Mastercard Incorporated (MA) Earnings Call Transcript & Summary

We'll start with our next session. I want to welcome Michael Miebach. I want to congratulate him first on his recent -- on the recent announcement of taking on the role of President of Mastercard, and he'll be transitioning to the CEO role beginning 2021. So congratulations, and thank you for being here. It's an honor that we are first to interview. Maybe you could tell the audience a little bit about your background and how you envision the transition to the CEO role and what your priorities are going to be.

All right. Good afternoon, everybody. So it -- this is a really special conference. It is indeed. It is like 2 days in. So I can see all these expecting faces for -- looking for all the answers. So let's see as we go through. The -- so coming into the role, a bit of a background. I really don't want to talk about 25 years of financial services and so forth, but concentrate on the Mastercard stint. So I joined in 2010, and I spent 5 years involved in building out our business in the Middle East and in Africa. And at the time, the task at hand was how do you scale up in a part of the world where there was really no business. So we, in the end, came to the conclusion of becoming a local partner, partnering with governments and build a business around a nonexisting middle class and build that out, which then turned into a financial inclusion strategy, which turned into a government engagement strategy around the world. So that was kind of the starting point, exciting at that time. And then fast-forwarding 5 years, so the second stint was Chief Product Officer, which ended on Sunday, but here, the focus was on taking on all of our core business, our new activities in new payment flows, our digital solutions, as of late, our CX and design practice and labs and everything, basically, all the products that we have. As the name indicated, that was a really cool role. I enjoyed tremendously. We pivoted quite a bit throughout those 5 years. A lot of the work and new payment flows started during that time. So now as of Sunday, President, that basically means overseeing sales, marketing, our services business lines as well as I continue to lead the product piece. Yes. So that is -- now 3 days in, what are the priorities for the rest of the year and throughout the transition period? Well, we actually announced, for those of you that -- where this isn't completely top of mind, so President until the end of the year. And then my boss, Ajay Banga, will transition to become the Executive Chairman and he'll do that going forward. Our Chairman will retire at the end of the year. So we have 9 months of a period that will solely focus on transitioning. So he will hand over the reins, so to say, that involves the whole range of relationships he's built over 11 years. So I'm getting all sorts of interesting e-mails as a function of that as he's introducing me to people I would have thought I would never ever meet in my life. So that is the side effect of this. But the other thing is, which I'm sure you're very interested in, is so not missing a beat. So this transition should go very smooth. As you can see, it's been -- Ajay has been talking about it, it's been in planning for a while, so it wasn't entirely a surprise. So making sure that we keep the diligence and the execution and all of that going and then handing over the relationships and so forth. I think that's kind of like, well, what I've been doing and what I will do in the next 9 months. Most of the time will be spent on the road, with Ajay listening to investors, to customers, governments around the world. So we'll travel quite a bit, provided that we can travel, but if we can, then we will.

Absolutely. So Ajay mentioned you've been a big enabler of evolving and diversifying Mastercard's business model. Could you maybe outline, I think, you kind of alluded to some of them, but just the 2 or 3 signature accomplishments at Mastercard thus far?

Yes. So it's kind of odd to be on stage and talk about your own accomplishments. So I'll keep that modest. So I talked about the financial inclusion piece. So that was certainly something that helped the company -- drove a narrative around the company on we're purpose-driven, we have this model of inclusive growth, there's business models that people can sign up to where there's an incentive for everybody, a level playing field. So that is just one thing to add to that point. Let's spend a bit more time on this whole shift into new payment flows and so forth. So imagine this, my first day in New York, I was starting the new role. And what happened is that an opportunity presented itself to buy a company by the name of Vocalink. And I looked at this and said, "Wow, this is a really interesting proposition, doing something entirely different than the company had been doing for 50 years." So we were just in the process of doing market trend analysis and all of that and brought the 2 things together and said, "Well, it is, actually, despite that it sounds like counterintuitive to do something entirely different, actually, a very logical next step." It is the natural thing to do for us to redefine our playing field. Because the underlying key capabilities of network management, of building a franchise around it, satisfying the needs of a customer group like merchants and banks. All that is the exact same thing in real-time payments. So we came to a point fairly quickly where it indeed felt like the most natural thing to do, and the rest is history, so to say. So with my team, with the product team, crafting that strategy and then coming to a point of entering -- buying Vocalink isn't a strategy, that's simply a starting point, to say what do we now do in terms of applications that really solve somebody's needs because getting the money from A to B is interesting, but there's not a lot of economics in it. So what else do we need to do to really drive a business out of that and making that one-stop shop thing. So I think that is probably the coolest thing. It ended up with me presenting to the House of Lords in London because that's what you need to do when you buy a local company there. I thought that was a nice add-on.

