Mastercard Incorporated (MA) Earnings Call Transcript & Summary

Thanks, everyone, for joining. My name is Tien-Tsin Huang. I cover the payments and IT services sector at JPMorgan. So really excited to actually kick off the conference today with Mastercard. Sachin Mehra from Mastercard, who's the CFO, has agreed to join us for a fireside chat on a Monday morning. Sachin, it's great to see you. Hope you're doing well. Hope you had a good weekend.

It was great. Thank you, Tien-Tsin. Thank you for having me here, and good morning to everybody.

No. It's always a pleasure to have you. It wouldn't be a conference without you, seriously.

So we'll go right into the fireside chat. I think we'll take questions from the Ask A Question portal, so I'll be watching for that. Participants, if you want to click on that, I'll be watching that as we go. But Sachin, the obligatory question upfront, everyone would love to hear your latest thoughts or thinking around market trends, domestic, cross-border travel. I think everyone's staying right on top of it. You've done a good job giving us some updates. But how do you see domestic and cross-border travel here and new thoughts on the recovery?

Yes. No. Thanks for the question, Tien-Tsin. So look, I mean this is what I'd tell you, on the domestic side, things -- we've shared at the time of our first quarter earnings call that domestic spending levels in many markets across the globe were in what we call growth phase or transitioning into that growth phase. And we're seeing -- what you saw in the nature of those spending levels pretty much carried through in terms of the same trend, in terms of the trajectory since when we last spoke, which was at the time of our earnings call. So spending in the domestic market, same trajectory as what you saw at the time we shared our Q1 numbers with you as well as our first 3 weeks of April. In terms of just some more specifics around that, we continue to see, as we had mentioned previously, strength in discretionary spending around clothing, around sporting goods, around furniture. Those kind of categories of spend, we continue to see some level of strength. We also talked about at the time of the first quarter of earnings call about domestic travel and how we had observed at that point in time that domestic travel spending in the U.S. In the weeks just prior to the earnings call, we had seen levels double compared to what we had seen in the early part of Q1. And those trends, that strength in domestic travel, continues to be very much something we'll continue to see as the quarter continues to progress. So what I would say is, overall, from a domestic spending standpoint, very much along the lines in the trajectory we had seen when we talked about this maybe a few weeks ago at the time of the earnings call, we're seeing that carry through. On cross-border, you had seen the numbers we had shared with you at the time of the first quarter earnings call, cross-border, card-not-present, excluding travel, had shown a decent amount of strength. You had seen those in the numbers, which were there, which we had shared with you. Cross-border travel was something which was a little bit more muted. We had shared those numbers as well. And what I would tell you is, in those areas where vaccination programs are taking hold and where governments are working actively to establish corridors for travel bubble, so to say, and there are more and more of those, which are starting to happen, travel is starting to come back. What is very clear to us, as we've seen in domestic travel, is that people definitely have the intent to travel. There's a significant amount of pent-up demand for travel, particularly on the personal side. That being said, we're seeing some level of business travel come back as well, not nearly with the same level of strength as what we're seeing on the personal travel perspective. Specifically, I'll tell you, on cross-border travel, intra-Europe is starting to show a little bit of strength, countries like Poland and Romania and some of these countries where you're starting to see some level of recovery take place. Now you know intra-Europe is the low-yielding, cross-border travel kind of corridors, which we have, but it's encouraging to see that people are getting back on the road. They are traveling. And so all in all, I would tell you, we're on the right path. Our expectation still continues to be that we think cross-border travel is something which comes back in the latter half of the year as more and more vaccination programs start to take hold in different parts of the globe. And look, I mean we're all kind of reading the news every day. Every country has got new news, which happens as it relates to the resurgence of the virus or otherwise, which kind of takes place on a day-to-day basis. So it'll continue to be uneven depending on the country in question. But broadly, I think we're trending in the right direction there. So that's what we're seeing in terms of the latest trends from a both domestic spending perspective as well as from a cross-border standpoint.

