June 12--MasterCard Inc. (NYSE: MA) is expanding its operations in Israel, by opening a subsidiary that will manage the company's activity in central and eastern Europe. It will also expand relations with fintech start-ups. MasterCard might even open a development center in Israel, similar to the centers opened by Barclays Bank plc (LSE: BARC) and Citigroup Inc. (NYSE: C), and other foreign banks.
The expansion of MasterCard's Israeli operations is part of managerial changes at its Israeli representative office. MasterCard Israel company manager Daniel Cohen is leaving after three years, to relocate to Miami, where he will head the company's Central and South America unit. He will be succeeded by MasterCard Central and Eastern Europe general manager Andras Hemberger, who will hold both positions simultaneously from Israel.
MasterCard is also hiring people in Israel to help manage the branch, which will be responsible for eight countries, including Cyprus, Hungary, and the Czech Republic.
In addition to expanding collaborations with credit card companies and the launch of contract-less credit cards for overseas use with the Israel Postal Company Ltd. and other new services, Cohen stresses relations with fintech start-ups. "There is a revolution underway in electronic payments. In Israel, this is especially prominent because of the high penetration rate of smartphones," he says. "I was surprised to discover how many financial start-ups exist in Israel. These companies are seeking money, but relations with relevant foreign companies that can suit them."
Two years ago, Cohen initiated a competition for fintech companies in Israel, which he said has become a driving force for these companies and drew the attention of MasterCard's headquarters.
"Globes": What do you get by sponsoring this competition?
Cohen: "Belying what people think, MasterCard is not a credit card company, but a technology vendor. We try to offer our customers, which are banks and credit card companies, technology solutions. Our activity with Israeli start-ups allows us to integrate them into MasterCard products. This is important for us to meet new competitors and threats, such as PayPal."
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