Mastercard Incorporated (NYSE:MA) Goldman Sachs Communacopia & Technology Conference September 5, 2023 5:25 PM ET

Company Participants

Michael Miebach - Chief Executive Officer

Conference Call Participants

William Nance - Goldman Sachs

William Nance

All right. I think we will get started here. Thanks, everyone, for joining us. My name is Will Nance, I cover payments at Goldman Sachs. We are delighted to have Michael Miebach here, CEO of Mastercard. So Michael, thanks for joining us.

Michael Miebach

Hey, Will. Thanks for having us.

William Nance

Michael, maybe can start by getting your perspective on the macro environment. What have you been seeing in terms of consumer spending trends of late? I think, broadly speaking, the consumer has outperformed everyone's expectations so far this year. What are you seeing on the ground?

Michael Miebach

Right. Will, that is the headline. The consumer has been outperforming expectations. Obviously, our business is a good indicator of what the consumer is doing. We have more data than probably many others. So what we are seeing is a resilient consumer all throughout. We told you that in the second quarter conference call. And as we look at data running up until the end of August, we continued to see the same trends. So resilient consumer, that’s good.

We are not the economic oracle. So as we look forward, it continues to be about monitoring the factors that drive consumer spend. So what we see is, we see a solid job market. We see solid wage growth. In the end it’s about net consumer wallet spend. So that's looking encouraging. Access to credit is there. Extra savings haven't been spent fully down. So we continue to monitor that as we have been all throughout.

And then, it is what a Central Bank is up to. So they have clearly committed, they're going to do everything that's needed to curb inflation, it remains elevated, it's moderating a bit, particularly in the United States. So if we -- I think back about Jackson Hole, the commitment is there. So we'll just stay close to that.

As different -- in different countries, there will be different sets of responses to that, we'll have a multi varied economy -- set of economies around the world as a truly global business. I guess in the end, that's good for us, in terms of it goes better here. Maybe if it doesn't go so well over there. So that's overall the headline.

From a switched volume perspective, looking at what we see domestic side, broadly normalized to pre-crisis levels, that's good., Brightspot is T&E. That's particularly good spending on services and experiences and so forth, continues. We see some select international markets with some moderation. Just pick an example, take the UK, high inflation rate, high share of variable mortgages impact them to consume a wallet, but in aggregate, it still means the consumers holding up. On a cross border side, it just continues to power on.

William Nance

So good picture overall. Maybe we can dig into the cross border trends. I mean, this has been an important revenue driver on Mastercard. What is the state of cross border today travel and non-travel? And where do you see kind of pockets of remaining recovery?

Michael Miebach

Right. I travelled over the summer, it's hard to get a ticket at a decent price. So people will continue to travel as they can, capacity isn't fully back. If you look at it through the lens of our business, we are -- if you just look at how cross border travel is looking vis-à-vis pre-crisis levels, we're at a 150%. So we're back.

So that's good. It hasn't moderated, so this original theory that could be revenge travel, and then it's going to come back down, it has held up that is very encouraging. And on the cross border piece ex travel, which had increased at the beginning of COVID that just stayed elevated. So overall, it's important for our business and it continues to look very positive.

And I think the trend here helps us a lot because we're well-positioned in travel to start with. In the last call we talked about Expedia, we talked about Masimo, Lufthansa, there's a lot of wins there. And those portfolios are performing well in relative terms. So that's all very good for us.

William Nance

There has been a lot of focus on the reopening in Asia. What are the Asia cross border trends been doing?

Michael Miebach

We called out I think, was two quarters ago, where Sachin went to calculate the numbers with a very fine pencil to figure out what is the trend in China outbound versus inbound and the headline, we still continue to be behind 2019 level. So there's still catch up potential, particularly in Asia, and China probably being the biggest.

So we're staying close to that and try to reap the benefits of that. Our recent partnership with Alipay to put in your, let's say, U.S issued card into your Alipay wallet, I tried it, it works really quite well. So we're ready for the travel inbound to come back.

William Nance

Got it. Makes sense. Maybe switching gears to Europe. You've announced a lot of large wins in Europe over the past couple of years. Can you just give us an update, what have you announced and more broadly, what's been driving you guys to be able to win in each of these situations?

Michael Miebach

Well, I love talking about our wins. I want to reframe the question a little bit as in, it wasn't just Europe. But there were a few significant ones. If we think back over the last couple of years, net with Deutsche Bank, First Direct, and as of late UniCredit, which we talked about in our last earnings call. So that's tremendous, but it's not just Europe citizens, the recent one Fiserv's Money Network.

