WEBVTT - Chief Future Officer: Sachin Mehra, Mastercard 0:00:02.440 --> 0:00:05.320 There's an old saying in finance that cash is king, 0:00:05.559 --> 0:00:08.280 but when it comes to payments, the data suggests that's 0:00:08.320 --> 0:00:11.440 no longer exactly the case. According to the latest World 0:00:11.440 --> 0:00:14.640 Pay Report, cash now figures in less than twenty percent 0:00:14.760 --> 0:00:18.599 of in person transactions around the world. The payments industry 0:00:18.600 --> 0:00:23.480 from the beginning has has really focused on getting people 0:00:23.560 --> 0:00:27.240 to use electronic forms of of of pain. In fact, 0:00:27.280 --> 0:00:30.440 if you look at like the US, for example, you 0:00:30.560 --> 0:00:34.680 basically have been moving around two to three of payments 0:00:34.720 --> 0:00:38.640 from cash and check to some form of direct electronic 0:00:39.200 --> 0:00:43.040 just about every single year. To regard volumes ex China 0:00:43.120 --> 0:00:47.639 today at twenty trillion dollars and there's another fourteen trillion 0:00:47.680 --> 0:00:51.160 dollars worth of cash and check left to digitized Even 0:00:51.159 --> 0:00:55.000 at level god, penetration is growing, so yes, we are 0:00:55.480 --> 0:00:59.360 moving towards a cash society. A new technology has promised 0:00:59.360 --> 0:01:02.920 to kick these trends into a higher gear. The terminal 0:01:03.040 --> 0:01:06.600 on the till of the merchant, depending on how old 0:01:06.680 --> 0:01:09.240 one is, one is used to that at least in 0:01:10.319 --> 0:01:15.800 the developed world, but that is not everywhere. But everyone 0:01:16.400 --> 0:01:19.840 has a phone, so electronic payments can end up in 0:01:19.880 --> 0:01:23.520 a super simple way in everybody's hands, and for our business, 0:01:23.560 --> 0:01:29.040 that's a massive growth opportunity. MasterCard is already seizing that opportunity. 0:01:29.080 --> 0:01:34.520 After dipping in revenues shot past pre pandemic levels driven 0:01:34.520 --> 0:01:38.720 by a rebound consumer spending. CFO Sachein Mehra knows that 0:01:38.760 --> 0:01:41.039 this boom is likely to fade, and he's set on 0:01:41.160 --> 0:01:44.280 finding ways to keep the momentum going. The key to 0:01:44.959 --> 0:01:48.120 being successful in this kind of environment is to have 0:01:48.160 --> 0:01:50.880 a diversified portfolio. You've got to be nimbled from an 0:01:50.880 --> 0:01:53.480 expense standpoint, You've got to be very disciplined as a 0:01:53.520 --> 0:01:55.320 finance officer. What I've got to do with I'm going 0:01:55.320 --> 0:01:58.080 to make sure that we are investing in those resources 0:01:58.720 --> 0:02:02.080 which are currently demand from a customer standpoint, but at 0:02:02.080 --> 0:02:04.720 the same time not losing sight of the long term. 0:02:04.920 --> 0:02:07.800 CEO Michael me Back counts on Meyer to do more 0:02:07.960 --> 0:02:10.799 than just oversee the balance sheet. The top line for 0:02:10.919 --> 0:02:17.320 me is um advisor and confident your conciliary. Yes, he's 0:02:17.400 --> 0:02:21.239 quite happy pushing back and saying vice versa. The rule 0:02:21.280 --> 0:02:24.240 of the chief financial officer has actually changed fairly dramatically 0:02:24.480 --> 0:02:27.440 over this twenty plus year tenure that I've had, you know, 0:02:27.440 --> 0:02:29.440 in the past, it was more of a function of, 0:02:29.680 --> 0:02:32.000 you know, let's make sure the numbers are good. Let's 0:02:32.000 --> 0:02:34.160 make sure we've got a great control environment. Let's make 0:02:34.200 --> 0:02:36.839 sure we're actually able to close the books on time. 0:02:36.919 --> 0:02:39.280 Let's make sure we've got all the financial elements of 0:02:39.320 --> 0:02:42.320 the business in order. The job of the CFO in 0:02:42.320 --> 0:02:45.000 in our view, in my view, is a function of 0:02:45.320 --> 0:02:48.680 making sure we're creating the right linkage between what the 0:02:48.680 --> 0:02:51.360 purpose of the business is, what the strategy of the businesses, 0:02:52.120 --> 0:02:55.120 and delivering on the financial returns for the company, all 0:02:55.120 --> 0:02:57.600 while driving long term sharehold