MA - Earnings call transcript Q3 2017 | Mastercard Incorporated

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Operator

Good morning. My name is Casey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mastercard third quarter 2017 earnings call. Thank you. Warren Kneeshaw, Head of Investor Relations, you may begin your conference.

Warren Kneeshaw

Casey. you, Thank and third everyone, for us joining Good XXXX thank earnings our quarter call. for morning, you With me Officer. today Executive are Ajay Banga, our Martina our Officer; President Hund-Mejean, Chief Financial and and Chief

operator Following Ajay registrations. get the queue only for comments queue will is your Q&A It that and the into session. from the then opportunity will Martina, open to announce the accept to

of the deck earnings website, section can performance slide this supplemental our our the release, that access Investor call in You and data, accompany Relations mastercard.com.

the was furnished with Additionally, SEC the morning. release earlier this

measures on comments currency-neutral and our Our unless release reconciliations regarding financial to today of non-GAAP slide impact and results otherwise items their will special GAAP the be Both the include and a equivalents. exclude noted. acquisitions basis deck the of

we've purchase a provides rates. X of the release reminder, about impact on a regulation volume and payments in added our of which the table GDV growth the Article information additional As EU's

of on Our comments on basis the for be call the impacts. these rates will adjusted

the release are for website XX A our at over call summarized Ajay? Officer, the SEC our posted end as earnings could to forward-looking release, I'll Ajay detail today's Mastercard's I to in materially Chief on our Executive statements future about performance these Information set that factors days. turn differ future the and affect filings. will now our performance our performance. in call call regarding of from like everyone that Actual President remind more replay Banga. that, be statements. would forth of could and Finally, include will this forward-looking in With

Ajay Banga

you, Warren, and Thank morning, good everybody.

and this an delivering to revenue of a quarter, financial our and XX%. execute record with continuing pleased we're XX% against of net growth our growth EPS objectives So performance

In generally overall. that the retail quarter they're estimates, gas, driven growth is X.X%, U.S. see inflation. and unchanged limited on continue demonstrating with a to bit recent increased is We the Our believe In weather impacts earthquakes markets. an Mexico. in Asia, we're to low positive, view Mexico, last from across confidence and confidence than the economies Most the in disruptions the And of volume confidence. broadly focus little consumer short-term that the on in is concerns unemployment. most positive. execute despite consumer transaction overall unemployment growth double-digit over with lower economic that. the significant In ex we to show better with France, although localized UK, rates steady favorable. the but the economic the and Consumer lowest activity in outlook this think improvement, economy potential years, from sentiment signs I consumer U.S. to strategy. economy Europe quarter effect continues Economic U.S., America, the that by have had and quarter. largely growth, We're Germany remains during ASEAN Brazil, meanwhile, global of backdrop, and According by continuing a and better unemployment our hurricanes in seeing and auto, steady. mixed prior impacts Latin of ex a of last SpendingPulse business was our with stability remain trend is little sales upward and in with impacts, more dampening Brexit steady,

spent talk just we've to things business a couple – Investor keep our going got I'm highlights today Day time at updating to but you brief So – we about. of

well a Integration Vocalink. recent including off we our We're progress on to Security and at most our underway. which good be capabilities our with also behavioral acquisitions, activities So firstly, pleased biometrics enhance to and intelligence. NuData ones, Brighterion, the in are continue start artificial

the in yesterday, the basically House, Clearing in ACH which and soon be gone check company, will clearing traditional that at active development and of clearing our the prior are fast speed digitizing efforts the with Day, U.S. The Faster to now we Investor live a with new helps each the Payments approach UK call process. credit in we've technology by we've up fact, for of earnings And system and said with course, image-based launched in business as in Our just regions.

Turning to partnerships.

within Masterpass and means footprint this option Asia cash to have that a partnership expand PayPal strategic several And every America, region Middle and PayPal, we through to the and our partnership What Send. out the is Latin global partnership including commitments established the customer with Mastercard Mastercard and have to the expanded implementing last We have a our global clear equal now and above It PayPal balances through programs enabling similar extensive we years. Europe, consumers making acceptance Braintree Africa. beyond is Pacific includes Canada, over with developed truly having to wallet. payment digital U.S. PayPal this East across enhance choice, that and

and for globally their all momentum. and partner and debit good U.S., their them UK markets are have solutions co-brands the In like continue of we prepaid some and Italy. see commercial the additional We with credit in to

in payable Mastercard In this will their Fifth platform who actually that commercial, customer, to which in our our Bank, In America announce small we and prepaid previous BXB consumer pleased the payroll one Investor the And the example consumer new to prepaid on Bank very deal at to of credit of and a businesses provider the that hub, Day, ADP, the announced processes. with offer have largest locked to simplify some is additional Third first side. credit, accounts program just U.S. in building medium-sized we're addition want discussions Craig is business debit,

goes Masterpass them. while will Asia, be the and the debit Arabia, announce largest activation make in with also East, we've exclusive Saudi Commercial Costco's And in extend has usage of signed well partner flips world, campaigns, continue banks beyond in such Middle in acceptance next starting Bank, and a into win with new as integration the long-term prepaid consumer National further, wins, the Mastercard Travelex renewed Europe. and Saudi portfolios entered continuing to as Beyond starting include and one issuer deal of around selected business Santander to issuance business those the loyalty the relationships a to that Poland and Uber new in Mastercard you U.S., and as customer exclusive and that a comprehensive year. we're new couple this on we pleased in Asia, give in France, very Masterpass to with services. committed Arabia. for Japan to examples. with In co-brand deal for Advisors to agreement enhance its be that's cardholders of in We're And And markets Banque progress to with just early first is