So if you take a step back and say, why are we winning? What is going on in the market? It's a competitive market. It's a great time to be in payments. You have a lot of local competitors, particularly in Europe. We have other international competitors. So these deals are hard fought.

It's pretty clear for us, we have to win a diversification and differentiation game, and not just a pricing game. And here is what comes to play and winning these deals is a truly unique set of services that our customers value. And that help us bring these deals. Any one of them is a different combination of services that in the end got us the deal in different interests that these banks have.

UniCredit, for example, they were particularly keen on our Digital First program. It's kind of the equivalent what we did with the Apple card. So that's a program for us, which we shipped around the world, they liked that. They liked our sustainability agenda and we're partnering on that front.

So different customers different reasons. But it's that diversified portfolio that helps us keep winning. Financials do matter. You see our disaggregated revenues on the revenue side, on the services side. In the end, we bring all of this together to mention -- managing that revenue yield, which we have managed to increase.

William Nance

Got it. I wanted to hit on a couple of strategy points. But maybe before we jump in, I was hoping we could touch on a couple of the recent headlines Mastercard released a blog post today, some articles talking about pricing, and specifically interchange any comments you can share on that?

Michael Miebach

Right. So my headline on that headline of the journal report is that the article is plainly wrong. So it's misrepresenting what's actually going on. We have had no plans and we have no plans to change interchange this fall in the United States. And we made it very clear to the publication, we made it clear in a blog post today, and we made it clear with our customers. Because of course, we all read the same news and it was clear to set the record straight, which in fact, was actually the head of our blog today set the record straight.

In the end, when it comes to pricing, it's pretty clear, remind you what the article is talking about is interchange. Of course, you are well versed in our business model, network fees, service fees, interchange, all very different things. So there is no change and interchange, we price for value. And we will continue to do that as we bring new products and solutions to the markets and we will price for that. But that's not what the article was allegation -- allegating and we set that records straight.

William Nance

Got it. Very helpful. So maybe switching gears to strategy, you've outlined three strategic priorities for Mastercard, expanding and payments, extending services and embracing new networks. Starting with payments, can you just talk about the opportunity that exists in person to merchant payments?

Michael Miebach

Right.

William Nance

And the key initiatives you have to address that opportunity?

Michael Miebach

Right. So three pillars, they all interlink. Yes, I was talking about the wins in Europe. We win because we have services and we have a deep moat and payments and we have solutions there to go after that. The opportunity in [indiscernible], you could argue, we have been incredibly successful in digitizing the world of cash, digitizing the world of checks. But the universe continues to grow. So think about developed markets and emerging markets, there's tremendous opportunity, and still just shifting the goalposts on that and growing that volume.

But there's also a massive transaction opportunity in all of this. When you think about some of the new business models emerging, we just had DoorDash here, I think on stage. Imagine, DoorDash, you order something on DoorDash, so that's a card transaction on file, while DoorDash has to pay the restaurant, and then the restaurant -- DoorDash has to pay the driver as well.

If you go to the restaurant, that's one transaction. This case, it's three transactions, you pick all these business models that really didn't exist before COVID at the same scale, at the same pace of growth. So there's tremendous opportunity there. So as we look at P2M, it's about finding more of these business models. Be very fintech-oriented, the emerging tech-oriented. We've various verticals that we now have an accompany that we didn't have before and find all new partnerships.

How do you turbocharge that whole opportunity and go after is by creating more and more acceptance, more places that you can use your Mastercard payment credential, whichever form factor it's in. And here I think we've done -- I'm obviously biased, but we've done a pretty decent job. We doubled from $50 million to over $100 million in the last 5 years in terms of acceptance points, and it continues to grow. And you do this with contactless, you do it with tap on phone, every one of the phones that have in your pocket could be a connected commerce device, you could be a merchant, and somebody could pay you on something that might have been cashed before.

So a lot to do. And then you play it out even further. Think about the strategic theatres of the future, think Africa. So how do you deliver financial, how do you deliver digitization and financial services in Africa, it's all based on the phone. And here we just signed a partnership with MTN, one of the large telcos in Africa, we previously had one in West Africa. Our focus on West Africa with Airtel.

So new partnerships, yet again drive opportunity go after that P2M opportunity. So it's tremendous. Its long-term. I think while we are very successful at it, we're not quite done with digitizing the world just yet.

William Nance

And I guess a lot of that cash to card remaining opportunity is in the emerging markets. Is it getting difficult, more difficult or easier to drive digitalization in this market?