of that. We're in the 0:02:57.600 --> 0:03:00.920 business of leading beyond the numbers. It's great that we 0:03:01.000 --> 0:03:03.320 know what the numbers are, how do we use those 0:03:03.400 --> 0:03:07.640 numbers to better drive execution of the business to accomplishment 0:03:07.639 --> 0:03:23.720 of the strategy of the company. Master Cards core business 0:03:23.840 --> 0:03:27.720 is no surprise cards. Card At products currently account for 0:03:27.760 --> 0:03:31.280 over half the company's revenue. The company set ambitious growth 0:03:31.280 --> 0:03:35.400 targets that investor day, committing to expand this core and 0:03:35.440 --> 0:03:38.960 to diversify beyond it. We've been on a six year 0:03:39.040 --> 0:03:43.440 strategy to be a multi rail company. In plain English, 0:03:43.440 --> 0:03:45.960 that means whichever way you pay, wee will enable that 0:03:46.600 --> 0:03:48.840 despite the fact that card is in our name is 0:03:49.160 --> 0:03:52.240 essentially any type of payment we have the reach. So 0:03:52.280 --> 0:03:55.240 I think we're reasonably well positioned. I mean, you've just 0:03:55.320 --> 0:03:58.360 got to recognize not only where the consumers today, but 0:03:58.400 --> 0:03:59.920 where they're gonna go, because a lot of what we 0:04:00.040 --> 0:04:02.960 got to do takes time to implement, and is it difficult. 0:04:03.080 --> 0:04:04.960 You'll get something, You'll get it right, sometimes you'll get 0:04:05.000 --> 0:04:06.800 it wrong sometimes, but hopefully you're getting it right more 0:04:06.800 --> 0:04:08.800 often than you can get wrong, and you're working with 0:04:08.840 --> 0:04:13.040 through the forecasting preferences. Is complicated by an uncertain economy. 0:04:13.440 --> 0:04:17.160 Consumer confidence has been plunging to historic laws, and recession 0:04:17.200 --> 0:04:20.359 calls are getting louder. Still, a slowdown isn't likely to 0:04:20.400 --> 0:04:23.800 cause a crisis for master Card and it's peers. Contrary 0:04:23.920 --> 0:04:27.640 to what people often perceived, I think payments as an 0:04:27.680 --> 0:04:34.800 industry it will be quite fasiliantiny Downtown. Generally speaking, even 0:04:34.880 --> 0:04:38.719 during a recession, the amount that consumers spend actually does 0:04:38.760 --> 0:04:42.080 not go down. It continues to grow. I think the 0:04:42.080 --> 0:04:44.919 thing that people are worried about more um in the 0:04:44.920 --> 0:04:47.520 payments industry is kind of how does the mix of 0:04:47.600 --> 0:04:50.720 spending change? The first thing that typically happens if you're 0:04:50.760 --> 0:04:53.320 going into a recessionary environment, is people tend to pull 0:04:53.360 --> 0:04:56.680 back on discretionary categories to spend. They move into um 0:04:57.080 --> 0:05:01.200 the non discretionary categories of spend, the pivot into food, 0:05:01.400 --> 0:05:04.840 they've pivot into m rent, those kind of payments which 0:05:04.839 --> 0:05:06.839 are most important for them to meet. But the rails 0:05:06.839 --> 0:05:10.159 still stay the same. So the reils which run debit 0:05:10.240 --> 0:05:12.520 and credit are exactly the same, the technologies the same, 0:05:12.560 --> 0:05:16.400 the distribution models the same, so those those areas don't 0:05:16.440 --> 0:05:19.400 necessarily changed by virtue of moving into more of a 0:05:19.440 --> 0:05:22.600 debit or credit environment. One area that master Card has 0:05:22.600 --> 0:05:25.880 been moving vigorously into is B two B payments, a 0:05:25.960 --> 0:05:29.160 market expected to reach twenty five trillion dollars by the 0:05:29.240 --> 0:05:32.000 end of the decade. We think there's tremendous promise in 0:05:32.040 --> 0:05:35.400 the B two B area. The card business as in 0:05:34.880 --> 0:05:37.520 the elements of the B two B space which are 0:05:37.560 --> 0:05:41.080 served by cards are doing well. Are they doing very well? 0:05:41.120 --> 0:05:43.400 And it's in the small business space and the mid market, 0:05:43.480 --> 0:05:45.520 it's in the large corporate space. All of them do 0:05:45.600 --> 0:05:48.720 really well. On the accounts payable side. I would say 0:05:48.720 --> 0:05:52.120 we're in the build phase, and here we're about building 0:05:52.400 --> 0:05:56.360 an open loop environment to enable payments on accounts pable rails, 0:05:56.880 --> 0:06:01.960 whereas the opportunity in that spaces different to consumer payments 0:06:02.000 --> 0:06:05.200 where there is a global standard. The global standard is MasterCard. 