MA - Earnings call transcript Q2 2019 | Mastercard Incorporated

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Operator

Good morning. My name is Brandy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mastercard Second Quarter 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. instructions] [Operator

like Investor call may Relations. now Kneeshaw, to begin. turn of Head Mr. to would over the Warren I Kneeshaw, you

Warren Kneeshaw

joining and today are Thank thank Banga, our quarter morning, Good Chief Ajay our earnings us Executive Chief and for Officer. Officer XXXX me you, second Mehra, for With everyone call. President our Sachin Brandy. you and Financial

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

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

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

currency-neutral Our comments today our results regarding non-GAAP otherwise basis financial will a noted. on be

we starting investments. updated exclude losses reminder, methodology to gains quarter, impact equity on our a non-GAAP this the our of or have As

a understanding results a We operating performance are will this excluding provide facilitate comparison believe these as our of periods. we meaningful of better items and between our

For net and gains was were of minimis. the change restated excluded. been as of just year not Prior the ended, months million have million the XXX de XXX impact and six three periods

exclude litigation certain also of measures non-GAAP settlements which one-time represent impact Our items, judgments items. special the and and

In currency. measures non-GAAP to the for Both present slide addition, foreign include we reconciliations of GAAP growth impact the the of rates adjusted amounts. deck release and reported

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

Officer, Banga. With the President and that, Executive our call turn to Chief Ajay I'll now over

Ajay Banga

everybody. and Warren Thanks, morning, good

basis just this invest reflect a continued continued is These a Warren as EPS up for quarter. Revenues up neutral we performance execution XX% strategy term a growth. long versus results on said. as ago currency year So, strong our XX%, of the non-GAAP

with the and XXXX On versus relatively expected. as strong, sentiment consumer moderation spending some remains macroeconomic environment,

continuing negotiations year. and factors, healthy some are we that continued to which sales X.X% according and growth, trade unemployment, and versus year weighing to estimates particular. QX US, monitor our consumer low of are a the moderation showing business We signs confidence, reflects retail ago ex-auto, ongoing economic sentiment geopolitical other are on In in SpendingPulse from last from grew and ex-gas seeing

In outlook the healthy, the according sentiment, to particularly is in modest remains. uncertainty to Pacific, Brexit continue Europe, slowed remains continue although our and weigh on we as has spending of China. growth. somewhat see from it mostly Asia around trade UK In estimates, retail tensions course, QX, to SpendingPulse unchanged, business

partially offset are growth We confidence and in continues and like Chile accommodative mixed, Mexico. by in America consumer the and markets weakness in markets Brazil, several are be to Latin in And more there. monetary policies however as outlook Colombia seeing Argentina improved

our growing healthy you against executing to business. customer areas double transaction our going across new of building continue are strategy for markets I'm digit we and core drive and most our by few business, of Meanwhile, our base for to give our successfully growth we how examples and Mastercard volume a diversifying

credit we’re commercial continue products driving make and debit, core, starting number and with bank expanding prepaid prepaid and across we both Saudi credit, exclusivity and progress So growth expanded growing physical and our a channels. across acceptance our credit, digital to We we business good their of with Commercial Bank, Arabia, National including in largest space, debit, along credit commercial across flipping the in relationships full issuer secured important the their portfolio.

won also consumer exclusive home remodeling House, a across And small We partnership rapidly the America new Latin co-brand we with co-brand business credit agency travel in region. five leading US marketplace. growing online a XX-year signed with a markets in a Despegar, the online new and in deal

will many loyalty of other with program engagement. customer deepen offering As our to co-brands, their integrate Despegar our their into

their they our In will banks country banking of with Germany, and they in the cards credit second we group have cooperative continue DZ issue renewed Bank, Mastercard the across the relationship largest country retail customers. hundreds to and to represent

and an of Turning space agreement with debit us their to FinTech. the to as demonstrated small experience in provider, in the signed Nationwide with business expertise working who our UK debit. card our We business selected due

So to Nationwide early proposition small plans UK year. million X in to launch banking over next a businesses new the business

an won secured extended Davivienda, our services security partnership partnership long long in we digital standing agreements advanced and with of term with largest and drive these we series the debit Scotiabank, And to the Mastercard German debit renewals debit exclusive adoption, savings Sparkassen. bank and issuers MasterCard. country. Colombia, In a contactless two will the of group, debit with Maestro in migration debit the Bancolombia help leverage Collectively, Germany, accelerate

terms of good are new technical EMVCo secure a and making SRC payment the in In June. launched specs. we remote progress icon, commerce initiative,

we working Avenue on months. testing few the in to United to Group, Expedia Line with and States tickets.com, upgrades and Fifth Norwegian partners Saks currently and are in Cruise launch We're in market We expect Mastercard’s with SRC the like merchants. issuers SRC next actively

security program, such combat worth services technology, And resources, the to online and Stripe merchants gateway Mastercard will cyber features and of as and a digital But with Square, then, these payment Adyen, of to make compliant and program wellness checkout. host payment with Mastercard have Mastercard tokenization with click platforms, available working we merchants. technologies unique our course, importantly, to provide pay a wellness along access processors standard own including We're attacks. AI Worldpay, a which developed added through to digital to resources through most security

help across of pillar ecosystem. diversify the issuers new India, where our and drive second in local building to to are you as geographies with partnerships further strategy, example growth now customers. An expanding turn where the and business payment develop me continuing know, retailers we're to by we let So and our