Michael Miebach

Our experience in emerging markets is it's not just off the shelf solutions out of developed economies. We really develop in emerging markets, we have a lab based out of Nairobi, where we specifically design products and solutions for emerging markets. I used to run our Middle East and Africa business for 5 years.

So this is oftentimes the long talked about leapfrog opportunity for Africa to change the way we do business elsewhere. For example, around the telco strategy is actually coming out of Africa. So I don't think it's more important. There's an opportunity to avoid some of the hindrances of legacy technology as we go there. lighter, easier, cheaper, and more flexible to give consumers what they actually need.

You have to start though to really deeply understand what the consumers is about. Their life is very different than your life and my life. So we have a lot of people there that actually spend time journaling the day and understanding how that is different. That's a significant long-term business opportunity.

William Nance

I guess beyond person to merchant payments, this is a targeted set of new flows that you guys are pursuing. Can you give us some examples of how you're capitalizing on that new flows opportunity? What are some of the growth factors that have you most excited?

Michael Miebach

Right. So while we are excited about P2M, we're excited about lots of things, including flows that were not in at all. So what we said in our investor community day back in 2021, was here specific -- four specific flows that we're going to go after in terms of the next opportunity for us to have Mastercard payment credentials in and services opportunity, and so forth.

So the logic at the time was, which still holds is total addressable market, that's pretty clear. High levels of cash and check, clear pain points and a high belief that we can deliver against those pain points. So that's what we said.

The biggest part of that is around the broad space of commercial and B2B, which two subsets commercial POS and then B2B accounts payable. We also talked about -- disbursements and remittances, and we talked about Bill Pay. So we're very excited about commercial.

I want to spend a little bit more time about that one. So commercial POS. Here you have a world where we can go in with our existing tools, our Carter tools as they are there, there's very little need to build anything new. So think about fleet card T&E, think about small business cards, and so forth.

And then tag on a few additional features like expense control logic, our smart data solution. Think about easy savings and discounts for small businesses and so forth, nothing too fancy. If you take that, and you put it in the hands of a sales force that's vertically oriented, that goes after a sector that's been traditionally underserved by financial institutions, where you have specialists players, you make the specialist players, your partners, you go after it, then you get the growth that we're seeing.

So about 13% of our total GDP and grows at 24%. I said in the last earnings call that's faster than consumer. We like that. So that's an engine that you can turn. Are there other tools in there that we can use? Of course we can. But for now, it is not about building new stuff. It's about going after what is out there in a segment that says that has been lagging.

So yes, you can almost start to repeat what we've done with P2M in a sector that is adjacent to it. Accounts payable, big flows, big pain points very clearly understood. Just covered in a journal in a piece our Head of Commercial Solutions and our Chief Product Officer talked about a trend and B2B payments where everybody is kind of fed up with inefficient processes. So the digitization that we all have in our lives, companies want that. The people who work in these departments see it every day that it works in your personal life, why isn't clunky and bad when it comes to the day on the job.

So here a bit more of work on the product side, but relatively simple to do. And then you find a big unlock and different go-to-markets, SAP, Taulia, Coupa, GEP, we embed ourselves in the ERP systems that these companies have tremendous growth.

The big unlock here for us is our virtual card platform with market leaders in virtual card. And that is how you optimize accounts receivable and so forth. So that is progressing at a very healthy cliff. We haven't released numbers on that. But we like what we see quite a bit.

Send, remittances. So the whole send piece is growing above 20%, well above over 20%. We like that. The growth of [indiscernible] new geographies. We have 10 billion endpoints today in this network. So that's pretty decent. But there's still countries that we -- where we can go in deeper and more use cases gaming payouts, for example, is a recent one. I think I called out interchecks in the call.

William Nance

Brings us to the last one, Bill Pay.

Michael Miebach

I think health care. What's the share of cards? It's low, education, utilities low. So all that is right in front of us. We have a whole range of assets through our NPS acquisition -- sorry, the Nets' Corporate Services part in Europe to go off to Bill Pay. We have RPPS, our Bill Pay directory in the U.S. And we have content solutions. It's about creating, acceptance yet again. And a mix of all of that makes that a very interesting business. So it's very specific stuff. It's not about building ecosystems in two sided networks, which is very hard as we learned over the years. This is easy stuff that we -- not easy actually, I should -- not oversimplify, but itself that is very, very doable in the near-term. And we have learned a lot these are all you have to understand the treasure of the midsized companies. So we hire people that know that. Give them a vertical instruction, they run after it. So we're excited about new flows to extend target market.