0:06:05.360 --> 0:06:08.800 The global standard are Card payments, because that's been established, 0:06:09.240 --> 0:06:11.800 that isn't quite established yet and B two B and 0:06:11.839 --> 0:06:14.360 I think the more benefits we bring into the payments 0:06:14.400 --> 0:06:17.360 that are easier than just making a really complicated cross 0:06:17.360 --> 0:06:19.520 border payment, I think we will find out way there 0:06:19.560 --> 0:06:22.160 and we're going to see an explosion of creativity, a 0:06:22.200 --> 0:06:24.559 lot of other companies coming in and using those rails, 0:06:24.600 --> 0:06:28.160 innovating on top of the pursuing new opportunities, takes capital. 0:06:28.600 --> 0:06:32.359 MasterCard has spent billions acquiring companies that add capacity and 0:06:32.400 --> 0:06:37.120 diversify its infrastructure. Acquisitions and partnerships have helped MasterCard offer 0:06:37.200 --> 0:06:40.360 more value added services to their clients, tapping into a 0:06:40.400 --> 0:06:46.400 lucrative revenue stream. What we call services, which includes data, insights, consulting, 0:06:46.440 --> 0:06:51.640 manage services, loyalty, and our fraud capabilities is roughly the 0:06:51.640 --> 0:06:55.080 revenues of this company. Wow. Yeah, So it's not insignificance. 0:06:55.160 --> 0:06:59.479 Oftentimes people think MasterCard and think Gord very important, but 0:06:59.520 --> 0:07:02.320 there's a very different bottom masks Card as well. From 0:07:02.320 --> 0:07:05.800 a balance sheet perspective, MasterCard has maintained a healthy leverage 0:07:05.880 --> 0:07:09.240 ratio even as it's put more resources into acquisitions and 0:07:09.279 --> 0:07:13.000 taken on more debt. Given the company flexibility to continue investing, 0:07:13.560 --> 0:07:15.880 we don't go in and say, well, right now, evaluations 0:07:15.880 --> 0:07:17.800 are lower than they were a year ago, let's go 0:07:17.800 --> 0:07:21.000 and buy something. Um that is that is an opportunistic 0:07:21.000 --> 0:07:23.679 approach that doesn't work for us. For me, it always starts, 0:07:23.720 --> 0:07:25.760 what are we trying to accomplish from a strategy standpoint, 0:07:26.240 --> 0:07:29.640 What our inherent capabilities we as a company have, What 0:07:29.720 --> 0:07:33.120 are the gaps and an own capabilities to meet that strategy? 0:07:33.200 --> 0:07:36.040 And then foll those gaps? Is it best to build? 0:07:36.560 --> 0:07:40.240 Buy our partner, and then we're out there and we're 0:07:40.240 --> 0:07:42.680 trying to find the right companies together. It's going to 0:07:42.760 --> 0:07:44.679 make sure that we have a clear view on short 0:07:44.720 --> 0:07:48.360 and long term synergies and so forth. And then we 0:07:48.480 --> 0:07:51.480 both talked to shareholders and to investors to explain what 0:07:51.520 --> 0:07:53.400 we're doing and why we're doing and why it's good. 0:07:53.960 --> 0:07:58.800 Shareholders have reason to appreciate Mastercard's capital allocation strategy. It's 0:07:58.800 --> 0:08:03.400 included annual share buy backs and steadily increased dividends. How 0:08:03.400 --> 0:08:05.520 do you prioritize the amount of money that you put 0:08:05.600 --> 0:08:10.119 toward innovation and toward building out different businesses versus share 0:08:10.160 --> 0:08:13.080 buy backs and dividends because master Card has traditionally had 0:08:13.320 --> 0:08:16.800 a robust program in rewarding shareholders, right first call of 0:08:16.880 --> 0:08:19.440 capital is towards growth of the business. After we have 0:08:19.600 --> 0:08:23.040 done that, it's about making sure we're being good stewards 0:08:23.080 --> 0:08:26.640 of capital and returning excess cash to shareholders with a 0:08:26.720 --> 0:08:30.520 biased stewards share buy backs. And then once you start 0:08:30.600 --> 0:08:33.880 to come to say I