1 00:00:02,440 --> 00:00:05,320 Speaker 1: There's an old saying in finance that cash is king, 2 00:00:05,559 --> 00:00:08,280 Speaker 1: but when it comes to payments, the data suggests that's 3 00:00:08,320 --> 00:00:11,440 Speaker 1: no longer exactly the case. According to the latest World 4 00:00:11,440 --> 00:00:14,640 Speaker 1: Pay Report, cash now figures in less than twenty percent 5 00:00:14,760 --> 00:00:18,599 Speaker 1: of in person transactions around the world. The payments industry 6 00:00:18,600 --> 00:00:23,480 Speaker 1: from the beginning has has really focused on getting people 7 00:00:23,560 --> 00:00:27,240 Speaker 1: to use electronic forms of of of pain. In fact, 8 00:00:27,280 --> 00:00:30,440 Speaker 1: if you look at like the US, for example, you 9 00:00:30,560 --> 00:00:34,680 Speaker 1: basically have been moving around two to three of payments 10 00:00:34,720 --> 00:00:38,640 Speaker 1: from cash and check to some form of direct electronic 11 00:00:39,200 --> 00:00:43,040 Speaker 1: just about every single year. To regard volumes ex China 12 00:00:43,120 --> 00:00:47,639 Speaker 1: today at twenty trillion dollars and there's another fourteen trillion 13 00:00:47,680 --> 00:00:51,160 Speaker 1: dollars worth of cash and check left to digitized Even 14 00:00:51,159 --> 00:00:55,000 Speaker 1: at level god, penetration is growing, so yes, we are 15 00:00:55,480 --> 00:00:59,360 Speaker 1: moving towards a cash society. A new technology has promised 16 00:00:59,360 --> 00:01:02,920 Speaker 1: to kick these trends into a higher gear. The terminal 17 00:01:03,040 --> 00:01:06,600 Speaker 1: on the till of the merchant, depending on how old 18 00:01:06,680 --> 00:01:09,240 Speaker 1: one is, one is used to that at least in 19 00:01:10,319 --> 00:01:15,800 Speaker 1: the developed world, but that is not everywhere. But everyone 20 00:01:16,400 --> 00:01:19,840 Speaker 1: has a phone, so electronic payments can end up in 21 00:01:19,880 --> 00:01:23,520 Speaker 1: a super simple way in everybody's hands, and for our business, 22 00:01:23,560 --> 00:01:29,040 Speaker 1: that's a massive growth opportunity. MasterCard is already seizing that opportunity. 23 00:01:29,080 --> 00:01:34,520 Speaker 1: After dipping in revenues shot past pre pandemic levels driven 24 00:01:34,520 --> 00:01:38,720 Speaker 1: by a rebound consumer spending. CFO Sachein Mehra knows that 25 00:01:38,760 --> 00:01:41,039 Speaker 1: this boom is likely to fade, and he's set on 26 00:01:41,160 --> 00:01:44,280 Speaker 1: finding ways to keep the momentum going. The key to 27 00:01:44,959 --> 00:01:48,120 Speaker 1: being successful in this kind of environment is to have 28 00:01:48,160 --> 00:01:50,880 Speaker 1: a diversified portfolio. You've got to be nimbled from an 29 00:01:50,880 --> 00:01:53,480 Speaker 1: expense standpoint, You've got to be very disciplined as a 30 00:01:53,520 --> 00:01:55,320 Speaker 1: finance officer. What I've got to do with I'm going 31 00:01:55,320 --> 00:01:58,080 Speaker 1: to make sure that we are investing in those resources 32 00:01:58,720 --> 00:02:02,080 Speaker 1: which are currently demand from a customer standpoint, but at 33 00:02:02,080 --> 00:02:04,720 Speaker 1: the same time not losing sight of the long term. 34 00:02:04,920 --> 00:02:07,800 Speaker 1: CEO Michael me Back counts on Meyer to do more 35 00:02:07,960 --> 00:02:10,799 Speaker 1: than just oversee the balance sheet. The top line for 36 00:02:10,919 --> 00:02:17,320 Speaker 1: me is um advisor and confident your conciliary. Yes, he's 37 00:02:17,400 --> 00:02:21,239 Speaker 1: quite happy pushing back and saying vice versa. The rule 38 00:02:21,280 --> 00:02:24,240 Speaker 1: of the chief financial officer has actually changed fairly dramatically 39 00:02:24,480 --> 00:02:27,440 Speaker 1: over this twenty plus year tenure that I've had, you know, 40 00:02:27,440 --> 00:02:29,440 Speaker 1: in the past, it was more of a function of, 41 00:02:29,680 --> 00:02:32,000 Speaker 1: you know, let's make sure the numbers are good. Let's 42 00:02:32,000 --> 00:02:34,160 Speaker 1: make sure we've got a great control environment. Let's make 43 00:02:34,200 --> 00:02:36,839 Speaker 1: sure we're actually able to close the books on time. 44 00:02:36,919 --> 00:02:39,280 Speaker 1: Let's make sure we've got all the financial elements of 45 00:02:39,320 --> 00:02:42,320 Speaker 1: the business in order. The job of the CFO in 46 00:02:42,320 --> 00:02:45,000 Speaker 1: in our view, in my view, is a function of 47 00:02:45,320 --> 00:02:48,680 Speaker 1: making sure we're creating the right linkage between what the 48 00:02:48,680 --> 00:02:51,360 Speaker 1: purpose of the business is, what the strategy of the businesses, 49 00:02:52,120 --> 00:02:55,120 Speaker 1: and delivering on the financial returns for the company, all 50 00:02:55,120 --> 00:02:57,600 Speaker 1: while driving long term sharehold of that. We're in the 51 00:02:57,600 --> 00:03:00,920 Speaker 1: business of leading beyond the numbers. It's great that we 52 00:03:01,000 --> 00:03:03,320 Speaker 1: know what the numbers are, how do we use those 53 00:03:03,400 --> 