William Nance

Yes, makes sense. And where does Mastercard Send fit into that strategy? I know it's more capability, but what …

Michael Miebach

So yes, this is the whole -- this is the one of the four flows as disbursements and remittances. So it is good to cross border prior to it. And the domestic part, I'll give you just some examples. The cross border side of this is our acquisition of Transfast, which gave us a real stuff, push ahead. So many of these calls gig economy let's take all those developers and countries outside of the U.S to help the tech industry here [indiscernible] many of the companies out there that is powered by Send. Chinese students and paying their tuition is the latest. Let's use case studies just agreed. So it's again, it's geographies, its use cases. There we go, and very healthy growth rate.

William Nance

Makes sense. I guess the second pillar of your strategy is focused on expanding and services. Can you discuss why value added services is so important and talk about the opportunities you see in that space?

Michael Miebach

So we talked about the wins in Europe, differentiation, that's really the headline. But it's not only that. It's diversification of revenue base, its driving revenue growth, its growing faster than our underlying core business. Now that we have the revenue disaggregation you see that more clearly. So that's a business that's growing fast now. We had plenty of choice where we wanted to have our services. We do have very -- set a very specific processing service for fintech -- for the fintech segment.

Billion dollar that is -- its almost surgical how we look at that. We have a gateway service that's also surgical. The really big trends, I would almost describe them in secular trends, in a digitized world -- digitizing world is one the safety and security. In a rapidly digitizing world, your threats, your potential for cyber threats increasing dramatically. So we said every potential solution we can have around cybersecurity will be a good one. So that's a big part of our services. And the other is the same data footprint that is shown off by this [indiscernible] digitizing world. Any one of our customers who want to understand more on what to do with that data to drive better decisions for their business, so data and analytics, that's the two big focuses for us, organizationally, lovingly called C&I and DNS.

And Mastercard speak. And the solutions that we have in there, multifaceted to drive the key kind of decisions that customers want to take on the data side and the key threats that they have on the cyber side. So one of the recent examples that we talked about on the C&I side is I find it particularly interesting because it's not on account based volumes. It's actually on account to account based volume. It's our customer fraud risk solution in the U.K, 9 big banks, so who is who are British banking from Lloyds to Barclays to net West and so forth are partnering with us to have a scheme that basically allows them to prevent payment scams. Because we have a unique vantage point as a network across all these payment flows, we can see that and we can bring that service, tremendous opportunity to take our C&I business further than what it is today.

Overall, we're very happy with that business on the DNS side. Yes, it's consulting, marketing services, loyalty, data analytics yet again, I'm particularly interested and excited about our latest acquisition there around personalization, Dynamic Yield. If you think about all these companies who want to engage their customers, post-COVID, book this airline ticket with me first and not with the other airline, how do you get a targeted offer to that customer -- to that consumer? Personalization, hyper personalization is the answer. Lot of GenAI. We have 14 minutes left, I got [indiscernible] GenAI right here.

William Nance

Perfect.

Michael Miebach

That is what we're doing there. So it's a good portfolio. In the end, diversification, differentiation, revenue growth, we love our services.

William Nance

Got it. So maybe switching to new networks, the third strategic priority, can you discuss the new network opportunities that you are pursuing and just give us an update on kind of where you stand.

Michael Miebach

So it's almost poetic. Embrace new networks. So -- but we were looking for a term that says, that describes what this is. It took us 50 years to build a network that we have. And we were convinced that our core competencies of running a large multilateral network can be distilled and can be brought to other opportunities, but you have to really embrace the opportunity. We said, so where are areas where somebody has data, and somebody else needs data that are close to the digital commerce value chain. And digital identity was just the obvious thing. In every transaction, you need to know is Will really will. And is Michael, really -- Michael, and whatever the transaction is, can be a payment transaction. But here's the opportunity can be any other transaction as well. So that's how we thought about it. And the same for open banking, which is, again, building a data network, which obviously can be adjacent to many of the things that we do that was the logic.

In terms of readiness, if you compare this to the P2M opportunity, or to the expansion of our flows, that we discussed earlier, this is a little bit of a slower burn. So from a timing perspective, it's a little bit behind where we are there, but we do have regulatory approach around open banking, we have a lot of interest from government and digital identity. So the space is coming, we have high level of conviction that will be the next big opportunity for us. If you think about it, we'll take the interlocking circles of Mastercard brand, before the transaction, and after the transaction and not only in the transaction, that's what we're trying to do.

