Mastercard Incorporated (MA) Earnings Call Transcript & Summary

Good morning, everyone. I also wanted to extend my welcome to our 14th Annual Fintech & Payments Conference. I'm excited to have Mastercard present next. We have a conversation with the Chief Digital Officer, Jorn Lambert. He leads the Consumer Solutions organization, which includes Mastercard's consumer, digital acceptance, crypto and open banking capabilities. You've got a lot on your hands. My gosh. They keep you busy. Prior to his role, Jorn served as Executive Vice President of Digital Solutions, and he's been with the company since 2002. So thanks, Jorn, for joining us today. I know there's a lot of competing conferences. So we appreciate you being here.

Maybe you could start with a little bit of detail on your background as Chief Digital Officer at Mastercard and what all that encompasses?

Yes. So in this day and age, pretty much everything is digital. And so when you think about Chief Digital Officer, it's essentially -- think of it as our core business that we're looking after from a product and engineering perspective. And so that's our big machinery, the switch of clearing and settlement, our tokenization engine, our suite of solutions that we bring to issuers for them to serve their consumers. The other side of the equation, the acceptance network, which is well over 100 million acceptance points. And then some of the new stuff around some of the new authentication methods, the new crypto and digital asset things as well as looking to optimize the installed base that we have of 3.3 billion consumers and so many more -- and so many merchants.

Great. And then in your prior role, what were the specific stuff that you did as EVP of Digital Solutions?

Yes. So I -- before I kind of looked at the full core business, I was really into the early innings of digital, so think 2008 until 2013 when all sorts of incarnation of digital payments were tried. And then we landed on, I think, a very well adopted in our digital payments equation. So that was more of the trial and error over a couple of years to land where we are landing.

That's perfect. Maybe you could just talk about -- one of the questions we get a ton of is how much secular tailwind is left. There was a big pull forward during COVID. I'm just curious as you look at it through the lenses of all these different products you have, what's your view on what's left?

Yes. So it's a great question, and I get the question quite a bit as well. And indeed, if you're walking around in London or in New York, you may think, see, everything has been digitized. Everything has been electronified. We hardly see any cash, but that's actually a little bit of an exception, well, in the rule. If you go outside the big cities, if you go to Germany, to Japan, there's a ton of cash, mainly in the lower-value transactions. There's a lot -- in certain merchant category codes, there's a lot. And then if you look at the developing markets, we're really in our early innings there on the back of accessible tech, on the back of financial inclusion. There's so much runway there. And we're quite deliberate about it. You may think of secular shift happens by itself, but we're really quite deliberate about providing solutions and targeting specific areas. Transit is a great example, right? Transit is many, many low-value transactions, lots of cash still there, lots of closed-loop systems, and we're looking at bringing this open loop and do what we've done here in New York, do what we've done in London, and that has a halo effect beyond. But it's not just the pure replacement of cash. We're very thoughtful around looking at what are some of the new business models that are emerging and how do we make sure that as they're emerging, they follow on our card network. And I think, for example, the subscription economy, the Netflixes and Spotify. It's all on cards. They may think that's coincidental, but there's actually a lot of work that goes into making sure we have tokenization, making sure that we have the right identity and fraud protection. So it does fall and stay on cards. Think about marketplace economy. Think about the gig economy. And not only are these, gaming, huge. That many of you are engaged in the occasional sports betting-type of thing. Most of that falls on cards. And the nice thing about these new business models is that this is spend that didn't exist before. It's not just cash to electronic. It's nothing to electronic. It's actually new spend, but it's also often splicing of transactions. So what I mean by that, if you think about Uber Eats, you used to go to a restaurant, and you used to pay that restaurant one transaction. Now you may order your food, and you pay Uber Eats, and Uber Eats pays the restaurant, and Uber Eats pays the merchant. And so you have 3 transactions, whereas before there was 1. Same with marketplace. You pay the marketplace. The marketplace pays the seller. Think about returns in this marketplace economy. Think about buy now, pay later. 1 transaction becomes 4 installments. And so you have this very deliberate focus, whereby we are making sure that we look at what are some of these emerging use cases, how do we actually meet the needs of that so that it falls on to our rails and, thereby, accelerate that secular shift and take advantage of that digital -- I would say, flywheel of digital rising tide.