00:03:07,640 Speaker 1: numbers to better drive execution of the business to accomplishment 54 00:03:07,639 --> 00:03:23,720 Speaker 1: of the strategy of the company. Master Cards core business 55 00:03:23,840 --> 00:03:27,720 Speaker 1: is no surprise cards. Card At products currently account for 56 00:03:27,760 --> 00:03:31,280 Speaker 1: over half the company's revenue. The company set ambitious growth 57 00:03:31,280 --> 00:03:35,400 Speaker 1: targets that investor day, committing to expand this core and 58 00:03:35,440 --> 00:03:38,960 Speaker 1: to diversify beyond it. We've been on a six year 59 00:03:39,040 --> 00:03:43,440 Speaker 1: strategy to be a multi rail company. In plain English, 60 00:03:43,440 --> 00:03:45,960 Speaker 1: that means whichever way you pay, wee will enable that 61 00:03:46,600 --> 00:03:48,840 Speaker 1: despite the fact that card is in our name is 62 00:03:49,160 --> 00:03:52,240 Speaker 1: essentially any type of payment we have the reach. So 63 00:03:52,280 --> 00:03:55,240 Speaker 1: I think we're reasonably well positioned. I mean, you've just 64 00:03:55,320 --> 00:03:58,360 Speaker 1: got to recognize not only where the consumers today, but 65 00:03:58,400 --> 00:03:59,920 Speaker 1: where they're gonna go, because a lot of what we 66 00:04:00,040 --> 00:04:02,960 Speaker 1: got to do takes time to implement, and is it difficult. 67 00:04:03,080 --> 00:04:04,960 Speaker 1: You'll get something, You'll get it right, sometimes you'll get 68 00:04:05,000 --> 00:04:06,800 Speaker 1: it wrong sometimes, but hopefully you're getting it right more 69 00:04:06,800 --> 00:04:08,800 Speaker 1: often than you can get wrong, and you're working with 70 00:04:08,840 --> 00:04:13,040 Speaker 1: through the forecasting preferences. Is complicated by an uncertain economy. 71 00:04:13,440 --> 00:04:17,160 Speaker 1: Consumer confidence has been plunging to historic laws, and recession 72 00:04:17,200 --> 00:04:20,359 Speaker 1: calls are getting louder. Still, a slowdown isn't likely to 73 00:04:20,400 --> 00:04:23,800 Speaker 1: cause a crisis for master Card and it's peers. Contrary 74 00:04:23,920 --> 00:04:27,640 Speaker 1: to what people often perceived, I think payments as an 75 00:04:27,680 --> 00:04:34,800 Speaker 1: industry it will be quite fasiliantiny Downtown. Generally speaking, even 76 00:04:34,880 --> 00:04:38,719 Speaker 1: during a recession, the amount that consumers spend actually does 77 00:04:38,760 --> 00:04:42,080 Speaker 1: not go down. It continues to grow. I think the 78 00:04:42,080 --> 00:04:44,919 Speaker 1: thing that people are worried about more um in the 79 00:04:44,920 --> 00:04:47,520 Speaker 1: payments industry is kind of how does the mix of 80 00:04:47,600 --> 00:04:50,720 Speaker 1: spending change? The first thing that typically happens if you're 81 00:04:50,760 --> 00:04:53,320 Speaker 1: going into a recessionary environment, is people tend to pull 82 00:04:53,360 --> 00:04:56,680 Speaker 1: back on discretionary categories to spend. They move into um 83 00:04:57,080 --> 00:05:01,200 Speaker 1: the non discretionary categories of spend, the pivot into food, 84 00:05:01,400 --> 00:05:04,840 Speaker 1: they've pivot into m rent, those kind of payments which 85 00:05:04,839 --> 00:05:06,839 Speaker 1: are most important for them to meet. But the rails 86 00:05:06,839 --> 00:05:10,159 Speaker 1: still stay the same. So the reils which run debit 87 00:05:10,240 --> 00:05:12,520 Speaker 1: and credit are exactly the same, the technologies the same, 88 00:05:12,560 --> 00:05:16,400 Speaker 1: the distribution models the same, so those those areas don't 89 00:05:16,440 --> 00:05:19,400 Speaker 1: necessarily changed by virtue of moving into more of a 90 00:05:19,440 --> 00:05:22,600 Speaker 1: debit or credit environment. One area that master Card has 91 00:05:22,600 --> 00:05:25,880 Speaker 1: been moving vigorously into is B two B payments, a 92 00:05:25,960 --> 00:05:29,160 Speaker 1: market expected to reach twenty five trillion dollars by the 93 00:05:29,240 --> 00:05:32,000 Speaker 1: end of the decade. We think there's tremendous promise in 94 00:05:32,040 --> 00:05:35,400 Speaker 1: the B two B area. The card business as in 95 00:05:34,880 --> 00:05:37,520 Speaker 1: the elements of the B two B space which are 96 00:05:37,560 --> 00:05:41,080 Speaker 1: served by cards are doing well. Are they doing very well? 97 00:05:41,120 --> 00:05:43,400 Speaker 1: And it's in the small business space and the mid market, 98 00:05:43,480 --> 00:05:45,520 Speaker 1: it's in the large corporate space. All of them do 99 00:05:45,600 --> 00:05:48,720 Speaker 1: really well. On the accounts payable side. I would say 100 00:05:48,720 --> 00:05:52,120 Speaker 1: we're in the build phase, and here we're about building 101 00:05:52,400 --> 00:05:56,360 Speaker 1: an open loop environment to enable payments on accounts pable rails, 102 00:05:56,880 --> 00:06:01,960 Speaker 1: whereas the opportunity in that spaces different to consumer payments 103 00:06:02,000 --> 00:06:05,200 Speaker 1: where there is a global standard. The global standard is MasterCard. 