Mastercard Incorporated (MA) Earnings Call Transcript & Summary

Can everybody hear me? Can you guys hear me? There we go. That's perfect. Thank you so much. So we're going to go ahead and get started. Thanks, everyone, for joining us today. I hope you're finding that the conference is providing some proof points that, as we said, fintech is finding its mojo again. So thank you all for being here. We are delighted to have as our keynote today, our good friends at Mastercard. And from Mastercard, we have Raj Seshadri, who is the President of Data & Services, joining us today. Thank you, first of all, very much for being here. I know you have a very busy schedule, so we really appreciate it. And so what I thought we would do, just to start off. Data & Services is an incredibly important part of the Mastercard story. But I don't think a lot of people have had an opportunity maybe to spend time with you. So if you would give a little bit about your background and ultimately, the responsibilities that you have here within the Data & Services. And then ultimately, what kind of falls underneath that? I think it's evolved a little bit over time, but that would be a great starting point.

Thank you, Dan. Thank you for having me here. And by the way, it's nice to be back fully in person.

I know.

Together, it's priceless.

Is that? Right out of the gate, she starts with this. All right. I like this.

So my background, I have a very checkered past. I've been -- I was a physicist. I was in consulting. I was a marketer. I've worked in various aspects of various businesses. And what I like about Data & Services is it brings all of these things together into one business unit, which is really nice. So what is Data & Services? The overall mission that we have, I'll start there, is to help our customers make smarter decisions with better outcomes, both in how they run their businesses and how they engage with their consumers. And so what does that mean? We have a variety of capabilities or services underneath that umbrella. So we have a very large consulting firm, professional services organization. We have innovation services. We have insights, we have analytics that do benchmarking, targeting models, things like that. We have Software-as-a-Service platforms like our Business Intelligence platform or Test and Learn for experimentation. We have a loyalty business that's very large. We have capabilities in marketing services. And then most recently, we bought Dynamic Yield, which takes us into personalization. So it's a variety of different service capabilities that underlie this mission. And the way we go to market is we put the customer center, think about the particular problem or challenge or opportunity they're going after and then figure out how to help them get there faster, better, more efficiently, more effectively. And sometimes the answer is one of our services. Sometimes it's a combination. And so when it's a combination, we snap it together like LEGOs to create what they need. And at the end of the day, the way I think about it is we measure our success as Data & Services based on the value that we add to our customers because if they find us valuable, then we're doing the right thing.

Yes, yes. So if we take a step back before we get in the weeds on all of these areas that you're responsible for. Can you talk about the journey that Mastercard has been on, the distinctions that services has brought to the company? When you think about competing against other incumbents, so to speak, in the industry? It's been a long time coming, I think, really.

Yes. It's been a journey. It's -- and it continues to be a journey. So we've been in services -- we first got into services is roughly a decade ago. And when you think about history, I think in 2012, services was something like a 1/6 of our total net revenues. In 2021, we disclosed that it was 1/3, and it's obviously -- it continues to grow, right? It grows really rapidly, grows faster than payments. So it's been a journey. And today, when we look at our strategy, we have 3 pillars. We have payments, we have services and we have new networks. And services are pretty unique because they not only drive services, they also enable payments and new networks. They increase the value of payments, they help our new networks, get to market with use cases faster. And then we also, with the services pillar, think about new segments, new solutions that we bring to market. So it's really -- it's very core to Mastercard's in the long-term growth. The journey actually -- and when I say services, by the way, I should clarify, when I say services here, I mean Data & Services, which is what we just talked about, which I managed as well as in our cyber security and intelligent services, which we call C&I in short, processing gateway, it's all of our services. And when I then think about D&S and the journey in D&S, it's a variety of different journeys. So we have services that came out of consumer card. That's how we got started in services. Some of our fraud services came out of there. Data & Services are a consulting, our marketing services came out of card. Loyalty came out of card, consumer card. And then there were others that we built organically. Our insights business, our analytics business, where we leverage the proprietary data that we have. We're built organically. Some of our business information platforms were built organically. We also acquired -- I mentioned Dynamic Yield, which we acquired last year. Our Test and Learn capability came from an acquisition of APT in 2016. We bought SessionM in loyalty, literally right before the pandemic and then we've also had a set of services that we built because customers have come to us saying, "Hey, you do that well. Can you help us do it?" A good example is innovation. Mastercard is exceptionally innovative. That's the fun part of being in Mastercard. And so we had customers that came to us and said, "How do you innovate? What techniques that you -- do you use?" And so we packaged it up and help our customers innovate using some of our, we call it, labs as a service, innovation services. So each services had a different journey or a different source of origin. And then going forward, they all have really interesting journeys ahead of them. As we see trends in the market, as we see what our customers need, as we see opportunities out there where we could create or co-create, we're constantly investing and evolving the portfolio.