We’re pleased exclusive India. Flipkart, have program in largest with to cobrand an credit retailer online launched the

payments relationship also in signed credit a a issuance addition, enable them market In in to drive we’ve Paytm that with bill them also acquiring bank capability new Paytm loop established with send Mastercard, with payments. has will our new agreement card open to India. be using acceptance

to design solutions economy. assets verticals, specific the growing such for leveraging We’re as gig unique

we Mastercard with provide a help and who workers. Uber provide which pay prepaid advances will the Mastercard DVVA to interest utilize to card evolved to and their access cards with drivers issue to and will We as send network were hourly provides in debit for their for Lyft trust and selected drivers. corporate branch Mexico, their Lyft Mastercard And Direct new Collaborating instant with card, customers bank Mastercard Uber partnered debit the earnings. fee

established in fintechs of the the solution fintech we well partnerships I Working around believe our world we as with there. who as the a space, selling lead value series just to successful approach. We’ve continue services provide

working card customers. prepaid offer the consumer Railsbank UK deal to and Brazil, with BanQi targeting we digital to we’re signed their digital debit a Varejo commercial and new a Via to in bank, and programs XX new This million card with market bring in quarter, approximately

building areas new third to on for of the on strategy our focused now business. pillar our So

our broad offerings, know, for operate acquired, which card one capabilities, have shop us existing our a stop and to let give as a We with you rails examples. importantly, and of new payment our developed me a as customers you flows, set few allow together differentiate address most and

And partnership across and our customer another and applications services and a series announced across account to a you the payment owned real account VocaLink in represents payments over real wins few and our the PXX will builds leverages choice region. partnership strategy recently payments secure with in across on provides of the Middle region. edge the and infrastructure, of batch I've believe to time the Payments Platform, and largest This provide quarters. Latin new that of this platform by infrastructure, payments to replace the America, Pacific, assets, six we First, to Asia existing time, the Nordic banks offer milestone East last a form multi-currency Nordics platform the highlighted I leading in instant

Second, scale cross continue and mobile our bank across all payments and border disperse to to us build through in additional accounts, API. cards, depth allow capabilities, we single which wallets already a

population, that and cross the suite for provides endpoints just XX% only also For service and compliance, border markets customers, to example, completed today. address reach leading but the points capabilities to assets, over of of exists messaging many greater allows not of the the Transfast, to world will licensing us us pain a a acquisition way, of by of number we our Transfast, which enable

Interac allow Canadians border in be to executing partnership new send solution. through We’re international our a Bank The capabilities new will the of cross Canada, with leverages remittance which launch Send Mastercard National on issuer Interac’s strategy first our across Canada this push agreement payment to e-transfer internationally platform. money to

cardrails exchange. combination completed we time capabilities customer bill to to and capabilities, for and Transactis new our account manage unique real bill through your mobile on acquisition a with relationships, methods to of or website. pay account developing payment pay strategy payment We’re to pay to exchange bills combined bill and our will when view, offers of banking accelerate Mastercard a consumers penetrate multiple allow or assets, partnerships whether the the the distribution app technical payments current across and space, channels, are Transactis go business which market

with compliance supply Supplier automotive associated Portal and and announced we digitize speed, financing. Track buyers streamline BXB, processes business and increase in to chain in finally, partnership And OpenText suppliers to our financial that security the the industry, with integrate Mastercard has a payments the information, and

metrics. that, an with to let turn Sachin me our over for call operational and update Sachin? financial the So results on

Sachin Mehra

morning, and Ajay good Thanks, everyone.

So see X, continue to perform well. we turning to you page will

ahead gains related currency contributed on highlights to certain as to and momentum both the and revenue company's expectations minimal on a the Net items matters few equity a by losses the amount investments. in are well growth. of neutral excluding due grew XX%, of as legal driven revenue to special quarter. services solid impact basis a was Acquisitions and stronger our our net in core Here slightly

net differential in XX%, our increased remaining by X XX%, to increase performance ppt a related operating expenses related hedging reduction initiatives. Operating grew losses investment relates includes X gains a year ongoing to to each versus increase each X strong the and operating Total The and ago. acquisitions. our acquisitions a strategic and includes income in a ppt XX% and to ppt reflecting income, which due

acquisitions. $X.XX per contributing $X.XX, repurchases with to drag a EPS share related EPS was share. our including growth recent $X.XX XX% year-over-year, was

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

the to can you XX% for basis, XX%, part the as co-brand or quarter up dollar X% the in QX. and where GDV the four as US, page in currency volume to with from well local quarter, on up last see from of operational of was turn debit fewer growth Worldwide ramping let's grew processing ppt X gross approximately credit So growth ppt X second GDV XX% quarter. metrics wins days US last due respectively. in and a

ppt XX%, with growth Outside driven XX% last double basis, X of up regions. in line currency grew expectations the in at volume Cross a digit US, quarter. on border volume all growth local was and by from

double transactions continue transactions healthy part digit continued regions. the switch XX% reflecting adoption growth page strong all of in X, show globally, switch across at in growth contactless. saw to We Turning a to

growth there issued. are addition, Maestro Mastercard was cards Globally, and branded card billion X.X In X%.

