Mastercard Incorporated (MA) Earnings Call Transcript & Summary

All right, everyone. We are back, ready to start our 11 a.m. session. I am delighted to be joined this morning by Linda Kirkpatrick, a face I'm sure many of you know, a long-time Mastercard Executive and now President of North America at Mastercard. Thank you. Welcome, Linda. Reminder everyone for folks in the room, if you have questions and you want to do it the old- fashion way, write them on the cards and funnel them up to me. [Operator Instructions]

All right. Before we get started, why don't you spend a few minutes, Linda, if you don't mind, talking about just sort of your background with Mastercard and some of the current priorities you have as the President of Mastercard's largest region?

Happy to, Lisa. It's always good to see you and delighted to be at your event. I've been with Mastercard, as you mentioned, for 25 years. I started in finance functions for the first decade of my time at Mastercard and was involved with the initial public offering of the company back in 2006. And from there, I helped to start our Investor Relations function and got very close to the community that you're in and many of your colleagues are in and have a great appreciation for that, of course. And then second half of my career at Mastercard was largely focused in P&L-facing, customer-facing roles, both on the acquiring and merchant side as well as the issuer side. I've spent the last decade managing customers in North America and then about the past year and 5 months or so leading our business in the U.S. and Canada, which is about 1/3 of the company's business. So it's been a terrific time at Mastercard. I've seen a significant evolution of our model and our offering and have a lot of first-hand experience with our customers in taking them through that journey and the investment community for that matter. So in terms of priorities, you've heard Michael, our CEO, speak a lot about our new 3-pillar strategy: extending in payments, enhancing services and embracing new networks. We launched that new strategy at our Investor Day last year. And what's great about it is the entire organization has priorities that ladder up to those 3 pillars. And we're all very consistent in the way we work, in the way in which we connect together across markets, across business units to achieve the priorities across each of those verticals. And North America is no exception. So from my perspective, on the payments front, it's really about extending our products to more customers in more places across debit, credit, prepaid, commercial and doing so in a way that drives our business forward, drives a greater percentage of our share in the market and does it in a really productive, partnership-oriented way with customers of all kinds, banks, merchants, fintechs, acquirers, processors, governments, health care providers, both the types of products we offer and the audiences to whom we offer them have expanded over the years. And that is absolutely one of our top priorities, to continue that growth and that momentum, a lot of which you heard come through in our first quarter call. And I can get to that in a little bit. Second priority under payments for North America is really evolving the point-of-sale as digital has grown and the point-of-sale has migrated from physical to digital, making sure our tools like click-to-pay and NFC, contactless and tokenization are leveraged at the point-of-sale in a way that creates safety and security, in a way that creates consumer ubiquity, in a way that creates a uniform experience so that payments are seamless for those that want to use them, electronic payments are seamless. That is a priority of ours as well. And certainly, throughout the last 2.5 years of the pandemic, this has sort of naturally grown and extended. And I thank our lucky stars every day that we've been investing in building digital tools for years. So when consumers were -- had no other option but to go online, Mastercard had digital-first tools like tokenization to protect them during this period. So most definitely evolving the point-of-sale in both digital and physical context is something that we care a lot about in North America. And then driving digital performance in a way that connects with our customers' priorities. So digital-first issuance is something that is taking hold. It has taken hold certainly with the Apple program that we have but with other banks and other merchant partners as well, the ability to not have to wait for a physical product but get a provisioned product in a wallet immediately and being able to start using it immediately, safely and securely is something that we've been proliferating throughout the market as well in both the U.S. and Canada. So that's the priorities in payments. In services, we've got a variety of services, as you know, Lisa, that connect very closely with the core. It's data and analytics, it's cyber intelligence, it's loyalty. And from our perspective, a lot of these services are really driving the differentiation in the business and in terms of why customers want to work with us. Of course, they want to work with us because the network that we offer is highly efficient and highly safe and highly effective. But -- and when you layer the services on top, it makes the experience so much richer from an end-to-end perspective, not just in cards but beyond cards. And so the ability for us to get closer to our customers' business across their loyalty platforms, their point-of-sale integrations, promotions, sponsorships, the ability to mine data in a way that allows them to test and learn new things, the ability to protect their digital and physical ecosystems with cyber tools, these are ways in which we differentiate. And it's the reasons why we're winning new business. And so that services pillar is critically important for us in North America. It's important for us globally, of course. But most especially in North America, it is a point of differentiation. And then with respect to embracing new networks, we define that as open banking and digital ID. And as you know, we've bought a couple of open banking assets in the U.S. It is Finicity; and outside the U.S., it's Aiia. And we view open banking -- frankly, services applies to all 3 pillars. Open banking can apply to all 3 pillars as well as we, in North America, particularly in the U.S., look to provide additional ways to pay for consumers and small businesses to pay and be paid. Open banking allows us to leverage consumer provision data, to make payment decisions, to identify and approve loans. And of course, digital ID going hand in hand with open banking allows us to help authenticate that consumers and businesses are who they say they are. So having access to 95% of all U.S. deposit accounts through our acquisition of Finicity is a really powerful tool from our perspective to offer choice, to offer greater visibility into a consumer's total picture and to use it for lots of different use cases in payments and beyond. And so we're spending a lot of time on that as well, Lisa.

