Mastercard Incorporated (MA) Earnings Call Transcript & Summary

Good afternoon, again, everyone. I'm Harshita Rawat, Bernstein's senior analyst covering payments, processors and IT services. I'm delighted to be joined today by Michael Miebach, Mastercard's CEO at Bernstein's 41st Annual Strategic Decisions Conference. Michael, thank you for joining us today.

Thank you for having me, Harshita.

So before we jump into details from your perspective as the CEO of Mastercard, can you share some of the broad underlying market trends that you're seeing in payments?

Harshita, if I go with my daily feed e-mails, websites [ afar ] and so forth, what's coming through is, clearly, there's this huge wave of tech-driven change that's affecting financial services broadly, the payments industry, more specifically. It's affecting the world of commerce, et cetera. What's also coming through is a lot of moving parts on geopolitical front on the macro front. And then you overlay that with every day, some government and some regulator somewhere is coming up yet another initiative. So that makes for a pretty complex operating environment. And with that as a backdrop, one thing is when I see customers that comes up who look at the same environment that I just described, one thing that consistently comes up is the topic of trust. And if you don't know what the future is going to bring, you're looking for trusted partners that together somehow you can work through that. And a partner that is flexible, let's say, you look ahead over the next 2 years and you have some sort of agreement together and then maybe things change and how do you pivot? How do you pivot in a world where consumers radically change their behaviors quite quickly and you need to offer them different solutions and so forth? So trust on -- with that -- through that lens is a big topic. Then trust on the lens of in an unclear regulatory environment, what do you do about data privacy, what do you do about regulations and spaces that haven't fully settled like stablecoins and so forth. So I see that coming at us as a big uber theme. More specifically, if you look at the trends, I would cut them probably in 2 different buckets. One is cyclical trends and one is secular trends. The secular trends are actually the same despite everything that's going on as we've been talking about for a long time. One is consumers want seamless. They want instant, they want personalized. They want easy. What also hasn't changed this base building on that is, why is B2B still clunky. So B2B modernization, that expectation is also holding. And then there's a few things that are more cyclical that has just picked up more recently, stablecoins. Recently, I went to see a regional-sized bank CEO that's working to a larger degree with a competitor. And we started to have a conversation and he says, within the first 5 minutes, "What are you guys doing on stablecoins?" So I explained what we're doing and he says, "How can we partner on that?" So there is interest in emerging technologies that existing players might have not had. And then, of course, there's AI. So in the customer meetings I had since we announced Agent Pay, this is the one topic. This is the one topic everybody wants to talk about, what does agentic commerce mean? Where is my role in that? And how can we partner? So these are -- this kind of landscape that I see on around us, interestingly, if you think about our strategy, which I always love to talk about is it kind of hits on all of those points.

So Michael, I want to really zoom in on a bunch of the things that you just highlighted. But let's just get some of the macro questions out of the way first. What are you seeing in terms of the consumer spending trends?

Right. So last time that we all spoke was at our earnings call. We had the first quarter data, and we had up until the 28th of April, and spending trends were stable at the time. Now if you include the first 3 weeks of May, we see exactly the same. So spending trends have largely been the same. Now if you look at this a little bit closer, and then you'd say, why is that? If you look at the headlines, if you look at the sentiment surveys, and we've just seen one yesterday, it was surprisingly positive. So you see a lot of rhetoric there and you see a lot of headlines and it hasn't really translated into consumer behavior. So why is that? Because the underlying support of the labor market continues to be there. We see we have low unemployment. And we have wage growth that is kind of keeping up with inflation, above inflation. So purchasing power is solid, which are both key drivers. So that's fundamentally the picture that we've seen and that's why we said what we said in terms of our outlook for the year in the earnings call. The other thing that is important in this context is you love asking about macro and colleagues as well. And then we talk about it, but we also say, you know what, it's also important to consider that what we do matters in any economic backdrop because there's a secular trend. Number one, people that are employed will spend. And when it's spent on cards, then we care about it and we can help with that. It's a very, very diversified model. So if certain macroeconomic footprint plays out in this part of the world, but differently in another part of the world, consider we are the most geographically diversified network. So I find it's important to look beyond the macro considerables.