and XX% turn line highlights increase currency neutral a was volume a described on let's transaction as as well primarily items, again by otherwise revenue few our basis revenue The the net services by partially strong rebates offset X unless noted. growth on in for to Now, offerings, and growth page driven of incentives.

grew individual at by growth The XX%. volume border offset The assessments XX%, fees see line line XX%, X primarily pricing, difference volume by while mix. while is switch domestic mainly Transaction mix. border with to that revenue driven ppt transactions due difference you'll XX%. in grew Looking of GDV grew fees worldwide items, XX%. the is XX% Cross cross quickly partially grew processing grew

in growth services other Finally, growth. intelligence to driven cyber data Acquisitions and particularly and were strong X quarter, and this ppt by revenues this up XX%, solutions. contributed our

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

geographic differential expansion. enablement, ago. initiatives, As X and digital I continued to and the XX security year includes and gains The losses versus to strategic said, as the of and and safety related remaining ppt just growth ppt this acquisitions relates investment such a hedging in our

Turning growth switch the our as follows. security X, ppt slightly discuss are the in saw through are Starting global through X at weeks saw volume slide we of payments ahead second of switch The XX%. QX. to numbers of let's from where this In to drivers what first XX%, the what or certain three July XX with due social grew seen of we've quarter. volume, quarter, of July we up US, the our each timing

outside quarter. volume the also up US respect border, our grew second XX% X driven growth primarily grew a by Switch cross to sequential Globally, by volumes ppt, driven the similar ppt, increase of to X US transaction XX%, switch With the primarily was Europe. and Europe. XX%, globally,

renewed our business, our and with We as in Looking a XXXX offerings. ahead, continue our deals expectations prior well solid of estimates. for terms had half service consistent we new and grow with first as to both our are

consumer ago as versus some We to see continue year healthy moderation spending, expected. with

of a also grow terms and rate the excluding on revenue, we net year. basis, expect neutral basis for a same at to currency continue low-teens versus a increase deal In in expect activity, at as for the On acquisitions, this to grow strong QX. of we a growth because rate quarter, some as very of a moderation to services sequential low-teens well third

FX a to to about ppt for to a expect ppt and X for revenue X the We headwind year X the headwind be quarter.

third acquisitions PPT X addition, will revenue about In growth. add to quarter

single expect digits we For at year. end a both high basis, high excluding currency continue on the operating of expenses to items for special and the neutral acquisitions, growth

the basis, growth weighted heavily timing the and is we marketing promote year versus ago same in as due QX mid-teens year, contactless a to quarter, in which this of On third sponsorships. expect we usage the the for spend, invest more to

OpEx the QX. about Year-over-year, year tailwind X FX ppt and of the for will be to both

to In addition, acquisitions ppt quarter add X growth. third about will OpEx

forward. of billion X debt rate at issued expense we in the reminder, interest and run a will going As our this end May impact

now terms XX% In approximately of rate, for be the we it to the year. expect tax

me the begin that, With to Q&A Warren call the turn to session. let back

Warren Kneeshaw

Sachin. Brandy, the Thanks, session. we're question-and-answer ready now for

Operator

[Operator of question line comes first George with Instructions] the Cowen. Your Mihalos from

George Mihalos

Ajay, obviously How how brought and it peak to that's as take it think I another sort guess, driver. contactless, you question, meaningfully ask a on Congrats quarter. you new geography it'll strong contactless does a long or up been introduce of take in you long up you introduce accelerated wanted growth. drive, really when good do a to

Ajay Banga

Canada, adoption. basically changes contactless the XX, place contactless very on the strongly. UK. case grown a contactless the market value enabled, cash many Turkey, are targets deal Australia, likes, So, where that the and great with the in has low combined how with as around transactions speed XX paradigm the and first Hungary that got now combined it depends of It of cards terminals, markets the are payments. everyday contactless Poland, for use We've world kind

tends it doesn't, tends ramp slower. it gets ramp to system enabled, faster. So transport contactless if to it the If

all pretty five to banks, in where it of were close on I'd community after merchant non-existent acquirers, percentage of to a to dollar an good and other to contactless hard is together four, went transactions worked was being promoting you that really with really if launch. to example, It case the four take transactions, contactless, markets, small not years Australia the say market from years like the the or get all So AUDXXX large under in five but as XX% a in the effort number.