Okay. I know there's a lot of cost current. So wearing your CFO hat and thinking about managing expenses, I know it's not easy. You have inflation. Of course, you have growth investments. You have M&A that you're also integrating or thinking about as well. So as you navigate through this phase, Sachin, how are you thinking about managing expenses? And has it shaped how you think about future M&A as well? If you want to talk about capital priorities on top of that.

Sure. So first, at the outset, I'll just tell you that our philosophy from an expense management standpoint remains unchanged. You know, as a company, we have a long history of managing operating expenses in a disciplined manner. We continue to exercise that disciplined approach. We continue to use those investments to drive our strategic priorities, to drive top line and bottom line growth for this company. The other point I want to make on expenses is that we've always had a level of flexibility in terms of our expense ability. So said differently, we have the ability to take up or take down expenses while keeping an eye on the top line. And we've demonstrated that, right, though we've gone right to going through the COVID environment last year where we ratcheted down in a fairly rapid manner our expense spend, and we focused those expenses on those areas which were critical to the long-term growth of the company and which were in demand from our customers. So that philosophy, I would tell you, remains very much unchanged. We mentioned on the first quarter earnings call that we are seeing signs of optimism return from a domestic spend standpoint, and as we were starting to see a little bit come back on the cross-border side that we do plan to lean in and take a little bit more in the nature of expenses to drive towards our strategic priorities. And this is exactly what I shared with you at the time of the first quarter earnings call. And that's very much in line with the philosophy we've always had. You asked specifically the question around acquisitions. Our philosophy around acquisitions remains unchanged, Tien-Tsin. It's strategy-led. We will do it where it makes sense. We expect our acquisitions will be dilutive for no greater than 24 months, and we will show you both the revenues and expenses for the year in which the acquisition is done and the next calendar year on an ex acquisition basis. So that's something we've done historically. We'll continue to do that on a going-forward basis. Now we have always maintained a view that we will drive the business towards this top line and bottom line growth, and we will drive that while trying to deliver positive organic operating leverage. And that philosophy remains very much unchanged. From a capital allocation standpoint, again, unchanged. We want to maintain a strong balance sheet, strong liquidity and strong credit rating. It's important for us for the role we play. And we want to invest in the growth of the business. And we'll do that through organic investments. We'll do that through M&A. And then we'll return capital back to shareholders with a bias towards share buybacks. That's really the philosophy. So not much has changed, really, I would tell you there.

Okay. No. That's good. So I do want to ask you about the acquisitions here, Sachin. But before we do that, you just mentioned organic. You are seeing some return on investment in the form of some nice wins, right? We've been writing about some of the wins, recently, NatWest. You picked up the TCF piece as part of the Huntington acquisition. So I know I always ask you about pricing. But generally speaking, if you can just talk about what's putting Mastercard over the top to win some of these deals. And is it sustainable? Is the pipeline there such that you can replenish the pipeline and obviously replenish the backlog?