have dealt with my strategic priorities, 0:08:33.920 --> 0:08:37.240 I either have invested in my organic growth or in acquisitions, 0:08:37.800 --> 0:08:41.839 then access cash. We will return back generally with a 0:08:41.920 --> 0:08:44.800 preference for buy backs over dividend because it gives a 0:08:44.840 --> 0:08:48.000 small flexibility. But that has been a good model for us. 0:08:48.040 --> 0:08:50.400 It's been working well and it's been well received by 0:08:50.400 --> 0:08:55.760 the market. Such a mirror joint master Card is Group 0:08:55.800 --> 0:08:59.880 Executive and Corporate treasure two ten. Over the next decade, 0:09:00.080 --> 0:09:03.280 took on several different roles before being appointed Chief managed 0:09:03.400 --> 0:09:07.160 Officer in twenty nine. That's a very different path than 0:09:07.200 --> 0:09:10.000 the one he started out on. I grew up in India. 0:09:10.360 --> 0:09:12.520 I went to school there, I went undergrad there. I 0:09:12.520 --> 0:09:14.800 worked with the family business that it's a textile business 0:09:14.920 --> 0:09:17.520 which my grandfather started. My dad and my uncle took 0:09:17.559 --> 0:09:21.959 over and then my brother and I got into and um. 0:09:22.040 --> 0:09:24.080 I worked with him for three and a half years 0:09:24.520 --> 0:09:27.520 and then I came up a business school. The moment 0:09:27.520 --> 0:09:30.679 of truth came on graduation day. My dad got on 0:09:30.720 --> 0:09:35.280 the phone. He congratulated me, He said, well done, graduated. 0:09:35.360 --> 0:09:37.760 I'm looking forward to having me back home. My brother 0:09:37.920 --> 0:09:39.600 was older than I am, who went to business school 0:09:39.600 --> 0:09:41.280 as well and went back home and worked with my dad, 0:09:41.960 --> 0:09:45.120 got on the phone congratulated me and said, so such 0:09:45.160 --> 0:09:46.800 a what are you gonna do with your life? And 0:09:46.920 --> 0:09:49.480 I'm going, well, why are we having this discussion? Dad 0:09:49.520 --> 0:09:51.240 wants me to come up and work to the family business. 0:09:51.320 --> 0:09:53.040 He's like, yep, that's what Dad wants you to do. 0:09:53.679 --> 0:09:56.520 What do you want to And then it really got 0:09:56.520 --> 0:09:58.760 me thinking and I said, hey, given a chance, I'd 0:09:58.800 --> 0:10:02.000 love to work in finance in the US. Mara took 0:10:02.000 --> 0:10:04.600 the chance, even though it took him six months to 0:10:04.720 --> 0:10:07.680 land his first job at General Motors, where he worked 0:10:07.720 --> 0:10:10.120 for over a decade. Then it was on to the 0:10:10.240 --> 0:10:15.440 energy industry at Hess Corporation before finding his way to MasterCard. Today, 0:10:15.440 --> 0:10:17.720 my dad couldn't be prouder of the fact that, you know, 0:10:18.160 --> 0:10:21.360 I chose the path I did. Obviously he misses the 0:10:21.400 --> 0:10:23.520 fact that we're not there as a family, but that's 0:10:23.640 --> 0:10:25.640 just spott of light, right, We've all got to grow 0:10:25.640 --> 0:10:28.440 in blossom and groom. Did he accept it at the beginning? 0:10:29.080 --> 0:10:31.199 It took him all of thirty minutes to get there. 0:10:31.640 --> 0:10:34.160 When Mara gets together with his team in the employee 0:10:34.160 --> 0:10:37.280 cafe and master Card's campus, it's clear that he's in 0:10:37.360 --> 0:10:40.080 his element. Well, more important, more fun stuff. What's the 0:10:40.080 --> 0:10:43.040 plan for the weekend? And of course the cafe provides 0:10:43.120 --> 0:10:46.800 a demonstration of the tap and co technology that's changed 0:10:46.840 --> 0:10:49.920 the game for payment companies. Can I just got a 0:10:49.920 --> 0:10:58.240 regular coffee with help? Okay? That would? You? Got it? 0:10:58.280 --> 0:11:00.480 All right? We're gonna make this work. There we go. 0:11:02.880 --> 0:11:07.720 I think contactless is a very powerful catalyst for accelerating 0:11:07.760 --> 0:11:11.400 cash depot conversion. In the last two years, what we 0:11:11.480 --> 0:11:14.760 have seen in the US is god penetration could growth 0:11:14.840 --> 0:11:19.000 rate annually has doubled versus what was the average and 0:11:19.040 --> 