MA - Earnings call transcript Q1 2018 | Mastercard Incorporated

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Operator

Good morning. My name is Jamie, and I will be your conference operator today. At this time I would like to welcome everyone to the first quarter 2018 Mastercard earnings call. Warren Kneeshaw, Head of Investor Relations, you may begin your conference.

Warren Kneeshaw

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

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

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

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

entity Our counts financial this a comments regarding unless will better you currency periods The to adjusted their can release providing include additional Venezuelan results neutral of our Both transaction to card switched our equivalents. Venezuelan from underlying understand items measures deck card and GAAP eliminate noted. due regarding our business. the special we're reconciliations starting Please today decision transactions growth our GAAP information that and be of year the slide to basis and on prior growth rates. and growth otherwise non switched rates our the that deconsolidate exclude so rates note

rates. on supplemental impacted Our call the today adjusted will deconsolidation. the operational the by are basis comments of these be growth metrics which on significantly These only the are

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

Ajay Banga

strong everybody. start a morning, We're this year. off Good very to Warren. you, Thank

will Our of currency of a XX% revenue over growth the for our acquisitions, you income if execution which explain special Martina growth other operating the the on XX% was some later, in revenue EPS and was comparisons, the basis by detail exclude these affect driven changes, accounting a future continue folks, net underlying fundamentals up All excluding neutral our even versus those we employees, year a that of our term and results to items ago XX%. net year of couple invest you But long of on impact as first and of focus solid quarter all and more to growth of are up the growth of XX% our year business and items. company.

Now the macroeconomic front.

We growth. to overall continuing are see

around their for central watch to well, are, banks year are very keeping as the monetary We The and a low close by globe consumer a ago. however, increasing healthy normalizing reducing Retail SpendingPulse estimates strong versus policies our spending S. fiscal perform confidence. employment, remains continues stimulus. to quarter evaluate X.X% the U.

ex-gas trends and the to the best spending. at look ex-auto, in we is estimate believe underlying that remember Now that's retail way

lower initiatives improved think of according has whole of some driven Now oil deceleration overall more first positively concerned region. We the Latin I when positive growth March, U.K. in have with remains to about renegotiation. and to retail we in NAFTA America do recovery, consumer confidence. of the some Middle trending And the will stable see the the there Most number the and for Africa prices impacts in generally and and course government impacts of in the conditions. Brexit. from in unemployment, improvement potential monitor its the particularly although showed favorable world, remain Asia Brazil continue quarter SpendingPulse looking at and continues potential we East rest been UK sales economies up the elections Europe in of in the picked continue again Mexico in a

Cabela's to that as positive executing on progress from designed that's absent bonus and remain healthy as loyalty consumer most and the U.S. The expect and of just put by the Bass double we which significant way the a give World the for airport which our on last Cash in announced retain Mastercard trade affluent examples. and for global Elite share product driving together, One the like growing or builds a We're we Capital few see wins mouthful, the Meanwhile you to And Card, economy issuance markets. you geopolitics into the launched Saver traveling was This and from Card move digit Rewards Bank are access. growth an has and Arrival other let quarter. credit. U.S., If now Barclays we we we're and lounge annual our America Premier me transaction to strategy benefits begun impact Pro of continue we volume Mastercard, attract such In XXXX. includes risks. good recent Mastercard any across premium momentum consumer,

cards this of a migrating progress Now product and launching some private We're existing to also And renewed over which Mastercard following their the turning we Shell. again cards that Kroger co-brands. last a credit announced Battle converting year. begun new making We've including quarter win now is number Playground consumer time. of be will real co-brand with relationships to with Mastercard has label including

And worldwide. card first in funds customers In shop exclusive debit stores withdrawals lets co-brands gain consumers Santander Santander all making In will U.K., addition of or largest commercial the online Group. with make in partnership debit ATMs to share debit issue say in PayPal and key from our I'm and cards very and and our includes broader this the U.K. to our currently digital and Santander Mastercard extends sponsorship the that's we to consumer and consistent to network And PayPal and in million solutions continue we're world. nine our which capabilities PayPal's in on theirs Europe to commercial around slip assets. than relationship markets its credit and pleased existing the pleased credit access this debit exclusive with more U.K. which with fraud we're really their some In expanding for bank leverages U.S. Mastercard's to accounts our PayPal relationship for in date. the consumer the accounts, of consumer be

Money new consumer in providing well. Airlines for this Brazil, Banco bank Brazil. launched including in And with Spain. announce a in of Banco a Now with for renewal. just Again, to signed a that the and momentum consumer We're American loyalty driving as cashback And Inter, largest new credit in exclusively in largest on HSBC programs position commercial Travel number strengthening card deal U.K., added Office other region, Post We one in debit Latin quarter. customers program strong we underlying the Banco markets Mastercard the K. that's digital we In innovative the consumer of our Santander pleased the the to we're addition consumer we've building U. and our in Mexico. a services commercial and in differentiated branded. are Brazil co-brand solutions America, with Santander credit in prepaid and both be also to

credit India, portfolio Commonwealth This and debit our with advisers, quarter Bank In agreement flip. includes consulting, signed debit Baroda a Australia deal of we Bank managed which that a data analytics, we of and includes extended comprehensive services.