And just one follow-up on that, Michael. Cross-border, right, can you maybe talk about what you're seeing there. Help us all to understand the sensitivity of your business towards different corridors and e-commerce travel spend, assuming you're quite diversified with this as well.

Yes, it's interesting you asked this question. There's, again, a lot of headlines on how travel behavior is changing and where consumers are not traveling to and so forth. So here's what we're seeing. Again for the first quarter and into April, we had a more detailed look into the travel behavior. And you saw the growth rate at 16% [ of ] our overall cross-border, which is very healthy. So that continues, gives and takes within that. Let's take a little bit of a closer look. So if you look cross-border travel, we start with that, and we can take a look at ex travel. On the travel side, overall, very, very solid. But then you start to look through the lens that we have, which is a very detailed lens in which corridor kind of stands and so anything that we see that's noteworthy. And we give you 2 things that I want to repeat those, is we saw some volatility and some moderation in select markets in Middle East and Africa. But those are generally volatile markets. Now I worked there for 9 years, and I've lived it. So it's up and down. So I wouldn't say that's a secular trend in one particular direction here. It's just something that we noticed. There was also some moderation into the U.S. This is something that we have seen in some of the headlines. But it's also true that we've seen increases elsewhere, increases in Europe, for example. So always important to look at it and then come back to the diversification piece geographically, all adds up to a stable trend for us. On the ex travel piece, which is largely cross-border e-commerce, been very strong, consistently very strong. No change in that, the behavior that changed in COVID and people stuck with it. They like to buy stuff that they found interesting in other parts of the world, and that continues. So overall, good picture. Now one thing is you have the underlying trend. Obviously, you need to be well positioned to actually make use of those trends and work them hard from a product perspective, from a portfolio perspective and so forth. We continue to focus on the travel sector, the OTA relationships that we have with Agoda, with Booking.com, what we do on the airline co-brands, Lufthansa, AA, hotels, IHG, et cetera. So it's a good portfolio and we put a lot of effort in engaging -- helping our customers engage consumers so that when they decide to travel, which they want to do, that they travel with them and then the spend comes to us.

So now on to more exciting topics, Michael.

It's already actually quite exciting.

Over the last several years, you've had a lot of notable client wins. How is the competitive environment, in your view? And what's enabling your wins in the market?

Right. So the market is competitive, no question. And it's competitive from an economics perspective, it's competitive simply from the breadth of competition that's in the market. So that has changed. I don't think it was ever more competition in payments than we have today. So you've got local schemes, you've got international networks, you got the wallets, you've got also some specialist players. So it is a very diverse, competitive landscape. Within that, why are we winning in that broader competitive landscape? I think it starts off with, maybe coming back to the trust point I made earlier, the kind of relationship that we build with our customers. And we hear it back. We do these surveys and we ask, "What do you think of us? What do you think about our client teams?" And the approach is, you listen, you understand what is the customer's problem, what are they trying to do? And then you understand how do you find a way to driving their top line. How do you drive -- find a way you'll reduce their cost or improve their fraud line or whatever it is. And then we take a set of -- as a former Chief Product Officer, instead of productized components of our solutions, you put them together into a solution that fits that customer at that moment. But then we have all these changes that I talked about. So people are saying, right now, we're in a higher inflation environment, I need to pivot. I need to find a different way to engage my customer than I did before. So you take your standardized product blocks and put them together in a different way. On the services side, that's something that we regularly do right now. We're just out there today with all the tariff thing. So everybody is thinking about that. So there's different data assets that we put forward to our customers to help them understand what the impact could be and how do they get ready for that. So listening, engaging, solution selling, I think that makes a real big difference. And then, of course, it's our product propositions that need to be differentiated. There was a bunch of announcements on that just recently. But I'll give you a couple of specific examples. In the last earnings call, I talked about Grupo Promerica. Not a name that is like a big household name, but it's a huge financial group across Latin America. They're partnering with us across our Digital First payment solutions, consulting and data analytics. So they hit across the board. This is an emerging relationship that's growing rapidly. UniCredit, more established in some markets, but they flipped over the whole business to us across 12 markets in Europe, 20 million cards, again, hitting on services and payments across the board here in the United States. Citizens, they shifted their whole debit business to us, open banking, SME focus, consulting. Same thing, again, we shifted the whole debit portfolio in half a year. So that's quite something. We're actually very good at conversions, which is one other thing. In a scenario where you -- there's -- question is, you go with a competitor, you go with us or you just do nothing. If I can make a point and I make a point by proving it with data that conversion is an opportunity to activate dormant cards and dormant customers, well, then people start to listen. So that's the approach. Listen, drive top line, bottom line, and of course, we need to have attractive economics as well.