That's cool. And I guess as next CEO, what trends do you foresee and might you be altering the company's strategy going forward?

All right. So 3 days in, I'm not going to declare a change of the strategy, particularly because in the CPO role -- I this -- I just gave you one example. But when you look at our digital strategy, what we're doing in blockchain, I had my fingerprints all over that. But you take a step back and you look at what is going on in the industry and you look at the trends. So I'm fascinated by 5G, the rollout of 5G, the data that it will throw off, what can you do with that data. Very closely related to that similar kind of impact on what we do will be the proliferation of the Internet of Things, all these connected devices that will throw off immense amounts of data. Then you think the rise of artificial intelligence, its applications, data analytics capabilities that are now widely available to do something with that data that's going to be around. So I think there is going to be a lot of change coming for the industry. It's going to invite a lot of new competitors. It will -- our existing customers will look at us and say, "Can you help us do something with that? How do I compete?" So our journey on cyber solutions that you will need for that is going to come in really handy. Our journey in building out a data analytics capability test and learn and then all those things that we've done, the Brighterion acquisition, I think we're well positioned for that. When you look at 30 billion connected devices and you start to see a massive push into micropayments and a whole new set of opportunities coming out of that, is that's where the strategy will need to evolve. We've identified those opportunities, but making the next click forward, I can already see that. So the one thing to say is the rate of change in our industry, the rate of technology advancement will just only increase, so agility on how we operate. But at the same time, don't lose direction in terms of what we stand for, is going to be super important. So things like choice in that world, you have multiplicity of solutions, so we accept that, and we will always stand for choice. So you come to us and say, you want to do real time, you want to do cards, you want to do blockchain, you want to do something else, that will be the solution set, experimenting with emerging technologies where we are not going to fall into the trap of saying we have all of the answers. So the labs team, what else could we be doing to satisfying customer needs, so we'll continue to invest in that. And then in all of this, in a world of so many opportunities, just keep the discipline and the execution focus because you could be getting lost in all of that. So I think that is kind of where I see it. The push from payments into transactions beyond payments, data transactions, is a logical next step, again coming back to core competencies of network management, franchise and so forth, that applies in the world of Open Banking, of digital ID, and those are frontiers that I see.

Okay. Switching gears just a little bit, talking about some more recent events on the coronavirus. Obviously, you guys adjusted your first quarter and full year net revenue outlook based on sort of the impacts you were seeing at the time. I'm just curious if you have any more color to provide. And maybe just help us think through some of the contingency plans you're taking in terms of expenses and such as we're having to contend with this unknown item?

Yes. So Monday last week, we put out the announcement. So the timing, quite interesting because on the next day, we announced the leadership transition. So we got quite a few questions on those. But here, today, like it's just over a week later, a couple of things to say. So we were monitoring, running up to Monday last week, and we continue to do that. I'm not going to repeat what we said in the announcement. So there is an impact on the first quarter. The question that we had at the time and which we put in the release that there's too many question marks around this. So severity, duration, they are not a good set of answers. So we keep monitoring very closely. And to your point, Sanjay, we're working through the contingencies and say, "All right, on our expense base, what are the options?" And we've been talking about this many times, that we -- in terms of discretionary levers in our expense base, there is a range. We generally manage the business for the long term. So erratic expense management is not what we do. We will try to stay true to the strategic direction, but there is a plan where we can say, "Okay, if we have to, here's a couple of things that we can do." That's the nature of our expense base. That's fantastic. I think the one thing to say, so we sit here and we think about the impacts on our business. Actually, the more noteworthy impact that I feel is that we have large teams in China and people are worried. We have people traveling. So there's a lot of effort that the leadership team put into making people feel cared for and understood, and we can do what we -- we do what we can do, providing masks and all those things. So that's equally important, but we feel reasonably prepared to see what comes. And then whenever there's something else to say, Warren will do that. We keep monitoring.