we're some doing topic. a Safety and security side. priority. on the that to is shifting no data right It's now product secret protection of Now work key hot a is consumer

for all multilayered quarter, shown the a an real that at Net losses. of tool and blocks you call also we checkout accounts activities, we they network Mastercard the our may future transaction. which website transactions helps also set with past, insights and based better do, strategy consumers save about of own closely to Safety to particularly shutting before you identifies have levels more been how we've Early security from We've will our external can and in of some down monitoring a own easily help probably future payments. fraud talked fraudulent We quickly predictive that to faster, action card therefore generate large-scale app. fraud in manage digital their on defenses. or file, cards merchant's services, while – be of added how overall of fraud ecosystem. Detection that it and working tool also used or to the security in a unauthorized significant stored data time, the this to their the customers transactions risk alerts Merchants what Early Like the as supplement could have tokenization fraud even is affected customers keep customers transactions this enhance the and on and to to recurring be determine account through to When an combines cards System, process are the convenient. And is leverages their our Safety our likely our trying products Net, that in System issuers take it which immediately Detection on been appropriate more issuers' In confidence protecting the used attacks power happen.

credentials able is connect our and are with helped when our card real also than attempts and them use if APIs Netflix when some continuity tokenize this up that customer it more Updater them else. cases to date And merchant payment our going directly stolen a to replaced. It's of our to value types Billing to to by or transactions bring fraudster credentials first useless account Automatic first somewhere significant we becomes the reduce These businesses customers be to our using expired, customer kept in on Now, what have in you steals to live call declined time tools lost, keep capability. is an file, XX%.

Mastercard Send. Now on to moving

markets bank payment over reaches mobile you cash-out know, cards in As worldwide. much many unique got solution. endpoints, all some reaches other It wallets, this push U.S., in we've capabilities in the pretty debit XXX locations, accounts

wallet will the debit other purchases option example to Friday's, directly We've U.S., faster in both and the in to awareness. Europe. for is emergency as and couple consumers. in continuing consumers' continuing we've This let is the like another Florida. terms real-time a consumer help invest relatives Carrefour, relief a response their to We're you Verizon four disbursements Masterpass, examples. whose in the funds me Hut number expanded they partners have acceptance in in-app debit we're in markets money enabled customers use merchants, in including and every Network Pizza in And Shopping Red to now the cards Asia. But day. deliver in Union, family of of cards quarter, live to digital Western members Avon, signed American which now And enabling receive give exclusive new Wireless, U.S. promoting U.S. and TGI Cross, Texas with to where we're of our personal from that Home

workspace Lyons to and We're Garry in some the front, quarter. as fully Day community. a piloting reach companies the expand of our We also Things. wearables acceptance digital this approximately talking leveraging the some shared by Investor while tapping in launched now pay enable on to like WeWork, our And doing at and globally. Internet Masterpass consumers million about as time we're we're at locations with exciting spent things past through partnering simply Mexico we experience innovation contactless of X And tokenization actually know, platform Garmin From merchant to their spaces, MDES smartwatches is connected you the WeWork. Fitbit

they're also shopping the to use payments a You card to launched Masterpass taking as powering time desk pay with app purchase an for reality can to digital authentication as there amount for through sitting Identity a shopping food virtual Mobile with Swarovski, and experience a their Masterpass, Avenue at well all Saks uses reality recently metered that augmented out even iris members wallet. or without is make Fifth purchases. payments with Check with with of

in all an to and it Martina? With front. over operational fun the metrics. that, on innovation turn all, results our on update me financial games let So for Martina and

Martina Hund-Mejean

Ajay, Thanks, good everyone. and morning

with things, cool you So while the Ajay covering I'm the review numbers going now. is to always

So as you highlights record the delivered page another quarter. X, have on we see, can

exchange to the to due benefit the strength Foreign primarily a results, euro. as-reported had of

expenses XX%, the by the from driven and year, out driven revenue XX%, call $X.XX by lower strong in was This EPS primarily share, we healthy XX. remainder tax my an $XXX up contributing $X.XX benefiting year our I and from includes million income a numbers was and that remarks, per acquisitions, additional Net Vocalink. a a grew through strong growth the will primarily October a an XX%, repurchases by quarter, share. rate. share by line includes expectations. while ppt of Operating was impact net our previous during up to worth benefit million was basis. approximately performance, with and $XXX XX% currency-neutral stock ppt with repurchased underlying due on over that's operating XX% income X.X X performance, acquisitions. For And increased of up per Operating

X X page to quarter. see local third worldwide XX% ppt up operating respectively. from the turn X, and the and up up XX%, credit X%, let outside for or last Now made of was And X%, last volume U.S., from GDV, you X basis, dollar from The can the growth gross quarter, of The me currency quarter. growth U.S. that's GDV ppt where grew growth of up volume, last on and X% was metrics and was quarter. a debit ppt

the to continue strength Europe see We and in regions. LAC

[Third] U.S. quarter with Germany. the all steady basis, double-digit growth. return volume in strong Asia a And currency regions. particularly we grew (sic) Korea South by and growth on And at led a growth while across local saw China. we First performance, was to a its Pacific UK solid healthy Europe finally, LAC, saw the continued in XX% Brazil, from and double-digit