Operator

Huang Tien-tsin Your next question comes JP with Morgan. from

Tien-tsin Huang

again. here growth Good

and and retail you I'm in growth. quick type a more payback on stronger card just Just then et of traditional are look, Maybe mind, know on Is project gave than third specific, you the services of and what the Is pay space bill if more on different and quarter, payback I past? we've mentioned don't it those bit the your you -- data. the helpful. deals of there you work. Maybe, which that can these is curious recurring outside or cetera? if related be on cyber seen the M&A, just couple types ones, more just little a

Ajay Banga

a Let numbers, on far Sachin here me being we But go. more correct crack then me. take and first probably comprehensive can

part going it's selling volumes into that to to revenue the recurring built the of a then the of part. lot kind banks through our involves first and would we goes a other as that change tend the cyber of merchants have is profile and has AI The That's that is because the re-utilization first they products current them change it, change, way it quarter-after-quarter. revenue, competence and services What dissimilar volume that obviously our because from business our will in and into more. cards, sold are not the through in earn revenue governments

efforts well. capability the XX% of be and is our to recurring. cyber improves. work the of years more ago. That's it see and now to it NuData some you transactions intelligence, by second our kind AI C&I doing part, see now transactions, in aside used be space, seeing of What improving all XX%, the a percent, something our was tends of time the impacts transactions, own way, tools But predictive tools Brighterion every percentage of that much – and used on data the more power larger your is, new from our improving acquisitions we business our XX We're the as to it XX we're we of and of than developing

that quarter in the of of slower space, expect of that growth D&I. than our the of part prior, where is second them of fact growth like fact part you services recurring, that in lapping some them little in that are had maybe are is comparison that a third Sachin primarily in projects. The the But our rates. the referred to one-off data and XQ by services some projects should to quarter, part of business, the enormous some caused

kind – D&S that’s these of the data me, acronyms the So sorry, business. confuse

our recurring, it work. data mix the where got proportional businesses And related cyber more so the have you've project fairly business a but business is some does inside are high recurring,

Sachin Mehra

that. just to Yeah. I'll Tien-tsin, And add

so quarter-to-quarter. So this moves quarter, second number said, in like around right, Ajay the

what bit in a even move And being year, caused very And last had you've which quarter things growth the side. are a function As of last of in advisor we quarter, first year, little the projects, place. quarter. on the quarter strong particular services which for seen, delivered take of and between that's are that's particularly to

I be would our could So growth of Ajay tell said with slightly in in second business. you what quarter, line came the the advisors -- consulting in which stronger, side our what on

been On part completed you -- I for we which of closed acquisitions, on your remind one closed look, of think shared impact couple what M&A, you of third things the early in with course I’ll during will which is the the acquisitions mean, have have the we've dilutive be acquisition, second is question the which quarter. which second Transfast, the the There's quarter. the

all forward that consideration, of we for So about has been think taken acquisitions. into as outlook

to acquisitions of $X.XX acquisitions continue our profile, that these XXXX, and as what it do. relates $X.XX different will in across between expect we lines the are We and to dilutive revenue be

described. a along standpoint, the the what lines a follow for Ajay safety Ethoca, of from So security will more, revenue is example, bit the and acquisition little model space, just which in of

such of on volume how into the get Transactis, are basis charge which the those in as and engagement we business resentments function other that. coming it's Then we a of, of kind where bill of the payment businesses space, what is there

of on the transaction in more presented, bills. be we nature per that'll of kind those bill fees charge So what

Ajay Banga

One and accretive becomes by the philosophies basic philosophy, our M&A sure stops is third try dilution and the two in changed has year. two, year which Nothing make being, we remain. therefore in

end we fairly embedded acquisition that by do the Secondly, of they business it in company. work on every year running, remember whatever second and the strongly a the in line next which don't second something means discipline in year, that making by business after businesses and the of for the you second the are embedded core now therefore buying year, is the

Operator

comes question Sakhrani Sanjay of next Your the KBW. from line with

Sanjay Sakhrani

to I could have have and then growth time. fintech expect to been Maestro robust for how in conversions maybe has region that you visible any and you had the that impacts I wins a And The question persist, Could about because speak continues some know also on you to talk long helped. remain Europe. Brexit. you've some from

Ajay Banga

day that strong the a now the personal cash change since prediction. that now this I for large Europe the therefore reason saying dominant it's continent see almost opportunity market years, and a growth been company, XX no Europe is cash I've and our I convert of to healthy. even CEO became Sanjay, market payments in in parts remains is to

To quarter the give XX% the that's over acceptance this year, you prior locations of grew an in first merchant by we one quarter. quarter XXXX, in example, just Europe year first

is pace national market most is to regulation whom well, a the having opportunity so technology, as this keep got payments so me share global but are about I'm large growth, that, schemes, Continental for market against There of it sense And in and has of with yet. talking innovation, which hard is just finding local growth, our get all competitors, enormous as said -- also not Nordics trends. Europe don’t the wrong, not developed are, against growth share

tend come they that therefore, And in a us their get allows even us to help businesses. assistance and to for foothold to stronger

about we yet space And all in in BXB. are commercial and and BXB And so, growing. is this the space and that another SME there's Europe

enormous opportunity, But of the So, doing. very banks, angle. of payments, course. and is there's remain what on just Europe, Europe now growth share cash yes, even and in I That's and of terms think in bullish fintechs, regular course, BXB of an acceptance yes capable

healthy. be still the for sing mean, Brexit I not UK spending directly remains spending impact Sanjay. I interesting, seem in yet, the to market people a and forgot it's And remains to answer growth where

there. you seeing isn't consumer I volatility healthy, volatile. tell interesting the there as border still October guess closer flows, get in XX. So is If you that in to currency still stronger we is the spending think impact pretty outbound clarity, is market. But remains expect an still, But, market. going direct attractive cross than more the Obviously, yet to fact, I inbound get But you're outbound. I'm can't inbound that UK and what,