Yes. No, that's really interesting. I never thought of that way, but the splicing thing makes a whole lot of sense. It's increased the TAM, it seems, of transactions.

Yes. There's so much to go. And God knows what generative AI will yield. And again, we're very deliberate about how do we get ahead of this.

So last week, Capital One announced their plan to acquire Discover Financial Services.

Really?

Yes. Yes. It was a shocker, honestly, for me, at least. I'm curious sort of how you think it impacts Mastercard on a go-forward basis because I know they're going to move a lot of their debit volumes over to the proprietary network. Maybe you can just talk through some of that.

It's never dull in payment, isn't it? So I mean I would firstly say we have a very long-standing relationship with Capital One. We've done some great things with them, put some great use cases and solutions out there with them. And I don't expect this to change. We have that relationship. We've obviously engaged with Rich and his team already. And I think there's a lot there that we can continue to do together however that deal pans out. Now on the deal itself, I think it's very early. I think Rich will come later today. He'll be able to be much more articulate than me about what that really entails. But the reality is that we have a big business with them. They're going to move some portfolios undoubtedly, assuming that the deal happens. But there's other portfolios where I am very convinced or very confident that we will continue to be working together. And like with many partners, we both cooperate and compete in certain pockets in certain areas. We have a very large network, an international network. And if indeed, Capital One has ambitions to further develop this cover, I am sure that we'll find pockets of cooperation around that to make this a win-win. And so again, hard to tell exactly what is going to transpire over the next couple of quarters or years. But what I can tell you is that we're in dialogue with them, and we'll continue to do so. And as you probably heard Rich say, he's very keen to make sure that we continue to work together and appreciative of the partnership that we've had.

Absolutely. And maybe just on sort of a related note because Discover definitely has its acceptance challenges. Maybe you could talk about your own acceptance and give us an update on how you're driving continued growth in your global acceptance footprint.

Yes, look, and that also relates to the secular shift, right? So there's no question that the growth of acceptance drives a lot of that continued secular shift. We've grown acceptance. We've doubled acceptance over the last 5 years. And I actually believe that the scope to further growth, further doubling is bigger than it ever was. And the reason for that is actually 2 discontinuities that are now there and that will drive a lot of that. The first one is contactless today is about 65% of all in-store or physical transactions. So that's clearly a tipping point that has been reached and is continuing to propel forward. And what that does is that we've now able to reach transactions -- low-value transactions that until contactless was there, [ which was a tipping point ], wasn't really within reach. And we see that. We see that both in debit and credit portfolios. Our ATV, average transaction value, continuously goes down. That doesn't mean that people spend less. That just means that people start spending in low-value categories. We mentioned transit earlier on, which really fuels a lot of the growth. And for Mastercard, the way our pricing works, actually lower value transaction has both an ad valorem and a fixed fee element. So that's actually good for our network. Many of these lower-value transactions are also tokenized that yield to switching. And therefore, that's actually a great feeder of our own metrics. And so right now, I think contactless is a big opportunity for us to capture new spend that was formally out of reach. The second discontinuity is software eating the POS, right? I mean the [ Anderson common ] software is eating the world, is now really hitting the acceptance world. And people don't talk about much -- about that much, but I think it's an enormous discontinuity in the sense that right now, because acquirers and payment facilities can deploy their solutions through software, the barrier to entry for them and the barrier to entry for merchants to accept has significantly lowered. And certainly, you see a proliferation of these entities that look to deploy solutions, that look to onboard smaller merchants or different type of merchants. And that has a vast acceleration in the number of acceptance points, not only a vast acceleration but also a fast innovation in that space whereby new business models and new revenue models are starting to emerge. And so we've really embraced that, work with payment facilitators, software providers, put solutions out there like Tap on Phone. There's billions of devices that could become acceptance devices. Right now, we are over a good piece of 100 million, but 100 million is tiny if you think there's billions of devices that could be deployed. And we think over the next couple of years, we'll see that really ramp, again, fueling the secular shift and making sure that the overall network becomes stronger as a result. So again, I think acceptance, we don't talk about it much, but it's one of the more exciting and the more vibrant spaces in the payment space.