Turning to page X.

are Brazil, similar growth there XX% and see issued. Here growth in transactions billion strong you we regions and the led cards And switched of by globally. India. last at And all continued X.X globally outside Maestro-branded can show double-digit saw Mastercard to Russia, to quarter, U.S.,

let's the revenue otherwise few noted. on items, described now basis to a for turn X again, currency-neutral of page a line on So highlights unless

grew mentioned, volumes and ppt includes Rebates grew as as higher for a and volume reflecting and renewed incentives deals. As benefit growth, I and already well new net which XX%, approximately acquisitions, revenue incentives in robust by services. transaction was X.X driven strength XX%, and from

items. Looking revenue at quickly line the individual

This the domestic some we half offset were incentives, be As have fees in charged between volumes cross-border of to case. during year, pricing, essentially assessment as the mainly rebates which well difference the commented to was the due in categories and first and as mix. and continues the

pronounced less this line is cross-border the quarter. the effect in However,

domestic assessments switched as XX%. growth. as in the transaction well XX%, grew service same growth So as from Cross-border fees revenues XX%, cross-border primarily driven grew fees And worldwide while grew the GDV offerings. volume XX% transactions, our volume grew processing XX%, various by

grew Finally, other XX%. revenues

also in the changes These & As this more Safety of we items Security the made up. offset our from to out ppt Advisors and shows I've business a were the revenue X previously. up than most in that Asia reminder, Vocalink loyalty line. revenues impact called

X. Moving to page

of well spend XX% was basis. including can You increased of the going expectations. expenses continued from This related expansion, on our to slide as operating in XXth acquisitions, in see of ppt line X. digital, Vocalink we've slightly been cross-border, campaign in to and our as purchase from the awareness our to of October, a first discuss integration-related of these the let's primarily X are and an turn with I'm that what increased discussing of all to that investments accounting of down. impact was costs. the now since generally total have was beginning remainder and capabilities due impact course And related year. similar or geographic the we which currency-neutral includes seen A&M better, drivers with the The October Advisors drivers Each Masterpass where exception through

XX%, we what programs. with ppt what up XX%, switched down outside volume the outside sequentially, region, In up XX% growth we in Europe. cross-border, third grew saw including growth grew was quarter, our with quarter. volume X to our X higher third So quarter, growth of U.S. the in higher up X finally, growth same as or ppt we the every credit growth saw with from U.S. from are XX%, quarter, volume, globally similar global the Switched globally, debit transaction numbers third volumes respect the healthy in ppt with Starting grew And And with the the in slower U.S., the regions and all in X double-digit third U.S. switched October in through of switched the with both as XX ppt saw growth the follows: X%, from

to of looking full year Now XXXX. the

our fundamentals underlying grow service strong Our new renewed through as agreements, expanded as we business remain as set and business combination of of offerings. our a well

acquisitions, on We Day. growth and basis at commented a high continue be revenue range at low we the Investor expect currency-neutral to the to on excluding double-digits recent year-over-year of the end as

and the As be to fourth higher quarter increased and sequentially. period of rebates a incentives reminder, we deal a tends expect activity,

slight expected increased single-digit items the range the the growth operating and for to at to a benefit to of high is excluding other be primarily for a A expenses, result top Masterpass we top spend, full bottom Foreign note. basis, and lines of few acquisitions expense expect now year. on On items. the as the year be currency-neutral of exchange a special

by about to XXXX, in and costs. continue driven accounting $X.XX We integration-related primarily purchase recent to be will notably dilutive acquisitions, Vocalink, forecast $X.XX

You should mix to a approximately expectations to tax benefits current year in tax QX. of discrete date, based our XX% year, regional XX% now for rate a rate realized the of on assume and tax with closer

is practice, defer turn year-end With Q&A in we let XXXX comments our Year. As call back will outlook to me the any to the our our that, New Warren until Warren? normal the about call begin session.

Warren Kneeshaw

ready We're Martina. question ask to limit possible for as single you the questions. to order many yourself question-and-answer we as now and get on to that back session. you, call, begin Thank In people queue to the additional then a

Operator

of comes question Cantwell Guggenheim. first from Your Jeff line from the

Your line is open.

Jeff Cantwell

Hi, good morning.

Martina Hund-Mejean

Jeff. morning, Good

Jeff Cantwell

Good morning. Thanks question. for taking my

brings to understand guess, now, the how it's to and use to very cases, combined just blockchain want important much. why Just a going just of to you at Money Thanks up about about merchants. a I high-level is want banks thinking Just businesses? high you banks opening just level us you're lot the and There of right understand about talk to blockchain hoping with your value the XXXX. for blockchain had had Mastercard's how And table. an question. – Mastercard? blockchain your be about at to a can importantly, API most I guys talk very announcement was course was blockchain