quickly. of ecosystem. a rates be What example million in as a be merchant cards side in should this acceptance and XX% and think acceptance codes, account digital all else. is will give provide April, RFP have and now signed services already with for to tokenize phase that QR Thailand since and our convenience or security opportunities India on on the checkout them does our ID. a more Vocalink And tries we're merchants that result payments Vocalink As and somewhere one PromptPay they in everybody that around growing Flipkart secure in enables like XX with number about secure a citizen for in the India tokenization for become using users same benefits see transfers have issuers. you January of a consumers up, XXXX also system making digital is And transactions gaining you button from improved flow, million XXX it a number when for store, if its us as a the scale details making to powered useless world. enabled and consistent, by in issuing lower we closer than progress in physical system just these mobile (XX:XX) checkout generating services, bank payments. and When both equivalent focus token-based steals and an implement have including technology tremendous single of merchants, believe payment And digital, in the in of Netflix the international as the world. world. heard know, PromptPay last essentially in announce we should on billion in for in us for the would good Thailand and authentication online we to it detection such Since we there far and a payment different expect store. merchants mobile faster our terminal our business, recently government to shop like about abandonment six sales, brings the common in consumers, unified On And you at response past. fraud talked standards potential to I support tokenized, they the number easier Shifting them common alone. in payments, in-app, and prevention issuers a That more $XX deliver simple merchant are months the is ways, and payments site, payment and of demand capability. paid secure, A digital people But checkout build and button use of with for the low-friction consumer, a the and they well. of are and standards launch EMVCo good fraudster

again, the to interoperability What's The reducing for when the numbers it are bring the account to transactions; acquirers, update to in bottom helps good merchants, consumers everybody eliminates of the automatically. and standardization, the It to in merchants by ecosystem. to openness, will issuers That consumers, declined benefits the EMV line importantly, space. bottom need framework happens line? manually cards More digital is and replaced.

NuData we for can merchants and easier our availability loyalty code from that A to in older Tanzania of and in through ways and access is in ID digital services. new user idea M-KOPA Now Facebook and continue their we finally, Staying will experience innovate suite services and we services pay of to Brighterion. Mastercard financial partnerships with our consumers our of sources reliable developing strategy, analytics QR millions QR users and scanning course, entering a for are power and QR of kinds like smartphones merchants provide, recent by particularly the get Masterpass platforms and merchant for we with a emerging continue to on further to their markets. of And Distribution feature at Africa the codes Pesa of energy it time. ways, and to expand offer payments to small new or to the consumers like a for on range make at platforms phones. with with is people we mobile extend and differentiated acquisitions social including announced authentication differentiated homes security example recent solar whole tools Tigo into daily East to people the QR partnership in power of codes paid prosperity. boost to to through finance productivity their enables to businesses. And

their know, data As personal consumers new for control it data, the Europe, greater of rules Data puts Protection GDPR, as is many and over used. of General use known in establishes the you how Regulation in

been to know, And work for aggregated you committed basis. Now example, on data in that fully for privacy. analytics a business only we've anonymized with our strong always consumer protection we and

therefore, And regulation. is said GDPR of positioned, area, new compliance of for particularly GDPR of full the part the I this what must think this late one May well deadline how data by is innovative we've be to very the are scope a approach. use. We with anonymized later Having related requirements for that, taken across in

in personal commercially. anonymizes Truata this We information from to Customers Essentially, output ensure back identifiers identity. which protect customers will service will sending the independent an capability and and have resulting never to analytics their founded be insights that can to designed solution and it offer of a the Truata aggregated further to for Truata, analytical compliant back an remove linked you use products then data this, solutions. receive that trust way before their That individual's an and called individual. to data

So in that's Truata's a Mastercard, way. further that services scale use customers, analytics a compliant will and data service including secure and to

So turn will call an to financial operational with the I over for on metrics. Martina Martina? and our that, results update

Martina Hund-Mejean

Thanks, everyone. Ajay, and good morning,

last primarily even ppt a year. net We revenue the the and foreign ppt very when by deliver strong the year, are was you exclude X pleased net tailwind driven to the which since of to from X appreciation exchange start the income, euro to to

exclude a currency basis. items to grew revenue related XX%, rules And a benefit new will underlying acquisitions. X, litigation includes on X.X X commissions. performance ppt page I now from driven strong neutral Here it the will ppt from and on also Net recognition highlight by benefit revenue the a special numbers I and

tax underlying impact to an basis by which impact adjustments the contributed XX%. EPS noted. XX% with expense recognition XX% XX%. XX includes net which these was of based to Underlying our the operating U.S. and for X Inclusive new the on operating items, repurchases increased the contribution Operating by growth. to underlying ppt revenue XX% and expense income revenue income strong due Center share. just the up year-over-year was growth this $X.XX ppt Operating acquisitions reform, of Growth approximately $X.XX to up by I charitable on results rules. grew Net per share, was Excluding growth per expenses growth or XX% income and reflecting share revenue of the was XX% contributing

of quarter, stock we additional worth an about through million and repurchased April During XXXX. the $X.X XX, billion $XXX

