issuers. It knows that getting its clients
to use these tools can be critical to keeping them as loyal customers. Discuss
the steps that MasterCard can take to promote greater use of its BI and
reporting tools by its clients. Who do you think larger or smaller clients will
benefit most from MasterCard’s analytics tools? Why?

 

Answer: MasterCard runs a combination of
homegrown and off-the-rack investigative devices to distinguish purchasing
patterns, charge card misrepresentation, and other valuable data. The
organization can connect and break down exchanges to decide a buyer’s advantage
or recognize irregularities that recommend a card has been stolen. MasterCard
offers bank customers access to these tools, and custom reports. Among the
signature applications gave by MasterCard is its Portfolio Analytics suite of
BI and announcing instruments. This suite incorporates an extensive variety of
standard reports that let individuals breakdown exchanges each day, week, or
month and contrast the outcomes with various parts of the nation, different
parts of the world, or predefined gatherings of comparable banks. MasterCard
keeps on growing the span of the information store and the apparatus set. The objective
is to incorporate each exchange dealt with by individuals over a three-year
times pan, catching the dollar sum, the card number, the area, and the vendor
in each occasion. In any case, it is the arrangement of utilizations gave to
individuals that is pivotal in increasing aggressive edge. MasterCard means to
pick up support with portfolio directors and part banks, who choose whether to
push Visa or MasterCard. If the online tools enable managers to examine the
productivity of the cards in their portfolio better or acquire clients and exchange
volume quicker, at that point MasterCard benefits.

 

3.      
Do some
Internet research to identify examples of “tap & go” applications. What are
some typical types of “tap & go” payment applications and what growth
trends are expected? Do you think that there are limits to the types of
applications that “tap & go” payments can be used for? Why or why not?

Answer: Tap
& Go payments are being made via traditional plastic cards but also with
new payment devices such as mobile phones, watches, or stickers – the method of
choice of the individual consumer. Transit, from public buses to highway toll ways,
also continues to offer some of the greatest opportunities for contactless.
MasterCard Pay Pass is being tested and used at some of the world’s busiest
commuter hubs to improve the speed, convenience, security and reliability of
transit systems by displaying cash and outdated systems. Mobile phones are at
the center of a fundamental shift in consumer’s everyday lives. MasterCard is
helping consumers use their phones in day-to-day activities, allowing them to
leave their wallet at home and rely on their mobile phone:

a) Tapping the phone to pay with Near
Field Communication (NFC) – enabled handset.

(b) Having greater control of
their card accounts through MasterCard in control and text messages, with
important purchase and account information direct through to their mobile
phone.

(c) Using a convenient, secure
platform for all kinds of payment-related activities from their mobile phones.

(d) Using the phone to authenticate
purchases, helping to secure their card-not-present transactions.

 

However, contactless cards are
accepted at far fewer locations than mag-stripe. Consumers cannot leave home
with only their NFC-capable phone, because they willing evitably need a mag
stripe to pay. If you have multiple cards in your wallet and you pay without
removing them, the winner is random luck. Sometimes, this can cause real issues

 

4.      
Do
some research on the extent to which MasterCard’s Pay Pass digital wallet is being
embraced as a payment mechanism for online purchases. What are the advantages
and disadvantages of digital wallets such as Pay Pass? What can MasterCard do
to encourage online merchants to accept Pay Pass digital wallet payments?

 

ADVANTAGES OF DIGITAL WALLET:

(a) Lower Cost: Employing the use of digital wallets removes the
need for intermediaries, in a variety of forms. Purchases in-store may no
longer require a cashier because the purchasing process becomes a tap or scan
of a mobile device.

(b) Competitive Advantage: Digital wallet applications provide a
more convenient transaction processing method for customers, giving businesses
that employ this technology a competitive edge in the market. It redefines the
user experience of paying and incorporates a novelty aspect to each purchase.

(c) Convenience: Users can get through a purchase in mere seconds
with a simple tap or scan of their mobile device. The experience of purchasing
items becomes quicker and easier-leading to a greater sense of satisfaction.
Also, with faster transactions, check outlines within stores become much
stronger.

DISADVANTAGES OF DIGITAL WALLET

(a) Investment: The initial monetary investment for building a
functional digital wallet application is quite large. It requires the initial
development of the software as well as the continual maintenance, updates and
fixes associated with it. Upon acquiring software, the business would also need
to install the corresponding hardware in their stores, which leads to a further
increase in costs.

(b) Support Technology: There are few supporting technologies to
choose from now, with NFC terminals and phone readers being the most prevalent.
In the case of digital wallets, they can only function with a corresponding
hardware device for each application. NFC terminals and specialize scanners are
the only devices created now that will support the processing of digital wallet
payments; thus, it is very limited because the technology is still new.

c) System Outages: Information for digital wallets are stored on
the cloud of business servers; therefore, the risk of a system malfunction or
shut down is always present. As a result, businesses will not be able to
process payments or they will become increasingly slow due to high traffic in
the servers.