Yes. The space we operate in is a competitive space. We have a lot of respect for our competitors, but we believe we're very well positioned to continue to win as we have historically in terms of our abilities. And I'll get into the specifics about the wins we've had, but let's spend a few minutes just talking through why we believe we can drive this competitive posture to continue to win, right? We believe that it's multifaceted. There's a level of it which just goes around just the engagement we have with our customers. And that's not to say that the competition doesn't have engagement with customers, but the question really is what's the texture, what's the way in which we actually engage with our customers, how we get into what we would call a solution-selling mentality, how we're helping them grow their top line while managing their expense base, how we're trying to co-innovate with them. These are all very important elements which happen at the frontline, which, candidly, the team out here has done a very nice job on executing. Then there's a set of capabilities we have, which differentiates us. And this is everything from our digital-first capabilities to our services capabilities to our multi-rail capabilities. And it really does help when you go and engage with the customer and you talk about a much broader strategic approach towards payments than just saying, "I want to be the brand of choice for your card program." And that's really been the approach. That's how we've gone about doing what we've done. And we've been successful. We've driven hard. And it's been something which has helped us win, like you said, the NatWest portfolio, which is 16 million debit cards in the U.K. And now with -- after the conversion of the NatWest portfolio is done as well as some of the other wins we have announced in the U.K., we should have close to 1/3 of the cards -- the debit card universe in the U.K. after those conversions are done. As it relates to NatWest, we expect those conversions to start later in this year. They will happen upon natural expiry of the cards. So it will be a multiyear journey because it's not kind of a hard flip that's something which will take place over time. So that -- we're very happy. We're very excited about the partnership. And it's -- again, it's not just about moving those cards to Mastercard brand. It's what else can you do with the client across the broad area of assets we bring to bear. Similarly, we won the Gap portfolio from a co-brand standpoint, which we kind of talked about. Again, another proof point of how the engagement model is something which we are very proud of because candidly, Gap and the stable of Gap brands has been with the competition for a very long time. That hasn't deterred us from engaging with them, with the set of services which we bring -- we believe we can bring value to them with. And we've been doing that even before they made the decision to move the portfolio to us. And it's those things which help in really winning from a competitive standpoint. So that would be the example of Gap. Then I think about the work we're doing with the digital players, the Apple Card program, the work we've done with Citi -- with the Citi Plex and the Google Pay program, which we've got Samsung and Curve. There's a lot of good interaction which is going on, on those fronts. So net-net there, what I would tell you is, it's the engagement model, it's the set of assets, it's about how you can drive value for the customers which is helping us win there.

All right. No. Good to hear that. I know debit has been a focus in the U.K. So the 1/3 share is important to highlight. So let's walk through some of these acquisitions, if you don't mind, Sachin. I thought we'd start with Ekata, the digital ID. I feel like we've talked about the potential for digital ID on the network as a tangential opportunity for Mastercard for some time. So how does that fit? And how do you see that evolving over time, this whole digital identity space, which feels like it's still very, very early?

Yes. Well, actually, the foundational elements for why digital ID is something we believe is very important, has been something which has been underway for many years. The fact that the world has been going more digital is just -- it's happening and it's only accelerated through the COVID environment. And as the world has gone more digital, what that means is more and more opportunities for fraud exists in that digital environment. Digital is that much more challenged just because it isn't face-to-face. And by virtue of that, there's greater opportunity for fraud. We have been participating with our fraud management tools in that space as it relates to the payment flows for some time now. You're aware about that in the context of the cyber intelligence tools we provide in that space. Where digital ID comes in is we've got to think about digital ID in the context of not only the capabilities you can provide when payments take place, but what happens prior to a payment taking place and after the payment takes place. So I can almost think about our strategy around digital ID as think about it as a parallel network. We have a payments network. The payments network has guardrails, has got ACH rails. We've got blockchain. We've got a whole set of abilities which we can actually bring to initiate and manage payments. Then you've got digital ID, which is basically how do you make it safe and secure and let commerce happen in the best possible manner. And commerce being prior to the payment, during the payment and after the payment. Where Ekata comes into play is it is complementary to the set of assets we have been building in this space. They bring a set of machine learning tools, a set of data attributes and ability to do some incredibly good credit scoring on a real-time basis. And when I say real-time basis, this -- so much of this is about being able to authenticate the validity of the person who is transacting without really destroying the user experience. So if you are looking to set up a digital account, you can't be bothered by having to wait to get approved for that digital account. You want to have your e-mail credentials put in, set up the user name, set up the password and then you suddenly have a digital account. And that's the way a lot of this stuff works. Well, the reality is there's a lot of stuff going on in the background. The stuff going on in the background is about validating that Tien-Tsin is indeed who Tien-Tsin says he is. And that's where our digital ID capabilities along with the card play a part in terms of helping with account opening, they help with certainly during the payment transaction, but even post transacting. It's -- prior to the shipment of goods, there's another validation point which could take place. So there's several elements which take place here, which are very important in our view to ensure that commerce happens in a seamless manner, but still in a safe and secure manner. The revenue model is very interesting. It's actually one where there are API calls which are done. And those API calls are -- it's like a per transaction fee which we charge. Then that's true for the digital ID network, which we have established, which we've been working on for some time now, but it'll certainly be true also once we close the acquisition at Ekata. So important space. It's one to keep an eye on. And we think about this as a parallel network, which is complementary to what we do in payments, but actually it goes before and after that as well.