was metrics So you basis growth or currency quarter and GDV XX%, for see volume quarter. from outside can a and here Asia-Pacific. up let the gross last U.S. a up and solid operational the growth grew me to made and first on up XX% X credit strongest And up of turn quarter. local ppt saw and currency across dollar from X grew by local coming last was the growth all growth to page from X% most and at primarily Worldwide X, regions. XX% on healthy volume quarter driven of last that's ppt volume growth was the basis, of double-digit debit Europe growth XX%, GDV ppt due respectively. XX% X We a from in contribution U.S. Europe. with Cross-border regions,

and by growth X, sequentially, U.S. as the growth regions. strong Turning consolidate switched growth switched all longer transactions transactions to to normalized up Venezuelan was exclude healthy at Europe page across And to We also double-digit XX% that show transactions no we led saw transaction entity. globally, continued in

again In cards and Globally, Venezuela. are issued. addition, there Mastercard global Maestro for card branded normalized growth X.X billion was X%,

by strong turn unless revenue rules the as as the than the anticipate items, on for higher currency X primarily again on me let revenue for growth growth what of The neutral total noted. volume transaction by net in rate, The a described and ppt revenue growth highlights otherwise page well year. contributed we new to services. driven was recognition XX% X increase line few basis Now a to

in and new and This than and incentives cross-border. impact growth was in of this for due deals Excluding the the expected rebates net quarter revenue stronger underlying higher services was growth acquisitions, and to XX%. lower resulting delay growth

as in ppt X the to from worldwide rules. XX%, the the due from fees impact XX%. difference volume volume GDV the The normalized individual offerings driven while grew cross-border and revenue Europe XX%, Transaction revenues grew Vocalink. assessments grew the XX% various recognition quickly as to items. by mostly switched XX%. due revenue processing up Domestic XX%, primarily service growth growth. of And higher transactions the is new grew is Looking gap while line at our fees primarily intra well was Cross-border

grew in advisers by revenues driven and other XX% and security services. safety increases Finally, our

show most accounts which Vocalink a growth. revenues of this this ppt As in of up reminder, the XX line for

page on neutral excluding special increased items XX% expenses currency on Moving you see operating to X, a basis. total can that

an from recognition As rules. I million impact referenced related acquisitions, impact X earlier, charitable revenue this ppt an our from $XXX new of X to includes X ppt the impact and a contribution ppt

our increased related expansion costs areas geographic as as investment strategic was Excluding XX%. data our initiatives security growth to digital and well safety analytics loyalty. certain as reflects these revenues higher This items, as infrastructure, expense and such in platforms, such in underlying

grew cross-border, XX% I X, volume numbers X%, quarter both in same April Turning quarter X in That's from what programs. with Switched quarter that the And are discuss growth to will all XX%, through we growth drop crypto growth the sequentially saw respect first down was drivers first region. with first of solid outlook ppt as each wallet slide the bit growth due comprehended all than or our grew to globally volume, talk part switched what credit healthy lower and in in slower ppt And ppt the the in in a of funding. let's from Starting our three volumes globally the in of switched first with U.S. through quarter. debit In XX%, regions. down outside volume growth saw our first the down the X about the April seen and line ppt U.S. transaction we saw we X our but XX are grew XX%. a where drivers we follows. with our switched to in with down with have similar XXth what expectations from of in The quarter global the as moment. in

will X our our to Turning basis remain core which continue on XXXX, our fundamentals special currency and as full slide thoughts business service we for items, to the and share our neutral and excluding expand across products describe grow year I offerings. a strong

healthy from And percentage-wise, We with expectations be we revenue high previous environment. first economic year over continue forecast in growth to of year to mid-teens. up a a teens the solid expect quarter our now

about to basis. reminder, we this rules of and XXXX the year acquisitions a to includes revenue will estimate points impact contribute a in recognition growth of on continue combined growth the the full As effect new which X

bar the for growth would of items our bottom low like the see these related chart you a our on orange in double revenue items out I the call to of the digits. be at profile As up mid-teens expectations the would from end year. can prior of the high organic excluding to range, few the

First, levels from which we to expect incentives implementations rebates up will closings deal quarters. increase following do the pick QX and in and

This Second, is in recent euro we the comps border And growth strengthening the given year also wallet to in XXXX. cross-border addition, the during expect due somewhat. the funding. of moderate of for cross will drop-off to tougher the crypto balance face

already You bit our can metrics. in a April this see

related expect seeing that the do in April. increased our in we're rules BXB see services products. related to revenue reminder saw costs Thirdly, as of On end next areas finally, such recognition our the security, not as also to we as particular as new operating investments our revenues, digital just at have our safety from to in acquisition some We're some expenses, lapped a and we of strategic and in loyalty. such accelerating higher three QX. much And the quarters Vocalink revenue uplift the we

effect that items and estimate to the to When rules, the year Again This we impact new our chart, prior of be these see in growth would of year-over-year the from of will up contribute can mid-single on the double of continue ago on revenue combined, now these orange contribution As growth growth includes three digits, you grow as expense acquisitions the expectations expense previous mid-teens, our than few the more Center range factors, note. high profile, impact items A Growth. as digits. low expense of of full basis of points of our expect a result recognition for Inclusive excluding bar single organic usual to X up quarterly the will With expectations these digits. the at quarter. of about growth. and we to in QX other to respect be versus the an our year from bottom significantly items the QX fourth

and for effective rate tax our exchange full-year a Foreign Of on year based is in year, to the mix approximately the that, discrete already income Q&A a ppt percentage to tax as And the the profile to to expected XX% regional XX.X% points. X occurred the of ago first rate, having turn XX% session. X let than biggest given included the the estimated With is quarter benefit call Warren? the be of to the earnings. begin tax of expected benefit ppt of year to for line back now with current the the lower QX rate Warren net uplift exchange expectations benefits of of rates. note, the QX top X.X me