104 00:06:05,360 --> 00:06:08,800 Speaker 1: The global standard are Card payments, because that's been established, 105 00:06:09,240 --> 00:06:11,800 Speaker 1: that isn't quite established yet and B two B and 106 00:06:11,839 --> 00:06:14,360 Speaker 1: I think the more benefits we bring into the payments 107 00:06:14,400 --> 00:06:17,360 Speaker 1: that are easier than just making a really complicated cross 108 00:06:17,360 --> 00:06:19,520 Speaker 1: border payment, I think we will find out way there 109 00:06:19,560 --> 00:06:22,160 Speaker 1: and we're going to see an explosion of creativity, a 110 00:06:22,200 --> 00:06:24,559 Speaker 1: lot of other companies coming in and using those rails, 111 00:06:24,600 --> 00:06:28,160 Speaker 1: innovating on top of the pursuing new opportunities, takes capital. 112 00:06:28,600 --> 00:06:32,359 Speaker 1: MasterCard has spent billions acquiring companies that add capacity and 113 00:06:32,400 --> 00:06:37,120 Speaker 1: diversify its infrastructure. Acquisitions and partnerships have helped MasterCard offer 114 00:06:37,200 --> 00:06:40,360 Speaker 1: more value added services to their clients, tapping into a 115 00:06:40,400 --> 00:06:46,400 Speaker 1: lucrative revenue stream. What we call services, which includes data, insights, consulting, 116 00:06:46,440 --> 00:06:51,640 Speaker 1: manage services, loyalty, and our fraud capabilities is roughly the 117 00:06:51,640 --> 00:06:55,080 Speaker 1: revenues of this company. Wow. Yeah, So it's not insignificance. 118 00:06:55,160 --> 00:06:59,479 Speaker 1: Oftentimes people think MasterCard and think Gord very important, but 119 00:06:59,520 --> 00:07:02,320 Speaker 1: there's a very different bottom masks Card as well. From 120 00:07:02,320 --> 00:07:05,800 Speaker 1: a balance sheet perspective, MasterCard has maintained a healthy leverage 121 00:07:05,880 --> 00:07:09,240 Speaker 1: ratio even as it's put more resources into acquisitions and 122 00:07:09,279 --> 00:07:13,000 Speaker 1: taken on more debt. Given the company flexibility to continue investing, 123 00:07:13,560 --> 00:07:15,880 Speaker 1: we don't go in and say, well, right now, evaluations 124 00:07:15,880 --> 00:07:17,800 Speaker 1: are lower than they were a year ago, let's go 125 00:07:17,800 --> 00:07:21,000 Speaker 1: and buy something. Um that is that is an opportunistic 126 00:07:21,000 --> 00:07:23,679 Speaker 1: approach that doesn't work for us. For me, it always starts, 127 00:07:23,720 --> 00:07:25,760 Speaker 1: what are we trying to accomplish from a strategy standpoint, 128 00:07:26,240 --> 00:07:29,640 Speaker 1: What our inherent capabilities we as a company have, What 129 00:07:29,720 --> 00:07:33,120 Speaker 1: are the gaps and an own capabilities to meet that strategy? 130 00:07:33,200 --> 00:07:36,040 Speaker 1: And then foll those gaps? Is it best to build? 131 00:07:36,560 --> 00:07:40,240 Speaker 1: Buy our partner, and then we're out there and we're 132 00:07:40,240 --> 00:07:42,680 Speaker 1: trying to find the right companies together. It's going to 133 00:07:42,760 --> 00:07:44,679 Speaker 1: make sure that we have a clear view on short 134 00:07:44,720 --> 00:07:48,360 Speaker 1: and long term synergies and so forth. And then we 135 00:07:48,480 --> 00:07:51,480 Speaker 1: both talked to shareholders and to investors to explain what 136 00:07:51,520 --> 00:07:53,400 Speaker 1: we're doing and why we're doing and why it's good. 137 00:07:53,960 --> 00:07:58,800 Speaker 1: Shareholders have reason to appreciate Mastercard's capital allocation strategy. It's 138 00:07:58,800 --> 00:08:03,400 Speaker 1: included annual share buy backs and steadily increased dividends. How 139 00:08:03,400 --> 00:08:05,520 Speaker 1: do you prioritize the amount of money that you put 140 00:08:05,600 --> 00:08:10,119 Speaker 1: toward innovation and toward building out different businesses versus share 141 00:08:10,160 --> 00:08:13,080 Speaker 1: buy backs and dividends because master Card has traditionally had 142 00:08:13,320 --> 00:08:16,800 Speaker 1: a robust program in rewarding shareholders, right first call of 143 00:08:16,880 --> 00:08:19,440 Speaker 1: capital is towards growth of the business. After we have 144 00:08:19,600 --> 00:08:23,040 Speaker 1: done that, it's about making sure we're being good stewards 145 00:08:23,080 --> 00:08:26,640 Speaker 1: of capital and returning excess cash to shareholders with a 146 00:08:26,720 --> 00:08:30,520 Speaker 1: biased stewards share buy backs. And then once you start 147 00:08:30,600 --> 00:08:33,880 Speaker 1: to come to say I have dealt with my strategic priorities, 148 00:08:33,920 --> 00:08:37,240 Speaker 1: I either have invested in my organic growth or in acquisitions, 149 00:08:37,800 --> 00:08:41,839 Speaker 1: then access cash. We will return back generally with a 150 00:08:41,920 --> 00:08:44,800 Speaker 1: preference for buy backs over dividend because it gives a 151 00:08:44,840 --> 00:08:48,000 Speaker 1: small flexibility. But that has been a good model for us. 152 00:08:48,040 --> 00:08:50,400 Speaker 1: It's been working well and it's been well received by 153 00:08:50,400 --> 00:08:55,760 Speaker 1: the market. Such a mirror joint master Card is Group 154 00:08:55,800 --> 00:08:59,880 Speaker 1: Executive and Corporate treasure two ten. Over the next decade, 155 00:09:00,080 --> 00:09:03,280 Speaker 1: took on several different roles before being appointed Chief managed 156 00:09:03,400 --> 00:09:07,160 Speaker 1: Officer in twenty nine. That's a very different path than 157 00:09:07,200 --> 00:09:10,000 Speaker 1: the one he started out on. I grew up in India. 