Operator

comes question line next from Your the Goldman Schneider Jim of Sachs. with

Jim Schneider

was -- I to comment give maybe us last any pretty before kind the to cards. it's on about also Can wondering that here, did if the just transactional five or have could is of highest it's you teens but drivers the growth. seems you what there big sustainable the Maestro been, level you first just process like relative in reason It in sense move of there's reduction contactless, of whether all, years. the the maybe since in, from much not a think, been six to level believe I at high the growth

Ajay Banga

take so that I'll Jim, one. Yeah,

we to switch our driving transaction you across the should contactless transactions. spoke about, helpful is, switch be of going adoption, continue about to growth on which vectors, a fact as terms in just you think drive growth which think I that's

which drive switching more The be vis-à-vis And focus switch of increased. helpful. our other as how network, company, MasterCard, you'll that over schemes. is is, engage remain to a do to also us, the area which MasterCard, What for from local of on which to has we years, percentage we focused continue continues the should piece remain a that to for we're is obviously transactions see, over doing should the migration, debit Maestro

of like eye forward the are of facts growth are going these terms basis. all it to growth. things, switch driving keep relates of what So on a as helpful transaction in would trajectory which factors a look Those would I on close the

Operator

next comes the with from Your of MoffettNathanson. Lisa Ellis question line

Lisa Ellis

of a with to an like of wallets environment examples Ajay, India. seeing many to follow seems which It debit players out MasterCard. issuing the least competitive these like cards wanted increasing agreement with call aspiring to in I been Mastercard a issuing relative this, where Paytm up pretty years shift an would couple against are digital to where number in we're signed the have balances, these ago, significant your at compete on that of of seems

can this than broadly you you markets Are like talk about these with more across So your little bit how this the it developing fact players traditional seeing in dynamic? this? banking different and is competitive working shifted customers? Has

Ajay Banga

of to guys, on card to debit is over economic has a changed a last Asian of at used these lot in moved decade. around, therefore, day, way a regulated the versus of the US account use in way factors where debit Lisa, are the far the find the debit, quite of a MDRs. account trying generating card has MDRs of it the the two on of start of or one debit as the they rails to example, going economic end And around the them world, some by out quite as lot an to bank dramatically payments. be benefits, So The therefore, benefit a or And regulated. market as are interchange many markets benefits India, the regulated. And incident so account have interchange account going markets, a regulation to have debit spread that’s

has that has benefit so And economic the card account rails. changed. and tonality The changed versus account -- of conversation rails to vis-à-vis,

the our and infrastructure real Meanwhile, parts why why and to parts of on view top a in that all the or payments that's a building America as and efforts out offering build with or about merchants East Asia the is good And payment rails in investments in choice region customers of applications to real investments and company, both is and time Latin well. have Nordics adopted that's VocaLink, of as in why to and idea. account services that’s we, Africa consumers card ourselves the account the Middle time

next being what the to decade, and prefer. us of sort payments Because cater best to and will agnostic, over our way the rail merchants see out believe of if you that's changing more that's the I I landscape. believe more customers consumers and

Operator

Credit Suisse. with from comes Moshe question Orenbuch next the Your line of

Moshe Orenbuch

number getting next more and a of you kind maybe and the bit kind talk of acquisitions amount guess, could of there round different a they talked there a the factor this than about just that might course perhaps bit over several You'd just about be of in of specific are little about you them. are revenues acquisitions think a I What of years. little the platform, how

Ajay Banga

I sets cases of of over oriented all, couple skill years, few would acquisitions, oriented we been even our in platform the First didn't towards of say, past or have most have. a

gave company access which which ones called merchant or all But that or So technology hire engineers, been been challenge programs bought XXX C-SAM, time. majority from years quite would have ago, to it platform last of service Pinpoint or deals, oriented of our Australia mobile us some organically. to loyalty these a be we the a have

and space, testing So or gave data learning and NuData take Predictive security. for platform platforms cyber take Technologies Applied of gave us that the services AI that us a

we do. bundled I'd most then of be our what sell to of kind what connect service say into a to and so the can So we add of in our as have, tend That's to owner we're trying platform, a to acquisitions back wanting system.

dramatically So, on don't see different logic. I as these that being

of in than deal interesting the two more flow deals getting deals five ever or in XX, seeing two first see one saw picked of the We years years. what's three we think we is XX. you've I lot last a did, always more we're seen than many out and that or

grow of growth. people it develop I credible acquirer, and a as think tries company have is the who a opportunities we into acquire seen part businesses to stitch to we and the give in career then of kind they're that

Mastercard and to way have Brighterion So plant APT of an you in who deal didn't bought acquirer taught a as we we’re the I tell great doing NuData the like us things and not know would that comes them. things. we before seen even

very of don't I I our in a from or acquisitions, our So that both successes flow or for also Ethoca cross an Transfast that them. but having patterns. a between a mother think of see see Transactis benefiting two the these I Wise. the can as culturally all or different enormously for similar company,

Operator

of Bob line William Napoli the from comes question next with Your Blair.