Warren Kneeshaw

Thanks, now ready the Martina. Operator, questions. for we're

Operator

Keane And question from comes Bank. your with first Deutsche Bryan

open. line Your is

Bryan C. Keane

those or and a growth Congrats on to markets? the the the about competitors, overall strength in Europe Hi, versus both seeing It's solid share in just particular. the is Are I'm I bit gains results. in guessing. Asia little ask you're the want guys. of probably that

Martina Hund-Mejean

Cross-border really seen both, growth what we're seeing we statistics from has we're Bryan. seeing, domestic in the have Europe, before, UK. Actually actually by Yes, way, the nicely. up what we're showing very growth the improved in seeing that including

inbound as in So solid the seeing of very see spend outbound UK we growth cross-border as UK the the domestically. UK. into solid are We well double-digit

growth, back China. it's from perspective is a seeing moment coming very like up. seeing what in single bit. solid even a see clouds horizon, Brexit. showing is obviously some the in rate, on So Europe though in high Eastern that Asia-Pacific, And the are we Australia really In about at we're cross-border growth worried little we're healthy digit we're seeing no the We also

Bryan C. Keane

rebates Okay. pick up it the the some a way quarter Thanks is second the Will bit so little about and here a it follow-up, closes? the the a going pickup deal year? or pickup just any side, through, on quarter is as quick the each think And of the in incentives of just you there much. rest to as expect, cadence throughout of

Martina Hund-Mejean

You're and question in implementing best outlook because that the once in people asking what is know. of I me let we the probably of $XXX close terms when here always high-water agreements our in and the point But will out have in It asking depends at that mark I'm we're are we that business. rebates really this signing incentives. terms the is we when agreement. time you is QX again, QX, The

Bryan C. Keane

great. Okay, Thanks.

Warren Kneeshaw

question, please. Next

Operator

comes ISI. next David Togut Evercore Your question with from

open. is line Your

David Mark Togut

comment Europe morning. RFPs for the ACH-related Thank you ahead Could on on PSDX. seeing of I'm asking of in Europe you, about offerings? pace good Specifically positioning you're Vocalink's Continental

Ajay Banga

what with years of in what's participating we in. of connecting and capabilities better I think RFPs systems more clearinghouse like. just world. are to their over but the terms That's data messaging in was participating the A out to ACH pace from any a do RFPs number around Fast don't based Europe in upgrade many there of the dates years not what there, of and are RFPs on to art with lot countries of built the We're transmission directories there's them. implementation PSDX. the and locations to have the of of ago all better the trying So state in change

David Mark Togut

as could comment then a any your update to with And you Understood. on hub? BXB follow-up, respect

Ajay Banga

already with half work this that And AvidXchange. clients year. progresses, is so client the process a first build we rolling to relationships partner BXB early we had hub of number our those This second with. and the the who are volumes with used in well. Yes, of doing the are we out really Meanwhile, have in of the had

check card. of fact, an we one is shift increased to seen not for volumes we've share those, KeyBank. seen coming In from just great through, And have example,

So partners got BXB of momentum beyond bunch America across Capital in Citibank, commercial. commercial with we've that a the Lynch, well on hub, good of other and business as Bank Merrill One, growth

David Mark Togut

the on congrats Understood, strong results.

Warren Kneeshaw

Next question, please.

Operator

next Susquehanna. Friedman with from comes James Your question

line open. Your is

James Eric Friedman

at Jamie clarification, could. it's I a Hi, if Susquehanna. wanted I Martina,

You then growth you were there. had other and were out you security. when about But and and safety talking advisers quick going revenue called

and Is you there XX ppt wrote Vocalink. total think, I wrong, that down you was this the if contribution referring of – Are from services revenue what's revenue? other I but to revenue I growth antecedent? apologize or said or

Martina Hund-Mejean

lapped the the called line the was to the know, quarter, of as you points safety XX, we other out the still in for services wasn't it acquisition it calling because included, the not on it we Vocalink, of XX fourth our And made most acquisition so business So acquisition. revenues, XXXX, there XX%. it was percentage why just it we're advisers so Remember, the I you. acquisition, as growth well we of by as underlying have the and and security. most for The actually April out of XX%. only that's Vocalink grew for quarter has that so XX%, that related the items that was drove did And

quarter month's impact one worth will course, you the Of of the coming much be the in second only year. lower in have Vocalink because year revenues over

James Eric Friedman

And Got ask crypto. moth like to guess it, about thank I've the the the you flame, a for then clarification. I got to

That's deteriorating to than you And where think how it on see from? had the one. are corridors come we anticipated it do through and is ever you ask a seeing this Let's that come guess back? will crypto. I what callout bigger