Yes. It's interesting in terms of covering, let's say, broadly the networks over the years, and it's almost embarrassing to think about, how long I've actually been covering the networks for the years. But the point of that is that there's a distinction in terms of you bringing services kind of separately and distinct to the market as its own entity to be sold to those end clients. So was that -- did that just evolve naturally into that? Or was that deliberate because you felt like that could be a competitive advantage versus maybe others that might have had more data?

Yes. It's both natural and deliberate, right? In the early years, it is natural, but then it became very deliberate because for 2 reasons. One, we want to make sure that this is a business that adds value to customers, that's valued by customers and we wanted to make sure we could capture its full potential, right, to make sure that we could have it support payments, support new networks, but also in places where it goes beyond payments and it brings new customers into Mastercard, I want to be able to unleash that as well.

Yes. Can you talk to us some proof points or maybe tease out some real-life examples that help people understand where service is part of the business bringing enhanced value to the overall Mastercard picture?

Sure, sure. Happy to do that. I mean if you think about the 3 pillars, the pieces of Mastercard in the overall picture, that I might refer to are the payments pillar and the new networks pillar, right, and we can connect to the services pillar. It adds a lot of value to both, right? A core -- origin of services and a core tenet or goal that we have in services is to enhance the value of payments. So in terms of that in the payments pillar, it -- obviously, we help our customers acquire consumers, grow their portfolios, increase spend, reduce fraud, et cetera, optimize their portfolios. And there are lots of examples of that. I was recently looking at a cashback offer campaign that we did. And we found that the redeemers had 2x the transaction volume of the non-redeemers. Things like contactless adoption. Our services business helps issuers think about the strategy when you first get to contact us in the market like in this market a few years ago. Think about we help them implement contactless. We can't just -- you've actually got to do the work to be ready for it, issue it, think about offers to consumers to encourage that first tap because it's a new behavior and think about how you build on that behavior and then eventually optimize the portfolio so you maximize contactless. Those are all examples in the payment space. And then in the open -- in the new network space is open banking, this identity. Let me use open banking as the example. So in services, we help consumers and small businesses access loans faster. That's something that we do with the open banking capabilities. We have -- oh, here's a good example. We were working with a bank in Central and Eastern Europe, and we wanted to capture the opportunity in open banking. So we started with our innovation services where we ideated, came up with a dozen ideas. And we with them prioritized what might make sense to pursue further brought it down to 3, and then we did prototypes in testing. And what ended up is one product that's in the market and is been used to, which is a multibank app. It allows the consumer across all of the banks under this umbrella institution to be able to look at all their accounts and look at their full financial picture and move money around. So that's a good example of the open banking space.

Yes, that's great.

So it's a force multiplier. I would think of services as a force multiplier that drives payments and drives open banking.

How should we be thinking about the opportunity from a cross-selling perspective versus just net new business? Like how often this service is actually bring someone into Mastercard for the first time or for the portfolio, said differently, versus just having this cross-selling flywheel really because it clearly enhances both -- it's reinforcing in both. So I'm just interested to know your thoughts on that.