You start off small, we bought a few additional assets to what we had an acquisition in the digital identity space company by name of Ekata, out of Seattle, and our business is tremendous now. So we have over 10 billion digital identity events that we're using to provide schools, to our customers. Is Michael really -- Michael, and exciting examples out of the crypto space, a lot of crypto exchanges have this question around your transaction identity. And then they come to us and we facilitate that. So that's exciting on C&I, DNS, and that's running across the border into new networks.

William Nance

So that's where we go next. Payments today, services today and then an opportunity in the future. And on the open banking side. I mean, you guys are very well-positioned. I mean, Felicity is kind of one of the big players in the U.S, you also have European asset, I believe. I mean, how do you think about the competitive landscape in that space, how the frame or the infrastructure for open banking evolves.

Michael Miebach

So, with -- when we stepped into open banking, initially it was our own in-house made product, we sell this too slow, it's not good enough, we need reach. So we need to buy connectivity and capabilities. So we bought Finicity in the US. So we have a reach of into 95% of all U.S deposit accounts. That gives us a good starting point. And we have four very clear use cases. It's lens, pay, it's small business since account verification. So we're not looking very far. Those are things that sell today that people need for a lot of tech companies that open all types of accounts. So well-positioned here in Europe, is comparatively smaller than Finicity was here in the U.S, but it gives us connection into 3,000 European banks, and we follow the same logic. Those are the two key markets. We have now built connectivity in Australia as well. It's a global trend and we have a global ambition. So open banking good. I think we have yet to see, which will be the ultimate winning use cases that truly scale up. I think, we're certainly in the lead with others in the market, we'll have to get to see where the market goes.

William Nance

Right. Maybe sticking with new networks, fed now recently lost and launched in the U.S. Could you talk about the opportunities and risks associated with that now?

Michael Miebach

Right. So, now we love competition, so here is another opportunity or another offer to consumers to pay potentially, it's live now. But is it really an offer for consumers at this point, it's a rail that is becoming available. The range of features are limited, the services around it are limited. So we'll have to see where that will land. If you look at different markets around the world, what government run payment systems have done to the existing set of solutions we have chosen to compete in those markets and do that effectively.

Mastercard debit is a perfect competitor. I got liability shift, you got consumer protection, you got reach, you got a brand that you can trust. In the end, that's what consumers want. They want something they're going to rely on. They know what happens if something goes wrong, and you merchants, what do they want? They want to reach. So that's what we delivered today, fed now doesn't deliver that today. We'll see where it goes. In the meantime, we continue to invest in our technology.

I think the most overarching point in most countries where you have these government payment systems is the question on security to hackers always two steps ahead. So is the investment in cybersecurity, the fraud, the fraud related aspects of that for consumers, where it needs to be. And here, I believe we are a leader, and that will set us apart.

William Nance

I guess the Fed now is the kind of the U.S and develop market trend. In emerging markets, we've seen Pix [ph] take off in Brazil, we've seen UPI in India. Maybe you could just update us on the global state of play of how you view RTP as it relates to Mastercard's business?

Michael Miebach

So just think a moment about P2P in other markets kind of the extension of the Fed Now, question if you had you take a fix -- a Pix. Brazil is a very big market for us. We're doing really well. We have great partners there with Itaú and Santander and so forth, and it's predominantly a credit market. So we like what we have there. This is a P2P play largely Pix today, we are obviously watching it closely and see where it goes. But it's the same we solve the eCommerce acceptance questions from Mastercard Debit, which was used to be Maestro, so that is being addressed. So we feel good about that.

Slightly different angle, underlying rails. When you think real time payments, more and more countries are doing what the U.S is now doing or have already been doing that. So think about Faster Payments in the U.K and so forth. 2016, '17, I'm not going to promise I will not talk you through 7 years, but this is when they really started to grow and spread around the world. That's when we bought Vocalink, we said okay, it's a reality. COGS [ph] is not the answer for everything.

So let's just be clear, we want to be in those flows as well. We build that position and we are now running, operating or building software for real-time payment systems in 13 markets around the world. So nicely spread of around the world in terms of kind of like follow the same kind of logic. So it's a world spanning network so to say. We think about how we can get to interoperability of these systems. So there's a lot in this position that we have built that one could think about. For the time being, we are where we want to be.