Martina Hund-Mejean

ppt. cross-border in ppt issue growth, the to cryptocurrency particular a it was of fourth number the really seen It volume crypto the quarter why So X event. that have in funding this, was of the in on significant saw ppt United in already we saw allow we vehicle. would related the And not of that States, first the decided, is X first a issue banks this that stacks, of that's the that of particular What the quarter. terms relatively all, or wallet the we funding in was the in usage X they that decrease for and have volume funding the the cards

In terms by we're in saw of coming a where some seeing select then of Asia, and number of from quite the United funding of We other the out States. a bit Australia coming country, is in countries bit and Europe. a countries coming out quite

Ajay Banga

the into the Korea, of biggest fair put bit their lot crypto cryptocurrency. a company around was little using on – normal of in of the with, bought governments interest buying one by exchanges in There's an some Asia general, involved there's as that our has now right a I to out it fourth concerns to keel. And bring well example, little out you part hacked to on the of another now back in quarter in and wallet, we interest there a because were been world the Japan less in And recently. as these depends pulled the even back allowing an of which latter got than was – see, in exchanges cards The can quarter. out In a is for has to and effort first a and what currency even currency operate. into

just or said want earnings our actually don't that not did to it how it. to don't we we when is time, we we call count even because something count So on this know predict last we

Warren Kneeshaw

question, Next please.

James Eric Friedman

Thank you.

Operator

with comes question Perlin Markets. Capital RBC Dan from Your next

open. is line Your

Daniel Perlin

around operating organic a question expense growth. morning. the Thanks, on good I commentary had

it in So the XX%. was quarter

think the high digits for single I kind remainder year. the to of of guiding you're

then there's investments to commentary investments. me imply a or just would about in So the ramp step-down. the significant that continued in advancement But

statement that So I'm just trying bit. reconcile a to

Martina Hund-Mejean

numbers It's operating have the the XXXX. and to third look going quarter really the so in fourth the where of were second expense and you're at year-over-year comps, to

that. to So nothing There's of reality it's Dan. just a more really it,

Daniel Perlin

Okay.

Martina Hund-Mejean

I thing. can one add maybe more

So going really to that's in quarter, enough for too often But the last that fourth A&M – what that go than earlier year. the And might of be are saw of we see because you different not expenses. move some to lower quarters. into some you we very trying it's

Daniel Perlin

but cross-border already down April these You've U.S., U.S., switching of some then just around obviously kind Thanks. And Okay. outside all can global you so. in the they step-down provide stepped the commentary statistics? in mentioned

Martina Hund-Mejean

Okay.

that I there all, view. But And in remind at stats I the point because net with it's line just is volume down, a this So, And switched U.S. really our programs. comprehended first it for where to when look from it's revenue seasonality you in debit totally the is XXXX completely the the want of of adjustment. of you predominantly expectations. a

an uptick the States. for the You the quarter. you that Comerica powering with depending first Security when little might paid, bit United we get in remember they a have benefits of And Social are

into a reimbursements. an we the continue to quite for course, Block which end expect And don't actually also of the quarter, quarter, the of of at first Secondly, H&R are bit of terms in quarter. the there's the tax second you provider in especially uptick

So that's for the United States.

it's there, just country from the here this. not ppt mean In time outside I'm by U. S., I – like downticks X or through go Look, even if or what X X down it's going the we But terms of ppt. upticks to volume is this ppt to all of see quarter-over-quarter. little time of or it's XX% country. and X

Daniel Perlin

Thank you.

Warren Kneeshaw

please. question, Next

Operator

Don Your next from Wells question Fargo. comes Fandetti with

is open. line Your

Donald J. Fandetti

Ajay, bit a over about look on little this networks talk will in about my little bit a bit I can I timeline you And approach how are the the then, a this checkout the that at do button, a and a can running? of future. you my merchant that is be is, common question when could is realistic where sort more think if for talk penetration? terms here? think you think Clearly be you little a up the been successful And of And volumes success struggle you that? strategically secondly, ecommerce going, of little under years sense is important wallets. digital it's guess

Ajay Banga

from is a or mean, through but Internet, ecommerce phone Don. ecommerce look, methods the of growing. as of pay Sure, and we in you over the from whether computer. pay participate funding remember lots paying wallets well you your different I And definitely of

take digital So It's good some also as concerned. ecommerce all It's in typically as out which we're and retail takes brick-and-mortar payments. ways. about is as out growing does well a far cash thing

they fussed how a that's the day So at what that interact, the do want And of is end remember our that. ecommerce in this the and wants to that a about that's I'm rewards make way way, and consumer if is to way, consumer the not safe to job to that in like meets incentives can gives simple and in way, in convenient do the do a them needs sure a their and it.

way in chance the quite digital Things so Internet checkout important. friendly relying important. way lot to coming together, inclined you to all is if only think each a but that where also issuers an space, and means. Therefore, actually with from finding way, effort brand think on consumers to that's be them which go by through I'm So present to other or digital of locations a its wallet grow appropriate a a that's each and merchant, network And of for create physical started about go to merchants is that also way, be attempting all will where as a well, a own to commerce merchants' think the simple on our in giving also in me way to it wallet in for connect providers not to with able what

a Forget big them. ones. merchants. of a the and Think sized It's them. for medium It's for smaller nightmare nuisance

normally difficult, for can becomes terminal. take about. the we things. the of So that and impossible, the in is one security those this button. way make It offers It's checkout it and merchants' and and provide this inconvenient did issues then we and from simple way terminals after the it all right physical and with all them flow locations. to loyalty with the you away incentives way rewards what That's card And would is the multiple business, one that, flows expensive