Yes, it does both, right? The reality is it's both. So if there's an existing payments relationship, the services help the customer achieve better top line and bottom line growth. And so it reinforces that and sort of it's -- I'd say it's something that's adjacent to payments that helps the customer maximize their opportunity things. And then on the other side, the times when it's standalone, in fact, we have services only customers that lead to payments. A good example is in this country's Gap, we're working with them Test and Learn for many, many years in their core business. And they were very great Test and Learn relationship working closely with them. And on the co-brand portfolio came up. We flipped it. We flipped it to Mastercard, and that was -- so the payments business came on the backs of the services in that case. So both the directions.

Yes. No, that makes total sense. You mentioned this earlier, but services has grown faster than payments, which is interesting because you think of Mastercard first as payments and services, maybe second, but from a growth perspective it's really evolved into an enormous growth engine with an improving margin profile all along the way, I believe. So the question is, why do you think that would be sustainable from here? I could see kind of how it grew into the leadership growth spot today, but I'm wondering if you can sustain that. And what are some of the major drivers, big kind of tectonic shifts in the world that you see that would be supportive of that.

I think it's worth stepping back and thinking about why Mastercard is in services, right? What are the drivers of a decision to lean services? Because that answers the question in some ways because when i think about it, we talked about growth. Services do drive growth. Services are growing faster than payments. But there's also this virtuous cycle where when we drive services and the customer's portfolios do better, it drives payments and payment flows and payment revenues for us. So it helps the customer win. It helps our payments revenue grow. Our payments flow grow, which means we have more services to apply to those payments and more to innovate with in terms of what those payments bring to us. And so it's a virtuous circle. So there's the growth reason. And then there's the other reasons you were just alluding to, so there's the differentiation, right, where it helps us grow our portfolios really well with the customers, makes the relationships sticky, helps us flip portfolios, retain portfolios. So it differentiates the payments business are relative to our competitors in payments. Then there's diversification, which we were just talking about the Gap example where we have -- whether it is looking at issuers beyond payments where a lot of our services are relevant to them beyond payments or even looking beyond issuers to acquirers, to merchants. And in the services business, we think about all the different verticals of merchants differently because their core businesses are different. So a grosser is different from a retailer, it's different from an airline, it's different from a CPG company. So providing services to them. The same set of services just applied in a different context to a different use case. Governments, local governments, city state, federal government, central banks, our fintechs, neo banks. So it really is diversifying Mastercard. The customer is coming into Mastercard as a result of services. It opens the doors to all of them. And then I'd say there's another reason, which is talent, 1/3 of all new joiners to Mastercard joined through services. A number of them joined through our professional services organization, advisers. And as they grow in their careers and as they develop, we do this for Mastercard. So they see the rest of Mastercard. They end up leading portions of Mastercard. We have a number of leaders who grew up in the services in the business. And so all of these things -- this is why we are in services, and this is why services is so important to us.

Yes. It's interesting you bring up talent. So like a lot of times when you're going after new talent, whether it's engineering talent or AI talent or we'll get to some of those top 2. But like, a lot of tech -- pure tech companies have like removed the fear of failure, so to speak. And so they -- these new joiners are a little more joined into those types of environments. And it sounds like maybe services offers some of those same attributes. So what would some of those be as to why you're bringing people into that organization?

Yes. Listen, we're very innovative. So we do share that, which is we experiment a lot. We not really have products like Test and Learn that encourage experimentation and regimen, but the reason we're innovative is we try and think and test and we're constantly evolving. So what I'd say is the talent pool is remarkable. It's amazing. We have locations, we have about 16 hubs and it spokes off those hubs. And if you look at the talent, the young talent that's there, it is -- they're from 80 different nationalities. They speak about 70 different languages. And what that means is we operate in 210 countries, as you know, so -- and territories. So it just means no matter where the customer is, no matter what environment they're in, no matter what language or regulatory regime they have to work under. We have people who can understand it and who can work there. And we have deep subject matter experts and we have people who are very local, and that helps a lot.

Yes. No, I bet it does. When you think about how the products are being utilized by clients, are there distinctions between geographies? Like do we do it differently in the United States versus people in the U.K. versus in Asia-Pac and Latin America? Like are there distinctions about what's important to be drawn out of services? And can you talk to those?