So Michael, let's talk about -- let's talk more about the core of Mastercard, right, consumer payments. How would you frame the growth opportunity within the U.S. and also internationally, which is a bigger market for you? There's so much focus on the U.S., but I feel like the opportunity is much bigger internationally, not just with respect to cash but also domestic schemes.

I'm so happy you say that, and I agree with that. 70% of our revenue is from outside of the United States. So that's something to keep in mind. So which clearly proves if you look at our overall revenue in absolute terms, that's a huge amount. If I take us back to November, last year in our Investor Day, we sized -- we resized the market at $11 trillion overall globally. That's the global opportunity. And then rather than looking geography, what we also said, well, within that is a tremendous transaction opportunity because we price on volume. We also price a number of transactions, 1.5 trillion transactions. And if you look at it from that perspective, you see a significant chunk of the transaction opportunity in markets where you have a higher degree of new emerging business models shared economy. That is, for example, the United States. If you look at the cash and check opportunity, find a lot of that highly attractive in some of the more emerging economies. So that we go after by, for example, mobile-based financial services in Africa, those kind of partnerships. What we also talked to you about, which I'm personally very excited about, is kind of new ways to get at volume that are not just about transferring cash and checks. It is also taking volumes from cash and checks equivalents of less evolved digital solutions, for example, domestic schemes, for example, some local wallets that are very -- growing dramatically in some countries. So domestic schemes, we've been partnering and winning for a long time. Tokenization is a good differentiator for us to get that volume over and realize that consumer opportunity by taking it from somebody that had already digitized it. On the wallet side, I give you the example of Swish in Sweden, so exciting. That's a -- it's a pretty prominent wallet there, and we basically brought to the party contactless payments. I said how about you are a Swiss user and you want to just tap and pay in a shop where you have Mastercard acceptance, 150 million times. That's a pretty cool proposition for every Swede. And so just you log your Mastercard, those transactions then come to us, which is a great way for us to continue to execute against the consumer payment opportunity. Now we thought about this in a bigger way. And excited to announce something right now, right here with you on stage. So we have agreed a partnership with Alipay, Alipay in Hong Kong and GCash to partner to enable 36 local e-wallets to extend their use cross-border through the Ant International's Alipay+ wallet gateway, this is a very long word. But it's basically the same thing as I just described in the context of Swish,. You log your card, you have this particular wallet out of Hong Kong, you travel somewhere in the world, you can use this app to pay. Now this is a really interesting opportunity for us to help those consumers and those wallet partners who are very good at digitizing cash in these markets. And those are transactions we normally would not see and now we do see those. So very -- there's a whole range of ways to go after the $11 trillion, and it doesn't stop. Consumer doesn't stop there because there's account to account, it's another $10 trillion. There is -- on the domestic scheme that I talked about, that's another $3 trillion, and then there's China with $10 trillion, which we are obviously very busy in China as well.