158 00:09:10,360 --> 00:09:12,520 Speaker 1: I went to school there, I went undergrad there. I 159 00:09:12,520 --> 00:09:14,800 Speaker 1: worked with the family business that it's a textile business 160 00:09:14,920 --> 00:09:17,520 Speaker 1: which my grandfather started. My dad and my uncle took 161 00:09:17,559 --> 00:09:21,959 Speaker 1: over and then my brother and I got into and um. 162 00:09:22,040 --> 00:09:24,080 Speaker 1: I worked with him for three and a half years 163 00:09:24,520 --> 00:09:27,520 Speaker 1: and then I came up a business school. The moment 164 00:09:27,520 --> 00:09:30,679 Speaker 1: of truth came on graduation day. My dad got on 165 00:09:30,720 --> 00:09:35,280 Speaker 1: the phone. He congratulated me, He said, well done, graduated. 166 00:09:35,360 --> 00:09:37,760 Speaker 1: I'm looking forward to having me back home. My brother 167 00:09:37,920 --> 00:09:39,600 Speaker 1: was older than I am, who went to business school 168 00:09:39,600 --> 00:09:41,280 Speaker 1: as well and went back home and worked with my dad, 169 00:09:41,960 --> 00:09:45,120 Speaker 1: got on the phone congratulated me and said, so such 170 00:09:45,160 --> 00:09:46,800 Speaker 1: a what are you gonna do with your life? And 171 00:09:46,920 --> 00:09:49,480 Speaker 1: I'm going, well, why are we having this discussion? Dad 172 00:09:49,520 --> 00:09:51,240 Speaker 1: wants me to come up and work to the family business. 173 00:09:51,320 --> 00:09:53,040 Speaker 1: He's like, yep, that's what Dad wants you to do. 174 00:09:53,679 --> 00:09:56,520 Speaker 1: What do you want to And then it really got 175 00:09:56,520 --> 00:09:58,760 Speaker 1: me thinking and I said, hey, given a chance, I'd 176 00:09:58,800 --> 00:10:02,000 Speaker 1: love to work in finance in the US. Mara took 177 00:10:02,000 --> 00:10:04,600 Speaker 1: the chance, even though it took him six months to 178 00:10:04,720 --> 00:10:07,680 Speaker 1: land his first job at General Motors, where he worked 179 00:10:07,720 --> 00:10:10,120 Speaker 1: for over a decade. Then it was on to the 180 00:10:10,240 --> 00:10:15,440 Speaker 1: energy industry at Hess Corporation before finding his way to MasterCard. Today, 181 00:10:15,440 --> 00:10:17,720 Speaker 1: my dad couldn't be prouder of the fact that, you know, 182 00:10:18,160 --> 00:10:21,360 Speaker 1: I chose the path I did. Obviously he misses the 183 00:10:21,400 --> 00:10:23,520 Speaker 1: fact that we're not there as a family, but that's 184 00:10:23,640 --> 00:10:25,640 Speaker 1: just spott of light, right, We've all got to grow 185 00:10:25,640 --> 00:10:28,440 Speaker 1: in blossom and groom. Did he accept it at the beginning? 186 00:10:29,080 --> 00:10:31,199 Speaker 1: It took him all of thirty minutes to get there. 187 00:10:31,640 --> 00:10:34,160 Speaker 1: When Mara gets together with his team in the employee 188 00:10:34,160 --> 00:10:37,280 Speaker 1: cafe and master Card's campus, it's clear that he's in 189 00:10:37,360 --> 00:10:40,080 Speaker 1: his element. Well, more important, more fun stuff. What's the 190 00:10:40,080 --> 00:10:43,040 Speaker 1: plan for the weekend? And of course the cafe provides 191 00:10:43,120 --> 00:10:46,800 Speaker 1: a demonstration of the tap and co technology that's changed 192 00:10:46,840 --> 00:10:49,920 Speaker 1: the game for payment companies. Can I just got a 193 00:10:49,920 --> 00:10:58,240 Speaker 1: regular coffee with help? Okay? That would? You? Got it? 194 00:10:58,280 --> 00:11:00,480 Speaker 1: All right? We're gonna make this work. There we go. 195 00:11:02,880 --> 00:11:07,720 Speaker 1: I think contactless is a very powerful catalyst for accelerating 196 00:11:07,760 --> 00:11:11,400 Speaker 1: cash depot conversion. In the last two years, what we 197 00:11:11,480 --> 00:11:14,760 Speaker 1: have seen in the US is god penetration could growth 198 00:11:14,840 --> 00:11:19,000 Speaker 1: rate annually has doubled versus what was the average and 199 00:11:19,040 --> 00:11:22,000 Speaker 1: the prior five years. The pandemic was one of the 200 00:11:22,040 --> 00:11:24,679 Speaker 1: reasons people didn't want to touch cash, and there's a 201 00:11:24,720 --> 00:11:28,480 Speaker 1: lot of e commerce purchases. The contact lists definitely contributed 202 00:11:28,520 --> 00:11:30,920 Speaker 1: to this groot as well. It's made a change, it's 203 00:11:30,960 --> 00:11:33,280 Speaker 1: really made a difference. What it's really made a difference 204 00:11:33,320 --> 00:11:36,480 Speaker 1: on has been in terms of how it's driving a 205 00:11:36,559 --> 00:11:40,080 Speaker 1: shift from cash to electronic forms of payment, particularly on 206 00:11:40,120 --> 00:11:43,439 