So it seems like the acceptance piece is part offense, part defense, too, because the channels are shifting, no?

Yes. And offense, defense, but it's undeniable that the stronger your network is -- the bigger your network is, the stronger it is, the harder to displace. And it is not just about the Discover, it's local APMs, for example. Our best defense against it is just the ubiquity that we can offer. And so to us, it's a very important trust in making the network more valuable, making the network more relevant to our customers.

Yes. So at the advent of like mobile payments, the whole tokenization efforts began, right? And I'm just curious sort of maybe if you could just give us the trend line of where we are today and the strategy going forward with tokenization.

Yes. So I don't know how familiar people are with tokenization. But if I can just take you back, like a decade, as people store their credentials, their card numbers in multiple places, we were thinking, gee, that actually poses significant vulnerabilities on the system because as many firewalls that we built around Mastercard, wherever the card credential is stored is a vulnerability that could be attacked. And any of you probably have your cards stored in 20, 30, 50 places. And for all our standards, for all our protection that we're putting, you have to assume that a hacker will find a way through, will be able to steal that data and will be able to replace it. And so the only way to resolve for that is not necessarily build more firewalls, but it is actually we architected from the ground up and making sure that whatever these hackers get their hands on, it's useless today. And that is what tokenization really does. What happens is instead of storing the real PAN number at that merchant or on the device, we store -- or you store a token, a fake card number that is bound to that environment, to that merchant through some very clever elliptical curve cryptography so that when a transaction is presented to the network, we check if that cryptography is valid and only then will we send it back to the issuer. And so if there's a breach, and there's breaches all the time, and a hacker takes that data, they can't do anything with it because it comes to us, the cryptogram doesn't actually validate, and we say, "Oh, that's not coming from the right place," right? So really fundamental, we architect. It's extremely important because the number of data breaches that is happening today is just accelerating. And so it's really urgent that we moved the entire space, frankly, to tokenization. We're now -- not just on your physical devices, but we're now on pretty much across the world on card-on-file. Just over 25% of all e-commerce transactions is already tokenized, but it's at an adoption speed that is very, very fast. And so we're well on a path to get the world entirely tokenized and making sure that data breach is actually -- has no value anymore to these hackers. So I'm really, really happy with the progress, really happy with kind of the decision that we took a decade ago. And I view it a little bit like the chip and PIN of e-commerce because you're now securing the credential and avoid a lot of what we've seen.

Has it outperformed, underperformed? Or is it in line in terms of tokenization?

I've been really surprised by the adoption. It sells itself. I mean a merchant suddenly has no longer the vulnerability. It's very expensive for the merchant to have a data breach because they have to pay for the reissuance of the cards that results from the data breach. So a merchant says, "Man, I want that because it protects me from that potential cost." The issuers love it because they actually don't have to incur the fraud. Merchants also get higher approval rates as issuers approve these credentials much more than normal PAN numbers. The consumers no longer have all the fraud, and mainly, the consumers don't have interruption of their transactions. If your car gets replaced, the token remains live. So you have your token in Netflix, let's say. If the physical card gets replaced, your Netflix doesn't stop working because we've actually managed to de-lodge or deconnect these 2, right? And so every stakeholder wins. And so this thing sells themselves. And what I have to do is not so much selling it but making sure that the machines can handle the volumes, which is really cranking up. So I am very pleased. I expect further acceleration because, obviously, the fraud will go to the weakest link, namely what is not yet tokenized. So you'll see an acceleration of that to 100% of tokenization in a few years.