That's a very exciting partnership. Congratulations.

Thank you very much. I had to write it down because it was such a long name, but I think I got it right. .

Speaking of China, so it's been about a year since you launched domestic processing in China. How are things progressing in the market? There's a perception that the ship might have sailed in terms of domestic China opportunity, given the local market dynamics. Why do you think that perception may not be right?

I'm not sure that perception exists, but let's just speak about it anyway. I'm not consistently hearing that. So let's start off with why is China important. It's the second largest economy in the world. So from that perspective, of course, as a global network, we should be there. Tremendous opportunity. Now if you look at the market today, the market today has a large, established bank card player. And the market has significant digital giants that have developed a QR payment ecosystem in the country. So one could say, why is Mastercard needed? The first thing to say is we have built good relationships with all of these people over the years, where they are since the mid-80s on our cross-border business and with our services proposition. Now there was one thing that has changed. And that is the regulator coming in and starting to balance out the market between bank cards and digital payments. We could all observe that over the last couple of years. The next thing that also happened is that it's now permissible to have a card proposition that can use domestically and cross-border. Now we got our license last year. This particular change had happened. So we're really the only party that can provide this particular single-use card because we are the only ones that have international acceptance, and we are the only ones who have a domestic license at scale. And that is the unlock where we believe that gives us a tremendous ability to compete. We need to build out our capability, as said on the ground. We've just launched [ ansall ] tokenization there, which is another important tool to bring this to life. So we've been busy since May last year because that's great in theory, what I just said. What you have to do is get the issuance going, solve for the chicken and egg, issuance going and get the acceptance going. We had a good start on the acceptance side by partnering with the wallets to ensure that you can start to pay through wallet acceptance on the QR side by just logging your card there. It's kind of a bridge, but we're building our traditional acceptance and the Chinese broader ecosystem has -- is very interested, including the government to have traditional acceptance because they want travelers to come in and be able to just pay way they are used to in their countries, which is not QR. So everything has come together. Very busy with the teams rolling this out. We're very encouraged and it's not just about consumer payments. It's also about commercial payments. So we struck 10 deals on the SME side. We're staffing up. The team is humming. This is a joint venture, just to keep that in mind. I recall a few questions from the Investor Day, how excited are you and said, well, German excitement, I keep it relatively low key because we do have a geopolitical landscape to consider in all of this, but so far, so good.

That's great, and definitely exciting. So Michael, let's talk about tokenization. Let's switch gears. A foundational layer of growing payment use cases and services enabled by Mastercard. Can you talk about how tokens enable the ecosystem with respect to security, programmability of transactions? And why is this so important for Mastercard?

Correct. So when it comes to tokenization, let's just put it in context when this started or happened. Just really with the rise of mobile-based payments, around 2014, '15, we had a strong partnership with one of the big wallets at the time. So we brought it up, and it scaled beyond anything that we've seen before. If you think contactless today, 73% of all transactions. That took us about a decade to get it there globally, but now it is the predominant way to pay. So you got to have patience in this, in the payments business, to really create these global propositions' ubiquity. On tokenization, it's growing at a tremendous speed. And today, we have 35% of all Switch transactions are already tokenized. So that's -- that's very impressive. And why is that? Why the pull? The pull is really coming from the user experience that it enables. So firstly, on safety and security, you don't need to make any argument to anybody that it's good not to have clear card data flying around. So the impact on fraud lines is very clear and measurable for our customers, but it's also good for consumers because in terms of fraud levels on consumer transactions, so far very positive. But then you have to look at the throughput and the approval rates, 3 to 6 percentage points higher than what you see on a nontokenized transaction. So it has clear economic and security and UX benefits that top everything else. For us, it's also very important because this is complicated technology, not everybody can do this, and positions us as a very attractive partner for -- when we show up with -- in some markets where there might be a local payment scheme and say, well, we actually can do tokenization that makes us an attractive alternative for a global company, really, really important. If you take a look ahead and say where could this go? Where do we want it to go? We made a clear statement that we will push for phasing out manual card entry by 2030. That statement that was very much welcomed by many players in the market. In Europe, I just came back from a trip in Europe, in the new commission, they're like, this is really good for safety and security standards. American company bringing that in the current environment, that's a really helpful thing for us. So we'll work hard on achieving that. Other things that you could see, though, you can tokenize anything. You can take -- tokenized data, thinking about our consumer data, your data, if there were a token network that allows you to tokenize that, you can send the data and you ship it to somebody else in order to get a better service proposition, that is pretty cool. So the world of multi token networks, which we have already built, we are ready for that, that in the end, anything can be tokenized. The step in-between that I kind of overlooked is passkeys and biometric. That's also token technology, which actually you need when you want to go to -- when you want to get rid of manual card entry. So there's a lot in there. It's complicated. We have invested a lot of money in this, and it's been a significant enabler of our going after consumer and the commercial opportunity.