All right. I can't let the head of a region not to talk about some of your recent wins. So just to give a sense for some of the momentum areas within North America. Can you talk -- give some highlights of recent wins kind of across the spectrum, as you highlighted, beyond issuers, of course, but also some fintechs, et cetera?

Yes, happy to. We've had a really strong couple of years with respect to growing our business with banks as well as merchants as well as fintechs. And we've had wins across the board. From a -- I look at it from a proprietary perspective, we have wins that we announced in the first quarter with Wells Fargo with whom we enhanced our partnership across a few different elements. We're now going to -- Wells Fargo will now be issuing Mastercard small business cards, and for the first time in a very long time, consumer proprietary cards bearing the Mastercard mark. And then there's a series of co-brand products that we're working on with them. So that's very exciting for us. Capital One, who we've had a deep relationship with for many, many years, we've renewed our business with them. And we're going to be their network on a larger number of their card products on the proprietary side and on their small business product portfolio. We've also had some great flips. We announced last year a flip of Merit Bank from a competitor network to ours. That conversion is happening. It's live as we speak. And that's bringing forward millions of customers, over 3 million customers who will be transitioning over to our brand. We also had Huntington Bank who made an acquisition of the TCF business, which also landed with Mastercard as a competitive flip. So very, very proud of that partnership as well. So that's on the proprietary side. On the co-brand side, we've done a lot. We just -- we announced last year the flip of the Gap business. And that adds to multiple co-brand wins on the retail side, wins that you've heard before, L.L.Bean, Cabela's, Kroger, et cetera. So that adds to our already large collection of co-brand wins. We also love when programs come out as net new to the industry. And Victoria's Secret is a really good example of a partner who took a PLCC program and went beyond that to extend the co-brand. And then we also had a renewal with Ulta Beauty. And we had another new program, again, speaking to the trends in the industry and the consumer preferences around digital, online grocery has become such a needed and beloved activity amongst consumers even since the pandemic. And so the opportunity to work with Instacart and Chase is very appealing to us and has a lot of appeal with the consumers that use our product. So those were some wins that we're proud of. And again, I'd say the reason why we're winning and the reason why decisions are being made in Mastercard's favor is there's a variety of reasons. There's, of course, economics that play a role. But then there's a ton of intangibles as well that start with the value of the partnership we bring and the relationship and the people. And then it goes right back to my earlier conversation on services and capabilities. All of the -- being able to go to a partner, whether they're a fintech, a merchant or a bank and say, hey, we'll process your transaction for sure. We'll give you our brand. For sure, we've got some great marketing. But here is the way in which we're going to support the whole of your business. That's a unique proposition. And it's something that is unique in the market. It's something we've been investing in both organically and inorganically. As you know, we saw for many years well over 30 acquisitions over the past decade. And it's really paid off for us. And then I'd say from a conversion perspective, we're the winningest network when it comes to conversions. And the reason for that, in addition to what I've said already, is because the way in which we do conversions, the conversion expertise that we bring to the table, the experts, we have an entire team whose focus is making sure these conversions are seamless and incredibly effective at retaining customers, minimizing attrition and actually not just minimizing but optimizing for growth. So that's been great. And then I will say as a unique attribute of Mastercard, our focus on financial inclusion and DEI initiatives has long been a priority for us. Something that we've been focused on for well over a decade, not just in the recent years, where this has become more of a priority for our customers. And that authentic commitment to inclusion and diversity has served us well in terms of winning new business. So very, very proud of all this progress.