Right. I want to talk about Click to Pay. It seems to be gaining some traction. I'm just curious on the rationale of Click to Pay because there's a number of wallets out there. We're even contemplating whether some of them should exist or not, quite frankly. Maybe you could just discuss why Click to Pay is necessary and its progress to date.

So Click to Pay, don't think of Click to Pay as a wallet. It's not a wallet. Click to Pay is actually a card-on-file, except -- so just like you store your card with a -- or token with a Netflix or an Amazon, Click to Pay is the same concept, except it's not for one merchant, it's for multi-merchants. So think of it as a multi-merchant card-on-file. And in that sense, it's similar to a Shop Pay. I don't if you've heard about the Shop Pay, but Shop Pay is also a multi-merchant card-on-file for the merchants that Shopify serves. But the difference to Shop Pay, which is domain-restricted to their own merchants, Click to Pay is open to all Mastercard merchants. And so in that sense, what it is for is not to compete with wallets, it's not to compete with card-on-file. We like wallets, and we like card-on-file. Anything that brings security and convenience to the consumer we like, but we don't like guest checkout. Guest checkout is still a very significant part of overall e-commerce. It's where most of the vulnerability lies, and it's where all of the cards -- the conversion issues lie whereby many people abandon the journey doing guest checkout. So it's very clear we have to solve that. We have -- guest checkout has to go. Some of guest checkout will go to card-on-file. Some of it will go to wallets, but it's quite a bit which will go to a multi-merchant card-on-file. That's what Click to Pay really is. And the progress so far is actually we're seeing really nice growth, geographically focused. Like if you look at Mexico, Brazil, Australia, U.K., we're seeing that really ramping up. But more importantly, we're seeing conversion rates, which are 5%, 6%, 7% above normal checkout. We're seeing approval rates much higher because it is tokenized, and we're seeing real momentum on the merchant side to seek adoption. Again, if -- that's actually another important point. It doesn't compete with the merchant's card-on-file. Like if you think PayPal competes with the merchant's ability to set up a relationship with consumers and Apple Pay arguably as well. The merchant can't harvest that consumer for their own relationship. Click to Pay doesn't do that. It's not meant to do that. It's meant to replace guest checkout and not anything else. So in essence, it's not a wallet.

It does compete with the wallet, though, right, in that it solves for guest -- easier guest checkout.

It's an option, but it's not -- honestly, if Click to Pay ends up on the end of the journey with 2% or 5% or 10% of total checkout, I don't really care. What I care about is that the guest checkout, with its vulnerability and with slow conversion rates, disappears and gets to a better consumer solution. We think Click to Pay is necessary because there's a lot of space out there still. But if other solutions do it, that's great as long as it helps the consumer and the merchants to get out of there.

I have a lot more questions, but I'll move on. Maybe there's a lot to get through. We've heard the term digital first in several of your wins. I'm just curious if you could explain what that means and why it's important.

Yes. So look, every consumer is now digital. The device becomes a bit of a body part of them. They do everything, entertainment, social interaction and also, obviously, their financial services digitally. And all digital first is to bundle a number of services that we have made available to our issuers through API connections in one coherent set of value position that goes to the life cycle of the payment journey, starting with consumer onboarding. And so we have an identity solution that actually can be called through that API, provisioning on the device, and we have our tokenization system. We have transaction history that we supply through that consumer device. We have transaction dispute. And so all these services accept -- exist separately, but actually by bundling it in one cohesive set of APIs that our issuers can use, we've created that digital-first suite of solutions. And we've done that not because we have some clever Chief Digital Officer somewhere but because we've actually co-created that with some of the best consumer financial services institutions out there, including a new bank in Brazil, an Apple here, an N26 or a Monzo bank, a Kakao Bank in Korea. We have co-created that set of solutions with those institutions, and we now think that as a baseline digital-first solution that issuers need to deploy, we have this thing down to a science. And it's resulted in some really nice wins, and we believe it will continue to do so.