Okay. Okay. And I mean I guess, just one quick follow-up on that. As we're thinking about sort of the time between when you guys provided some color and where we are today and things seemingly have gotten worse, do you feel like that was reflected in the numbers that you guys provided? Or...

So the way we -- our monitoring went on for a couple of weeks. We took all the indicators into account and put out what we felt is the impact.

Okay. Got it. I'm going to shift gears, talk about M&A strategy. You guys have been quite acquisitive over the last couple, several years. Could you just talk about the determination to buy versus build and sort of how wide you're casting the net in terms of the types of deals you're doing in industry verticals and such?

Yes. So Mastercard is a fairly acquisitive company these days. I think last year is like Vyze, Ethoca, RiskRecon, Transfast, which I'm forgetting something, Transactis. So what's the logic behind that? So I'm going to say the most obvious thing now, it starts with the strategy. And that is what are we trying to do? So I'll give you an example. We talked about Vocalink earlier on. So Transactis is a follow-on from Vocalink. So we believe that there is opportunity in serving our customers with solutions around real-time payments. So Vocalink comes, and then we start to think, all right, what is the set of flows, what is the set of needs that need additional solutions. Transactis bill pay comes along, and we said, "Okay, that's good." And could we have built this? The starting point is always built and internal. But here, the thing that Transactis brought was they had an existing business. They had credibility. They had a team. They had talent. So a mix of all 3 things that matter, talent, technical capability and reach of the business that you built in a market that we felt was hot. So yes, you can do this yourself, but in the end, you're going to lose out on time, and then that's a problem. And if you look across, Vocalink was the same thing. Everybody was out there with RFPs modernizing the national payment stack. Could we have built this ourselves? Yes, we could have, but the land grab was on. So we went on to do that. So that is broadly the logic. Say, is there a capability that we don't have? Yes, we can build it, but not fast enough or not at the cost that we can do it, tell them the same thing. Nets. Nets is one that is out there that's pending right now. So I keep my fingers crossed, it's going to close at the first half of the year as we said previously. And here, we got a great team of engineers in the real-time payment space. That's hot talent. And it's going to give us more reach around the world, and it's going to give us more bill pay capability. So hard to do that yourself in that time. So that's generally the logic around M&A. So you're going to see us continue to look in spaces like real time, in spaces like B2B. When you remember that Investor Day slide, that on the right-hand side, those categories, we keep looking under those criteria.

Got it. And I guess you mentioned Mastercard is a -- the multi-rail strategy, the multi-rail company. Could you just give us a sense as to what that means? How it will benefit your customers? How you're going to market with it? And what's the benefit by being inside that infrastructure?