All right. Well, let's talk about our favorite topic when it comes Mastercard right now, which is cross-border travel and the return to travel as a huge tailwind for your business. Taking that North America lens, I guess what I'd like to focus on is what are you doing specifically to capitalize on the return of cross-border travel, meaning in terms of trying to steer as much of that volume as possible in your direction versus just kind of riding the tide as it returns?

Yes. Yes, we're doing a lot, Lisa. So I'd say -- you've heard us talk about our -- the corridors that represents the greatest percentage of our cross-border travel and volumes. And those are the U.S., the U.K. and Canada. I have 2 of those markets. And so we're obviously quite pleased that as of last quarter, the travel across these quarters were at about 85% of 2019 levels. So certainly, great progress but still runway for growth. And for us, that's a big deal because we've only begun to see the full potential for cross-border. And I'll tell you, I've been traveling myself. I'm outside of the United States as we speak. And the planes are booked. They're not just booked in the near term, they're booked for the long term. The propensity for both consumers and corporate travelers to get back on the road, whether it's to see their family or to see their clients or to see their colleagues is alive and well. And we're hearing from our travel partners the very same. So the opportunity to work across a few of our partner programs like American Airlines, one of our marquee partners with whom we just renewed and expanded our exclusive co-brand partnership with, is a real bright spot for us as they look to capitalize themselves. We have our program together which is rich with the services that I just talked about. And from a loyalty perspective and from a marketing perspective, we are partnering with them to help encourage this travel in this growth. Same thing across our JetBlue portfolio and with Chase, we have Aeroplan and Air Canada. So we have -- and then of course, on the hotel side, we've got partners, a lot of partners there as well like IHG and MGM, et cetera. So we're in a unique position to be able to leverage partnerships where it matters for them and it matters for us and light up programs that really encourage consumers and corporates to get back on planes and to travel. And we are seeing, Lisa, the incredible demand and the demand not abating at all. I mean just on the commercial side, we definitely saw a bit of a dip because of Omicron. And there's still more room for improvement on the commercial side. But on the consumer side, we are, well, almost back, 85% back across the 3 top corridors. So that's exciting for us. And I'd say the more -- our emphasis on travel partners and our emphasis on doing more with our existing customers has only amplified during this period so that we can get, to your point, not just take advantage of the wave but actually get some differentiation in the process.

Another one of my favorite topics when it comes to Mastercard is small businesses. I've recently become obsessed through the digitization of small business payments as the huge next kind of TAM for Mastercard and others in the card-based space. Can you talk about the development of small business in the U.S., what Mastercard is doing? What's unique about serving small businesses and how you see the path to digitization of small business payments?

Yes. Lisa, I share your sentiment. One of the things I'm most excited about is our growth and opportunity in small business. I think it's been a largely underserved category for so many years for lots of different reasons. But the pandemic put a spotlight on these entities, these small businesses, which are, in effect, consumers that sit behind them who are now poised for growth for lots of reasons. They have capital. They have tools. They have the ability to go digital that they never did before. And they are an underserved part of the industry that, again, we had -- at Mastercard, we had recognized for a long time as untapped potential. So we are delighted to be able to work across a number of our partners to be the, in many cases, exclusive provider of small business services and small business portfolios across banks, across merchant partners and across third parties with whom we're doing marketing and really creative strategic efforts that we can then leverage with our traditional partners. So we've got small business portfolio, as I mentioned earlier, with Wells and with Capital One as well as with Bank of America. We announced that we were partnering with Verizon on their small business, their Verizon business, Mastercard, which is targeted to small business customers. We're working with the First National Bank of Omaha on a couple of small business programs with them. And the reality is that we didn't just show up to the party and say, like, "Hey, we've got this great offering. Why don't you take a look at it?" We've been investing in it for so many years. And we've -- again, the pandemic highlighted the fact that the needs in this segment, 99% of all businesses in the United States are small businesses. Yet when you think about their ability, their capability to manage their business and to do so in a way that -- whether they're accepting electronic payments, they're protected against fraud. They have the data and insights that they need to manage their businesses. They're most definitely underserved. But during the pandemic, we announced a $250 million investment to support small businesses, to get them online through a program in the U.S. that we call digital doors. 30% of small businesses in the U.S. did not have the ability to go online. And in a short period of time, we stood up a suite of small business solutions to help them get online, to help them protect against fraud, to help them open their digital doors in a way that actually help to grow their business instead of shut their business down. And that was very exciting for us. We also announced a $0.5 billion investment over the next 5 years to support Black communities throughout 7 cities in the United States. And this is really to close the ratio of wealth and opportunity gap amongst small businesses in these -- across these 7 cities. And we do this, one, because we care and we're authentically committed to diversity and inclusion. But we also know that there is a virtuous circle of benefit that exists when you empower small businesses and electronify and protect small businesses. It comes right back into the economy, and it supports our own business. So I think the progress that we're making in this space is notable. We're a leader in the space now. We're working with partners -- third-party partners to help us gain access to small business lists, minority small business lists so that we can, again, provide value to them and we can introduce them to our other partners so that this high tide floats all boats in the industry. Very, very proud of this and, like you, think that there is just a ton of potential here. We've only just begun. And I will say also that when I think about open banking, I talked about Finicity a little earlier, we've got the ability to look at these consumers and small businesses in a way that others don't because we can see in a provisioned way, in a consumer provisioned way, we can see the beyond card, beyond one account, a more fulsome picture of the financial health. So we can help our partners use that data and information and empower their small business customers in a way that's pretty unique and differentiated. And that's where you get the beauty of the 3-pillar strategy where open banking and services come together to benefit this new segment that we're so strong in.