 

(d) Security: Companies must ensure that their customers’
information is encrypted and well protected. They must develop security systems
that are as safe and full proof as possible to avoid potential security issues.
Pay Pass Wallet Services is an attempt to expand it to online stores and mobile
phone users. Merchants want flexibility to easily accept digital payments so
they can convert more browsers to buyers. MasterCard plans to allow banks,
merchants and other partners to use its own technology to create their own
digital wallets. It will also distribute developer tools to allow other digital
wallets to connect to the Pay Pass acceptance network, allowing their customers
to make purchases online or in stores that accept PayPass.

 

 

 

 

 

5.      
Supporting
mobility and smart phone apps is important to MasterCard. What challenges does
MasterCard face in rolling out smart phone payment systems? Which of these do
you think will be most difficult to address? Why?

 

Answer:

A mobile payment process works by providing two parties in a
transaction with a single touch point, such as bank or credit card service or a
payment-service provider. Mobile payment technologies are defining the next
generation of commerce. Retailers face several challenges in adopting these new technologies. The
retail payment transactions have been initiated by an in-store point-of-sale
system that reaches out to the payment processor for authorization. With the
emergence of mobile payments, customers can now initiate payments through
cloud-based mobile applications that don’t require a POS transaction. Given
this, store locations are faced with real obstacles in successfully managing
the coming influx of cloud-initiated transactions. One significant problem individual
stores will face is how to account revenue from, and cost of, cloud-purchased goods
sourced locally from their store site. There are few solutions that connect the
cloud transaction to the specific store site where the goods are bought,
therefore, the reduced inventory cannot be reconciled with revenue generated at
the specific store site. Unless this issue is resolved, there will be little
adoption of mobile cloud to local POS payment applications. The stores will
lose potential sales and payment providers will fail to expand their market
opportunity.

 

 

 

 Case Study 3

MASTERING
MASSIVE DATABASES AT MASTERCARD INTERNATIONAL

1.      
MasterCard managers are motivated to increase
(1) the number of individuals who have and use a MasterCard credit card, (2)
the number of banks and other clients who issue Master Cards to customers
and/or employees, and (3) the number of locations that accept MasterCard
payments. Discuss how MasterCard could use its data warehouse to help it expand
each of these customer bases.

Answer:

Credit cards are one of
the biggest businesses in the market since several years. MasterCard’s data
warehouse has emerged to play an important role in the company’s competitive
strategy. This global data has turned into a business knowledge (BI) motor that
enables the credit card giant and its customers settle on more powerful
business choices. Master Card’s executives quickly got hands on the data
warehouse concept suggested by the IT division as a potential distinct
advantage. MasterCard administrators normally required a detailed business case
legitimizing IT venture suggestions, yet for this situation, the officials
right away perceived the proposed information distribution center as a vital
move to give MasterCard a focused edge. MasterCard needed to enhance piece of
the overall industry. At the time, MasterCard represented just around 25% of
charges for products sold overall utilizing MasterCard, with Visa representing
half. Since the production of the information stockroom, MasterCard’s piece of
the overall industry expanded to 31%. Even though Visa keeps on being the
business pioneer, MasterCard’s part as a worldwide pioneer in charge card
preparing has reinforced. Financial institutions that use MasterCard depend on
the historical backdrop of Visa

2.      
MasterCard makes its analytics tools available
to all of its member banks and other issuers. It knows that getting its clients
to use these tools can be critical to keeping them as loyal customers. Discuss
the steps that MasterCard can take to promote greater use of its BI and
reporting tools by its clients. Who do you think larger or smaller clients will
benefit most from MasterCard’s analytics tools? Why?

 

Answer: MasterCard runs a combination of
homegrown and off-the-rack investigative devices to distinguish purchasing
patterns, charge card misrepresentation, and other valuable data. The
organization can connect and break down exchanges to decide a buyer’s advantage
or recognize irregularities that recommend a card has been stolen. MasterCard
offers bank customers access to these tools, and custom reports. Among the
signature applications gave by MasterCard is its Portfolio Analytics suite of
BI and announcing instruments. This suite incorporates an extensive variety of
standard reports that let individuals breakdown exchanges each day, week, or
month and contrast the outcomes with various parts of the nation, different
parts of the world, or predefined gatherings of comparable banks. MasterCard
keeps on growing the span of the information store and the apparatus set. The objective
is to incorporate each exchange dealt with by individuals over a three-year
times pan, catching the dollar sum, the card number, the area, and the vendor
in each occasion. In any case, it is the arrangement of utilizations gave to
individuals that is pivotal in increasing aggressive edge. MasterCard means to
pick up support with portfolio directors and part banks, who choose whether to
push Visa or MasterCard. If the online tools enable managers to examine the
productivity of the cards in their portfolio better or acquire clients and exchange
volume quicker, at that point MasterCard benefits.

 

3.      
Do some
Internet research to identify examples of “tap & go” applications. What are
some typical types of “tap & go” payment applications and what growth
trends are expected? Do you think that there are limits to the types of
applications that “tap & go” payments can be used for? Why or why not?