And how does it compare to what your competitors might offer?

You should ask them.

All right. Fair enough.

Maybe a small point. So you probably know these -- some of these institutions that I have mentioned. A new bank, a Monzo, a Kakao Bank and N26, they're all exclusive Mastercard. I don't think it's a coincidence right? I think this is because we've really honed our solution out there in such a way. But you should ask them.

I will. All right, cool. So I think Mastercard was really early in identifying opportunities with fintechs, and you partnered with them and invested in some of them. And I think the strategy has been successful because many of them work with you still. I guess of the ones that you're enabling today, some of them could be viewed as disruptors. I'm just wondering if you think that's the correct strategy for the long term in terms of enabling potential disruptors.

Yes. You want me to elaborate?

Please elaborate.

So I mean the reality is that nobody does anything alone in the digital space. You always have to deal with a browser, a whole ecosystem to deploy things digitally. As a network, that's even more the case because in a network, we don't do anything alone. We always work with a set of partners. And so as -- and we need to be humble about also what it is that we can do well and what it is that we should let others do. And so very early on in this journey, we actually recognized them, and we kind of created a program for -- to invite fintechs in, right? We actually had the debate. Is it better to build walls because those are disruptors and they could eat our lunch? Or is it better to actually bring the walls down and invite people in? And as a network, we strongly believe it's the latter. And what these fintechs do is, on the one hand, they allow us to look around corners. What's the next thing in crypto? What's the next thing in GenAI? Or what's the next thing in cyber? And so that's really important if you want to be relevant over the next 5, 10, 15 years. They allow a distribution of our products, and they are huge distribution. Fintech is a big word, but I consider a new bank a fintech, and I consider an Apple a fintech. I consider Mastercard a fintech, right? So they allow us to distribute our products. They allow us to acquire new capability that we can't really build in-house or develop in-house. And again, we have to be humble about what we can do, and they force us to move faster. There really are impatient people. And so we as a company need to reinvent ourselves. On the point around disruption, I think we all know payments is an industry where it's not a zero-sum game. It's not because somebody wins that somebody else automatically loses. You can actually lift the tide for everybody. And that's what, time and time again, we've seen. You can work with them. Sometimes you compete with them, but by the by, you lift the tide. And we're sufficiently confident around the reach of our networks that bring scale to these players, the trust of the network that brings confidence to these players. The capability and technology that we've brought to bear like something like tokenization, that means that even if they may have ambitions by the by, this is a win-win, that has really worked well for us, yes.

Perfect. Mastercard's talked about portfolio optimization as an important component of the growth algorithm. How would you explain that is? And what are you looking to drive out of it?

Yes. Yes. Well, thanks for that question. Usually, people ask me about GenAI and crypto. But that, to me, is really sexy stuff. It's portfolio optimization. What we mean by that is we today have 3.3 billion cards out there. Not all of these credentials are active. Not all of these are contactless-enabled. Not all of these are active on e-commerce. Not all of these are stored at card-on-file, and not all of these are top of wallet. And so even if we don't win any deals, even if we don't grow our acceptance, just making sure that those fire on all cylinders has enormous growth potential. And so we are actually very deliberate about that. We're very forensic around that. We're applying our AI tools to understand what are the pockets of opportunities to get these cards top of wallet to actually increase the approval rates. And that goes very deep in terms of oh gee, that issuer -- or that car from that issuer, when used with Booking.com, performs less well than a car from a different issuer. And why is that? And so we help issuers through our services with making their portfolios work harder. We help merchants with their transaction presentment strategies so that they have higher approval rates. And that actually not only makes sure that we see more transactions on the network, but also our issuers see more transactions that drop straight to the bottom line. Our merchants see more approvals again straight to the bottom line, and we manage, as a result, to sell services, whether it's portfolio optimization services, fraud services as a result of that. And so it's a really nice flywheel of really making sure that we -- our installed base works as hard as it can.