All right. A hot topic of the day or at least the last 9 months or so, I suppose, has certainly been BNPL. Last fall, Mastercard announced Mastercard Installments, which is a productized BNPL program for a variety of issuers that can be traditional bank issuers or fintechs, et cetera? Can you give us an update on how the BNPL program is progressing? And also sort of what's your current Linda Kirkpatrick's view of the role of BNPL in payments within a geography like the U.S. or Canada?

Yes, happy to, Lisa. So we've talked before about BNPL. Again, if you look at the trends, you can't ignore them. In the past 12 months, 1 in every 2 Americans has leveraged some form of installments for checkout. And many merchants have opted to enable their points-of-sale to offer this additional form of choice. And so from our perspective, we are an organization that not only recognizes trends but responds quickly to those trends and offers products for those opportunities. And installments is no exception. For us, it most definitely is another form of credit. It's an extension of our strategy around choice. And when we saw some of the fragmentation that was happening in the market, where you had bespoke contracts between third-party fintechs and merchants, where you had significant economics that were being absorbed by the merchant community to capture and offer installments capabilities and you had many kind of gaps in some of the tools and protections that normally come into play when a consumer is used to checking out at a point-of-sale, we said aha, this is precisely an area where Mastercard can add value. So what we did, as you know, is we enabled our acceptance universe globally, so over 90 million acceptance locations throughout the globe, to have the capability to accept installments by connecting lenders to merchants that accept Mastercard products. And this -- we did it in rapid time. And we did it in a way that kind of looked at all of the flaws that are currently in the system with respect to merchant enablement and bilateral agreements having to be struck and lack of consumer protections. And we said, you know what, we can do it better, faster in a way that is more palatable economically to the participants and in a way that uses the power of what we bring to the table as a network and adds value to every single constituent and stakeholder in the process, banks and/or lenders, merchants and consumers and enablers like processors and fintechs who want to participate in this effort. And it's been very well received thus far. We've had a number of announcements with our partners across each of those stakeholder groups. On the bank side, Synchrony, Barclays in the U.S., Huntington, Fifth Third, SoFi, all wanting to work with us from a lending perspective. On the merchant side, again, all merchants are enabled to want this capability, but certainly American Airlines, Walgreens, Saks Fifth Avenue, H&R Block have all raised their hand to really work with us closely on installments. And then importantly, on the enabler side because you do need enablers -- in addition to acquirers who enabled the merchants with this capability, you need enablers to help banks as well with lending and with the technology. And so partners like Amount, i2C, Deserve, these are players that will be enablers for the ecosystem and will help this model scale. And so we're really, really excited about how this is coming together. It has -- it is launching first in a model where the consumer can go to their bank and get a preapproved installment line of credit vis-a-vis the bank who issues them a virtual card, which they then use on a merchant website as they would type in their normal 16-digit Mastercard number. And so that's use case 1. Use case 2 is really leveraging click-to-pay to -- and other wallets to enable this at the point-of-sale, at the checkout for the merchant. So we're -- I think, really, we've seen really good early traction. What I like most about it is it becomes Mastercard good in the process. So it takes these transactions. And it offers the consumer zero liability, charge-back protection, more transparency and visibility. All the things that regulators are concerned about, Mastercard is corrected for with our model relative to the models that are out there in the market and is really being inclusive in terms of who can participate in this, not just the folks that sign contracts. But we will provide -- we have provided an easy onboarding to those that are interested in this. And I will say fintechs can also participate in this to help extend the value that they're bringing to the table currently for merchants. So I love it because it's rarely you can launch a new product that's actually good for every single stakeholder. I do think consumers have spoken with their wallets. And they've demonstrated a desire to use this form of checkout. And I do think merchants have shown their interest by enabling. So all these pieces of the puzzle come together in a way that makes sense for these stakeholders. This could be continued growth in our business and a continued area where, again, we're taking services and we're applying it to the lenders to help them make those lending decisions on behalf of consumers, to help them know that the propensity for a consumer to pay for an installment loan is richer when this data is being used. And then on the merchant side, deploying our data and services tools to help them target consumers in a way that gives them relevant offers, gives them a reason to use this at the checkout. So again, another -- just like small business, another great example of a product that is using the power of our services on both sides of the equation.