And I think you -- the point you made was also so interesting around local schemes, domestic schemes. They are just not able to keep up with this level of investment, this level of technology that also differentiates Mastercard. So speaking of technology, Michael, you recently announced Mastercard Agent Pay, which will be...

Isn't that a cool name?

It is cool. Yes.

I think so.

Yes. It is, Which will be supported by your agentic tokens.

Right.

So my question for you is, how are payments changing in the era of agentic commerce? And what evolving role can Mastercard play in that? And also, how does this fit into your broader AI strategy?

Right. I think I would probably -- building on your question, but start at the other end, how is commerce changing? And then how can payments enable changing commerce? So today, if you think about it, online commerce involves search. You go and you try to find out, let's say you want to buy a running shoe and you start to look at different sites. Maybe you look up what the latest ratings and the tests are and then you see who has the best offer and then maybe you look at your airline website and see if you have any miles to burn and they might actually have a link to one of those merchants, et cetera. You do all of this and you've just wasted an hour. And at that point, you still not have -- you haven't purchased anything. So at some point in time, you will actually make a purchase transaction. So search is complicated. Natural language doesn't really work and the purchase transaction is in the second [ floor ]. So imagine a world where people are using chatbots and other agents to help them with their commerce decision. And that isn't theoretical, it is actually happening. We just looked at the study just recently that since 2023, 25% more people are starting to use chatbots over traditional search engines for their commerce -- for their search use. Now if you then think how about the chatbot could also complete the transaction. So it all just goes in one go. We say, I want a hookah and I have the size and just get me what is available from my preferred merchant, et cetera, et cetera, and it flows all the way through, very interesting. That is where it could go. From a consumer perspective, it might be very scary, though. Even from a bank perspective, it might be scary. If somebody uses a payment credential that's issued by a bank, so how do you know that, that chatbot is actually real? How do you know that behind the person that is making that request to the chatbot is actually the person who claims to be that person. So all of that, which is a very known set of issues in payments today, how do we solve that today? We solve that by using tokenization, by using a whole set of fraud tools to keep the payments safe and authenticate everybody that is in the transaction. And this is where Mastercard Agent Pay comes in and say, let's recognize there will be new players initiating instructions -- payment instructions and we will apply all of those technologies around tokenization, making sure it's safe, secure and sound. And at the end of it, you could also go even further and say there will be disputes and charge backs and all those things that has been established over the decades and say, well, you go back and you prove is there sufficient data to flow through that we can say, well, you actually did ask for this particular product. So you close the circle very much the same way that we have done it. So it is not how payments is dramatically changing. It's taking the components of what we have built across the ecosystem and technology with partners who are in the agent building business and say, these components are available for you today. So we announced this with Microsoft with open NI -- with OpenAI and said, "Let's start to build out this ecosystem." This is also very early days, so we shouldn't get carried away by that. But the proposition in itself makes sense. And I'm sure, in the end, the consumer will decide if they get comfortable with it. But Mastercard Agent Pay can help people get comfort with it and the banks get comfortable with it and we might see search evolve. But we also see that traditional search engines are also upgrading. And you heard what Google I/O -- what Google announced at Google I/O with the AI Mode. So there's more coming. And I think the whole industry is just right now evolving very, very quickly. So good for us as a player, fundamental leader in tokenization all along because that's the core of all of this.