Perfect. So there's a number of alternative payment methods that have emerged around the world. I'm just curious how you think about these players and the risks and opportunities they present.

Yes. So that's a great question. I figured you would come to that. And so it's one whereby, I think, it's a tale of 2 stories, right -- or a tale of 2 cities there. On the one hand, many of these are coming into the space in areas or spend categories that are not very well served by cards. P2P comes to mind. They almost all start with P2P. And as they do so, generally, what you get is a digital habituation from consumers as a result, which results also in an increase of spend on cards. So as I said earlier, it's not always a zero-sum game. The tide is lifted for everybody, and we see an acceleration on cards because this APM causes that habituation. On the other hand, some of them are moving into P2M payment, person-to-merchant payments. So kind of our turf, if you want to call it that way. And in that case, it's mostly debit. It's mostly domestic, almost exclusively domestic. And that's where sometimes there is competition. And -- but competition is just the nature of the beast. That's what we've been dealing with for the longest time. And it's where I apply what I call kind of confident paranoia, right? We're paranoid about these because frankly, any competitors should worry us. But at the same time, we're pretty confident about the value proposition we have. We have pretty much unparalleled reach in terms of acceptance, domestic and cross-border. We have functionality that most of these don't have. Don't forget, we've been in this business for like 60 years. And we have things that people take for granted, like preauthorization. If you want to rent a car or check into a hotel. Split shipments, if you buy a TV and a soundbar, but the soundbar has a 4-week delivery delay, we do a split shipment. Very few people -- very of these entities can do that. Returns in e-commerce, how many -- how often do you return the shoes that you've bought, right, or partial returns. I mean all these things are embedded in our network, buy now, pay later now as well, which gives us confidence there. We have unparalleled consumer protection. People -- if a red T-shirt comes in the mail and you've ordered a white T-shirt, but you have recourse. In many of these systems, you don't have recourse. Our fraud and resiliency around that is, I think, probably the biggest thing that will set us apart. I mean, with AI, GenAI, not only are we going to see increased data breaches, we're going to see increased scams, increased social engineering. And we have multilayer protection out there that, I think, is best in class. And so based on all of these things, we feel confident that we can compete. But at the same time, honestly, we need to be humble. We need to be paranoid, and I, for one, there's the reason why I look older than my real [indiscernible] years old.

So you're not only a payments company. You're also an insurance company in many ways. I think that's definitely something to think about. [indiscernible] protection for the consumer.

Yes. Well, we wouldn't call it insurance. But yes, we do provide the right way to make sure that the consumer has no liability for fraud and has recourse when something bad happens. And that's not always well understood but extremely important because when the going gets tough is when it really matters.

Absolutely. So the digital currency space has obviously seen better days. We've seen a big up and down in that space. I'm just curious sort of where Mastercard is with digital currency and some of the recent trends that you're seeing and what your approach will be on a go-forward basis.

So I -- for us, the digital currency never was about the crypto assets and the trading that, I think, people focused on. There's 2 areas where we think this is very relevant for us, and we continue to think that, by the way. One area is how could we unleash the power of blockchain in terms of programmability, immutability, atomic settlement into real-life use cases of, say, trade finance or [ conditional ] payments initially. And we think that this will be part of our future. And we think that it will not be on crypto assets but on tokenized deposits. So commercial bank money that will get tokenized. And we see increasing interest in cooperation, frankly, with many banks. I think of Chase and Citi that are really investing into that in order to unlock the potential of that technology on real use cases. So we're working on that. We have a program called -- or a network which we call multi-token network, which is looking to prove the premise, and we're well advanced on that. And so I think it will take a couple of years for this to really scale, but I really think this is not, by any means -- or that promise is still very valid. I think the second area is CBDCs, Central Bank Digital Currency. There's about 80 central banks in the world that are exploring with either retail CBDCs or wholesale CBDCs. We're of the view that if a Central Bank wants to do that, kind of makes sense, right? It doesn't make sense that in a digital era, only paper money is the only way to get access as a consumer to Central Bank money. So if a Central Bank wants to do that, we want to make sure that we are leaning in and do that in a public-private partnership by, for example, making our acceptance available or by providing our fraud and resiliency solutions to that. And so in many geographies, I was actually on a panel only last week on the digital euro. In many geographies, we're engaging, making true that as that happens, we're able to operate with those CBDCs in our system.