All right. Another hot topic. So as President of North America, you lead Mastercard's relationships with a lot of the prominent technology firms, including Apple, for example, who's a partner of Mastercard. How would you characterize the current state of Mastercard's relationships with big tech? And where do you see opportunities for further collaboration or maybe some points of friction between you guys?

I'd say the relationship with these partners is very strong. It has been for a while. Mastercard is known for its partnerships, even amongst third parties who could be considered potential coopetition. From our perspective, we know what we do well. And we know the value that we can bring to others. And we recognize that in order to scale, partnerships are a must. And partnerships have served us well. We are very grateful for our partnership with Apple, with whom we have a terrific co-brand partnership. But we've done so many things throughout the year, starting from tokenization with Apple Pay and then, of course, right on through to the co-brand and other initiatives. We believe that our interest are aligned in many ways. And finding those avenues of goodness that allow us to come together for the benefit of both parties is something we do really well. So whether it's digital-first enablement of the Apple Card and the Apple Wallet, which by the way, is offered to broadly across our ecosystem or whether it's tokenization assets that we offer to protect consumer transaction information in a wallet, there's a lot of cross collaboration that can happen in a way, again, that benefits both parties. Amongst the fintech community, we are the winningest network when it comes to fintechs. We have -- in the U.S. and the U.K., we have greater than 70% win rate amongst the fintech space. We embraced them early on. We had our Mastercard Start Path program, where we evaluated hundreds of fintech partners across a variety of criteria and found those with whom we felt we could authentically go to market with in a way that doesn't disrupt our B2B2C strategy but actually adds significant value for banks and for merchants and others. And we moved early in the space. We developed a leadership position. We worked with the -- our bank partners, connected the dots between these entities and our bank partners. We use programs like our Start Path program and our accelerator program to evaluate late-stage fintechs, to help them -- invest in them directly and then also introduce them to other partners in the ecosystem. And that's served us quite well. So again, here, I see a lot of benefit to these third parties with respect to speed and agility and flexibility and new technology. And the more we can connect the dots between what they bring to the table and what our partners on the other side bring to the table, I think the greater our network becomes. And that's been our strategy all along.

So interestingly, after the surge in digital payment usage we've seen during the pandemic, one of the big controversies nowadays is that we're running out of cash. And so some of that long-term secular growth in the sector, particularly in more mature geographies like in North America, may slow down. So from your perspective, where are the major incremental vectors of growth, both for additional digitization, both in the traditional consumer-to-merchant space as well as in some of these adjacent spaces?