Almost sounds like multi-rail isn't a very clear term if you ask the question. So here's what it means. It means essentially 2 things. The first is the multi-rail strategy enables us to participate in more flows than we have historically been able to participate in. We were focused on payments of goods and services as well as B2B payments, there's B2C, there's B2B and all the combinations of letters and numbers. So that is what we were trying to do by getting capabilities to play in these roles -- the rails, therefore, participate in these flows and tag on capability, build capability by capability that allows us to address the actual needs of people at either end of the transaction. It could be a business. What's the business trying to do? Yes, they want to get money from A to B, but they also want to optimize the reconciliation of their accounts receivable. So that is -- that was what that strategy has designed us to do is get us in the flow and then set us up to build solutions that address these needs. The second thing that it's designed to do is drive additional revenue, diversification of our business. The go-to-market around multi-rail is basically continuing to drive our core business, number one, because multi-rail means we keep doing what we're doing. This is not a replacement. So making sure that we are out there and we're participating in as many flows as possible with our card solutions. And this gets interesting when you look at B2B. In B2B, let's say you have $120 trillion kind of size over there. Card solutions do play a role, and we will continue to push our VCN, our purchasing card, our T&E cards and all of that. So that journey will continue. But then when it comes to B2B that sits in the account-to-account space from one bank account to another, one business paying an invoice of another business and shifting money from one bank account to another, for that, the go-to-market works in a way that we first believe there's great value for us being present in the infrastructure of these particularly real-time payments. We also believe that, that is not sufficient alone. It will be good to have additional applications that make -- differentiate the payment, make it simpler, make it safer, address a particular need. I've talked about accounts receivables earlier on. And then there's an opportunity of services that go around that. And I'll give you an example here. If you think about, let's say, a national banking association that wants to modernize the payment stack, the question is, well, how do we do that. That's a fantastic opportunity for a consulting business. So we have now a thriving real-time payment consulting business. But you take our existing services that we have around our cards business, extending that into real-time payment flows is again an opportunity around services. Cyber solutions is one of them. If we can make our card payments safer, why can't we make our real-time payments safer, and yes, we can. So some of the solutions around anti-money laundering and so forth are good examples. So it matters. It matters for our participating in more flows, driving revenue. The go-to-market is around infrastructure applications and services, and there's a national opportunity for us to extend what we have been doing. So that's, in a nutshell, the multi-rail strategy. Just maybe one thing to add on is there's this question about do you have to play in all 3 of these layers? So we prefer to. We feel there's an advantage of playing across all 3 levels, and I give you some reasons for that. The -- just the example of the consulting opportunity, that's a pretty obvious one. Being in infrastructure in itself is a revenue-generating activity. When we bought Vocalink, we saw what 10 years of Faster Payments in the U.K. does in terms of revenue opportunity and margins. That's in itself attractive, but then you start to see that this business is different than the cards business in terms of the data standard. So that's a great example on why playing across makes sense. ISO 20022, if you're in infrastructure and you know how the data sets flow and then you build an application on top, it's plug and play. It's like you're arguing that I would be in clearing off and settlement on the cost side, but I don't own clearing off and settlement. That would be kind of a weird set up. So we felt we took a page out of our own cards playbook and said, "I want to be in infrastructure. I want to be in applications and services across the board." So there's an interplay there.

And as you're going to market with the product, the multi-rail strategy to your customers, how are you marketing it to them? And sort of what's the pricing structure and strategy around them?

Yes. So the go-to-market, oftentimes a lead-in, in a market where there is, let's say, a somewhat dated payment infrastructure is a conversation around modernization. So you have a central bank or you have a national payment association who said, "We're going to kind of upgrade our payment stack." And they RFP. And then if you have this capability, you will be invited to the table, and if not, then it's just a little more difficult to get a seat at the table. And then the conversation in every one of these cases, in the end, not initially, but in the end, goes into, "Well, what else could we do? How do we drive value and traffic into such an infrastructure?" So the conversation around additional services and applications comes fairly soon because it's generally a significant investment of banks and the national payment association in such infrastructure, and they're looking for a way to drive true value and make a difference for the users of that system. So it's kind of like in stages, go-to-market from that perspective, and there continues to be that the relationships that you drive, because you're locally invested in a local infrastructure, makes you a trusted partner. It's a longer-term relationship in the world that is fragmenting. We then go to a point where you have continuous opportunity to come with new solutions. We see the data flows from the infrastructure and say, "Well, how about we have a solution for you on anti-money laundering?" That is exactly what happened in the U.K., and 10 years after, there was like, okay, we see data flows now, we can identify money meal accounts, and why don't we do something together. So there is -- it turns very much into the go-to-market that we see on our core business. So our sales teams' in the markets, they know about this, they see the opportunity and then identify the next set of solutions, and a product road map emerges from that. So even in the short period that we've been doing that, we now have a whole range of solutions in that space. The economic models, they vary. So we have software deals. That is a classic software licensing business. We have an operating model where it's basically transaction fee-driven on the infrastructure side. And then on the applications, it varies. There are no established models. If you take Pay by Account, for example, we enable a bank account to pay directly, which is going to be very relevant in Open Banking markets. You see economics that look fairly similar to debit economics. That's kind of what the market is comfortable with. It is fee-based, not interchange-based. So yet to see how that emerges. And on the services side, the economics actually is fairly comparable to what we see in the services and now we got our own services business.

So Open Banking is a quickly growing area here and both in data aggregation and payment facilitation. What is Mastercard doing in this space? And sort of what value can you bring to this ecosystem?