Yes. No. I like that parallel network idea. I mean it's in the flow. It's in the stream, right? If we can get early on and do instant account opening and help with authentication on that side, there's a lot of power to -- obviously, on the issuing side, I would imagine, especially like co-brand or store card.

And it's certainly true on the issuing side. It's also very much true on the merchant side. There's certainly, like we talked about, account openings, but there's -- the capabilities on the merchant side. Merchants care deeply about ensuring that before they ship goods, that those goods indeed are going to valid customers. And it's certainly valuable. And you can take that out to a whole range of merchant categories as we go down this path.

Good. So let's talk about Finicity. You mentioned API calls for Ekata. I know when I think about open APIs and think about open banking and what's happening there, can you give us an update on what's happening with Finicity and, of course, the whole open banking play? It feels like it's going to be more important here as we come out of the pandemic, Sachin.

Yes. So look, I mean open banking is a very important part of the execution of our strategy. It's actually -- it's important on 2 dimensions as far as I'm concerned. One, it enables our multi-rail strategy. So you know we're in the business of providing choice. We want to provide as many forms of payment choice as consumers require and want. And open banking will help us get there. The second, let's talk about part of our open banking is it's indeed a data network. Because at the end of the day, the heart of what we do from an open banking standpoint is the movement of data with consumer consent, with the right principles around data management, which we've been very clear about, just around ensuring there's full-on data securities, there's consent from the consumer for the utilization of the data for the use cases, which is well understood, right? Data privacy is being maintained. All of those things are super important. And that data network piece, which I'm talking about, is an equally important piece of it. So we acquired Finicity. We closed on it in November of last year. The integration is going very well. Sales teams are fully integrated. We're in full-on mode as it relates to not only further building out the connectivity, and they've got very good connectivity, and they've got the right kind of connectivity. So let's talk a little bit about why that's important because at the end of the day, you can gain access to data the right way or you can get access to data the wrong way. We believe the way to do it is the way Finicity does it. And the way in Finicity does it is with consumer consent, working with data providers who are typically the banks and/or the fintech providers. And that's foundational because what you want to get is data sharing agreements in place, which improve the quality of data you get as well as ensure that there's an equitable sharing of the economics across those who are the value providers in that ecosystem to make it long-term sustainable, very important for us. We've done that. We continue to build that connectivity out, and that's all at the -- what I call the infrastructure level. What that enables you to do is get to a space where you can deliver what would be very valuable applications. So let's talk a little bit about what kinds of applications can come through and are coming through as it relates to our open banking road map. We -- when we acquired Finicity, Finicity was very prominent in the mortgage space. They have customers like Quicken Loans, like Experian. And really, what they're doing there is they're leveraging applications like verification of income, verification of employment, verification of assets, all of which are very important for mortgage lenders to make decisions on whether they should or should not lend. And they get that information through APIs, which are well established. Again, back to that API theory, right? So that's just but one -- again, remember, when I talk about that, I'm talking about credit scoring and credit decisioning. It's got nothing to do with payments. That's why I call that a data network. Now there's a separate use case, which could be there where you could leverage that same data to initiate payments as and when required. And that's where the multi-rail piece of our strategy comes into play, right? And then there are several other verticals where you could take your credit decisioning and credit scoring capabilities like small business lending. It could -- there's a whole range of opportunities in which is exactly where we are very focused. So the first step is get the foundation right, get the right kind of data exchange in place and then continue to build out applications to drive and deliver on that. And that's what we're doing. We're doing that with Finicity in the U.S. We're taking them very much into the global remit on an as-appropriate basis. You know that from an open banking standpoint, we've been investing particularly in Europe in terms of building out our capabilities there. And there's a fair amount of synergy, which we're looking to actually derive. It's still early days. The acquisition is 6 months in, but we're on the right track.