Yes, sure. Listen, we built our services at scale--at global scale. And so that's what Mastercard brings. It's one of the key things it brings us the ability to deliver these things at scale and in a way that a customer in a local geography might not be able to access in the same way. So we're built at scale. But then our -- the way we take it to market is in a very local contextual way where it's really about that particular customer, that particular challenge, that particular opportunity. So that's really how we operate, which is why having these global capabilities is important, but then having the people on the ground to translate it is important. The other thing I'd say is the thing that makes our services distinctive. So in our services, whether it's consulting, marketing, loyalty, we compete with an entirely different set of competitors, and we compete well with them. And the reason we compete well with them is because all these services have data-driven insights embedded in them, and those are unique to Mastercard and what we bring to the table. And if you think about it, the source of that is a vast amount of proprietary data that we have. In consumer card alone, we see something like 125 billion transactions from 3 billion cards in the 210 countries and territories I mentioned. And there are lots of other types of proprietary data. And for a couple of decades now, we've spent a lot of time cleansing it, aggregating it, anonymizing it. We very driven by our principles around privacy and security. We have hundreds of other third-party sources that we mix in to create nuances, tease-out insights, create relevant data sets. So the quality of our data and the insights that we derive from it are critically important. We're talking about an era where we talk a lot about AI and algorithms, data quality for that is critical. So we have very high-quality data. And so that enables our services. So I'd say, our secret sauce is this data-driven insights and our talent pool. That's what really makes our services unique.

Interesting. Have you seen distinctions in terms of clients, maybe by vertical that are consuming your services in different ways during different economic cycles? Like when businesses are distressed, they're doing more of one or another. When things are really great, are they out there constantly testing and learning? And I'd just be interested to know the spectrum of how that correlates to the macro headwinds.

Yes. We have a number of services that are relevant in different ways and different parts of the economic cycle. So Dan, I'll tell you, let me drop from my own experience. I took this job in 2020 in January, right? 45 days later, the WHO declares a pandemic. And so there was a moment where I looked in the mirror and said, "Wow, what now? But as we reflected on it, we realized that it was actually the perfect moment for services. Services did very well for Mastercard in 2020, if you go back and look at our results. And why is that? It's because all of a sudden, we were in an environment, which is -- there's a lot of uncertainty. Yesterday's data was irrelevant. It was all about real-time current data and insights. Consumer behavior that we used to expect suddenly changed. Each one of us behaved entirely differently, right, once the pandemic hit. Experimentation became very important because you have to very quickly try out different things. The old levers, the old techniques no longer were relevant. So to experiment test, double down on the tests that worked, cut back the test that didn't very rapidly evolve to the right to what works. And so that ability to have real-time insights, that ability to experiment and test in real time, the ability to pivot and be agile is something that was really important and important to Mastercard, but equally important for us to take out to our customers. So we created this program called Recovery Insights across Mastercard. And our focus was to work with customers to help them assess, react and recover at that time to the pandemic. And we did thousands of engagements with banks, with retail and commerce players, with governments of various types and policymakers that we're thinking about economic versus health care policy and it really -- it highlighted the importance of services in all environments. It really made us realize ourselves how valuable these services are in all parts of the economic cycle. And that has held true since then 2021, 2022 have all been a little different. 2023 is a little different. And we have all these services that are relevant no matter what the environment is.

Yes. Any insights you could share with us about what you're seeing currently? And I don't -- it doesn't have to be like an April-May trend update, but just are there things that you see inside of your business that are interesting to call out?

The one thing that we see, so we have the Macroeconomic Institute, right, which I think you know about and they put out the economic forecast, reports and we put out spending policies, I'm sure you're familiar with. That's -- it's an amazing group, by the way. It's a remarkable group of economists, data scientists, consultants, graphic designers and they're very good at teasing out the insights and communicating it in simple terms, both orally as well as visually. And so we spend a lot of time with them. And what -- I think this is nothing new we said this before, but it remains true. The consumer is really resilient and across the globe. Now the different markets are going at different speeds. It's a little -- it depends on where you are. The exact details are a little different. But overall, the consumer is very resilient, and it's something that we keep a close eye on. I mean the headwinds, the tailwinds -- there are lots of tailwinds like many markets, including this one savings rates high, there are more jobs than there are people. The consumer spending on experiences. Travel is up, dining is up, dining out, things like going to concerts, entertainment is up, experiences over things. Before the pandemic, this is true in the pandemic things switched to things over experiences, it's now back to experiences. And consumers are resilient in that way, they're spending a lot. On the other hand, there are headwinds. There's inflation in different countries, including ours. There's different monetary and fiscal policy, interest rate environments. And we're all keeping an eye on what that does to consumers, keeping an eye on what that does to the banking sector. And so there are lots of puts and takes. But net-net, if you look at our economic institutes, what they've put out there and the conversations we have with them, the consumer is very resilient so far, even in uncertain times.