So I'm the of and do checkout just a banks, single supporter why think That's Not or consumers. big I I on button. the focused believe merchants do. and is the really it's for important really actually I I'm what this absolutely networks important? for

I think it's transformative for the industry as a whole, for the ecosystem.

job execute to is think I it well. our

it do well. Now first My timing. is better is belief that question this your about we

Somewhere over the this year, coming into of of of see this you'll to marketplace. latter out course first part the aspects the the begin

probably early got have getting for merchants the next gear year. part into in the then to do we're this. signed but the gear see Remember getting have for of it You'll offer enrollment. That's real set up banks we're issuer. wallets have Banks the got digital merchant, well a they push already into network up Normally to this. also up on. be There's what the to things to done and of consumer online if for it going customers seamlessly to for a how here whole focused their to

Donald J. Fandetti

Thank you.

Martina Hund-Mejean

business quarter, add been to just has I how kind business saying this And growth. Ajay XXs to have step very important It's one lower ecommerce been large is XX% And a quarter very, quarter after okay? XXs, the that's high So us. the ecommerce what to or on the either want In seeing looking the XXs at. mid which by on depends stats we of quarter. way, these in you're grew

huge focus a obviously us. for it's So

Operator

from Brett question Stephens. Huff with comes next Your

open. is line Your

Brett Huff

on detailed just a are quarter. little It for you more investment Thanks specific strands I for like time BXB the just the have? building the technology? there? accelerate be be more Can more to to there. little what bit a strategy specific morning. it accelerated you Is little of us? in that Good more sounds of organic Can on on congrats more you're it you be investments Is a partnerships? that going nice going a Could dig and

Ajay Banga

sure. Sure,

that's right? of two about, she mean look, we was expense commentary Martina's taking I are things. that So advantage talking part of

revenue strategic digital There's is reforms them and BXB of Commercial is that the rewards. have we're some on the one and growth allowed the and in Let of in me acceptance put but there's everything One we're us tax is matter accelerating them like. There's areas. two at terms of all and with the codes in think and context. better to doing our QR work of security. doing contactless. safety There's loyalty investments expanding

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access work about and people there a payable the aspect, are which and As Hub and to it, two there's find buying verticals most payable The to the on construction with. haven't BXB And accounts last on you're I'm Then over shouldn't that is cross-border the of the it's BXB killer is other but the but to payable last easy the as of provide end kind help one Hub well which and space. great aggregators help capturing Mastercard at That what of Send years. to people don't appropriately more that the complicated well asked payment to. the accounts about with efficiency me payments. one and the had the That's and years cycle a the reconciled of place. penetration third We credit you're on we're of issues as which hand is it as the quite those nightmare the app. where to like reconcile together credit. lots enormous more be accounts Mastercard all the from, Vocalink actually of is ensure otherwise we again enable become over you Trying talking BXB There's just in then with leave the lots somebody way stuff payments people. and the the combined don't to way actually we has focused in idea me HomeSend insurance which streamline providing paying can can where

BXB can bank I to the I your meet So and today there say needs. can go go and

them want debit, You ACH and talk me. to direct through

them want virtual You through to cards, talk me.

commercial You to want cards, me. talk them through

Mr. I Medium And help by You Small Bank, want That you and our quicker more them streamline. is through efficient, BXB strategy. making any can can for to I you, help and life Merchant you. reconcile easier easier aspect, for Mr. and you,

Brett Huff

mix. any see I your it network then more Day. economics how on kind of a being talked last the economics just or know Thanks. you of And you network deployed, at was something business versus be or arms about helpful. that Vocalink an effects update of the kind That's Analyst being dealer

Ajay Banga

I That's I used interesting an dealer? if know don't that. topic. Arms

they part is some debit make UK, customer built, being Bank and by later, two creating or systems. deal. work later, off fast in or pay ability of is is view payments We do that's the we Vocalink real-time thinking. that in their the about than of it different card It's a are in UK the countries. capabilities. their bigger are a We what that where to go Vocalink's I'll the instant. be the the provide their country. direct participating helping launching application fit capabilities what us kind kind of a one services I country. there's consumer, to space. of that bring call Latin that app the for We an I and participating a fondly that's build one every knowledge but base. is read RFPs of the is one, participants are that the services out sense we added give make their here's in in in to is software in value do to or day So it. become run for more a of economics marketplace, going infrastructure, and sort our you I merchant another for they the do in to in the in offer is we other participate There through with Thailand, will third of kind Sweden. of paying it's of scheme second number which the of to work actually Pay which as It's therefore sometimes to That able from We're value-added the the ACH them aspect, ACH start and a the banks where space a that consumer One sometimes markets. strategies that banks Asia. by the gave world rolling the also and a actually loyalty be which I'll Singapore. software Like happening, clearinghouse infrastructure way that said The terms the that about United in around Martina. can And Then merchant, to. set at All up code find in countries said, like only instrument not My powering States, is it you example not of to way relatively In just more a different of changes as on-time, which that that we they a where of payments our from bank. this do process helping is and is it instant that. reconciliation for in by days as is manage part takes to in America a RFPs to attempt which choice of in this and settlement of with blunt markets where for and We number the