Answer: Tap
& Go payments are being made via traditional plastic cards but also with
new payment devices such as mobile phones, watches, or stickers – the method of
choice of the individual consumer. Transit, from public buses to highway toll ways,
also continues to offer some of the greatest opportunities for contactless.
MasterCard Pay Pass is being tested and used at some of the world’s busiest
commuter hubs to improve the speed, convenience, security and reliability of
transit systems by displaying cash and outdated systems. Mobile phones are at
the center of a fundamental shift in consumer’s everyday lives. MasterCard is
helping consumers use their phones in day-to-day activities, allowing them to
leave their wallet at home and rely on their mobile phone:

a) Tapping the phone to pay with Near
Field Communication (NFC) – enabled handset.

(b) Having greater control of
their card accounts through MasterCard in control and text messages, with
important purchase and account information direct through to their mobile
phone.

(c) Using a convenient, secure
platform for all kinds of payment-related activities from their mobile phones.

(d) Using the phone to authenticate
purchases, helping to secure their card-not-present transactions.

 

However, contactless cards are
accepted at far fewer locations than mag-stripe. Consumers cannot leave home
with only their NFC-capable phone, because they willing evitably need a mag
stripe to pay. If you have multiple cards in your wallet and you pay without
removing them, the winner is random luck. Sometimes, this can cause real issues

 

4.      
Do
some research on the extent to which MasterCard’s Pay Pass digital wallet is being
embraced as a payment mechanism for online purchases. What are the advantages
and disadvantages of digital wallets such as Pay Pass? What can MasterCard do
to encourage online merchants to accept Pay Pass digital wallet payments?

 

ADVANTAGES OF DIGITAL WALLET:

(a) Lower Cost: Employing the use of digital wallets removes the
need for intermediaries, in a variety of forms. Purchases in-store may no
longer require a cashier because the purchasing process becomes a tap or scan
of a mobile device.

(b) Competitive Advantage: Digital wallet applications provide a
more convenient transaction processing method for customers, giving businesses
that employ this technology a competitive edge in the market. It redefines the
user experience of paying and incorporates a novelty aspect to each purchase.

(c) Convenience: Users can get through a purchase in mere seconds
with a simple tap or scan of their mobile device. The experience of purchasing
items becomes quicker and easier-leading to a greater sense of satisfaction.
Also, with faster transactions, check outlines within stores become much
stronger.

DISADVANTAGES OF DIGITAL WALLET

(a) Investment: The initial monetary investment for building a
functional digital wallet application is quite large. It requires the initial
development of the software as well as the continual maintenance, updates and
fixes associated with it. Upon acquiring software, the business would also need
to install the corresponding hardware in their stores, which leads to a further
increase in costs.

(b) Support Technology: There are few supporting technologies to
choose from now, with NFC terminals and phone readers being the most prevalent.
In the case of digital wallets, they can only function with a corresponding
hardware device for each application. NFC terminals and specialize scanners are
the only devices created now that will support the processing of digital wallet
payments; thus, it is very limited because the technology is still new.

c) System Outages: Information for digital wallets are stored on
the cloud of business servers; therefore, the risk of a system malfunction or
shut down is always present. As a result, businesses will not be able to
process payments or they will become increasingly slow due to high traffic in
the servers.

 

(d) Security: Companies must ensure that their customers’
information is encrypted and well protected. They must develop security systems
that are as safe and full proof as possible to avoid potential security issues.
Pay Pass Wallet Services is an attempt to expand it to online stores and mobile
phone users. Merchants want flexibility to easily accept digital payments so
they can convert more browsers to buyers. MasterCard plans to allow banks,
merchants and other partners to use its own technology to create their own
digital wallets. It will also distribute developer tools to allow other digital
wallets to connect to the Pay Pass acceptance network, allowing their customers
to make purchases online or in stores that accept PayPass.

 

 

 

 

 

5.      
Supporting
mobility and smart phone apps is important to MasterCard. What challenges does
MasterCard face in rolling out smart phone payment systems? Which of these do
you think will be most difficult to address? Why?

 

Answer:

A mobile payment process works by providing two parties in a
transaction with a single touch point, such as bank or credit card service or a
payment-service provider. Mobile payment technologies are defining the next
generation of commerce. Retailers face several challenges in adopting these new technologies. The
retail payment transactions have been initiated by an in-store point-of-sale
system that reaches out to the payment processor for authorization. With the
emergence of mobile payments, customers can now initiate payments through
cloud-based mobile applications that don’t require a POS transaction. Given
this, store locations are faced with real obstacles in successfully managing
the coming influx of cloud-initiated transactions. One significant problem individual
stores will face is how to account revenue from, and cost of, cloud-purchased goods
sourced locally from their store site. There are few solutions that connect the
cloud transaction to the specific store site where the goods are bought,
therefore, the reduced inventory cannot be reconciled with revenue generated at
the specific store site. Unless this issue is resolved, there will be little
adoption of mobile cloud to local POS payment applications. The stores will
lose potential sales and payment providers will fail to expand their market
opportunity.

 

 

 

 

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