Bob Napoli

BXB internationally. any the you give piece, business the far you'd the the haven't if maybe, on was rates, BXB automation -- update of I question even in that and in is in payments. US, scratched surface of is AP trends behind acceleration, could an US A Ajay, on the there international wondering signs market Sachin, you growth mentioned payments. the that growth

Sachin Mehra

Yeah.

So continues management on to standpoint, to our as our remains about side things the lot fleet from opportunity the business catering secular well. There that business small business, you side would shift universe, grow think you a a of part side, many the BXB Bob, doing that you, business, the the we've as still the for I of of card been of business, business. in tell many, commercial T&E years should know,

which got We've that to very growth We continue grow that solid which you're business. some support the nicely. platforms, with, familiar commercial of

which that. in interest as the more relates again, seeing we've good BXB customers it stuff, from recent our to The done hub, we're

things it's in things take is curve because a those solving which previously, those like adoption promise lot something we time, points the a multi-year process, still said but on the is pain shows business. adoption of So curve

Then I different new stuff. and think about the

established of segment. real the our on points solving announced For this partnership the BXB just about in but comments we pain the relates because compliance talked we of earlier customers, early for the instance, and today, with OpenText, capabilities again, shows days, a it in onboarding as side example, Mastercard promise to we've track in automotive Ajay’s it's lot

standpoint. as new there, other spectrums, our not about multiple traction. such from track, in There's as invested we're good think then to now. should in market which things are BXB there just and the in, to off over pay we've which getting our views the across has are show revenue and which business terms right this of US doing trajectory delivers starting the businesses Mastercard opportunity changed last term, which on much which you are in healthily, And will the longer over both continues which a been global other few think years, as well I we've going, grow So, business

Bob Napoli

the market behind I Is are would the market? international imagine – further opportunities US the

Sachin Mehra

answer in in taking BXB partnership again, example, with the as hub of quarter, the lead an we for from We is Bob, clearly an The be there last to is that Yeah. well. example US [indiscernible] in it that taking exists announced question to the which yes. our did to question answer Australia, and for yes. overseas the would that what opportunity,

This quarter, Again, we in talk about there. towards taping the primarily our agreement big opportunity Europe. with Nationwide, which is business in small a space

globally typically as on So and there's start think in answer US yes, up the I this well. opportunity things the is really

Operator

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

Jason Kupferberg

points domestic and on revenue Sachin looked XXX it Ajay. for decelerated assessment, there one the constant the growth one about just like I'm Just for starting in currency.

second to maybe wanted we in there considering the just get revenue for and what some parts color should half line. drivers moving that the be So on

maybe kind terms then targeted we What's just to go of educating with Ajay, had of little plan now getting that live we see on SRC implementations. Will you actual seen actually Masterpass? a consumers And if closer there? the further what in advertising we're can historically like

Sachin Mehra

first in take year. they year place to you’re of this down due So continue that pricing the was lapping our sequentially see XX% standpoint, rate rate last with trajectory that progresses. a pricing from domestic come effect primarily marginally to of is That a at certain as would And the one, quarter, Jason, the of in assessments, you the put growth line assessments down domestic XX%. in I'll right, XX% That's growth GDP QX. from grew

Ajay Banga

get the Masterpass industry on you the testing efforts once the of marketing see probably will uploaded we current for idea starts. away has of to and coming, one it’s that that that expect that talking of stuff I'm consumers the checkout before world, promotion to a see digital the the but few merchant SRC broader we simplicity banks, making yeah, of still the networks, used out start the get fact completed rolling into and button marketplace, would and acquirers whole months substantial you SRC, substantial making SRC kind And part today's we effort, this you in get would

Operator

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

Don Fandetti

a the commercial? can the cross that little terms you some parse follow clarify in growth in Ajay, been growth? up it's T&E industry bit in on spend trends out just on in versus know I then a of bit different And e-commerce border, little how overall? you're the concerns commercial just on a maybe or around been you talk some commercial, feeling there's can

Ajay Banga

I’m on commercial getting good overall. spend

border, Sachin And is kind part high cross that's part double just of answered. growth number us. where digits, for a that is thing. good teens The exactly in the border e-commerce, cross high So about

it’s remember crypto purchases, stronger, because whole you that’s talked lapped. remember, currency you the well, about, we that If stuff

So, some border part XXXX. improvement that in getting the out that. the the saw benefit we're that's real cryptocurrency cross you effect of is back quarter-over-quarter growth the lapping And of of

expense, and border tourism, border alive is of kind well. by travel still and cross tourism The cross large,

what's as doing and to changes tourism to find quarter. this depending quarter, China, China. large, card by up some Canada, just Germany, happen, cross began so on. United But would due that and border travel going to from where growth But this the in is prior out, Japan actually holders seeing increased people take quarter over travel, well. Europe, quarter you’re still to primarily to and is which the on travel, it's it You intact, okay. But Australia. going, States In in Chinese where and are is to not to goes which And