0:11:22.000 the prior five years. The pandemic was one of the 0:11:22.040 --> 0:11:24.679 reasons people didn't want to touch cash, and there's a 0:11:24.720 --> 0:11:28.480 lot of e commerce purchases. The contact lists definitely contributed 0:11:28.520 --> 0:11:30.920 to this groot as well. It's made a change, it's 0:11:30.960 --> 0:11:33.280 really made a difference. What it's really made a difference 0:11:33.320 --> 0:11:36.480 on has been in terms of how it's driving a 0:11:36.559 --> 0:11:40.080 shift from cash to electronic forms of payment, particularly on 0:11:40.120 --> 0:11:43.439 the small ticket items, which is really really important because 0:11:43.440 --> 0:11:45.440 at the end of the day, our model is as 0:11:45.520 --> 0:11:48.040 much about converting the dollar value of the spend as 0:11:48.080 --> 0:11:50.000 it is about the number of transactions we can get 0:11:50.040 --> 0:11:52.680 over our network, and even though it happens to be 0:11:52.679 --> 0:11:55.280 a two dollar transaction, transactions the transaction on which we 0:11:55.320 --> 0:11:58.320 make revenue on which we can deliver services, and that's 0:11:58.360 --> 0:12:03.280 really more. Master Card introduced pay pass, its first contactless 0:12:03.280 --> 0:12:06.400 payment system, in two thousand two, but the technology took 0:12:06.440 --> 0:12:09.280 some time to gain traction. I would say we first 0:12:09.320 --> 0:12:12.320 invested in this many many, many many years ago. The 0:12:12.360 --> 0:12:15.200 adoption rate on this in the early part, even in 0:12:15.280 --> 0:12:18.480 markets like the UK, Canada, Australia, was fairly slow in 0:12:18.520 --> 0:12:22.440 the early part. The inflection point of when it really 0:12:22.440 --> 0:12:24.840 started to hit it stripe was when it was used 0:12:24.840 --> 0:12:27.560 in the transit vertical. So what we figured is, let's 0:12:27.559 --> 0:12:30.400 get all the transit systems around the globe enabled for 0:12:30.480 --> 0:12:33.960 contact less technology. That will create muscle memory for the 0:12:34.000 --> 0:12:36.880 consumer will like the experience in transit and will use 0:12:36.920 --> 0:12:40.560 it elsewhere. How do you judge the revenue proposition for 0:12:40.679 --> 0:12:44.360 MasterCard with an innovation like that and the adoption in 0:12:44.400 --> 0:12:46.760 the pace of it. Look, I mean for us, we're 0:12:47.120 --> 0:12:51.040 agnostic as to whether somebody's using the chip technology or 0:12:51.120 --> 0:12:54.320 the contact less technology or you know, using the mag 0:12:54.360 --> 0:12:56.240 stripe which was the old way of doing business. We 0:12:56.360 --> 0:12:58.959 own revenues which are quite similar across both of those. 0:12:59.280 --> 0:13:01.440 The revenue put aventual and upsite for us comes from 0:13:01.440 --> 0:13:03.880 the fact that now more spend is being done on 0:13:03.960 --> 0:13:05.680 guard based forms of payment than what's being done in 0:13:05.679 --> 0:13:08.280 the past. So we're converting that cash over the electronic 0:13:08.280 --> 0:13:11.120 forms of payment, which is where the implemental revenue comes from. 0:13:11.160 --> 0:13:15.720 If contactless payments is the current revolution sweeping the payments industry, 0:13:15.760 --> 0:13:20.320 when's the next one? I think pay with your smile, 0:13:21.320 --> 0:13:24.080 so biometrics. I think that's where it's going to go. 0:13:24.640 --> 0:13:26.520 And I think we've reached that point that people are 0:13:26.600 --> 0:13:30.360 sick of too many passwords, people are sick of typing 0:13:30.360 --> 0:13:33.640 in stuff. And there's also too many wallets and other 0:13:33.720 --> 0:13:36.920 ideas and stuff that is around. So why don't you 0:13:36.960 --> 0:13:40.000 just everybody has a smile, So just play with your smile. 