Martina Hund-Mejean

From we're Investor in core normal Day that's it's already in normal we the typically or a by lastly, a people not Ajay an to we at pricing in always pricing it's if out Pay top service the fee is really when then our to there model, basic we is typically an what the either using are economic pricing, a transaction-based of established you investors, core or that run app. showed loyalty if That the our layer, tell Bank be that to who on that from data view, k to of And or point going those point if infrastructure the when perspective. we similar a for And of is or fee. a have a already lot go September, in that our the when have is money referenced, infrastructure. time. it's app. a it's money the license you That's is scheme last service. service with services number analytics made comes with proving building, very fraud UK that And we're and what Where a the a of in services

the us you're the turning all So time. are three like not all It's Having take to this will to should going in This terms develop. this, those a prove really key number next see the to us we're of case. this take be year. for you is and of to layers of some watching in said what suddenly out coming years going

Ajay Banga

issuer, are either own clearinghouses us the And a that These clearinghouse individual we're in deals set you're that is dealing for get country, And together banks to to deals. to the able going to on. are consumer. Fast merchant, to an or can lots not But focused implications migrate makes where bank it and is this. be we are offer government what that a to different a choice to the choice one-on-one of us the to ACH. are player a There reason to with countries. These of of

Brett Huff

so you much. Thank

Warren Kneeshaw

please. question, Next

Operator

Jim question next Goldman with from Your Schneider comes Sachs.

line Your open. is

James Schneider

two processed you on terms maybe the One perspective improve Anything network European the debit. noted if an you that there for there? call pretty of that was here? that to my globally. effect on bit. in to I are – trends second something question, or seems strong beyond out is from a debit the purely taking Thanks down think like could or an confidence one terms it going Kroger issuance little of and step in wondering share items do good then your due on was you morning. things Was That switched can your to address the relates transactions. seemed the to from mix, And transactions that else

Martina Hund-Mejean

and you the routing also routing quarter you're some a world the rest U.S., PIN of looking the really all, because two of quarters few of of won time. decisions which can merchants the is But performance winning transactions quite in might that depends the and can you make transactions So look see, States strong of but dynamic difference. are those by lapping. in really very time the When that's in RFPs make that first our remember at at ago, a debit it U.S., you merchants in Europe, And asked. to those from too, we're share. quite the as the United In some questions some the you we

point don't other a a From reading into should that be U.S. good from progress. make I to view you of So think European... anything we continue than that

Ajay Banga

We U.S., which in will PayPal also deal help debit us. the have the

Martina Hund-Mejean

And few in rolled able us. been There's Europe. in this have of we're debit one what are issue, countries space you Ajay UK country these had where hasn't about is last to very we we see bit course in with point strong into Europe being It making we over talked a think can in, of only this more a time. I the as that going of in Which at and morning will And which an as that little well then help compete Santander, Europe, in in as back from really quarters effectively. number announcements the most

and will to X It implementations some actual for those You our for XX-month the those portfolios to to a seeing numbers. yet are not stats of over. into typically take coming happen period flip

Ajay Banga

Mutuel a talked got Last there. we France. about Italy. Crédit about got talked just of time in in in Bank India. Baroda We flip We've I ING debit Bank

the next our quarters, us growth couple debit rate that strong. find at on over talking debit, about share in you'll see millennials. of is there. the You'll you're India aiming India And debit The

spend. everyday at aiming You're

at You're contactless, aiming really attacks which cash.

So ATMs. you're meets at aiming obviously and of also cash getting all Debit withdrawals ATM those needs. out

of to a using better And doing on. where debit Mastercard cards We're so banks debit we're and of converting cards. consumers capability important because Maestro also us, that and on is work that's to those a gives some focused lot

on So lot debit. strategy blocks building to there's our a of

Martina Hund-Mejean

not confused volume. out the want one Venezuela impacts remember transactions. which to is, if It sure doesn't The really the we I'm you're first that particular starting point of of because thing, impact getting I XXXX, in of are Jim, quarter because results excluding just

ex-Venezuela, And is had so then the XX% fourth was the out, growth strip quarter you're same the that or if fact, But quarter and in in transaction not XX% seeing that the first transactions. we you – growth XX%. you're so in seeing in

an saw of a actually view. you acceleration So from transaction point

James Schneider

thank helpful, you. very That's

Operator

Lynch. from Your of next Bank Merrill with Jason Kupferberg question America comes

is open. Your line

Jason Kupferberg

the really get footprint of questions in something Thanks, potentially that's But Hey. just WeChat of in past. Just there expands Alipay to and traveling as the about to outbound small talked to percent Is little volumes? other on China you the use total some acceptance sizing and matter? I was if as be Western the too acceptance in know Chinese rough around the on I business those some helpful. is give your us countries we've We bit cross-border. continue needle a services, guys. cross-border those citizens this this significant move it could enough outbound wondering of Pay. expanded the some West context a more would U.S. ultimately China just and any