So as a European, let me just focus on European regulation to start with, which is everybody's favorite topic. So PSD2, payment systems directive, kind of it formalizes what individual countries in Europe were looking for. Somehow, the relationship between banks and consumers needs to be broken open to drive more innovation, open up the market, see alternative solutions come to the table. So Open Banking dramatically shifts the relationship between banks and their customers, hence, introduces a third party. We looked at that and said, "This is going to happen around the world, and it is happening around the world." So this is clearly a global trend. So the model that we see in Europe finds its way into Asia, into Australia. So we see that there's a few markets that are a bit of an exception. The U.S. is one of them. India might be another one. So global trend, with this shift in the relationship between banks and their customers and suddenly there's a whole host of fintechs coming in, our starting point is we have to have solutions for all 3. So -- and we also believe that if Open Banking can live up to what it's designed to do, not only by regulators but by consumer push, I want better solutions, you need to have some sort of a trusted ecosystem. In a world where there's a bunch of fintechs around and there's no digital trust, that's going to be a problem. If there is no business model that are transparent, that's going to be a problem. If consent management doesn't exist, if one of us here in the room would give a consent to a fintech and say, "you can access my bank account." But tomorrow, you change your mind because you read something about that fintech, and your consent renewal is never ever recorded anywhere and people just run around with your credentials, that's a problem. So we felt there's a lot to be done here. As a trusted partner, we're a pretty principal trusted partner when it comes to data handling, we said we have a role to play. And we went off launches in summer last year in Europe, a platform that drives connectivity, that makes the connectivity easier for fintechs to connect and for larger banks to connect. Just imagine 10,000 banks and 10,000 fintechs on one side, it would look like a spaghetti plate. So making that easier with a multilateral network like we have it today on the card side, that was the starting point. And we said, "okay, what a good actors." So there's a product called Protect that basically says, here's kind of the compliance approval stamp of this is a good actor and this is not a good actor. And then finally, in the world of cards, in a payment transaction, if you don't get what you ordered, you can dispute the transaction. In a world of Open Banking, that could be the Wild West. We felt we should add that, and we put that in. So we feel good about that. We feel good about the principles. The principles come out very importantly when it comes to treating the consumer data with great care. So this is all about giving consumer the ability to do something with that data. So I want to use my account data to get a better loan from somebody else. If that data isn't treated well, then that's a real issue. So we kept looking again at Europe's regulation and looked at the data protection regulation there, which, in principle, is a comprehensive piece of work. But in the principle, it says something like you own your data, you should benefit from your data, you should control it, and everybody in the ecosystem needs to protect it. We adopted exactly that and said that's data imperative. We will not do anything in Open Banking that doesn't comply with that. And as a result of which, a lot of people come to us and say, "You seem to be a reasonable partner." So I'm very optimistic around the space. I want to tie this back to the M&A question that you had earlier. This is a big space. We believe it's early days, but we believe it will grow. And the question about how do we scale around Open Banking, well, in Europe, we're like in 11 countries. We have 1,800 connections, so that's pretty significant, but the world is a big place. So that is one of the areas where we will be looking to see do we invest and do we invest inorganically or organically or we can watch that space.

That's fair. Again, B2B -- and I'm going to open it up to the audience after these next couple of questions. So please be prepared for questions. I guess B2B, you identified $125 trillion. You mentioned it before. Can you just talk about sort of the B2B opportunity, how you're approaching it, Mastercard Track?