Ajay Banga

use asking you're of that think traditional our connect cases, has the I question I that think real is to blockchain a whole and So how will potential customers. ton

of blockchain, create So just learn own I'm in you our to give a how in been what own trying not to we've but to our is really sense platform blockchains investing work. blockchain,

whether future, people's for other platform how knowledgeable on to they operate off operate. blockchains, or and confident in facilitator So our the only objective operate we as a own we, is the be

patents we've and space platform. our own So in the our of number own a in filed blockchain

using other We the like like and Currency we've Digital things look enable have are in blockchains. people also innovating the organizations done to way APIs, making Group, which developed us investments at their

what to cross-border will and transparency hackathon do on up and we merchants solve has that to the for they there, But days. and connecting country was them into be that that like. teams BXB Money It this our we The to is the open costs, on is XX of challenges initial a so both the and Don't find built you on tomorrow. networks are by to believe developers settlement the connect APIs, there institutional a than payments gets XXXX space, But of speed, focus more and country, at remember, be consumer blockchain is a because consumers settlement early was trying in in not successfully. domestic So financial looking technology perceive. problem platform in to expect this payments to that BXB, can turned interesting and saw of tested continue that this switch network. into idea

the we put to there's working from privacy. there making of to others, on opportunity on bigger that So or one ways first is solution are BXB. us blockchain out three a the trying four and in We're different

got among got that shared while we're or make trying participants you've of you've only that transaction blockchain. So (XX:XX) a transaction, a details to your permissioned sure are the

is The second flexibility. one

combine maybe other use these and of Mastercard, range them on apps. create So a you with can APIs, new APIs

system our to and through rules, it network. reach scalability. Obviously, with is That's and system, if we leg possible, into our connect operate could becomes you whole can use then everywhere Because therefore reach. time, we're what into our scalability our up network Third to. over we settlement

We've are virtual which here: itself. going a cross-border flows. of bunch got by at payment Vocalink, things on and domestic all currently not supporting of cards, it's aimed Send, BXB Mastercard Now,

with to blockchain. And what we're up so the that's

Warren Kneeshaw

Next question, please.

Jeff Cantwell

appreciate that. much. Thanks very I

Operator

of next Peller. Darrin Your state company. your from question line Please comes the

is Your open. line

Darrin Peller

guys. thanks, Hi,

You a about X, our well adjusted hundred came quarter basis versus in maybe numbers. Just and and great. comment I in you purchase maybe digital, the Can driving, some trends, outperformance growth volume, just of on know, Article break for underlying really talk mean, secular market versus these pretty your was, us; what more even around accelerated couple what's view, for points in share? a compare little what to e-comm be was macro more then it down that'd shifts last

Martina Hund-Mejean

it's Martina. So, Yeah, Darrin,

Let that take first. me

terms obviously of a can you the the you look the the the Asia at when better, is of a time, really point more, around they go of lapping U.S. not China, bit some just really them look world, actually When of Pacific, to Pacific, a well. the the the quarter-over-quarter of spending see bit USAA. performance at most In at are drivers, world In as if drivers, little behaving this doing is rest while world, little in is due drag. the of rest I in Asia

In very in additive you we when already so very the prior kind been Sweden, volume, mid-teens had to mostly on we Mexico is the kind in doing therefore flip, right stabilized it Ajay of And as numbers. by said. that as – nice we well then is a – the and In the America but at with also is a the as have quarter continuing the actually In it's numbers expansion in perform Russia, that seeing. Europe, Latin are well to Brazil, has that Russia. actually of led of did we've our actually also additive agreements, nice is look number of a fact, so really had China component. growth cross-border

Darrin Peller

give in trends or share versus anything in macro of or spend digital Okay. market terms underlying Can more any you else? this in sense is

Martina Hund-Mejean

the the you lap I out I United what In of a economy's the it's number just out. doing for States, USAA. of just between called That's called States, and United what Outside the we look the our are at When in instance, just they're gaining in the this of high actually European in time. for share. region, growing high point at market teens, you where teens, areas

Darrin Peller

That's right. helpful. Thanks, All Okay. guys.

Operator

from of next the from Don Fargo. line question comes Fandetti Wells Your

Your is line open.

Donald Fandetti

morning. Good

So, fundamentals here quarter. good are Ajay, clearly the in

U.S. manageable you So regulatory paying right And particular Would the on with wanted any we in to? just environment, pretty globally It to like I should agree now. seems check in it's attention are that? and in emerging quiet hotspots that be the there

Ajay Banga

careful On around to think the previous think would but the environment, he payments, over a I industries roll environment and there's anybody to – now, connected But some you place not really what just in industries XX years. about in to be other U.S. other Because with world, back on hand, hard eye changes administration yes, about me in the I that – That's in the regulatory we becomes industry many region important. where honestly, put on whenever about, were I an broader working every correct. and of the talks you mean today's in an close tell regulatory. cybersecurity is about around should that and that, keep important, and where, very see becomes in environment I can we the about. the really I right the more regulatory the this. eight That if including newspaper anything, in cybersecurity this regulatory – there's two world things devices, politics more

could leaders, in clear very it my all a on things. clients, remain very now franchise is impact country goals said regulatory but policymakers, our those to objective their managers the calls, changes, I close one to opinion litigation, be are whether locally, or just of not previous anything As – that

is regions in all were the on schemes a number payment of we're on very domestic where time. going points so world earlier at are And What's them there active.

end those technological of up they of that for keep regions, unable to the to reasons those mostly with developments, being tending be. up pace is used compared open domestic reason they to – Some where to schemes payment –

other Brazil markets America and examples that, in Latin is of that's are and happening. So an and example Colombia Europe there where in

Asia, Asia the thinking and you hand, On schemes. other markets of parts around renewed a of surge in payment Southeast domestic and find

value-added we're be in whether working in intelligence so out India, trying to figure with And technology them services And help try in that's our That's and as beyond our artificial partner it they well. they with or constantly how them. and Indonesia trying those and services Russia do the if what capabilities over how were story deliver we China this countries, themselves. our to in do could or can and

So big story. it's a

Donald Fandetti

you. Thank

Operator

Bank. next Your Bryan question Keane comes from from Deutsche

Your line is open.