0:13:40.040 --> 0:13:41.880 There you go, how much are you investing in that? 0:13:42.000 --> 0:13:45.160 How quickly do you see that becoming the next tap 0:13:45.240 --> 0:13:47.720 and go? Yeah? So look, I think this is gonna 0:13:47.760 --> 0:13:49.880 take a while. These things have an adoption code which 0:13:49.920 --> 0:13:52.560 typically is fairly flattened the early part, and then you 0:13:52.559 --> 0:13:55.920 start to see some level of steples. Mastercard's next breakthrough 0:13:55.960 --> 0:13:58.600 maybe born in one of its global tech hubs. The 0:13:58.679 --> 0:14:03.240 company has open to innovation centers in Australia, India, Europe, Canada, 0:14:03.400 --> 0:14:08.200 and the United States. These are spaces where we draw 0:14:08.280 --> 0:14:10.880 in customers, where we draw the local community. We have 0:14:10.960 --> 0:14:13.400 them in big cities where the latest technologies and the 0:14:13.440 --> 0:14:15.600 players are all around us. In New York City it's 0:14:15.600 --> 0:14:18.280 in Tech Alley, and everybody in the tech industry is 0:14:18.320 --> 0:14:21.120 around us. It's a point where people want to work 0:14:21.440 --> 0:14:24.920 and we attract the best talent and we go and 0:14:24.960 --> 0:14:27.400 this brings us back to the CFO. We go and 0:14:27.440 --> 0:14:31.000 look at our vitality index. So how are the our 0:14:31.040 --> 0:14:33.880 revenues looking what is generated from new products? What do 0:14:33.920 --> 0:14:36.400 we see is their real momentum, is their real growth. 0:14:37.440 --> 0:14:40.080 And if you overlay that um and link that back 0:14:40.080 --> 0:14:42.720 to our tech hubs in these regions where we have them, 0:14:42.720 --> 0:14:45.840 clearly that is what driving what is driving our new solutions. 0:14:46.200 --> 0:14:49.200 From an investment standpoint, we try and make sure we've 0:14:49.240 --> 0:14:50.840 got our foot in the door and all of these 0:14:50.840 --> 0:14:53.400 new and emerging technologies because what we don't want to 0:14:53.400 --> 0:14:57.080 do is play favorites with one versus the other. We 0:14:57.120 --> 0:14:59.640 want to make sure we're investing just appropriate amounts of 0:14:59.640 --> 0:15:01.840 money to have skin in the game to know that 0:15:01.880 --> 0:15:03.720 if this thing has got legs to it, we want 0:15:03.720 --> 0:15:05.160 to be at the inflection point for them. To write 0:15:05.160 --> 0:15:08.600 out in your tech hubs, can you act like Bond 0:15:08.960 --> 0:15:11.520 James Bond, one of the Q movies, And like the 0:15:11.560 --> 0:15:13.720 laboratories we walk in and they you know, you sort 0:15:13.760 --> 0:15:16.880 of face off and clear the system and they serve 0:15:17.400 --> 0:15:19.200 there are some people who are provolution in this company 0:15:19.200 --> 0:15:21.000 who can do that. Not everybody can and I'm not 0:15:21.200 --> 0:15:28.280 I'm not one of them. That's not me Like many 0:15:28.320 --> 0:15:31.560 of its counterparts, and the payments and financial services industry. 0:15:32.000 --> 0:15:35.800 MasterCard has developed products and partnerships that bring cryptocurrencies into 0:15:35.800 --> 0:15:40.479 its networks. I think from the payments and payments system perspective, 0:15:40.760 --> 0:15:45.800 the players and members that make up that ecosystem are 0:15:45.840 --> 0:15:51.880 really agnostic. To them, crypto is just another current, literally, 0:15:52.320 --> 0:15:57.840 just another asset. At this point. The overall revenue contribution 0:15:58.000 --> 0:16:02.760 is still so small. It's very early. But if I 0:16:02.760 --> 0:16:07.200 am a hard company, it's better to invest and also 0:16:07.320 --> 0:16:10.760 lean in any partner with some of these companies um 0:16:10.960 --> 0:16:14.200 for future revenue growth rate versus kind of sitting on 0:16:14.280 --> 0:16:18.160 the sidelines. Crypto is a term that encompasses a number 0:16:18.200 --> 0:16:22.440 of different projects, including central bank digital currencies and private 0:16:22.440 --> 0:16:26.640 sector stable coins, also digital assets like bitcoin. These volatile 0:16:26.720 --> 0:16:30.720 valuations and susceptibility to fraud have raised plenty of anxiety 0:16:30.720 --> 0:16:34.400 among investors. Master cards long term plans to stay in 0:16:34.400 --> 0:16:38.240 the space haven't wavered. We're not really in the crypto 0:16:38.320 --> 0:16:41.800 hype of investment investing around crypto. We like the fundamental 0:16:41.840 --> 0:16:44.400 technology and the promise that it brings to solve problems 0:16:44.480 --> 0:16:46.800 