Yes. So that was the big unveil at the Investor Day last year, Track, the product family. So we -- as I come back to the $125 trillion, we were on this journey into commercial with all our card-based solutions, and then VCNs were our first step into accounts payable. And that's a nice business. We grow it well. It's profitable, all that. We feel we're a leader around VCNs. We're making them better, but you still come to the conclusion that the vast majority is just happening from one bank account to another. It's just a reality. And then you take a step back and say very similar to what I just talked about in Open Banking, what are the needs, what are people's problems. And as I mentioned it earlier, cash flow prediction, account reconciliation, control, efficiency, all that. So how do you address that? And if we didn't have good answers with the card solutions, so it's okay. So better answers, do we have? We had some learnings out of the B2B Hub activity that we had in the U.S. and where we put an investment into Avid. We put out the B2B Hub, which is making really good progress. We got Fifth Third. We got Bank of America there. So that's looking strong. But we said, okay, so what are the key components that people are struggling with, and it's a very simple payment stack. It is like, who do I want to pay? So I need a directory. Then I want to know if that person that I'm paying is a good actor. So I want the same compliance thing that I talked about earlier in the Open Banking context directory, then you have the compliance piece. The next thing is I want to have a payment strategy, an accounts payable strategy. I want to pay 90 days, 60 days, 30 days, whatever. And then you want to have choice and solutions. I'm going to choose a really simple payment because it's a domestic payment for something very simple. I don't need to send off a lot of data along with it. So I'm going to choose, let's say, a basic ACH transaction for that. So payment optimization and choice. We have all of those components. They just don't exist together in one proposition. And so we pulled that together. And the last thing missing in this was a data switch. And the data switch that sends along -- that can send along any data that is needed, along with the payment, and all that data together, from the directory, all the way to the data switch, leveraging our multi-rail capability, that is Mastercard Track Business Payment Service. So I feel very excited about it. It doesn't exist, and it's going to take some time on until it will exist. Just kind of mind -- we should just keep that in mind. It's going to be a bit of a journey because it's a 2-sided network that you're building. You need the suppliers participating and the buyers participating and need people that recruit suppliers and buyers into this ecosystem. The starting point was a launch here in the U.S. on a use case around payment delivery, physical delivery, where exactly that functionality is needed. We had some learnings out of it. And we said in September, we're going to launch BPS in the U.S. in a somewhat more significant way in the first quarter of 2020, and we intend to do that. So we're not going to change our plan. So I'm pretty excited about that. And then it's beyond the United States in 2020 as well. So that's a journey, a multiyear journey, but I think that's really going to solve the issues that the B2B space has been suffering from -- for quite some time.

And bill payment is another big opportunity. So when we think about Bill Pay Exchange in the U.S., could you just talk about the opportunity and the strategy there?

Yes. So we talked a lot about B2B and $125 trillion. So there is space in the PCE. That $50 trillion that we called out is our traditional space. The largest flow that isn't really well-addressed in there is bill pay. The reason -- there isn't really a good reason for that, but there is a lot of unanswered problems in that. And then the billers find it difficult to efficiently present bills. Consumers find it difficult to pay bills. In billing, you got to go to this website, that website, a super fragmented proposition, and banks are looking for ways to pull people into their online banking and their mobile app. So everybody has a need in this space. If you look at the volume, just the United States, if I recall the number correctly, 15 billion bills adds up to $4 trillion. That's just one market, was the largest, but still, it's just one market. And only half of them are electronically paid. So it's a massive opportunity. Everybody has a need. We have bill payment capability. We've had the largest biller directory for many, many years. With the acquisition of Transactis, we have the presentment capability and we have reach in terms of participants on the billers' side and the bank side. So BPX launched. Bill Pay Exchange is on the way. Our launch partners, U.S. Bank, Aliaswire, Avidia Bank, Jack Henry coming. So a good start. Pretty excited. So this whole $235 trillion, here's a big chunk on how you're going to eat your way through the $235 trillion.

Great. So I'm going to open it up to the audience for questions. Anyone have questions?

I saw some yawns. This is the after-lunch session.

There's 2 right there. So you can take them.

Congratulations.

Thank you. It's nice to see you again.

Nice to see you, too.

Friendly face in the first row always helps.

Yes. Exactly. I wanted to ask you about the multi-rail ecosystem that you were sort of talking about. I think when most people think about it, they think about it mostly as the B2B opportunity as well as maybe some P2P. Do you see a role for multiple rails emerging in a very significant way in the B2C space? And how important is it to kind of manage that in an effective way? Or do you think that, that's going to mostly be B2B and P2P sort of a story?

I mean, in the B2C space, so the way I see this emerging right now, there's more and more use cases emerging where people want to transfer real time to a consumer, and I think the choice question comes in as much as everywhere else. So when I see what we do with Send, I mean, our partnerships with, let's say, some of the rail -- the taxi companies, then there you'll send where possible. But in a market where you have a real-time payment system and you can reach people, then that is the -- that's just as much as an opportunity. We also see solutions where we link our Send capability with their Faster Payment systems. So you originate in a bank account and you send into a card. So converged solutions, Send. And in a market where just like we see this in Thailand, PromptPay, 45 million ties, all connected. Actually, these kind of use cases on corporate distributions, insurance claims and stuff uses that as well. So I think we're well positioned again for that. If we go to slice that and say, "Well, here's 2 or 3 solutions that we have." Yes.