Sachin Mehra

volumes for is mid-teens. we in double continue XXXX, I'll all cross digit across growth the be year see cross And to rates just add expect full in to border which to growth right we border regions continue and here,

Operator

question next Deutsche line Keane the Bryan comes from of Your Bank. with

Bryan Keane

can or Hi there's you of about guys transactions are Maybe bit Ajay maybe where higher can throughout it there higher. that revenues guys, like can about switching, ask talk percent just the over about then about little a you comment just want that your now you lift economic as services it pushes XX seeing so to an model, you talk and for percentage that Obviously, go time. yields well. sounds

there. about just different So thinking implications the

Ajay Banga

XX% but with technology more and I allows opportunities reason reasons. like or in behind reason regulations, what cyber innovation to to part are struggling I'm not year, show to ours protected for is One the gives with to are What I local going analytics after. was or to have I that for transactions to and to them come companies happened there be our mentioning better that with service keep us expect pace next multiple tell its security, grow. you that that that number you to year is can continuing growth, year, able payment expect schemes growing, tell this The I keep

when some changed formulated where the in it And regulatory changing in see example. as in happening marketplace. more they to And in beginning no change, of happens has on they across dynamic control That's Europe because so all the goes issuer, Colombia, of they're and changes the is locally transaction transactions, either your kind as ubiquitous the like ago, It an longer also change tend to begin there, they're to Brazil, change scheme, years environments you to control, the routed. control merchant on now choice Argentina.

see seeing. than markets allows in you transactions, certain to technologies cards old see in could you're chip many allow to you of stripe obviously, what the kinds or behind of That's Mac this then transactions do. And more some growth contactless more

behind something, of things a the the number becoming forgot years XX I XX number XX so ago. And there's or exact XX

the is both That our banks. us solutions better of data, think XX I XX%, expect grow. they does is now. and correct. that our And see to help businesses, were that predictive that does us yes, percent to of odd bundle continuing merchants our for and I implication it allow cyber data XX% in in and up services power with and that the coming to to

Operator

of David Your next from Evercore. with line question Togut comes the

David Togut

XX, PXX Good when launch and to and, customer partnership the of in to in authentication, go of of leveraging ahead secure transaction talk September in live broadly terms Can Nordics you what on expect see continent more VocaLink’s the you European with on Europe? Continental authorization the on do we approvals XX VocaLink. positioning about happen SCA your September

Ajay Banga

a expect of I fun. lot

SCA of the the let enforcement authority. there So flexibility from been in But a all, XX also September announcements walk that be European will you, some at date. me of national first banking an some level is there's important

will I in I enforcement's be that of confusion. countries. merchant degree some be think there clarification some gave on out different friction two caused lead the issuer confusion, because a confusion, fact think interesting, to consumer you'll some month will And get different back, or by some they some could That that that.

So work we're this way months, have through going our as to happens. next few to this over the

requirements, parts by SCA. understand individually their to on they needs we’re during What if try assist as customers, through the them what banking this requires. of PSDX for which connecting to kind their connected and a launched the there the of continue the by is meet we're UK, advantaged that better resolving in to provide I on Remember, in is help solutions stand very is process stuff do compliance you them, there, around working we've to with them trying process, help we’ll focus with be our Europe. believe to of from in of Poland, that launched open with that regulation in everything of number different for protecting doing countries, work disputes

physical the more is counter to intelligence that businesses, in opportunity the in presence the of Continental do that. Europe, there's rails, with implemented it's in Continental cyber the one on a where is services the data as we It’s whole Europe, once of helping cardrails, give were case do in no first and across X. Europe, because and lot PSDX Europe. Europe, count entity knows in be VocaLink the us UK otherwise it's and a would VocaLink, not in fully Nordics that us actually a UK, will only November

get So we as time few years. the implemented on Europe by this gives the us over next foothold well a Continental this

years been contract, of the on all contracts bank by faster payment substantial provides and link out contract UK, the the extended a both the number what our In contract. have VocaLink

are we’re those. for positioned making Of be and busy we years later, course, well will sure some of there those, all RFPs

David Togut

Understood. what we for September And bank consumer payments, my go your once by XX? Continental then pay up, of or live as expectation the adoption ACH Europe follow is in

Ajay Banga

it's a to Like know got a angles, I and real it. said, it. on yet. isn't switch Yeah, on XX some attached bunch It's I got September switch don't demos of

think I great comment by making account or paying Lisa to the the September as may a for earlier, bank advance I incentive direct a economic loaded that to has or give of by as account compared to the method debit the was may way for account. the a choose reduced debit, benefits paying like remember opportunity? to not pay Yeah, come a to difference consumers better cards merchant cost other their taken on merchant a XX. the That to to help that therefore as economic some on pay as fully MDR or switch into to of account and between bank So are just incentive this. fully to and payment by Do the

suspect think for something pay bank of a so as way and planning account debit way consider And to a a paying of of economic argument. this is credit. who to with a paying preference of number of understand safer. a with debit I they natural bank compared think will an by They Europeans pay compared as appeals as I their as their lots argument of or paying less them of by adopt as financials. to

slower very it'll a that's merchants, this some to think way will be as compared to the or benefit I consumers bill. and economic grow which opportunity strong means pecuniary

Operator

from Wolfe Your with next question comes Research. the Darrin line Peller of

Darrin Peller

of change actually share innovation anything could seeing maintain strong, just other mind comment, kind you how this to to in good even much growth in to of parse continue trends you still or just that you there's macro to this is spread out technology metrics. you're a a try that driving or volume anytime July and more this most the in volume maybe next that lot competition mean, and think Ajay, the is broadly, your mean, trends, would of market growth, half? current solid your the across just I I if remain pretty you of period, Can volume really

little cross underlying border should up there was is also, quickly growth volume it [indiscernible]? rate, we pricing then revenue, the that cross And just border Sachin there, more, a expect anything on

Sachin Mehra

Sure.