that have not been solved. So if we see more 0:16:46.840 --> 0:16:50.480 revenue coming out of B two B solutions that leverage 0:16:50.480 --> 0:16:55.560 blockchain technology, for example tokenized bank deposits, you know, just 0:16:55.640 --> 0:16:58.080 to throw out one example, across border payments, whatever it 0:16:58.160 --> 0:17:00.840 might be. In the crypto world, we play the rule 0:17:01.200 --> 0:17:04.320 um as an on ramp, so people use MasterCard card 0:17:04.359 --> 0:17:07.639 products to buy crypto, our debit and credit products. So 0:17:07.680 --> 0:17:10.240 that's the on ramp if people want to spend money 0:17:10.240 --> 0:17:12.880 as in fiat currency to buy crypto and react as 0:17:12.920 --> 0:17:15.359 the off ramp. And the off ramp is when people 0:17:15.400 --> 0:17:18.120 want to in cash it we help them actually gain 0:17:18.200 --> 0:17:21.040 access to be able to use their crypto balance as 0:17:21.040 --> 0:17:24.879 everywhere MasterCards excepted. We engage with central banks on central 0:17:24.880 --> 0:17:28.399 bank digital currencies. We engage with governments on how a 0:17:28.480 --> 0:17:31.439 policy could look like, how regulation could like look like. 0:17:32.359 --> 0:17:34.919 We engage with the startup community and say, come on in, 0:17:35.040 --> 0:17:37.240 let's sit around the table in one of our tech 0:17:37.320 --> 0:17:41.719 hubs and we discuss what what solution actually is needed 0:17:41.720 --> 0:17:43.880 by whom and how we can bring it together. They 0:17:43.920 --> 0:17:45.960 have the greatest idea, but the greatest idea needs a 0:17:46.000 --> 0:17:48.520 path to scale. That's what we can bring. Is there 0:17:48.520 --> 0:17:52.600 a potential liability because of the volatility, because of how 0:17:53.560 --> 0:17:57.560 Bitcoin and certain other cryptocurrencies have been painted, Is there 0:17:57.560 --> 0:18:00.760 any liability for MasterCard. Yeah, well, long as we follow 0:18:00.760 --> 0:18:03.000 our principles, we think we're in really good shape. And 0:18:03.000 --> 0:18:07.119 the principles we care deeply about our stability as in 0:18:07.200 --> 0:18:10.639 stability of the currency in question point number two. It 0:18:10.880 --> 0:18:14.840 must meet consumer protection requirements, it must meet the laws 0:18:14.840 --> 0:18:17.159 of the land. And this is not new news to us. 0:18:17.160 --> 0:18:19.520 We've done this in the space for the last fifty years. 0:18:19.560 --> 0:18:22.240 For everything. We've been working with regulated financial institutions on 0:18:22.880 --> 0:18:25.320 UH and so, which is why when we got into 0:18:25.359 --> 0:18:27.080 the space, the first thing we did was to find 0:18:27.119 --> 0:18:29.960 principles and we will keep abiding by these principles and 0:18:30.000 --> 0:18:32.560 what we do. Yeah, I feel happy because we're in 0:18:32.600 --> 0:18:37.520 the discussion. We're shaping the ecosystem and then one day 0:18:37.680 --> 0:18:40.760 it will look like what we have done in many 0:18:40.760 --> 0:18:44.520 other spaces over years of the past years. Such in 0:18:44.640 --> 0:18:46.840 Mira is a leader within a company that has the 0:18:46.880 --> 0:18:49.920 power and reach to shape ecosystems, and he'll be making 0:18:49.920 --> 0:18:53.359 strategic and financial decisions that shape the business. I wanted 0:18:53.440 --> 0:18:56.200 to know what he sees when he looks ahead, what's 0:18:56.240 --> 0:18:58.680 the opportunity for master Card in the next ten years 0:18:58.840 --> 0:19:01.800 that most excites you. There still remains a very sizeable 0:19:01.920 --> 0:19:05.720 consumer payments opportunity which we stand very well poised to 0:19:05.840 --> 0:19:09.399 actually capitalize on. This is the trend of the shift 0:19:09.440 --> 0:19:11.760 from cash to electronic forms of payment. If you think 0:19:11.760 --> 0:19:15.120 about it globally, there's still a ton of cash which 0:19:15.160 --> 0:19:18.200 remains to be electronifying, and that that opportunity is huge. 0:19:18.840 --> 0:19:22.520 The second pillar for me is around we have identified 0:19:22.600 --> 0:19:26.439 over the past few years a sizeable total addressable market 0:19:26.680 --> 0:19:29.400 in what we call new payment flows. Bucket number three 0:19:29.480 --> 0:19:33.440 is around services. It goes back to our insights, analytics, 0:19:33.480 --> 0:19:36.959 are fraud management capabilities and everything we're doing in that space. 