Martina Hund-Mejean

it. I'm going to probably start going is comments to Ajay some then on and add

impact, does in as that's as ago What dual-branded a which it some the to the again took not dual-branded year much where last more we're cards PBOC banks we being willing got in card well positively our okay? have The as Alipay, come business. single impact issued where what's happened seeing point all, of did growth off few and time. few banks at point is the Mastercard the both what saw that or back around a not of that meantime, and quarter starting digits, have called into quarters. of In what dual-brand were And cross-border card in big issued this First cut single-branded a you That's were know logo in China the market. a not cards. cup the quarters impact cards go volume is it And of that view, for Tenpay, on it were cross-border. the we growth used China cards. growth changed in when from is being the dual-branded our outbound last to to they to logo is high domestically the then the actually last card guidance used impact terms they're issue into as be an actually And the allowed went quite

only So There's just single-branded logo these by the on Mastercards. customers in cross-border cards used those And it. are context. domestic no are

to impact up put that China. going be cards to is out As and we're to cards not to pays. there wallet, consumer their of a that you those lots and use saw have in carry daily work are able sure going spend top overseas because But less dual-branded right, it of to loyalty those card they more can make have things to way But than Chinese we're the what appreciate, of our cards of also top an much other because from was with That programs less that the actually they're you issuers. doing wallet. than

Ajay Banga

part is. that I'd of forward. is what is interesting relatively it's realize China The going to Mastercard I numbers, only that you've total think a to add think got small market that today, an But

domestic there structure, China or for in So It's constructed some local as years that's with down. of one that you a of with it get enables are domestic Yes, up, it's to some brings strategy added deeply offer China we've processing interesting went us in get apply way a And one to yes, the some venture our lot period the as the of in us processing into expertise system by our cross border life. through interesting, ability And China there operate quarter technology overseas way We a goes the but but there. how our includes it's our thinking depending doesn't in a the other, from one joint ability well. plays value quarter from is know, transform out our we effort opportunity our focus services that. got own out, That, on I which, to way where company to way, the is. license. to our believe for very time,

local very them years. impede measure waiting business I from value some talking topic constructed a and months our global of years working months. nine will while this Chinese this and nice China of the I've three to U.S. in been and from services. We're don't company been I the or for but movement, on circumstances years. be it's over balance help here clarity add our helping six nine trade government to people regularly. a us few I've So that this helpful Clearly, also for obviously to allowing measure

partners day. a are of and ours in Alipay number of actually change to going a in ways. Meanwhile, Tenpay not it's So

So them. admire I their I have a for lot of respect capability.

around go I put regulator a a large the with a it constructive little China isn't back. a what as beginning the you It's can going and opportunity a in should more in well we us bit I others China think a are what And new as of the government landscape in and is we to playing players there's there's this working whole them that field well. change marketplace. believe that of are looking on banks a very get think do study sense lot well out was together for doing. with digital and to ground There kind doing as just as forward, and what what's

Warren Kneeshaw

think time one last I we have Operator, for question.

Operator

from the question of line with final JPMorgan. your And comes Huang Tien-Tsin

line open. Your is

Martina Hund-Mejean

Tien-Tsin. Hey,

Tien-Tsin Huang

stuff. you. thank morning. Good you, stuff. don't of a morning. Thank I lot Good Good Hi. have

this on regulations been we've ask to wanted Just question. getting because the side,

Mastercard? Just euro conversion currency for Any on cross-border dynamic implications proposals. the and

Ajay Banga

to implemented, it's mean, always it is consumer-friendly. Not get really. a in sense help think think but I implications I I going actually

And helps the it understand so it if they're do way paying. what they're much and paying, they're you consumers when actually paying right how

implications I do. to to there So it's the thing right get – don't it it's is done, probably think but

Tien-Tsin Huang

And Good. just then Okay. quick one one.

info your data Just things does sensitivity on analytics and in It the very nature? thinking this focus side. and on curious, sharing, all strong I'm on growth services given and there. services way change that the any of sounds like monetizing

Ajay Banga

No.

I the believe can different we of get bar of rules that parts Tien-Tsin, fact, world. a set implemented In GDPR on how kind in

with ready a ready the way And commercial work are if believe in you We're the can most not Europe. people out is you think opportunity still it our GDPR privacy. do cost. we work. really are We're with what of protect creating right consumer a We

our provided, added I their shared. your only ability could that of and still I that but you specific. as merchant want include Remember You consumer overwhelming or value, and protect the the interest time number, you interests, the data is see that data code. what your to with is transaction as the provide majority how value euro conflicting. we dollar don't the majority still today choose the card as good essentially see The value, of is services not of

think don't changing. I So that's

Tien-Tsin Huang

Thank Great. you. right. All

Warren Kneeshaw

any questions final any Ajay, or comments.

Ajay Banga

your thoughts. Thank wrap closing some you question. up all with for We'll

with good wins start growth this and the actually our momentum very is a raised for deal digital of year which what emerging Santander earnings like pleased And our both also We're And year record are advance as Martina with all quarter. across Europe. is offerings. well, differentiated our channels, revenue in the devices, to to We our first. has the are at on strategy, expectations willingly delivering all leverages a off now. and in getting just That's digital we executing Tien-Tsin best experience that service developed markets. with

that position we us other these continue really long for term in key areas and investments So will believe our to growth. well

you that, Thank your you joining support today. for us so, thank of And the for with company.

Operator

concludes call. conference This today's

You may now disconnect.

Mastercard (MA) 2 May 182018 Q1 Earnings call transcript