Bryan C. Keane

guys. morning. you how it, slightly. Hi, Martina, about little I a about bit thinking talked pricing, changed know Good just it's

the sure Just And do impact I impacts, want Thanks. just in and make the on models, an any we understand other on the FX, our euro what as was there. secondly, real movement and just update currencies. major

Martina Hund-Mejean

my On the pricing side, prepared in out really no change, as it I remarks. called

we reshuffling offset up rebates in year, see for pretty and this continue pricing, it you for which it know, essentially cross-border, much been in the the line. quarter. as well assessment as of But where domestic you beginning have some incentives you the of coming to see As in was

to one of have the From bottom top benefit this. slight what there's just really more quarter, in exchange we're line going for have to foreign going you're So that. to as the as a I fourth be continue quarter, to look year, point at the a to think really no view, to full line. And change year, the of total well

QX if more those when rates bit benefit of of little rates the So continue numbers today, you're for a a see course to extrapolate persist. of going to you

Bryan C. Keane

Happy great. Halloween. Okay,

Martina Hund-Mejean

Halloween Happy you, too. to

Ajay Banga

Yeah, exactly.

Martina Hund-Mejean

kids your to especially. And

Bryan C. Keane

Yeah, exactly. It's a big day today in the Keane household.

Martina Hund-Mejean

We know.

Operator

your Your company. Caller, please comes James next Schneider. question state from

open. is line Your

James Schneider

of back thanks detail kind Day, provided morning, and when opportunity you of be a Investor years, maybe step to was versus the Goldman kind the time a Vocalink a talk how in BXB while, a little us you parts is impact question. you my between at next had and and give of in kind for been of do your Is taking think notable that's there's five-year noticeable discussion the in have business if we sense more can Sachs. this expect ACH that of to three or BXB. Good the something Maybe begin a a about horizon? you'd two I about results? little will consumer-facing of different lot of wondering now for bit just payments specifically terms this the

Ajay Banga

through whole, the not seeing talked BXB channel, or hub doing, we're just as already but other BXB a cards. we because you're the through about that from things virtual results approaching we're So Vocalink, all

only it's the Investor our Day, cardable of portion, from a to back a started. smaller but cards pretty address large we virtual where Now, It's spend. portion portion that

So you're commercial results that. in on seeing based

you'd to in BXB as are to do process ACH like of can results T&E more seeing than infrastructure our ability years, inroad more the what know within scheme Vocalink infrastructure. continuing inroads fact, already And country, said, fleet how in which know That's the timeframe exception. And is we on get other country. you in But and play, rare that the to I in apps be, years the a with happen guess timing, don't. me it domestic on therefore, ACHs government-owned comes are business. very very are asking domestic. itself, space that first tends tend either Vocalink five a And RFP when answer which shorter only don't better those the Because, corporate to terms the Those the years. an switching in in options, next actually our it And portion in stages how specifically, those. and momentum out. countries. get a or five we see three opportunity there's which non-cardable new But the and various other we'll the an of business, all going two to that different you the of like, a system, few are could be into or really all ACH with because from than the business, the if into make its as one do to to marketplaces. Most I that. to a RFPs. over I You're capability has are than in in rules depends six demonstrated enter business. deal in to what has country-by-country strategy a install on way great It cases, ACH you're

in of way know you or estimate. It's to yet. a I days. early transforms really points hate proof know That you I just enough that give to good that kind of through that make our this. next not Whether for Vocalink just we're the years, that revenue all will So an you three will our not, I'm is see. or commitment BXB our very see asset two to willing company. working would

Warren Kneeshaw

please? question, Next

Operator

next from Caller, comes company. your please Sakhrani. Your take question Sanjay

Your open. line is

Sanjay Sakhrani

we software And about Thanks. that it's the think benefit then, are there a that you or well? revenues revenue related when note, for is the network? with as Could cases talk mentioned KBW. Ajay, be ACH. you use live Thanks. House about a Maybe actual to has in real-time already the or just gone fee, live understanding on The the Clearing will going run because you, of volume-based your rate

Ajay Banga

into Clearing they'll hasn't with House couple in the as become And Clearing process of been ACH live enabled UK. roll us. has gone the banks the The the out banks. yet. is in to connect put and That check to platform fast that testing technically went yesterday. House then system gone House live software The their the is with of imaging the system a the built The clearing Clearing that's What's Sanjay, live

which is it to what could cases, for though happen on that filling that That's But system. fast one other I that built could in with economic of being current be are watch It to more ACH is and clear not of BXB. Clearing other And cases revenue use where cases or out each second a how and PXP. is those be upon. if extension software think Your as now The for a of what figure yet. to off that use therefore, they the us the that for that license. increases kind in use have satisfies revenue of they're it, that that It don't enable meeting any think parts those, going actually all which need And the part them. software are BXB could wait answers ACH should use we're it you play sense, for cases question right different could it or in. those a is new of what can a time value switches be That's be else the use cases across case business to of border, of factor make banks either there capability And actively clicked business as your use connected we stream, at somebody if that and makes American believe the opportunity other you're space. clearinghouses eventually, a opportunity not I House, will world. it The it's priceable or to it's in doing look software about