Okay. No. Good. I know it's important. We're all certainly watching it. And I know if debated, is this an infrastructure play or an applications play, but I guess in the end, it's data, right? I mean that's really what you're getting after and it fits with some of the broader themes that Mastercard is talking about. So I wanted to quickly talk about Nets and why it's important to own that asset, how does it complement Vocalink and what you're doing on multi-rail side? And again, right, with sort of this infrastructure application services, that framework that you've talked about, which I think is really great, what about this asset fits that strategy? What -- how does it fit against that strategy?

Right. So we closed on Nets in March of this year. And we're into that integration process as we speak right now. It's like you said, Tien-Tsin, let's talk about it in the context of infrastructure applications and services. What Nets brings is complementary to what we have with Vocalink. And how is it complementary? At the infrastructure level, it's complementary because the technology which Nets brings for infrastructure is well suited for faster implementations, less complex implementations in what I would call smaller markets. Vocalink, on the other hand, is a little bit more around more complex integrations and implementations. And it's more customized, so to say. And so you're serving a broader set of customers at the infrastructure level when you have both Nets' and Vocalink's capability. So that's kind of purely at infrastructure. On applications, Nets brings a set of applications on bill payments, which we think is very important. They are leaders in the bill payment space in the Nordic countries. And we believe that the capabilities they bring from a bill payment and invoicing standpoint is something which is very much useful to us as we go across the globe with that specific application on bill payments in different markets, different regions and complementary to what we are doing in the U.S. with Bill Pay Exchange, which we can talk a little bit about as well. So -- and then there's the services piece, which, candidly, really what we're looking to do is by being in the infrastructure across the infrastructure implementations of Nets and Vocalink, you have the opportunity to deliver services more broadly across the broader set of flows which are there. So that's kind of the theory, the logic behind what we're doing with Nets and why we're driving that. We're, like I said, early days of the integration out there. We just closed it a couple of months ago, but we're very encouraged and we're very excited about the prospects of that going forward. Did you have a second part of that question, Tien-Tsin? Was it only about Nets or...

I was just trying to unmute myself. Forgive me for the pause.

Okay.

Yes. No. I think that covered it. You did mention bill pay. I know Mastercard has been very focused on bill pay for some time, dating back to RPPS, and I've talked to you about that in your prior role at Mastercard. So what's happening with the business payment service that Mastercard has on the bill pay side? And I get this question a lot, Sachin. Is it -- is the focus more about driving virtual card usage? Or is it more about automating AP? And it's just so complex, right? The supplier recruitment and going after the buyer, I know that's -- you're very close to that. But just catch us up on why Mastercard is so focused in this area.