Speaker 1: the small ticket items, which is really really important because 207 00:11:43,440 --> 00:11:45,440 Speaker 1: at the end of the day, our model is as 208 00:11:45,520 --> 00:11:48,040 Speaker 1: much about converting the dollar value of the spend as 209 00:11:48,080 --> 00:11:50,000 Speaker 1: it is about the number of transactions we can get 210 00:11:50,040 --> 00:11:52,680 Speaker 1: over our network, and even though it happens to be 211 00:11:52,679 --> 00:11:55,280 Speaker 1: a two dollar transaction, transactions the transaction on which we 212 00:11:55,320 --> 00:11:58,320 Speaker 1: make revenue on which we can deliver services, and that's 213 00:11:58,360 --> 00:12:03,280 Speaker 1: really more. Master Card introduced pay pass, its first contactless 214 00:12:03,280 --> 00:12:06,400 Speaker 1: payment system, in two thousand two, but the technology took 215 00:12:06,440 --> 00:12:09,280 Speaker 1: some time to gain traction. I would say we first 216 00:12:09,320 --> 00:12:12,320 Speaker 1: invested in this many many, many many years ago. The 217 00:12:12,360 --> 00:12:15,200 Speaker 1: adoption rate on this in the early part, even in 218 00:12:15,280 --> 00:12:18,480 Speaker 1: markets like the UK, Canada, Australia, was fairly slow in 219 00:12:18,520 --> 00:12:22,440 Speaker 1: the early part. The inflection point of when it really 220 00:12:22,440 --> 00:12:24,840 Speaker 1: started to hit it stripe was when it was used 221 00:12:24,840 --> 00:12:27,560 Speaker 1: in the transit vertical. So what we figured is, let's 222 00:12:27,559 --> 00:12:30,400 Speaker 1: get all the transit systems around the globe enabled for 223 00:12:30,480 --> 00:12:33,960 Speaker 1: contact less technology. That will create muscle memory for the 224 00:12:34,000 --> 00:12:36,880 Speaker 1: consumer will like the experience in transit and will use 225 00:12:36,920 --> 00:12:40,560 Speaker 1: it elsewhere. How do you judge the revenue proposition for 226 00:12:40,679 --> 00:12:44,360 Speaker 1: MasterCard with an innovation like that and the adoption in 227 00:12:44,400 --> 00:12:46,760 Speaker 1: the pace of it. Look, I mean for us, we're 228 00:12:47,120 --> 00:12:51,040 Speaker 1: agnostic as to whether somebody's using the chip technology or 229 00:12:51,120 --> 00:12:54,320 Speaker 1: the contact less technology or you know, using the mag 230 00:12:54,360 --> 00:12:56,240 Speaker 1: stripe which was the old way of doing business. We 231 00:12:56,360 --> 00:12:58,959 Speaker 1: own revenues which are quite similar across both of those. 232 00:12:59,280 --> 00:13:01,440 Speaker 1: The revenue put aventual and upsite for us comes from 233 00:13:01,440 --> 00:13:03,880 Speaker 1: the fact that now more spend is being done on 234 00:13:03,960 --> 00:13:05,680 Speaker 1: guard based forms of payment than what's being done in 235 00:13:05,679 --> 00:13:08,280 Speaker 1: the past. So we're converting that cash over the electronic 236 00:13:08,280 --> 00:13:11,120 Speaker 1: forms of payment, which is where the implemental revenue comes from. 237 00:13:11,160 --> 00:13:15,720 Speaker 1: If contactless payments is the current revolution sweeping the payments industry, 238 00:13:15,760 --> 00:13:20,320 Speaker 1: when's the next one? I think pay with your smile, 239 00:13:21,320 --> 00:13:24,080 Speaker 1: so biometrics. I think that's where it's going to go. 240 00:13:24,640 --> 00:13:26,520 Speaker 1: And I think we've reached that point that people are 241 00:13:26,600 --> 00:13:30,360 Speaker 1: sick of too many passwords, people are sick of typing 242 00:13:30,360 --> 00:13:33,640 Speaker 1: in stuff. And there's also too many wallets and other 243 00:13:33,720 --> 00:13:36,920 Speaker 1: ideas and stuff that is around. So why don't you 244 00:13:36,960 --> 00:13:40,000 Speaker 1: just everybody has a smile, So just play with your smile. 245 00:13:40,040 --> 00:13:41,880 Speaker 1: There you go, how much are you investing in that? 246 00:13:42,000 --> 00:13:45,160 Speaker 1: How quickly do you see that becoming the next tap 247 00:13:45,240 --> 00:13:47,720 Speaker 1: and go? Yeah? So look, I think this is gonna 248 00:13:47,760 --> 00:13:49,880 Speaker 1: take a while. These things have an adoption code which 249 00:13:49,920 --> 00:13:52,560 Speaker 1: typically is fairly flattened the early part, and then you 250 00:13:52,559 --> 00:13:55,920 Speaker 1: start to see some level of steples. Mastercard's next breakthrough 251 00:13:55,960 --> 00:13:58,600 Speaker 1: maybe born in one of its global tech hubs. The 252 00:13:58,679 --> 00:14:03,240 Speaker 1: company has open to innovation centers in Australia, India, Europe, Canada, 253 00:14:03,400 --> 00:14:08,200 Speaker 1: and the United States. These are spaces where we draw 254 00:14:08,280 --> 00:14:10,880 Speaker 1: in customers, where we draw the local community. We have 255 00:14:10,960 --> 00:14:13,400 Speaker 1: them in big cities where the latest technologies and the 256 00:14:13,440 --> 00:14:15,600 Speaker 1: players are all around us. In New York City it's 257 00:14:15,600 --> 00:14:18,280 Speaker 1: in Tech Alley, and everybody in the tech industry is 258 00:14:18,320 --> 00:14:21,120 Speaker 1: around us. It's a point where people want to work 259 00:14:21,440 --> 00:14:24,920 Speaker 1: and we attract the best talent and we go and 260 00:14:24,960 --> 00:14:27,400 Speaker 1: this brings us back to the CFO. We go and 261 00:14:27,440 --> 00:14:31,000 Speaker 1: look at our vitality index. So how are the our 262 00:14:31,040 --> 00:14:33,880 Speaker 1: revenues looking what is generated from new products? What do 263 00:14:33,920 --> 00:14:36,400 Speaker 1: we see is their real momentum, is their real growth. 