Sanjay Sakhrani

you. Thank

Operator

comes company. Togut. your Your Please David from next state question

Your line open. is

David M. Togut

you routing schemes? the on comment Europe open Thank some deals, in Evercore pipeline you. regulations Could playing especially of payment new pan-European field national payment for the as versus the ISI. recent up

Ajay Banga

in Well, the scheme the opening payment PSDX, happening because has how field become outside value schemes, of new of also a banks been for chain PSDX. and players could about other not just more are and the merchant up the between domestic the national payment into the players the or Actually, regulations, the while, enter in the playing versus of consumer. between and banks the

And The more more tackling aspect quite payment different see of domestic is every in on. actually, going are scheme, two work and quarter, that that countries. we it's ongoing. things So transactions most the

seeing saying we're in everything European at not improved Now, is not schemes revolution, are President, a number because transaction country payment share a evolution as that it's as of in far that fond – an as of our pace. domestic Europe it's every moves And Javier, concerned.

As banks provide where will that be talked about we meet far come challenges be able as responsible essentially will of little about terms the work bit to through a acquirers at a to both Day in is lot Investor a – data – PSDX things. the and We and thinking and it concerned, we to enabling of also regulations, to. other they on there's doing transparency players, – the can of the are both of their layer they also couple of them merchants the transaction beholden next security but to both with with safety And those – help over them can new help be a of course going to with help that the years.

them players So Europe could be fin-tech next of roll the got to helpful banks, how couple over we of merchants and a we've people who ready out team with, working and we're ideas with years. in

Martina Hund-Mejean

GDV because David, grew So, Europe's environment of economic the by doesn't That just happen XX%. all itself Europe. in

on is a but Of to it, after with there. to big actually but of stages helping There's has portion PSDX, that's what help other lot the of yet And early going grow. of number quarter winning trend course, this it's the been a talking we're banks really one terms are in of Ajay kind what some secular as drives team said, opportunity, have deals we Every very needing. the second about: continue Ajay

Ajay Banga

payments if its that take own the will it's of forms strength in a to will remember need acquiring to Europe. element fact Just and different Because that environment how PSDX enable low-interchange of quickly less in pot and the the of alternative methodologies you There's have for this Europe. build available there's people is build out less. acceptance low-interchange in payment a just other side environment, out money to introduce

really a something would to few going as that's showing I so to start changes. take treat And PSDX years

from level, numbers to keep domestic going at win much our other this years a famous of trying competitors we're can You'll global to going take as to see Meanwhile, we to more reform than changing, high as and come. period. and from real businesses some some rather during is changes

David M. Togut

Thank you.

Warren Kneeshaw

please? question Next

Operator

Tien-Tsin Please Huang. comes next from question Your state your company.

open. is line Your

Tien-Tsin Huang

JPMorgan. with I'm you. Thank

I of want about lot a security. guess talk – Just to

breach? breach, or a So fallout would security great. change the more demand maybe be any Any see reissue you Equifax from projects? for that Could or was curious, deal activity in color Thanks. on

Ajay Banga

yet. few. yet, I'm not got were not cards – leaked the very to trying of remember. in first Remember, like of time that that Tien-Tsin, all, number It's

relative information I of than that of terms. in And think we're that missing compared the to in know the happened XXX,XXX end you less zeros it's that cards. card many the breaches at past,

first more noticeable of figure you out whether but because know, So Internet that's it's level the part cyber is typically, to activity identity the period a item with our difficult that's over you of just the a world. out see that's to the tends being in way theft is time. of elements really some that, beginning of of to that connected Equifax or Things where The there And of issue, data fraud as become Equifax be.

Equifax any not way. probably breach is wouldn't statement. that jump I in higher new to any to or true So now right That's leading conclusion attacks a

Tien-Tsin Huang

Makes Thanks. Congrats revenue growth. the sense. on

Ajay Banga

you. Thank

Just keep using your card, man.

Tien-Tsin Huang

will do. Will do,

Operator

Your question your comes Kupferberg. next from state Jason Please company.

open. is line Your

Jason Kupferberg

Merrill taking America question. of Thanks Bank the for Lynch.

thoughts in your know then, been going three on can opinion, just any India? general forward get for with standards needle So the QR latest global was to years? Is start, there. they're growth. two move e-comm Mastercard, moving code in I the to of to and this the next terms size we curious in And on if update Ajay, and a business online

Ajay Banga

to digital of you should World answering I think actually the going wallet, line. doubt. weeks interesting. card continue Forum. ago e-comm I where about no the co-chairing I'll increasing. Trying It's pretty start have was of forms the tell let to see spend Martina I there I'm There's a few payment, and pleasure India. to from. on Economic

Although to back right used withdrawals pre-demonetization. are they cash where be

it's to considering much into So how a this. kind place effort be has strange gone of in,

the forms will because of than pay a to will help cash, earlier of less the Now, by traceable merchants pay have turn, the a form have incentive and to taxes out, anyway the as payment what use begun different a has to incentive impetus consumer months taxes, over that just in of rather will no they, not period chain. non-traceable few longer GSTs because paying in the think next happened roll on I

a need tax the margin, and absorb a reasonable try and to to quantum of or they So taxes their hit absorb it's recover that. in

So next high growth. see purchase volume you

of excess volume It's In in of be. was excess than quarters cash mean, ago. But but in being they quarter, quarters, the other XX%. It XXX% so a growth in few it's XX%. fact, from to this there's as because down, used is of negative I withdrawals number ATMs less astronomical.