Perfect. Let's talk about AI. You mentioned it earlier, but maybe talk about your AI strategy. Obviously, gen is kind of the most important thing here in terms of the new innovations. Maybe you can just talk about it, generative AI.

Yes. So AI as a whole is not new machine learning and AI. We've been applying it for more than a decade on things like fraud detection, making sure that we see patterns and detect fraud before it really hits. In terms of portfolio optimization, we're using propensity models. So that's actually already very well established. As you can imagine, we sit on enormous amounts of data. And so we've -- applying machine learning on that data is part and parcel of the fabric of what we do. Generative AI is a very different space. We think it's actually a very big technology evolution or wave. And how we apply it, I think it's still early innings, right? So obviously, like most companies, we're really looking to apply it in productivity tools, coding, code review and customer service and onboarding tools. So all that is bringing a lot of efficiency. But it doesn't necessarily revolutionize the business. But we're also looking at, okay, how does GenAI change the shopping experience? We have this thing called Shopping Muse that allows a consumer to interact with a merchant -- with an apparel merchant to kind of find the right things for them. I want to look like Kim Kardashian, or I want to look like Taylor Swift. And actually, the solution will present me with -- actually, you should try that, with the Taylor Swift outfit. But I think we're starting to work with some of the AI companies, generative AI companies to really understand how product development can be impacted in different areas of our business. Early innings, but just like mobile, just like cloud before that or just like Internet, we think it's a very significant way that we need to be on -- early on and hence, again, the importance for us for partnership and with all these payers.

On a related note, like what are some of the emerging technologies that you're paying attention to that might have an impact to payments in Mastercard?

So the one that -- we mentioned quite a bit, and the things like Tap on Phone or some of the generative AI stuff is really interesting. The one we didn't touch upon that I'm really excited about is biometric authentication. And the reason why I'm excited about is -- and we mentioned earlier on, data breach is a big vulnerability. The other vulnerability is scams and social engineering. And today, still a large portion of e-commerce transactions are nonauthenticated, like a really large portion. It's transactions whereby you don't actually need to do an approval from your banking app or a onetime password or something like that. And that poses a big threat to the ecosystem. Now we can resolve that by imposing a lower friction onto the system. We need to do that in a frictionless way. And so biometric authentication, we believe, is the advance here. And with a new standard called FIDO that produces a thing called passkeys, we're now able to provide biometric authentication on web transactions. Now just like tokenization, whereby the network is not domain-restricted, provides a solution that all issuers and all merchants can benefit from. If we apply passkeys to a token as credentials, we'll be able to do it in a way that really spreads around the system and doesn't actually gets fragmented across. And so just like tokenization, I actually think of biometric authentication as the new tokenization. If we are able to deploy it in the right way and shape it with our partners, I think we can do a real advance in how secure e-commerce payments can happen, and we can do it in a way that the network sits at the center and holds the key ring, so to speak, to make all that work really well. So really excited about that. It's happening, frankly, this year. So it's not something that is far out, but that will give another wave of, I think -- yes.

To be clear, you would check out with the biometric authentication?

Yes, you would make a transaction online. And the moment you say, "Yes, I want to buy these shoes," there would be a biometric.

Like scanning of your eyes or something like?

Yes or Face ID or -- and that will make sure that we know it's Sanjay who made that with a token that is locked to that environment, and therefore, no scammers, no data breaches can go in between. And that's really what we need to get to.

Got it. Well, we've run out of time. Thank you so much, Jorn, for being here.

Thank you.