Yes. Lisa, I think there's honestly still a lot of runway in the cash and check to electronic payments migration. We're still seeing, as we talked about at our Investor Day last year, there's a $45 trillion global market in payments. And only $20 trillion of that is carded through some form of product that already exists today, which means the runway for growth is so strong. And so I think from a -- how we'll grow for the future, PCE growth and the secular shift from cash and check to electronic form of payment is still going to be an important and significant part of our business and doing it again in a way that gets us preference and gets us more than our fair share of wins, of course, but doing it in a way also that endears us to the partners who haven't yet explored electronic payments. One good example of this is the rent space. Still, the global rental ecosystem is largely uncarded. And our opportunity to work with aggregators in this space to light up electronic payments and rent, we see as a big opportunity. We announced a partnership with Bilt and Wells Fargo. Bilt is a network of property managers, millions of rental properties represented in their ecosystem. And they're offering renters the opportunity to get a co-brand card but also to earn rewards on that card that will help with either paying for their rent or setting themselves up for a mortgage in the future, which I think is really cool. And so we find those opportunities in categories that are largely underpenetrated like insurance and utilities and telco and rents. And we create new products that appeal to the consumers and to the participants and make it work for everyone. So I do absolutely believe that cash and check is still a formidable competitor. But the other avenues of flows like bill pay and disbursements and remittances, that presents an even greater potential for growth in the future, above and beyond this cash and check migration.

All right. Well, I'm taking a peek at my dashboard. And I know based on some of the questions coming in and the broader investor dynamics, I'd be very remiss to get too far through this conversation without discussing FedNow and account-to-account payments more broadly. Can you talk about how you see FedNow affecting Mastercard's business in North America? And then broadly, more broadly, how Mastercard kind of integrates and takes advantage or fits within the whole account-to-account ecosystem between open banking and your owned assets in the space and what you do in services, it's kind of a multifaceted strategy?

Yes. Spot on, Lisa. So I think, again, going back to what are we about, at Mastercard, we're about offering choice to our partners and how they want to pay and be paid. Cards is a big part of that, most definitely. But we've -- again, we've recognized early on that, that's not the only way people and businesses are going to want to be pay and be paid. And so we've been investing in our ecosystem to offer choice and to offer different vectors into Mastercard. And part of that is account to account through the acquisition of Vocalink and, of course, through the acquisition of Nets, we have account-to-account capabilities across multiple geographies. There are certain markets that have embraced account-to-account already. There are other markets where it hasn't taken off. Our point of view is who are we to know or be the arbiter of how things are going to play out in the future, the consumer or the business is going to decide. Our role is to give them the pipes and give them the capabilities to transact in the way they want to transact. So for us, the ability to offer account-to-account services, and just like installments, the way we saw the gaps in the current model for installments, we see the gaps in the current model for account-to-account and are applying services to help enrich that account-to-account transaction with better safety and security tools, better data and analytics, faster payments. And I think it's -- I think we're still -- at least in the U.S. and in Canada, we're still a ways off from P2M, account-to-account in a P2M way taking off. We do believe it's important to offer that choice. I also think that without the rigor that's provided in the typical way transactions take place, you're going to -- it's going to be difficult for consumers to trust a closed-loop ecosystem or to use a closed-loop ecosystem in a way that gives them that comfort that wherever they go, however they choose to transact, whatever part of the world they're in, it's going to work exactly the same way with the same efficiency and the same speed and transparency and protection. And so we'll help enable any of these partners who want to work with us, to use some of our capabilities, to infuse and power their flows. But we do believe that in the end, open-loop models that provide ubiquity, that provide an ecosystem of rules, that provide an interoperable network, that layer in protections ultimately will win the day. And we've seen examples of that throughout the decades. Where products and services prevail is really where you can leverage an open model and not a closed model that only a few people can participate in. You mentioned open banking. I absolutely think open banking plays a role here. That's how you get smarter. That's how you enable the digital identity into an account-to-account transaction so that -- I mean like I don't know if you've used any of these types of payments. But there's opportunity for fraud. There's opportunity to send things to the wrong account, and there's no going backwards on that once that happens. And so our view is, let's look at this market. We believe the total addressable market can be big. Let's invest in it so that if our partners want to use it and leverage it, it's offered to them in a way that's just as safe and just as secure as electronic payments and cards are. So that's -- from our perspective, that's how we think about it. Again, account-to-account applies in some markets, not all. But from our perspective, we need to have those capabilities in place to offer that choice.

All right. I got another one on a related note because you've mentioned open banking and Finicity a couple of times, another one from the dashboard. Just how the economics work of open banking? So what is the revenue model for Mastercard? And so how should investors think about the contribution of open banking to Mastercard's overall business?