264 00:14:37,440 --> 00:14:40,080 Speaker 1: And if you overlay that um and link that back 265 00:14:40,080 --> 00:14:42,720 Speaker 1: to our tech hubs in these regions where we have them, 266 00:14:42,720 --> 00:14:45,840 Speaker 1: clearly that is what driving what is driving our new solutions. 267 00:14:46,200 --> 00:14:49,200 Speaker 1: From an investment standpoint, we try and make sure we've 268 00:14:49,240 --> 00:14:50,840 Speaker 1: got our foot in the door and all of these 269 00:14:50,840 --> 00:14:53,400 Speaker 1: new and emerging technologies because what we don't want to 270 00:14:53,400 --> 00:14:57,080 Speaker 1: do is play favorites with one versus the other. We 271 00:14:57,120 --> 00:14:59,640 Speaker 1: want to make sure we're investing just appropriate amounts of 272 00:14:59,640 --> 00:15:01,840 Speaker 1: money to have skin in the game to know that 273 00:15:01,880 --> 00:15:03,720 Speaker 1: if this thing has got legs to it, we want 274 00:15:03,720 --> 00:15:05,160 Speaker 1: to be at the inflection point for them. To write 275 00:15:05,160 --> 00:15:08,600 Speaker 1: out in your tech hubs, can you act like Bond 276 00:15:08,960 --> 00:15:11,520 Speaker 1: James Bond, one of the Q movies, And like the 277 00:15:11,560 --> 00:15:13,720 Speaker 1: laboratories we walk in and they you know, you sort 278 00:15:13,760 --> 00:15:16,880 Speaker 1: of face off and clear the system and they serve 279 00:15:17,400 --> 00:15:19,200 Speaker 1: there are some people who are provolution in this company 280 00:15:19,200 --> 00:15:21,000 Speaker 1: who can do that. Not everybody can and I'm not 281 00:15:21,200 --> 00:15:28,280 Speaker 1: I'm not one of them. That's not me Like many 282 00:15:28,320 --> 00:15:31,560 Speaker 1: of its counterparts, and the payments and financial services industry. 283 00:15:32,000 --> 00:15:35,800 Speaker 1: MasterCard has developed products and partnerships that bring cryptocurrencies into 284 00:15:35,800 --> 00:15:40,479 Speaker 1: its networks. I think from the payments and payments system perspective, 285 00:15:40,760 --> 00:15:45,800 Speaker 1: the players and members that make up that ecosystem are 286 00:15:45,840 --> 00:15:51,880 Speaker 1: really agnostic. To them, crypto is just another current, literally, 287 00:15:52,320 --> 00:15:57,840 Speaker 1: just another asset. At this point. The overall revenue contribution 288 00:15:58,000 --> 00:16:02,760 Speaker 1: is still so small. It's very early. But if I 289 00:16:02,760 --> 00:16:07,200 Speaker 1: am a hard company, it's better to invest and also 290 00:16:07,320 --> 00:16:10,760 Speaker 1: lean in any partner with some of these companies um 291 00:16:10,960 --> 00:16:14,200 Speaker 1: for future revenue growth rate versus kind of sitting on 292 00:16:14,280 --> 00:16:18,160 Speaker 1: the sidelines. Crypto is a term that encompasses a number 293 00:16:18,200 --> 00:16:22,440 Speaker 1: of different projects, including central bank digital currencies and private 294 00:16:22,440 --> 00:16:26,640 Speaker 1: sector stable coins, also digital assets like bitcoin. These volatile 295 00:16:26,720 --> 00:16:30,720 Speaker 1: valuations and susceptibility to fraud have raised plenty of anxiety 296 00:16:30,720 --> 00:16:34,400 Speaker 1: among investors. Master cards long term plans to stay in 297 00:16:34,400 --> 00:16:38,240 Speaker 1: the space haven't wavered. We're not really in the crypto 298 00:16:38,320 --> 00:16:41,800 Speaker 1: hype of investment investing around crypto. We like the fundamental 299 00:16:41,840 --> 00:16:44,400 Speaker 1: technology and the promise that it brings to solve problems 300 00:16:44,480 --> 00:16:46,800 Speaker 1: that have not been solved. So if we see more 301 00:16:46,840 --> 00:16:50,480 Speaker 1: revenue coming out of B two B solutions that leverage 302 00:16:50,480 --> 00:16:55,560 Speaker 1: blockchain technology, for example tokenized bank deposits, you know, just 303 00:16:55,640 --> 00:16:58,080 Speaker 1: to throw out one example, across border payments, whatever it 304 00:16:58,160 --> 00:17:00,840 Speaker 1: might be. In the crypto world, we play the rule 305 00:17:01,200 --> 00:17:04,320 Speaker 1: um as an on ramp, so people use MasterCard card 306 00:17:04,359 --> 00:17:07,639 Speaker 1: products to buy crypto, our debit and credit products. So 307 00:17:07,680 --> 00:17:10,240 Speaker 1: that's the on ramp if people want to spend money 308 00:17:10,240 --> 00:17:12,880 Speaker 1: as in fiat currency to buy crypto and react as 309 00:17:12,920 --> 00:17:15,359 Speaker 1: the off ramp. And the off ramp is when people 