Do you use the Economic Institute as kind of a consulting angle to get new partners in or do you use it differently because it does have an enormous amount of information that comes out of it?

So we use it both as a think tank, as a tool for us to understand our own businesses, to forecast better, for example. We use it with our partners in advising them on what we're seeing in the market, we have a very unique data set. It's also embedded in our products. So obviously, there's a close linkage to spending falls. It is -- there's a linkage to Test and Learn. We're doing a lot of scenario planning work, economic forecasting work with many of our customers. In fact, there's one recently that I was looking at where we improved the accuracy of their forecasting by tenfold by coupling some of our economic insights with -- under steep understanding of their business coupled with consulting. So yes, there's a lot of commercial applications as well as thought leadership applications.

Yes. That actually brings up a really interesting point. So what are some of the things that have happened within services that you've actually turned inward and made maybe Mastercard a better organization as a whole because of that? Are those examples that you would be willing to share?

There are lots of examples. So services, like I said, when you think about data analytics and AI, it's embedded in all of our services, right? The D&S services in terms of getting the consumer what they want faster, better, cheaper, right, more effectively in terms of C&I in protecting us against fraud attacks, Cyber attacks, et cetera, to embed our products. And then we've dropped that into Mastercard. So we have things like the unlocked platform that matches employees to opportunities that leverages data and AI, right? We're looking at all kinds of applications of AI across Mastercard and analytics across Mastercard. And it originates in our products and services and then comes into Mastercard. Even the forecasting scenario planning work that we now do as a consulting project, started with us doing it to ourselves. It's a little like innovation. We started labs as a service because we became innovative and then suddenly, we realized we can help others in a way. So it goes both ways.

Okay. So we've gone a little while without saying AI. So let's just -- you said it, but we haven't really talked about it. So how do you actually look at the opportunities and threats within your business? Is there a broader context of the way that Mastercard is thinking about how to employ this both again internally but also externally with partners?

Yes. So given -- focus on data quality, on AI, on machine learning on that entire space has been something we've had for 2 decades, right? The data assets that we have, the insights, we have, they've taken a lot of work to get here in terms of the quality and accuracy of them, and it's very hard to replicate very quickly. But embedded in that is the AI and different types of algorithms that we use. It's embedded in our products, whether it's consumer engagement product, ones that we had traditionally or even Dynamic Yield, which is new, whether it is an insights product. Most of our platforms, Test and Learn, all have AI embedded in them. In the C&I business, a lot of our fraud scores the ability to detect patterns of cyber attacks, all of that leverages AI of one form or another. And I mentioned internally, to things like matching employees to opportunities. There's a lot of AI around Mastercard. The -- and then we're also looking at new techniques, privacy-enhancing techniques, PETs. We're looking at, obviously, everyone's talking about generative AI and Large language models. It's not new to any of us, right? Just very popular given ChatGPT right now. So we do things like, we have synthetic data sets that we use to train our fraud models. We have applications that we're developing. There are lots of applications such as, can you get information to a salesperson faster in a more synthesized way? Can you write a job description faster? Can you help your customer -- service folks deliver an answer to a customer faster? Can you iterate creative faster? These are all things that are tools that we and everyone else is looking at. Now I will say I'd be remiss to not include AI governance. One thing we take very, very seriously is AI governance. And this has been true ever since we started this path, this journey on data and analytics -- on data analytics, et cetera, a couple of decades ago. Ethical AI is really important. Governance is really important. Putting in guardrails, understanding of all different types, whether it's from -- in the ideation process, bias testing, model testing, releasing the product and then making sure you understand drift, making sure it doesn't have any unintended consequences. You really understand what it does, the governance and making sure you feel it is ethically correct. It's critically important. So AI is both exciting in terms of what it unleashes. The innovation it unleashes because our employees are innovating all the time, using various techniques. But equally important is you need to have the guardrails, you need the governance. You need to have the oversight to make sure you're doing the right thing.

