There are brand deals and then there are deals with the Board of Control for Cricket in India (BCCI). Any brand collaborating with the BCCI is after the massive reach cricket offers and Mastercard is no different. With mobile payments and financial services company Paytm ending its seven-year association with BCCI as title sponsor and Mastercard set to take over, credit cards will be back in the limelight, experts said.
The global payments major, Mastercard, is reportedly set to replace homegrown Paytm as the title sponsor for BCCI’s international and domestic cricket matches till 2023, after Paytm reportedly requested a withdrawal from the deal.
Hindol Purkayastha, executive vice-president, Dentsu Impact, said that for Mastercard, it is about making its presence felt in the market. “I feel the need is now,” he said.
But why? According to him, the expanding digital payments industry has literally stolen any impetus brands like Mastercard had. “The pandemic brought about a flurry of new options for digital payments for consumers which has left India’s credit card market at crossroads. Also, with options of ‘Buy now, pay later’ offerings, credit card customers are surely being lured further away,” he said.
As per the Reserve Bank of India’s (RBI’s) Annual Report, during 2020-21, the number of card payment transactions carried out through credit cards and debit cards decreased by 19 percent and 20.6 percent, respectively. This resulted in a decrease in value of credit card transactions by 13.7 percent and debit card transactions by 5.9 percent during the same period.
The report further said that Prepaid Payment Instruments (PPIs) recorded contraction in volume by 7.4 percent during the year as against a growth of 15.7 percent a year ago, while the transaction value at 1.97 lakh crore was lower by 8.3 percent vis-à-vis last year.
The title sponsorship spot with BCCI can play an instrumental role in bringing back the excitement in the category, across markets.
Storyboard18 reached out to Mastercard and Paytm, and this story will be updated with their responses.
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Purkayastha said it will be interesting to see how Mastercard starts using the visibility and what is the strategy and communication they bring when they get such visibility. Does it focus on business SMEs, does it address convenience or does it focus on security and reliability in a world of increasing cyber-related issues and digital frauds?
“Either way we can expect some interesting shots from Mastercard when they start this association. As for Paytm, they have surely leveraged what they needed from the BCCI. The cost of the association being in such astronomical figures, I do agree that even a year saved seems like a smart move,” he added.
In August 2019, Paytm had renewed its title sponsorship rights with BCCI for all international and domestic matches played by the Indian cricket team. The deal cost the company Rs 326.80 crore for 2019-23, which was around 60 percent costlier than what they paid for the rights for the 2015-2019 period.
From a broader industry view, executives Storyboard18 spoke to also pointed out that as the funding winter sets in and as startups head the IPO way, they are diverting resources to strengthen financials and are rationalising advertising spends.
But is it still a good move for Paytm?Ankur Pujari, co-founder and growth lead, digital agency Hyper Connect Asia, said that giving away the title sponsor spot has been a difficult decision for Paytm as they still need constant top-of-mind awareness, not just for acquiring new customers (which would have attained sustained velocity) but also for keeping the users active and making them use the app, and most importantly, block the rise of competition like Phonepe and others.