Okay. So I'm going to step back and first just distinguish between what we've got with Bill Pay Exchange relative to Mastercard Track BPS, right? Two different things. But let's go after Mastercard Track BPS because I think that's where you were going with the whole B2B opportunity, so to say. First, I kind of think about B2B at multiple levels, right? We've been doing B2B for many decades. Roughly 11% of our GDV is commercial flows, and that's been primarily driven by our guardrails. And the guardrails being our SME propositions, our T&E propositions, our B2B propositions through our virtual card capabilities. So that's one piece. It's currently revenue-generating. It's growing at a nice pace. It's taken a little bit of an impact during COVID because T&E has stepped back. But the reality is that's just -- and from my perspective, that's transitionary as it relates to the strength of what we've got in that space. Then let's talk about the other opportunity, which is the accounts payable opportunity, which is where Mastercard Track BPS comes into play. In the accounts payable opportunity, the problem we are trying to solve there is one around the availability of data to enable reconciliation of invoices. That's point number one, which is very hard today. Point number two is around enabling working capital availability to buyers and suppliers and ensuring you're doing all of this while delivering what would be a very good user experience in a safe and secure environment. So Track BPS has got a few elements which help us get there. What Track BPS has is a supplier directory, number one. So it has credentials of suppliers as well as what their payment preferences are. Do they want to get paid on cards? Do they want to get paid by ACH? What is their preferred method of payment? When do they want to get paid? So the elements are supplier directory. It's multi-rail. So it will enable card payments, it will enable ACH payments on that. It has a payment optimization engine. In other words, knowing what the preferences of suppliers are as to how they would like to get paid, the payment optimization engine enables that to happen. And it is a data exchange. And the data exchange is to enable the securing of data elements related to what invoices are getting paid from ERP systems in an easy and more comprehensible manner and then the delivery of the same over to the supplier who's receiving the payment to allow them to enable better reconciliation of invoices. So that's kind of the theory. Where are we on this? We have -- we're live with the solution in the U.S. We have actually taken it to several markets across the globe. We are -- our approach to this is very much of what I call an open-loop approach. And I say it's open loop, but it's important to distinguish between what Mastercard Track BPS does and several accounts payable optimization providers in the market do. So there are several accounts payable optimization providers across the globe, but mostly in the U.S., who have created what I call closed-loop environments. They have their supplier directory. And their supply directory is good for payments to be made to those suppliers and those suppliers only. What Track BPS is doing is it's contracting with several of those players to say, "If you make your supply directories open, we will be the data exchange engine which will be there, and that will give you the leverage and the power of being able to reach not only your suppliers, but several other suppliers built into Mastercard supplier directory." No different than what we've done, by the way, when we built out an open-loop acceptance network on our consumer payment side of the business, right? And so that's really what we're doing through engaging with what we call buyer-paying agents and supplier-paying agents, which are the equivalent of -- think about them as the equivalent of issuers and acquirers, right? These are the engines which help us get to the end corporates on both sides, the ones who need to pay and needs -- the ones who do get paid. So that's the vision. That's where we're going. We've signed up several buying -- buyer-paying agents and supplier-paying agents in the U.S., but globally as well. And now it's about making sure that we've got the flow coming through. And that's the work which is currently underway, which is them contracting with the end corporates on either side to say, "Yes. We want to be part of this network, and this is how we're going to drive it." And that's what's currently underway there.

Got it. Yes. And you can absolutely work with the banks to do that. I mean I asked because there's a lot of focus, right, in this -- in the public side with a lot of different players that are playing in this field.

I can well imagine. And I'll just close out by saying the revenue model -- because oftentimes, I'll get asked the question, what is the revenue model which you would expect with this? Here is the revenue model, right? I mean to the extent there's a payment which is going to take place through virtual cards, over Mastercard Track BPS, it's virtual card economics. So you would -- it's what you see is what you would get there. To the extent there are going to be payments taking place with ACH with what we call enhanced data or this data for reconciliation, there will be the charge which we will levy for an ACH payment, which is a per transaction charge, but there's an enhanced charge for the quality of the data, which is being delivered to enable better reconciliation and a more efficient payment flow. So that's generally one -- a couple of elements of revenue flows. But there are other elements. So the vision again is as we're building this out and you get the flows to go over Mastercard Track BPS is to build out connection points for supplier financing. So remember, one of the pain points I talked about was working capital requirements. And so when you build out the ability of supply chain finance providers to integrate into Mastercard Track BPS and leverage their balance sheets to lend to buyers and suppliers, it provides us an opportunity from a revenue standpoint there as well. So that's kind of the vision, and that's just one application. There will be several other such applications which we'll play out going forward.

Yes. And it sounds like there's a lot of ways to monetize. And that leads to another question that I had for you, Sachin. We talk -- you just talked about a lot of different ways to monetize there. You talked about API calls, right, on the Ekata side. So it's getting tougher I think to -- for us to look at the base of the P&L and look at revenue yields and think about pricing and monetization rates and things like that, Sachin. So how would you guide us or suggest that we think about revenue yields going forward given the various new natures of the business today?