310 00:17:15,400 --> 00:17:18,120 Speaker 1: want to in cash it we help them actually gain 311 00:17:18,200 --> 00:17:21,040 Speaker 1: access to be able to use their crypto balance as 312 00:17:21,040 --> 00:17:24,879 Speaker 1: everywhere MasterCards excepted. We engage with central banks on central 313 00:17:24,880 --> 00:17:28,399 Speaker 1: bank digital currencies. We engage with governments on how a 314 00:17:28,480 --> 00:17:31,439 Speaker 1: policy could look like, how regulation could like look like. 315 00:17:32,359 --> 00:17:34,919 Speaker 1: We engage with the startup community and say, come on in, 316 00:17:35,040 --> 00:17:37,240 Speaker 1: let's sit around the table in one of our tech 317 00:17:37,320 --> 00:17:41,719 Speaker 1: hubs and we discuss what what solution actually is needed 318 00:17:41,720 --> 00:17:43,880 Speaker 1: by whom and how we can bring it together. They 319 00:17:43,920 --> 00:17:45,960 Speaker 1: have the greatest idea, but the greatest idea needs a 320 00:17:46,000 --> 00:17:48,520 Speaker 1: path to scale. That's what we can bring. Is there 321 00:17:48,520 --> 00:17:52,600 Speaker 1: a potential liability because of the volatility, because of how 322 00:17:53,560 --> 00:17:57,560 Speaker 1: Bitcoin and certain other cryptocurrencies have been painted, Is there 323 00:17:57,560 --> 00:18:00,760 Speaker 1: any liability for MasterCard. Yeah, well, long as we follow 324 00:18:00,760 --> 00:18:03,000 Speaker 1: our principles, we think we're in really good shape. And 325 00:18:03,000 --> 00:18:07,119 Speaker 1: the principles we care deeply about our stability as in 326 00:18:07,200 --> 00:18:10,639 Speaker 1: stability of the currency in question point number two. It 327 00:18:10,880 --> 00:18:14,840 Speaker 1: must meet consumer protection requirements, it must meet the laws 328 00:18:14,840 --> 00:18:17,159 Speaker 1: of the land. And this is not new news to us. 329 00:18:17,160 --> 00:18:19,520 Speaker 1: We've done this in the space for the last fifty years. 330 00:18:19,560 --> 00:18:22,240 Speaker 1: For everything. We've been working with regulated financial institutions on 331 00:18:22,880 --> 00:18:25,320 Speaker 1: UH and so, which is why when we got into 332 00:18:25,359 --> 00:18:27,080 Speaker 1: the space, the first thing we did was to find 333 00:18:27,119 --> 00:18:29,960 Speaker 1: principles and we will keep abiding by these principles and 334 00:18:30,000 --> 00:18:32,560 Speaker 1: what we do. Yeah, I feel happy because we're in 335 00:18:32,600 --> 00:18:37,520 Speaker 1: the discussion. We're shaping the ecosystem and then one day 336 00:18:37,680 --> 00:18:40,760 Speaker 1: it will look like what we have done in many 337 00:18:40,760 --> 00:18:44,520 Speaker 1: other spaces over years of the past years. Such in 338 00:18:44,640 --> 00:18:46,840 Speaker 1: Mira is a leader within a company that has the 339 00:18:46,880 --> 00:18:49,920 Speaker 1: power and reach to shape ecosystems, and he'll be making 340 00:18:49,920 --> 00:18:53,359 Speaker 1: strategic and financial decisions that shape the business. I wanted 341 00:18:53,440 --> 00:18:56,200 Speaker 1: to know what he sees when he looks ahead, what's 342 00:18:56,240 --> 00:18:58,680 Speaker 1: the opportunity for master Card in the next ten years 343 00:18:58,840 --> 00:19:01,800 Speaker 1: that most excites you. There still remains a very sizeable 344 00:19:01,920 --> 00:19:05,720 Speaker 1: consumer payments opportunity which we stand very well poised to 345 00:19:05,840 --> 00:19:09,399 Speaker 1: actually capitalize on. This is the trend of the shift 346 00:19:09,440 --> 00:19:11,760 Speaker 1: from cash to electronic forms of payment. If you think 347 00:19:11,760 --> 00:19:15,120 Speaker 1: about it globally, there's still a ton of cash which 348 00:19:15,160 --> 00:19:18,200 Speaker 1: remains to be electronifying, and that that opportunity is huge. 349 00:19:18,840 --> 00:19:22,520 Speaker 1: The second pillar for me is around we have identified 350 00:19:22,600 --> 00:19:26,439 Speaker 1: over the past few years a sizeable total addressable market 351 00:19:26,680 --> 00:19:29,400 Speaker 1: in what we call new payment flows. Bucket number three 352 00:19:29,480 --> 00:19:33,440 Speaker 1: is around services. It goes back to our insights, analytics, 353 00:19:33,480 --> 00:19:36,959 Speaker 1: are fraud management capabilities and everything we're doing in that space. 354 00:19:37,240 --> 00:19:39,440 Speaker 1: And then the last piece around new networks, which is 355 00:19:39,480 --> 00:19:42,800 Speaker 1: around open banking and digital identity. What are some of 356 00:19:42,840 --> 00:19:45,359 Speaker 1: the challenges from MasterCard over the next ten years that 357 00:19:45,480 --> 00:19:47,679 Speaker 1: keep you up at night. It's around staying plugged in 358 00:19:47,920 --> 00:19:50,960 Speaker 1: on what's going on from a technology innovation standpoint and 359 00:19:51,000 --> 00:19:54,159 Speaker 1: making sure we're leading from the front, not turning our 360 00:19:54,200 --> 00:19:56,159 Speaker 1: back to it and saying we're going to walk in 361 00:19:56,200 --> 00:19:59,040 Speaker 1: the other direction. We've got to engage with people who 362 00:19:59,040 --> 00:20:03,679 Speaker 1: could potentially be disintermediators competitors to let them know what 363 00:20:03,800 --> 00:20:06,520 Speaker 1: value we can bring while they're executing on their strategy. 