Yes. Do you feel like in that context that because of the popularity of generative AI and large language models and you are a very regulated business. Some of these other ones are not quite regulated, so they can kind of maybe push the envelope. Do you feel like that's a gating factor for you in terms of being able to be more innovative? Or do you think that's an actual net positive speaking to your point of having a responsible approach to this process?

I would say that positive. That's an easy answer. We've always been principled in our approach. I talked about AI, but we've been principled across the board about our approach, right? So take our data privacy rules that we abide by. We believe, Dan, that you should own your data, you should control and consent in terms of who you give consent to on your data, you should benefit from that consent. And it's our job to protect it if you give us the consent. And you should have the right to change your mind. So these basic -- I call them human rights, right, fundamental human data, rights? Our data responsibility principles are really embedded in that and we live by it. We're principled in how we approach product development, for example. So we have privacy by design, built into our product development process from the ideation stage all the way through the implementations stage. We have security by design embedded into our products. we believe in data minimization. The product should only use the data that it needs to use and no more, right? So these are all -- we're very principle based. You mentioned regulation. We abide by all the regulation that's out there very willingly. So I think GDPR in Europe is an example. We obviously are GDPR compliant and do it in absolutely the right way, and we're very careful to do it in the right way. But it's a very high standard, and we like the standard. So we adopted it not just in Europe, but in other jurisdictions too, because for us, that's the -- it's the high standard. It's the high hurdle. So we believe in being principled and being careful and deliberate in what we do, while we want to be innovative. I think it's important to do both. It's not one or the other.

To your point about data, I mean, you see a lot of it. You obviously gained enormous amount of insight. We've talked a lot about the responsibility of it. But how do you protect it, right? I mean that is core ultimately to the success of services. If it's not appropriately protected in some way, shape or form and/or govern, then you run the risk of the whole segment being compromised. And the trust, quite frankly, a Mastercard. So?

Yes. So we obviously, protect it diligently. It is data quality is important. So it's not only the data, it's the quality of our data. It's our crown jewel. And we're very careful to tease insights out of it, and it's the insights that we use. It's not the raw data. It is the insights that we use. We use all kinds of techniques like aggregation, anonymization, new privacy-enhancing technologies. I mentioned synthetic data a moment ago. We're always using techniques to make sure that we treat it in the right way, we tease out the insights in the right way. And then it's those insights that fuel our products and services. So we are very, very careful with it.

Yes. No, I suspect you are. I did want to touch -- you mentioned Dynamic Yield a couple of times. So one, maybe for our own edification, what was exciting about that asset that you worth to acquire it? What does it bring to not only your business but here again in the larger context of Mastercard?

Yes, very excited about the asset, by the way. It's just a little over a year since we acquired Dynamic Yield and brought them into the Mastercard family. It is a state-of-the-art personalization platform. It is a remarkable capability. And they also brought in something like 400 brands into the Mastercard family. In some institutions, we already work with some are new to Mastercard, but the bottom line is the capability when you look at the synergy with what we do. The capability is applicable to a lot ofdifferent things that we do. So obviously, on a stand-alone basis, they're very successful and continue to be successful. But it's also -- it is linked into a lot of our other products and capabilities. So for example, we launched something called Element recently, which takes some of our insights and our targeting models and embeds it into Dynamic Yield to make it more powerful. We have customers that use Test and Learn in Dynamic Yield or in some of our insights products in Dynamic Yield or SessionM and Dynamic Yield, the synergies there. And we have a vision of creating a consumer engagement hub using some of these capabilities that we're working on. So really, it brings a lot to the table. And we continue to be successful with them. We announced a few wins. They continue to win really well on a stand-alone basis and with us. I think we won -- announced Puma, we announced Hyundai Motors. There's some wins with Cencosud, with -- there are several example. And it is global. It is truly global. Yes. Very excited about it.

