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pww.comMastercard Incorporated Presents at Wolfe Research FinTech Forum 2024, Mar-14-2024 02:30 PM - NYSE:MA

NYSE:MA

Craig E. Vosburg [Chief Services Officer] đź’¬

During the presentation and subsequent Q&A session, Craig E. Vosburg, Chief Services Officer at Mastercard Incorporated, discussed several key topics:

Overview of Corporate Strategy

  • Core Focus: Continues to invest in the core cards business (debit, credit, prepaid solutions).
  • Digital Adaptation: Ensuring the core business is fit for purpose in an increasingly digital world.
  • Choice and Diversification: Providing consumers, merchants, and financial institutions with choices in payments and diversifying payment capabilities.
  • New Flows: Enabling participation in new areas of payments, such as B2B, disbursements, and remittances.

Core Business Growth

  • Secular Shift: Confident there's significant room for growth in the secular shift from cash to digital payments.
  • Geographic Opportunities: Different levels of card penetration across geographies (e.g., U.S., Mexico, Japan, Germany, China).
  • Merchant Categories: Opportunities in underpenetrated categories like bill payments, rent, utilities.
  • Transaction Types: Potential in small-ticket transactions.
  • Growth Strategies: Expanding acceptance, advancing technology (contactless, Tap on Phone), digital strategy.

New Flow Opportunities

  • B2B Payments: Targeting opportunities linked to existing card products (T&E solutions, procurement cards, fleet cards).
  • Virtual Cards: Enhancing product experience with straight-through processing and automated reconciliation.
  • Global Expansion: Seeing global appetite for B2B solutions, partnering with financial institutions and integrating with ERP systems.

Fintech Partnerships

  • Importance of Fintechs: Recognizes fintechs as a rich source of innovation and a new channel of distribution.
  • Early Engagement: Invested in working closely with fintechs as partners, shaping strategy, and leveraging Mastercard's scale and global reach.
  • Learning and Adaptation: Fintechs help penetrate new segment opportunities and improve speed and agility.

Value-Added Services (VAS)

  • Portfolio Composition: Cyber and intelligence services, data and services (fraud solutions, cybersecurity, consumer authentication), marketing services, loyalty solutions, processing and issuer processing, real-time payments, open banking, identity solutions.
  • Positive Flywheel Effect: Payments and services businesses reinforce each other, creating insightful products that reduce fraud and increase authorization and approval rates.
  • Market Needs: Long-term needs in fraud reduction, cybersecurity, understanding consumer behavior, and personalization.

China Market Entry

  • License Award: Excited about being awarded a license to operate in China through a joint venture with NUCC.
  • Existing Presence: Established network of partners in China, focused on cross-border transactions.
  • Opportunities: Opportunity to expand relationships with domestic banks and fintechs into domestic payments activities.
  • Competition: Wallets like Alipay and WeChat Pay have a strong presence, but Mastercard sees opportunities with banks and through partnerships.

Risks and Competition

  • Domestic Payment Systems: Views the rise of domestic payment systems as an opportunity to expand the addressable market.

  • Brazil’s Pix and India’s UPI: Acknowledges the potential for these systems to enter commerce transactions but emphasizes Mastercard’s competitive advantages.

  • Fraud Solutions: Highlights Mastercard’s robust fraud solutions as a competitive differentiator.

  • Long-Term Focus: Excited about opportunities in new flows and open banking, with a focus on long-term investments and capturing market share.

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