Then just lastly, on the application and services piece, as a B2B2C company, where do you guys sort of draw the line on these are things that we, as Mastercard, have a role to play, whereas we should leave some of these opportunities for our customers and partners to play that role?

Yes. So I fully believe in the B2B2C model. So we have no intention to get between our customers and their customers. So that's really not our strategy. But our strategy could be to -- and it increasingly is, in a world where, let's say, traditional financial institutions are facing competitors that put out a fantastic user experience, leveraging APIs and all sorts of other technologies, and they're coming to us and say, "Can you help us?" So we need to have answers that get a lot closer to defining the user experience and basically in-source the complexity and then enable some of our partners. At the same time, it's also very clear that when I think about what our service set is, we're very strong in data. We're very strong in cyber. But there is a whole range of other capabilities that a fintech provider can provide. And we are pretty clear to say we don't have all of the answers. But if I have an ecosystem and a developer zone and an ability to digitally connect experiences into one, draw in a fintech and say, "you're going to do the chat bot; you're going to do this, that; and the other into that." It's one product that we can help our customers with. So that's another way of looking at that and say. So in the end, we will do some things, we will help our customers get closer to whatever the user experience that it is designed to have. We have reference apps and all sorts of things, but we stop short of being out there ourselves.

Just go back and -- just -- and back there and then come back to them.

Michael, congratulations, again.

Thank you.

Just a quick question on this -- continuing with this discussion on the infrastructure space. Your competitors have talked about the fact that because it's a negotiation with the government and more -- thought more of as a utility layer, the infrastructure layer becomes -- gets commoditized very quickly. And there's always -- from an economic standpoint, there's always the pressure on fees or economics that you can draw out from that. So love to hear your thoughts about why that is not the case?

Our -- so I'm not going to talk about our competitors. You will have to ask them. Our experience has been, first of all, it's a mix of who thinks about infrastructure in real-time payments, who offers them, who procures that. So we have examples where it's bank associations. We do have examples where it's a regulator. It's a central bank. It's somewhere in between. Oftentimes, people that have, therefore, a wide range of motives, I want stability, I want resilience. Other people have an economic motive. So it's a range, so it isn't just one model. If you think about P27, sorry, so P27, the Nordics, this is a deal that we won that we talked about in our earnings calls and other conversations, the conversation there is about a whole range of activities. It has infrastructure, but it has cross-border functionality. It's a number of countries involved. So the clear cut, this is an RFP on a particular infrastructure. There's many examples where it just doesn't stop there. It's a natural conversation with somebody to say, "If you're a party that offers multiple services, I want to see what the -- of course, there's competition. There's always competition." But there is an advantage to be at the table and say, "Let me talk to you about a few other things that are emerging." Money meal is an example. I said, you see the data flow because of the infrastructure, therefore, you can start to develop a product road map around things like anti-money laundering and so forth. But we also recognize, and we don't want to make the -- leave the impression that we want to play in infrastructure everywhere. That's not a sensible thing to do. But in some markets, it is a very sensible thing to do. And then it is helpful if you play across infrastructure, applications and services. There will be markets where there's an existing infrastructure, and we want to be an agile player that says we have learned in other markets, we can come in with our Pay by Account solution or a B2B solution, and we're going to use the existing infrastructure stack. Works just as well. But having both, U.K. is the most -- it's like a really good example of this, 10 years of Faster Payments. We're processing like 90-plus percent of payments in the second largest payment market in the world. That's a pretty unique position to be in. And if it weren't for infrastructure, many of the opportunities would be very hard to come by. But there is competition, and things are changing in the world and everybody is looking at that. We compete on value as we bring in other solutions that allow us to address the commoditization route and say "we bring more value, and therefore, we're happy to compete."

Okay. I think we're going over. So I'm going to have to stop right there. Sorry.

Okay.

Thank you.

Thank you very much.