I'm interested because the personalization space and loyalty, I mean, it seems like it's evolved massively, not just in the past like 5 years, but like in the past year. And this asset seems to bring you into kind of a different level of discussion. And so when you're winning these clients, these very large global brands, and they're coming to you, what are they asking for that you're able to deliver that maybe someone else can't, either from a competitor directly or indirectly, quite frankly?

Yes. And the personalization capability is just one more addition to this fleet that we have. And at the end of the day, when the customers come to us, they're really looking for -- and I come back to smarter decisions for better outcomes. They're really trying to see if it's in the case if it's consumer engagement, they're really trying to say whether it is in-store, digital, whether it is -- whether the digital experience is on your phone or off a menu board or off wherever you are. The ability to be able to understand that consumer, understand where they're coming from, market to them as a consumer of one, be able to put the right offers in front of them, to be able to deliver the right experiences to them is really critical. And a lot of our capabilities come together in order to do that.

Yes. One of the things we talk about often within the services sector is maybe it's kind of noncyclical nature, right? So payments by its nature is cyclical. You might have different verticals here that support you when things are going to be bad. But reality is it's a cyclical business. It always has been. I think everyone just kind of woke up to that during COVID. But services, as you point out, is 1/3 or more of this company today. Do you think in the broad context of Mastercard that it's helping balance some of that cyclicality associated with just payments?

Yes. So if you look at our services business, I think we disclosed this back in 2021. About half our services are tied to transactions. That's true of a lot of the C&I services. It's true of some D&S services. We have a lot of services that are subscription-based, loyalty, Test and Learn, Dynamic Yield, all long-term contracts. And then we also have bespoke services, which can be for a project, but could also be a program over multiple years, right? And so there's a variety of different types of services that are embedded in there. And yes, it is -- and they're relevant in -- across economic cycles. So I think the example I gave you is 2020. If you go and look at our results, services did pretty well in 2020. right, when payments fundamentally changed because people were frozen where they were, right? And so our services business is -- the elements of our services business that are very applicable in different ways, in different economic cycles, in different parts of an economic cycle. And that's true of our consulting services, our marketing services, our Test and Learn capabilities. And even some of our insights analytics products, the way you use them it depends on the context you're using them in.

Yes. So I know we just have a few more seconds here. I figured I would seed the floor to you. If you're looking through kind of the lens of the possible within services over the course of the next 5, 6 years, what are the things that are most exciting that you see on the horizon and things that maybe we should be looking out for that we think could be material drivers to the business, not just for your business, but Mastercard as a whole?

Yes. So services are a key contributor to Mastercard today and will be for a very long time. It is a part of our long-term growth. And like I said, it's both differentiates our payments business and enhances our payments business as well as it diversifies us, new segments, new use cases, new networks, right, really diversifies us. And it's -- there's a lot of runway. It's a world rich with opportunities, both in enhancing our current capabilities, bringing in new capabilities, which could be organically or through an acquisition or through a partnership. There's a lot that we're doing to continue enhancing our data quality and the size, the scale of our data assets. Our algorithms are AI, our techniques are analytical techniques, investing a lot in our talent. So all of those contribute to the growth of services and it is -- there are lots of different opportunities. And there's always -- the challenge for us is investing in the highest value opportunities at any given time, keeping in mind payments and services. And it's an exciting place to be, a lot of runway, a lot of really interesting things that we are looking at, and it will be a part of Mastercard for many years to come and a large growing part of Mastercard. And like I said, ambition at the end of the day is helping our customers make smarter decisions for better outcomes. And that is really what we're focused on.

That is priceless.

That is a priceless. Thank you.

So I wish we had more time to spend with you today. But thank you so much for being here. It is really an exciting part of the story, and we're looking forward to seeing where that ends up taking you. So thank you so much for being here.

Thank you, Dan.

Alrighty.