And Michael, some of the other announcements that came from Mastercard just in the last couple of weeks have been around stablecoins. Interestingly, they are also an area which are perceived as a risk for cards at times. Can you talk about how you see the role of stablecoins evolving within certain kinds of payments, B2B, cross-border and why they are not a solution for card payments and also Mastercard's approach within stablecoins?

So there's a lot more activity around stablecoins right now. And why is that? I think that is driven by there's a potential for some -- reaching some regulatory clarity around it. So the Genius Act is kind of going through the motions in Congress as we speak. It was very close first time around, and we'll see if it goes through and will settle some of the questions on where this is landing from a regulatory perspective. So I think there's a whole ecosystem that's ready to move. And if you then start to look at, so why do people -- why are they interested in stablecoins? And there are some folks that are interested in it for stability, for example. So a stablecoin, as the name says, if it's dollar-denominated, that is certainly a way to be paid or store value in emerging markets right now. So that's clearly one of the use cases. Another one is speed. So stablecoins, if you put it in the context of cross-border payments where speed is not always the key hallmark of these payments, it can take days; with stablecoins it could be a lot quicker. So there's a lot of good reasons also why stablecoins make sense. For that very same reason, we've invested it for the better part of 10 years in blockchain-based and other kind of digital asset technologies. In the days of Libra, when I was a Chief Product Officer, we were very close to even launching it, and then we didn't, mainly for regulatory clarity reasons, and I think we're coming back to that point. So one thing that we are doing today where regulatory clarity hasn't fully achieved is all of whatever use case it is, it needs an on-ramp and an off-ramp. And that's been really the focus of our business. We have a whole range of partnerships, on ramp and off-ramp, with various exchanges. In our last call, I talked about OKX. I talked about Kraken. I talked about Crypto.com, some of the big names. And only in the last couple of weeks, in May, we announced MoonPay. It's a fun interview that the CEO of MoonPay did with -- Ivan Soto did with Andrew Ross Sorkin. I think it had like 1 billion views of that interview and he is talking about the amazing way of paying and being paid in stablecoins. Well, that's exactly what we're enabling because we're building that bridge as well. Now it is also important, which is something that we actually did say in 2019, that we will enable our network for stablecoin settlement, so directly in stablecoin, and we have done that. So it's just not that anybody wants to use it right now because the regulatory clarity isn't quite there at this point, but we're ready to do that. Where is this all going? Is this interesting? Yes, that brings significant volume to us, on- and off-ramp. That's exciting. The settlement piece is ready. That isn't doing anything yet, but we have that optionality any moment. I'll give you the example of the banker that I saw that wants to do something in this space. So there's a lot of customers that are coming and they're seeing that we've invested, and we have some really good folks that know something about it. So what's the use case? Let's work on it together. I think the real area where you're going to see these use case is in the B2B space and the commercial space because there is issues to address on speed and transparency. Programmability matters in those kind of businesses. Oftentimes, payments are linked to complex scenarios and say, well, these 5 things need to happen and you can build that straight into the payment. There's governments who want to build of that kind of an ecosystem, central bankers who are working on that who are reengaging with. So I'm excited in the medium term for more fundamental changes coming out of it. It's pretty clear. We've always been a multi-rail player. That is an interesting technology that can solve issues with parties that don't know each other, which is what we've been doing since 1966. So it's just a plug-in and from that perspective, I see this as a significant opportunity.