Yes. So look, I think a lot of these initiatives we're discussing right now are at different stages of progression. So I kind of think about the evolution of Mastercard as a company, right? So we started up as a card network. And what we've all gotten very familiar with is the economics of what's the revenue we get from domestic assessments, cross-border volumes, transaction processing fees. We take that over GDV, and we say, okay, that's our revenue yield, right? Over the years, and the last decade, in particular, what we've done is we've really expanded on the services side. And as we've gone into the services side, what we've generated is, as we mentioned in 2020, roughly 1/3 of our revenues were coming from services, and they were growing at about 18% on a currency-neutral basis. So the profile of revenues has changed. So I think the new element which have come in around services, we can spend a little bit of time just talking through what you should think about in terms of how that revenue model works. But I wouldn't take away from the fact that there's still a lot of opportunity on where we first started, which is the card side of the business, right? And that continues to be something which is growing and growing at a healthy clip. And you've seen us operate. And we think about revenue yields in the composition of both card economics as well as services. And as we keep adding to these services capabilities, whether it's the data network from open banking or the digital ID network, it's going to be accretive from a revenue standpoint because you are delivering new things for which you're going to charge. So I mean do you want me -- I can go into the services piece, if you're interested in kind of getting into a little bit more detail about what we're seeing from the services side. We've got in our services portfolio our consulting services, our data and analytics services. We've got our cyber intelligence tools. We've got loyalty and rewards. We've got processing. These are generally kind of the space of services which we have. We have seen -- the philosophy around services has been very much around driving differentiation at the core. It goes back to the question you asked earlier as to how we're winning, right? So driving differentiation, and that's very much part and parcel of what we want to do, and we've been doing it successfully, growing at a rate faster than the core, which is again something services has delivered, and doing this all while continuing to tap into new opportunities while we're going down this path. So if you want to get the diversification of revenues where when you go through periods like COVID, it provides you a well-diversified revenue portfolio, as you've seen, to grow in a COVID year at 18% is pretty interesting. So look, the market size there, Tien-Tsin, is something which is very interesting to us. We continue to grow there at a pace which is faster than the core. We expect that growth rate will continue to grow at a pace which is, again, faster than the core for the foreseeable future. And the reason we're confident in that is because we think there's a lot of opportunity to continue to take our existing services and cost for deeper penetration with our existing clients, to take our existing services and move them over to new flows, away from just card flows into ACH flows, which is, again, an opportunity for us, right? That's the second area. And then to expand the suite of services. So there's a lot of runway there as far as I'm concerned. And what's very encouraging to me is that our client base is very much appreciating that and making decisions on the core, on the strength of what we bring holistically from a services capability standpoint.

No. That's well summarized. I think we're almost out of time. I want -- I'm getting a lot of requests to ask you about digital currencies. I don't know if you can do it in a minute here.

I can try.

Let's try because I got several questions about it. I know you've said you're going to consider standing some currencies up by the end of the year. I'll let you go.

Okay. So let's think about digital currencies across 3 levels. There's CBDC, central bank digital currencies; there's private stable coins; and then there is what we call bitcoins. The first two are different than the third. The third, we think about as an asset class. There is a limited store of value. We enable that -- the purchases of those through the billions of cards that we've got out globally, and we continue to see good traction in terms of what we're doing there. We also partner with several digital currency wallets to give them access to our acceptance footprint to allow them to settle. So that's well understood. On CBDCs, we are partnering very actively with central banks. We think we have a role to play at the infrastructure level, but also in applications and services. We are partnering with them to give them -- we've created a sandbox to allow them to come and do what they need to do to experiment as to how they might want to do central bank digital currencies. But what we're also doing is helping them create a use case for it. Just having a currency but not -- which is not accepted anywhere is not helpful. And so that's where we bring our acceptance network to bear. And that philosophy is very similar in private stable coins as well, right? But we'll do that and we'll do that in the right manner. So in other words, they have to be approved by the regulator. They have to have a store of value. They have to respect the privacy requirements which are there. And if they do meet those requirements which Mastercard has established for private stable clients, then we will -- we're working towards enabling the settlement of those private stable clients over our network, which we still expect will happen in the latter half of this year.

Well done. No. I think Mastercard has got an important role here with this. Some of the decisions you guys make will be widely followed. So it's a good framework, Sachin, to end with. So thanks again for the time. I wish we have more time. I think we covered a lot in a short period, but hopefully, I'll get to see you real soon, Sachin. Thanks again for spending the morning with us.

Thanks, Tien-Tsin. We appreciate it. Take care.