XX% few the was pricing quarters you what at you’re is in about pricing, were would for So Cross up And than the is growth mix. continue by more and on which forward. border you due quarter, -- X a which going offset to that saw ppt driver right. XX% assessments second partially

that, So nothing more on early Darrin.

Ajay Banga

growth So two like, on the pictures. growth transaction broad GDP and for

One BXB of healthy. macro moderated but concern prior still towards and the it are course, on of -- in it’s pockets good. it's There yes, macro to spending still environment relatively business, consumers spending. Has compared the by year,

other that are a Mexico has to now better. something but it’s there begun and China challenge is is is talk about, doing think I slower, which stressed. are markets everybody

and UK is Europe doing So, Brazil doing doing of okay. up, Australia is are Northern holding holding doing better. The is strong. okay India Japan The are parts and US is fine.

doing So markets there the macro okay, trends. are that's

business XXX share Are while share Absolutely. for share? across basis share product categories. been growth a we this And But share, points growing consistently don't doesn't we've growing change in a quarter. growing you from, grow by

by in deals grow is country country, incrementalism even combination that you one number. big spend the of total contributing if the share You mostly, world smaller win a still to

consistent first gives And secular share grows and a but you macro and growth. and share its share a second tailwind, so

three. markets It's other all of tends the all I position better. we’re make believe of in smaller the of some different numbers, bit look little that than combination number of competitors of percentage third a going And on. in these to some remember, because a overall three it's our

So that you into take should account.

Operator

from of comes line the Moore Craig Autonomous Your last with Research. question

Craig Moore

Considering the thought on all controversial the of enormous wagons few items. ask positives, I my circled I’d peers some on the have

Australian by has First, interchange against agreed class comment eliminate to the UK proposal the on the Court can fact can you end? completely Mastercard. year you discuss to Supreme the that case And action if hear

Ajay Banga

the a Craig, of on to is Murphy First delighted chance UK. to Tim get all, speak

me with ahead let So that. go

Tim Murphy

thank Sure. Great, you.

very to at approve of decision feel we’ll Supreme our the of couple we that -- next in look So, appeal, take good Court about to the the months. forward

court class said a Just standard too is that the We think not was the the at to appellate produce the UK cases one intended law. first context collective action would low on in that under that outcome the and new or issue, of an this their looking law. major action in UK,

with approval. So we then decision pleased is for more the we'll basis. come to very But think a to this proceed great balanced opportunity that that and we’re on Court Supreme

Ajay Banga

At is Australian a payments, interchange or country, wherever derived there be if being sense me. doesn't for from the something, the the does terms expenses or the continue be merchant, Australia, management, And it that believe lower of in community collecting, of make what in bank world increasing the better it’s there's around cash digitization be to you of for MDR is zero studies and value series a day, demonstrate digitization proposal, for I be end particularly, merchants incentive them. ticket benefits the are value value it test, no somebody digitized this doing either capability providing that just the lower by be of for derived, from it deriving to then an it payments, be if the economic be the sizes, entity, some come and merchant else a case, in be not consumer, the to acceptance to

this risk issuers allocation that And way, the sensible the providers acquirers, incenting who model. digitization I in is enable who and that processors, some capital that a to is take business expense, believe on required enable

way what, end to know make decisions. at going not X day, anyway. suspect that’s And way to you do a to about the countries it do says, it, But find to to the it. just not the I smartest I'm will of you So need going and go

they our and it to be believe regulatory other work to illustrate we markets, the through job to systems. with conducive in can. help that And is research, through Our experiences logic to we decision, them best when through job then make is what

years, company. as approach be that’s we’ve our I Australia approach very That's for important our been taken the well. in to market Australia a consider for

the keep a ecosystem, Australian that of presence for to them. in recently, the a the best payments We and work I Australia categories. are my of with market will partner in are I And trying consider market and Government leaders categories responsible number in be to we definitely Westpac leaders our more there with

Ajay Banga

thoughts. closing few So

strategy. earnings revenue to continue growth. just We well and quarter execute our had of another strong We against

And We to capabilities you Thank new are really the continued colleagues for with from recent forward for thank all real acquisitions. of pleased We that, Nordics. joining working extend of the the company. PXX reach in our time you the support today. with payments further to win look with our our your us

Operator

today's concludes call. conference This

disconnect. now You may

Mastercard (MA) 30 Jul 192019 Q2 Earnings call transcript