Fantastic. So Michael, let's talk about commercial now. It feels like you're increasingly putting together more of the building blocks for that opportunity with respect to partnerships with the SAPs, the Oracles of the world and now a little bit more targeted verticals. So can you maybe talk about your approach to commercial and how is that evolving?

Right. so earlier, we talked about consumer and we said like this $11 trillion number. That looks comparatively small to commercial. So back in 2017, when we first sized markets, we gave you like outlandish numbers, but now we are focusing more on SAM, serviceable addressable market. And we sized that up at $80 trillion. And commercial is such a big word. We look at it really in 2 buckets. And one is commercial POS, which has SME in it, it's T&E cards, fleet cards, and we're the leader in open fleet cards, for example, who would have known. But that is an attractive business. And then the other is the B2B payments, which is invoice payments. So those are the 2 buckets, and maybe we take them one by one. On the $16 trillion opportunity in commercial POS, when I look at that, there it's existing tools. We're differentiated on the SME side. We're winning in the SME Wells Fargo. We just completed the migration. But it's a geographically concentrated business. So what do we have to do? We have to build out a specialist sales force in SME and take this opportunity elsewhere. It's on every government's agenda. The building blocks are there. It doesn't really require us to do very heavy investment on it. Get the sales force out, get the specialists out and repeat what we have done, certainly in a big way in the United States, to some degree in the U.K. and initially now in Europe, and just take it around the world. So SME, very exciting. That's also our near-term focus. I think we're ready to convert those. It is important. Oftentimes, there's a link into the consumer side of the business, so we can have joint proposals for our banks. And there -- I think there's a lot of momentum there. On the invoice payment side, that's the other $63 trillion to add it up to $80 trillion. There's really 3 things we need to do, and we have been busy with that first on the buyer side, you just mentioned it, is the ERP system, make it easier that you are in the process with your invoice -- with your invest payment capability in the back-end process of a company. So there's Coupa. There's SAP, there is Oracle. There is GEP. So we've done that. That's great. But that doesn't mean there's volume. So I think here, a little bit more work is to do on activation and really driving the volume and enhancing that. And I'll come back and there's also a question of economics around that. Then on the supplier side, so how do you get the payment? And if you get a card payment, this is all VCN based, which we are the leader in, if you get the payment, how does this a straight-through process? So Mastercard Receivables Manager is the key tool there. We announced that, I think, last year that we put that out into the market and a combination of being in an ERP system, having the Receivables Manager on the supply side, buyers and suppliers come together. What is needed is the one other thing is flexible interchange program. So B2B rate manager, which we talked about in our last call, is kind of the last tool. So bilaterally, they can find a way to find the economics that incentivize both sides to use virtual cards. In a world of higher interest rates, card payments generally are interested because there is a working capital advantage. So you don't need to explain this long to some people and said, yes, we should start to look at this. So overall, I think it's a pretty clear approach. If we zoom back to the overall commercial opportunity, this was, I think, 13% our 2024 GDV, I think, was the number that we shared with you, growing at 11%, and we have been winning in the market and outpacing. So overall, we shared -- gained share 4 percentage points since 2019. Those numbers are very clear and understandable for us. We're ahead of the market because we have differentiated propositions, we approach this the way that I just shared with you. So I'm excited. I'm a little tired of this question. Why does it take forever? No, it doesn't. It's growing at 11% and it's a tremendous opportunity, and we're going to go after it. You didn't ask that question, but others do.

And you've also recently announced an expanded partnership with Corpay. Can you tell us more about this partnership? And how does this fit into your broader commercial strategy?