is said, As cash I usage back.

the fact over next cards So years, to I wallets, good, million X.X digital, there's as year. that, up we to GST. spend that very with I'm now Along just in compared are the to there's September there. of of country two, continue the n over happening. because optimistic strong the about mix changing and an acceptance And interesting million business growth in three terminals X.X generally said, acceptance will high last see

million India the informal merchants well. XX as in take if there's you remember, sector Now,

and acquiring QR that, part to the terminal and cost what but acquiring yet. banks interesting, of it's discount rolling lot comes, merchants to merchant Bharat where is and question. the the of is go merchants accepting is of a electronic which would right a be to clarity out has for called QR starting your been cheaper payments country. now first been code-based of cost the your number of got – opportunity million The X.X of heck real the you've to QR, the acceptance, what's That's for on that this What's transactions of and rate through of there's So standardized EMVCo, me, change in because replaced the players gone the the is missing by accepting. terminal as the form now maintaining software relatively

that MDR XXXX, the right statement. those their should As building using what sometime be tell lower you are the think back quarter, in second in or is kind generally, of various Once a think And headed next I had policy, is, X what going quarter policy and going to their direction. I banks therefore year because a rates, in to revenue risk-reward rates remember X last higher as are be but months first year, are and of equation proposed it's those stakeholders. to Long out you're get lower trying a three And through actually, but a becomes effect answer, what That there's know if QR. in January in acquiring going regulator the reinstated, you promotion. rate. to acquiring at model still came I'm

will I an think GST provide impetus.

and growth year. continue of in kinds QR, should digital see to impetus begin will in you all India. I next it see more think And business I think you payments in to

on and issuers are that, acquirers significant having QR I is XX payments. are there's growth already think But a yet XX Now, opportunity that come. just with said to

Martina Hund-Mejean

just of three the that e-commerce is other question, the know, years And e-commerce worldwide, of around was as From part X% way, your an XX% so. you perspective, by retail payments. ago about or

cetera, So of clearly, There's Airbnb. Uber terms in e-commerce what a the happening and a et is with side. lot there's economy in lot of gig of growth

switched we of then that a volumes, terms And the our growth have about of on In those healthy quarter pace. e-commerce a side. at very XX%-plus

it's focusing It's good. additive, on we're it. and So

what we're as that upgraded use get Ajay easier Uber the we're cards. with some has their their cards well Asia they're see, terms sure of with as Pacific in doing remarks doing – can you replacement get cards going as people or with what doing, making can forward been they that Netflix on of As in

to will that benefit e-commerce of All growth. the continue

Jason Kupferberg

Thanks for commentary. the all

Operator

Your with from Lisa Bernstein. comes next Ellis question

Your line is open.

Lisa Ellis

quarters. I just last are Europe. a the volumes Europe, at quarters one, question and on also up Follow-up last morning, couple of volumes X, the over over looking the of points purchase guys. guess, transaction where good part points Hi, up of couple couple X

just you Mastercard trying versus from guess, us Because the just that into the cards region. underlying clarify looks strong very of debit part is it the Maestro – how it is of to is about acceleration. second or cards cards? reporting a First to I then, are of is debit how due like question: Maestro swap dimensionalize down question, in just how X%, thing that like looks And much much Martina, for shift can so

the bank debit you're – Ajay well-established debit is aggressively can is regions how transfer you're how what in these pretty of this against there? competing bank proposition So you where Thanks. an is network, maybe a value competing articulate question – – transfer the just

Martina Hund-Mejean

to Actually, I the and as wasn't first necessarily That of and it. a on Russia a better context, cross-border to wins, of for first some important. us part very When but So, performance had a of was wins environment, out cards, in are Italy. a obviously, scheme on to money in much performance. like the some not question, know, view. Mastercard From a domestic cards revenue as drives we actually secular better economic because get have slip, trends related Turkey countries you cards number used a of Sweden. those that context with as Maestro make Lisa, Maestro your domestic that Mastercard, used those Europe. in well of a from actually in mostly the and co-batched all That the all, those more point are they are the as lot flipped called

can not get just but card and a going it's that have domestically, cross-border These the real a on you revenue-generating activities, Maestro not cards are might now So up. because or also card. person showing and earn they away over use and with technical, rewards Mastercards the anything points the side, out a the only be

Ajay Banga

the other to in about like growth back that. Lisa, region And, debit a question

three things. two are there So or

are this the of our First the And been volume stuff for within numbers. years. in is facts all, of facts the growth that's saying And in debit I've share there They're six five, already the growing debit. Europe.

one. the to at If first reports, Nielsen you show well. look that you as That's they'll

of how part even like with exist. who do really Germans, second a - consumers, are Martina, is networks The compete around bank-connected which is you actually Germany, they which a confused question, go interesting number these

Martina Hund-Mejean

Converted user. Mastercard

Ajay Banga

to used their gardener transfer, years, actually some versus grow do I that as you a three direct lived account to payments there and give well. But be make direct Mastercard even Yeah. user. things in with transfers. know to allow that do I fascinating. or able are find to data for Having Converted bank They four bank to my vendors my that Brussels I to merchants which

technology The in first itself. is one

with payment to Technology system technology things What new enable to could Technology safety typically limited ability by transfer that on do technology. with to payments. to with digital invest card bank-to-bank it's Just mean clunky banks and competitive that? the and as and by I just is domestic of run be and what invest, have forms ability on them old, on do security. we other of loyalty, schemes associations limited

that in the fight accepters So the markets. places enables which of a first that's in to I think high actually new thing are these relatively number And like including of us technology. Nordics,

tends acceptance. be is debit clearing to through localized differentiator. has domestic business. I to systems, said, I cross-border tended acceptance, interesting expand more network enablement or part a a second mean, The be the The within bank want you as go local even a moment to