I said in the last earnings call that we will not really pursue to build in a lot more markets. We chose the ones that were in because they have potential to scale. The focus now is on building solutions on top of that. If you think about where we stand the United States with our partnership with Chase on Pay-by-Bank solutions, that is kind of a way how you bring value to these real-time payments systems, which just bring money from A2B, but how do you make money on that is by putting a service on top of it. So scaling the volumes and [indiscernible], which we are and building applications and services.

I gave you an example on the service opportunity cuts into a real-time payments. So still the same strategy matters, because real-time payments are real, so we want to be there and we will. But we will not go to smaller markets with no skill opportunity.

William Nance

Makes sense. Switching gears a little bit. Can you give us an update on your strategy related to crypto blockchain and tell us more about Mastercard's recent developments in that area?

Michael Miebach

Right. We -- some of you might have seen as we launched something called a Multi Token Network, not too long ago. So this is coming to a point about this whole digital assets ecosystem, it's coming together slowly, it hasn't really scaled, it hasn't really become mainstream. There's different players with different technology. We took a step back and said, what about if we bring play -- the players together and what to say, here's a way to create some sort of interoperable system for value exchange using digital asset technology.

So it's almost a replica of what we're doing on the card side. Obviously, it has nothing to do with cards, but principally you could make that comparison. So we said, what does it need? It needs some business rules, it needs kind of what a global network brings today, interoperability standards, it needs compliance capability. So if you want to build using digital asset technology, the best use case on B2B payments, do you worry about compliance? No, but you can use our CipherTrace solution, and so forth. So we put all of those fundamental components and building blocks into what I would describe the AppStore of the digital ecosystem and we call it the multi token network.

Now it sounds like a crazy idea, potentially, but it's actually relatively straightforward. So we invited 2 weeks ago, we invited 10, 15 players in the U.K for a day to showcase that and see if our theory would be falling on open ears. And the theory was validated. So we're actually going to launch that, or we're planning to launch that later in the year in the U.K., and try that with a few partners and see where this is going. I think there's tremendous potential and using digital assets to unlock a lot of innovation and growth, principally in B2B and cross border to start with. In the wholesale side, we see that.

In the meantime, we're busy with our crypto related services. I talked about the CipherTrace acquisition compliance. I mentioned Digital Identity earlier. So we provide the industry with our services. And then there's of course, the on ramp and off ramp of people that want to invest in crypto currencies, so we do that as well. So we're pretty busy. It's an area where the, I think are a leader, we have to be thoughtful about the risks associated with it. We take a pretty principled approach and regulatory compliance, currency stability and consumer protection that has kept us in safe waters. So I like it, we're excited about it.

William Nance

Makes sense. I saved the best for last. This is effectively an AI conferences here. It's generated substantial interest over the past couple of months with investors and really all year. What is Mastercard's AI strategy? And how are you currently using AI in the business?

Michael Miebach

Right. So we've been at AI for quite a long time since about 125 billion transactions in our system that's not done by humans. So AI is the way to do that. That's discriminative AI, it's machine learning. So we've been at it. It's actually a company based out of San Francisco that we bought many years ago. That is the core of our AI knowledge. And we build it out, we now have an AI garage in Delhi and it spans around the world. It's a lot of focus on cyber security and keeping transactions safe. More recently, we're starting to use generative AI. Also, again, starting in the cybersecurity space, where we use Gen AI to create datasets to train our machine learning models on.

Where you see the path into other products and solutions that we have is on the personalization front, I talked about that earlier. So using Gen AI for personalization solutions that we bring to our customers so they can make a better offer to you and me. That's an interesting space. So right now when I look across the company, across our three units, our payments unit, our services unit, and the folks who deal with the new network opportunities, Gen AI is cutting across, AI is cutting across. I see it as a fundamentally enabling technology. So it's not a mega hype in the company. It is something that we use like electricity, if you want.

There's another aspect, we always think about the ecosystem custodian role that we have. So what are the risks around it? What is the principled approach? I'll give you some principles right now that we have for crypto. We thought about it, how should this be done for AI. And we said, well, it's actually four. Its accountability as a company should take accountability that you will use AI in a responsible way. It's about security, of course and privacy that goes without any explanation needed. It's about integrity. You take bias out of AI. And the final thing is about transparency. You tell your customers and you tell the end consumer I'm using AI or I'm not because it's not often known. So these four principles, we've put them out in the market and made a ton of sense.

William Nance

Okay. We're right on the dot, right on time. Well, I appreciate you being here with us. I think that is all the time we had. But thank you very much.

Michael Miebach

Thanks, Will. Thank you so much.

Question-and-Answer Session