Yes. I mean you can think about it in a few ways. One is we have access to this data that third parties are using to make decisions, whether that's loan decisions, whether that's payment decisions, whether that's something new that hasn't been created yet. Any time the data is being leveraged, there's a model of economics that's extracted for us. And so it is like in the traditional payments world, where you have a per transaction-level economics model, in the open banking world, same idea. The more you use the data to make decisions, the more economics we would extract. Now again, it's going to depend based on the use case. It's going to depend based on the partner. Right now, we announced one of the products that we recently launched in open banking is a decisioning tool that allows a third party and the first third party is Bilt, a partner that I announced earlier in the context of the small business answer that I gave. Bilt is using our smart decisioning tool, our payments indicator tool to decide when it makes sense for a consumer to have their rent payment drawn from their account and if -- and when the propensity for those funds to be included in their account actually will exist. Is it today? Is it in 2 days from now? Based on that, the renter will take the funds from the consumer's account. Now that would be a model where every time data is being accessed, every time a decision or a score is being calculated on behalf of the rental property, that would be an economic opportunity for Mastercard. So it's another form of services that we have that adds an additional layer of insight to a customer where there would be a separate economic transaction flow there.

All right. Just as we start to wrap up, I did want to quickly touch on digital identity because this is -- I was interested to see at your Investor Day last fall that this actually made it on to Page 1 after having tracked these initiatives for a number of years. So how is Mastercard capitalizing on this opportunity in digital identity? And I want -- focus specifically like outside of your core business, so actually using it to get into other addressable markets.

Yes. Again, digital ID and open banking go hand-in-hand because you have to authenticate the user if you're going to give access to their precious DDA accounts and other accounts that they leverage to -- in a consumer provision way to fuel decision-making. So knowing that someone is who they say they are authentically is table stakes in an open banking environment. It's table stakes in a crypto environment. And so our digital ID falls within our third pillar. You rightly saw on the first page of our strategy, and it goes -- absolutely goes hand-in-hand with open banking. We've made a couple of acquisitions in this space. Ekata, which uses AI and other identity solutions to power crypto wallet providers, for example, to authenticate consumers when they open an account. CipherTrace, which is an acquisition that we made in the cyber and intelligence world, identifies for a bank when a crypto transaction is happening on their network. And it scores the transactions that a bank can decide is this too risky for their overall risk appetite. So both -- in both scenarios, we are leveraging digital ID as a way to authenticate a user. And again, digital ID goes well beyond payments. It can be applied in loyalty. It can be applied in account opening. It can be applied in providing loans. It can be used for travel passport enablement, driver's ID, you name it. The use cases are endless. But the reality is in an increasingly digital environment, where you don't necessarily have biometrics in every circumstance, so you don't necessarily have a document that you could show. You're not signing in 17 places that you are who you say you are, using digital ID and leveraging digital ideas is absolutely -- it's the way in which consumers expect to transact today and the way companies are migrating today and the way in which they will for the future. So our view is as we think about expanding our assets in the cyber space, and by the way, with crypto, digital ID is ever important and top of our priority list. And that's why it's made it to the third pillar on the front page.

All right. So our wrap-up question because I'm starting to get the red light over here. So we've covered a lot of ground, everything from digital ID to winning co-brands to disproportionately winning cross-border across all of the opportunities for growth you see in North America, what one -- or maybe I'll let you do 2 are you the most excited about?

Well, it's hard to do 2. I'd say the opportunity to do more services. Right now, services represents 35% of our revenue with growth rates of 25%. And so the opportunity to talk to a customer and say, I am not here just to service you across your payments portfolio but to service you across your business, the entirety of your business, that is very exciting because it really increases the aperture, which -- increases the number of individuals at a particular organization, I can talk to. It increases our relevance. It increases our stickiness with those customers. And the more these partners do deals with us, the more services are embedded and the greater the opportunity to grow that business in a way that we would never have absent these new capabilities. So I'm very, very excited about services. I'm also -- I am very excited about open banking. I do think it opens up across the consumer business, the commercial business and the small business portfolios that we have. It opens up and unlocks potential that we wouldn't otherwise have if we didn't have this information. So those are 2 that I would narrow in on. I think if I could just add one more, the new flows in B2B context in potential account to account, potential bill pay are also very exciting because those are, again, largely untapped, total addressable market is very big. And we have the tools and capabilities that our customers need to unlock this new volume. And that's -- to me, it's been 25 years at Mastercard, but there's never been a time of greater opportunity and growth in the business from my perspective.

All right. Fantastic. Well, thank you so much. That's Linda Kirkpatrick, President of North America at Mastercard. Linda, thank you so much for being with us.

Thank you, Lisa, for having me.

Thanks.