So it question the domestic is payment than systems. debit about about a rather it's cards network really versus a question

I You mean? what know

Lisa Ellis

Yes, to Martina, too. terrific. you. Thank Thanks. you Thanks,

Operator

Please Your Perlin. next company. question state comes from your Dan

Your line open. is

Dan Perlin

RBC. Thanks,

network? different PayPal onto bunch so, And – And talked difference your by I'm driven being curious, you you expansion have you actually incentive or integration fees are at of would So payments in about and PayPal. – just global that that the this where with them? now seen paid at get to are stage point if volumes about the of discernible there's partnership point talked terms a in you a actually of back a areas threshold Thanks.

Ajay Banga

relationship elements doing is had They've the key are co-brands, on, absolutely, for well of them. we in in PayPal with see cases, there elements two a volume renewed from and growing. quite So that our co-brand they're of some been remember and space. them, with the partnership the we've so but yes, co-brands while. The

We've to acceptance regions. out go some things up Braintree be great. merchants first signing we has in had that Europe. they're There's also to. done new online. the Masterpass We into has to That's that in U.S., happened. whom the sign Masterpass we you're Those to come and prepaid So And great. as work a integrate One they've beginning referring of goes it. our got those of up see, In begun months, We're merchants. commercial and Obviously, which few Braintree. to those that's They're capability first of putting number the few deals for see. out last and up Masterpass as the into merchants, Braintree. with signs and see is them two

That's methodology U.S. today, the that see the used scale you you will in a an when us So three details. natural see enroll to on but during couple sometime growing there offering equal happen that again, a you is fire compared And you None what and no months, world the good. acceptance. about The and on some a some We're rolled year that across be player, used over your nine a ago, benefit next the the there's happening. house on our that account towards Braintree-Masterpass different it's out to if PayPal will XXXX bank to when being integration form that U.S. part giving give of should in – of the maybe of about to in very PayPal a push two, numbers. longer six prompt in ago. seeing it it is try setting of will months yet,

Dan Perlin

Thank you.

Warren Kneeshaw

more we think Thank Operator, you. question. for I time one have

Operator

you. Thank

next is Your Maurer Research. question Autonomous from from Craig

Your line is open.

Craig J. Maurer

questions, the for question. Thanks on cross-border. taking first actually, the Two Thanks.

regulatory taking competitors? share strong. Is from Brazil, Thanks. in regarding network you're your on You discussed had because of single reissuance this you processing approval deal? are where the Itaú the being China secondly, And

Martina Hund-Mejean

On of things. a mix I Craig. it's think China, Hey,

the something. and also banks of the continued that of out grant back number really a there relatively number First going dual they're of is expanding cards single obviously all, with well, and to that. market, in But issuance they're recently, adds having the went and that issuing

issuers. are given year, dual-branded there that remember these a and earlier that view, cards a of hiatus of there top And wallet. last clarity for that, this again, certainly bit You only of on year, regulatory point late is opened that a that a was a number rough benefit, up of but was given many from might that of

Ajay Banga

issuance of within our we that last larger baked years the approved, larger. That's dual share over time Every in the much three were new much a in got four number. share card a that. or was of And dual-branded brand kind

other this remember, question deal new is the the limbo. such way about advantage on kept one, begun own when if as regulatory Brazil, no there, happened network domestic limbo. well most we card payment agreed also But our of for new happening that as to change networks why domestic been and longer is past as with debenture the in networks. the flipping Itaú a to other Nothing rules with as strong compete the competitive domestic as – won It payment Your do regulator in payment on we did regulatory a them network it we book. that their of of is win, of months launching has to hasn't now. would've issuance it's with flip rules That's What's the Itaú couple back, still in it place. in is the that yet (XX:XX),

Craig J. Maurer

Okay, thank you so much.

Warren Kneeshaw

do Okay. any final you Ajay, have comments?

Ajay Banga

I've reminding Warren got That's cards. me that to read our

thoughts. of question, wrap Okay. and Got it. a couple I'm all going with your Thanks up for closing to

in we're way long part core our our planning, willing to on focused deliver term. and in a business that budget run performance revenue to financial well our start something efforts to of right a in of are and acquisitions. That strategic way. our We We're off sacrifice good while safety and continuing investment is underway. grow investing strong while is our We're not each very the Integration security. the the for cycle continue Martina and I business

our Most adding safe, customers and our You technology sustained heard drive ability executing early well incorporating those on detection to exist. simple customer joining very through ways thank the We're bit and me into you this is to the system safe make products levels of like much us and our growth. enhance about today. ecosystem of tools appreciate that to of data. our of your pay this to that continuing expanding our to And is and company, and talk a little is artificial of and sure continued strong intelligence our and revenue set strategy, done which support we systems for

Operator

gentlemen, and concludes call. today's And, this ladies conference

disconnect. now may You

Mastercard (MA) 31 Oct 172017 Q3 Earnings call transcript