364 00:20:06,600 --> 00:20:10,439 Speaker 1: So that's number one. Number two is look, I mean, 365 00:20:10,440 --> 00:20:14,480 Speaker 1: the world is getting more and more into a regulatory 366 00:20:14,560 --> 00:20:18,119 Speaker 1: environment where regulations, regulators are playing a bigger role, nationalism 367 00:20:18,240 --> 00:20:20,439 Speaker 1: is playing a bigger role. It's important for us to 368 00:20:20,520 --> 00:20:23,439 Speaker 1: continue to do everything we're doing by being deemed local. 369 00:20:24,240 --> 00:20:27,199 Speaker 1: It's important to be a global company, but be deemed local. 370 00:20:27,480 --> 00:20:29,520 Speaker 1: And that's going to be important for us to execute 371 00:20:29,560 --> 00:20:31,320 Speaker 1: on because at the end of the day, sitting in 372 00:20:31,320 --> 00:20:35,280 Speaker 1: my role as the CFO, strategy is great, visions, fantastic, 373 00:20:35,520 --> 00:20:38,160 Speaker 1: but what really matters is can you really deliver and execute? 374 00:20:38,440 --> 00:20:40,920 Speaker 1: And we've got to stay focused on execution and that's 375 00:20:40,920 --> 00:20:42,960 Speaker 1: what we do every day. What's the biggest change that 376 00:20:43,000 --> 00:20:45,200 Speaker 1: you see a role having over the next ten years. 377 00:20:46,119 --> 00:20:49,680 Speaker 1: That's a good question. Honestly, I am not really in 378 00:20:49,720 --> 00:20:51,879 Speaker 1: the business of predicting that much as it relates to 379 00:20:51,880 --> 00:20:53,800 Speaker 1: how it's going to change. What I can see happening 380 00:20:54,280 --> 00:20:59,960 Speaker 1: is greater emphasis on making sure we're leading from the front. 381 00:21:00,040 --> 00:21:04,359 Speaker 1: It on executing, but also failing fast. And that's where 382 00:21:04,480 --> 00:21:06,960 Speaker 1: a CFO can play a big role. And by that 383 00:21:07,040 --> 00:21:10,160 Speaker 1: I mean that you're not always gonna win the things 384 00:21:10,200 --> 00:21:12,960 Speaker 1: you're gonna do. Hopefully you get more right than wrong, 385 00:21:13,359 --> 00:21:16,440 Speaker 1: but recognizing things which are not working out and making 386 00:21:16,440 --> 00:21:18,840 Speaker 1: sure you actually fail fast on them and get out 387 00:21:18,840 --> 00:21:20,280 Speaker 1: of them. Because you can get you can fall in 388 00:21:20,320 --> 00:21:24,119 Speaker 1: love with stuff, keep doing it, keep wasting resources to 389 00:21:24,119 --> 00:21:26,359 Speaker 1: only realize that it's not going to pay off. And 390 00:21:26,400 --> 00:21:28,560 Speaker 1: I think the emphasis around that is going to only 391 00:21:28,600 --> 00:21:31,520 Speaker 1: increase for that for CFOs in a scarce capital resource environment. 392 00:21:31,720 --> 00:21:34,920 Speaker 1: What advice would you give a CFO today. I think 393 00:21:34,920 --> 00:21:38,520 Speaker 1: it's important to stay calm. I think it's important to 394 00:21:38,520 --> 00:21:41,800 Speaker 1: recognize that change is going to happen. You can't fight change. 395 00:21:42,440 --> 00:21:44,879 Speaker 1: What really matters is how you can get up and 396 00:21:44,920 --> 00:21:47,959 Speaker 1: I actually deal with that change. That's super important for 397 00:21:48,000 --> 00:21:53,000 Speaker 1: a CFO. Being really clear and crisp in your communications. 398 00:21:53,200 --> 00:21:56,560 Speaker 1: The outside world wants to hear in very simple terms 399 00:21:57,280 --> 00:22:00,480 Speaker 1: what exactly this company stands for and why they should 400 00:22:00,480 --> 00:22:03,399 Speaker 1: believe that you are a good investment. And notice I've 401 00:22:03,440 --> 00:22:06,159 Speaker 1: said nothing about financials and I've said nothing about necessarily 402 00:22:06,280 --> 00:22:08,919 Speaker 1: financial infrastructure and systems, because I do believe as a 403 00:22:08,960 --> 00:22:12,240 Speaker 1: CFO those things are table sticks. You've got to make 404 00:22:12,240 --> 00:22:14,280 Speaker 1: sure that stuff happens. You've got a level of technology, 405 00:22:14,280 --> 00:22:16,000 Speaker 1: you've gotta drive efficiency in the business. You've got to 406 00:22:16,000 --> 00:22:17,600 Speaker 1: get the numbers right. You gotta have a good control 407 00:22:17,640 --> 00:22:20,119 Speaker 1: in moment. But what's going to call you apart is 408 00:22:20,160 --> 00:22:24,720 Speaker 1: the is the other elements which I spoke man. If 409 00:22:24,800 --> 00:22:27,480 Speaker 1: master Card can meet ambitious goals for growth in its 410 00:22:27,520 --> 00:22:31,200 Speaker 1: core business and build on strategies that are taking payments 411 00:22:31,240 --> 00:22:33,960 Speaker 1: to the next level, such in Merora, will deserve a 412 00:22:33,960 --> 00:22:37,640 Speaker 1: lot of the credit. I'm Lisa Abramo. It's this is Bloomberg.