0:19:37.240 --> 0:19:39.440 And then the last piece around new networks, which is 0:19:39.480 --> 0:19:42.800 around open banking and digital identity. What are some of 0:19:42.840 --> 0:19:45.359 the challenges from MasterCard over the next ten years that 0:19:45.480 --> 0:19:47.679 keep you up at night. It's around staying plugged in 0:19:47.920 --> 0:19:50.960 on what's going on from a technology innovation standpoint and 0:19:51.000 --> 0:19:54.159 making sure we're leading from the front, not turning our 0:19:54.200 --> 0:19:56.159 back to it and saying we're going to walk in 0:19:56.200 --> 0:19:59.040 the other direction. We've got to engage with people who 0:19:59.040 --> 0:20:03.679 could potentially be disintermediators competitors to let them know what 0:20:03.800 --> 0:20:06.520 value we can bring while they're executing on their strategy. 0:20:06.600 --> 0:20:10.439 So that's number one. Number two is look, I mean, 0:20:10.440 --> 0:20:14.480 the world is getting more and more into a regulatory 0:20:14.560 --> 0:20:18.119 environment where regulations, regulators are playing a bigger role, nationalism 0:20:18.240 --> 0:20:20.439 is playing a bigger role. It's important for us to 0:20:20.520 --> 0:20:23.439 continue to do everything we're doing by being deemed local. 0:20:24.240 --> 0:20:27.199 It's important to be a global company, but be deemed local. 0:20:27.480 --> 0:20:29.520 And that's going to be important for us to execute 0:20:29.560 --> 0:20:31.320 on because at the end of the day, sitting in 0:20:31.320 --> 0:20:35.280 my role as the CFO, strategy is great, visions, fantastic, 0:20:35.520 --> 0:20:38.160 but what really matters is can you really deliver and execute? 0:20:38.440 --> 0:20:40.920 And we've got to stay focused on execution and that's 0:20:40.920 --> 0:20:42.960 what we do every day. What's the biggest change that 0:20:43.000 --> 0:20:45.200 you see a role having over the next ten years. 0:20:46.119 --> 0:20:49.680 That's a good question. Honestly, I am not really in 0:20:49.720 --> 0:20:51.879 the business of predicting that much as it relates to 0:20:51.880 --> 0:20:53.800 how it's going to change. What I can see happening 0:20:54.280 --> 0:20:59.960 is greater emphasis on making sure we're leading from the front. 0:21:00.040 --> 0:21:04.359 It on executing, but also failing fast. And that's where 0:21:04.480 --> 0:21:06.960 a CFO can play a big role. And by that 0:21:07.040 --> 0:21:10.160 I mean that you're not always gonna win the things 0:21:10.200 --> 0:21:12.960 you're gonna do. Hopefully you get more right than wrong, 0:21:13.359 --> 0:21:16.440 but recognizing things which are not working out and making 0:21:16.440 --> 0:21:18.840 sure you actually fail fast on them and get out 0:21:18.840 --> 0:21:20.280 of them. Because you can get you can fall in 0:21:20.320 --> 0:21:24.119 love with stuff, keep doing it, keep wasting resources to 0:21:24.119 --> 0:21:26.359 only realize that it's not going to pay off. And 0:21:26.400 --> 0:21:28.560 I think the emphasis around that is going to only 0:21:28.600 --> 0:21:31.520 increase for that for CFOs in a scarce capital resource environment. 0:21:31.720 --> 0:21:34.920 What advice would you give a CFO today. I think 0:21:34.920 --> 0:21:38.520 it's important to stay calm. I think it's important to 0:21:38.520 --> 0:21:41.800 recognize that change is going to happen. You can't fight change. 0:21:42.440 --> 0:21:44.879 What really matters is how you can get up and 0:21:44.920 --> 0:21:47.959 I actually deal with that change. That's super important for 0:21:48.000 --> 0:21:53.000 a CFO. Being really clear and crisp in your communications. 0:21:53.200 --> 0:21:56.560 The outside world wants to hear in very simple terms 0:21:57.280 --> 0:22:00.480 what exactly this company stands for and why they should 0:22:00.480 --> 0:22:03.399 believe that you are a good investment. And notice I've 0:22:03.440 --> 0:22:06.159