So on -- there is a cross-border opportunity in commercial. So everything I just said, there is cross-border elements, but there's a lot of domestic payments. Specifically on the cross-border side, we've long invested in this space. We had a joint venture with HomeSend, we acquired Transfast, but we had a footprint in kind of medium ticket size, smaller to medium ticket size with a big focus on P2P payments. But because we think the commercial opportunity, the B2B opportunity is so big, we need to build out our proposition there. And as we always do when we look at M&A, the strategy says, this is a big opportunity for us. So how do we do it? Do we build it? Do we buy it? What do we do? And we said, well, for now, I think it's good for us to bring together our existing solution, which we didn't want to throw away. It's working particularly well and has great reach. We're reaching about 90% of the global population with that existing network that we have. We just can't carry larger transactions at this point in time. We don't have the full range of the FX capability that you need for that. So why don't we partner with the leader in that space and add that as Corpay. So we're not investing in Corpay, the company. We're investing and partnering with Corpay, the cross-border business of Corpay. That's important to note. So what is the agreement? The agreement is that their capabilities, which are larger ticket size, which are different types of corridors and which is a lot to corporate customers, is merged with our capabilities, which is lower ticket size, more FI-oriented, different kind of corridors and different payout points. So you've overlay the 2 of them, this is highly synergistic. So very attractive for Ron Clarke and his team and for me and our folks on that side. And the other thing that we have done is we had a long-standing exclusive relationship with VCN, and we will continue to -- we extended that. Part of what we do is, in very specific terms, when we bring together these capabilities, Mastercard Move will be fully made available to their existing customers. That's just one of the first things that we will do. So this is an exciting deal, a long-term partnership that I think will do wonders, 2 leaders coming together, the best proposition for our customers.

Very exciting. So Michael, let's talk about value-added services and solutions, which is such a big business for you, another...

$11 billion, yes.

Another strategic priority. Can you talk about your offerings, how they set your part relative to the competition? And maybe also remind us why value-added services are really expanding your opportunity to services before and after a transaction, not just your [indiscernible] actions?

So it's a huge part of our business. We have 9 minutes and we have not talked about the virtuous cycle. So you know how we talk about this. When we say more payments -- the more payments we see, the more data we produce, the more data allows us to provide better services solutions and then you're in this -- your virtuous cycle. It's a big part of our strategy for that reason. We want to have all payment propositions. At the same time, we want to have differentiating services that make these the most differentiated payment solution that's out there. So that's always been the strategy. I keep getting the question, what is in your services? I feel we're actually very clear about it, but this is -- you're giving me the opportunity to talk about it again, which I love to do. When you think about it in terms of around the payment transaction, the first thing I want to say is 60% of our services are network-linked. So that's important to note. So if we look at that and that part, before the transaction, what is said, what's the service before the transaction? For example, digital identity, you got to authenticate kind of who is behind the transaction during the transaction. There's a fraud score, which is an example. And then you come to after the transaction, take Consumer Clarity, which is our product that's related to avoiding charge backs by giving more information to the consumers that you actually did make this transaction. So carefully curated around the transaction, and then there is the other 40% that are not transaction-related, where we say, well, across the board, our customers will need consulting. Our customers will need marketing services. Our customers might need a whole of other things that don't have to do immediately with the payment transactions, but a second degree related to that to help them devise a payment strategy, execute it and so forth. So that is the approach that we had on curating the portfolio over time. If we run through that, what that portfolio is, it comes in categories. The first is anything safety security. Back to the first question on big trends and what's going on, underlying security, there is an expectation of security from our customers and from their customers. So we build out that business. We always talk about powerful underlying secular trends in the digital economy. We could choose any service, but security will not go away. If anything, the risks are rising. So we're banking on a business that will continue to grow for a long time in the security space. So there's a whole set of solutions in there. Most recent addition is the recorded future acquisition on threat intelligence, but it starts always with the transaction side and then we move around the risks -- the broader cyber risk that a customer of ours might be facing. This also opens up a whole different set of buying centers. Originally, we would have sold to a retail bank a head of a bank. Now we sell to CSOs of any kind of company. So different, much, much broader proposition. So security is the first one. The second one is on customer acquisition and engagement. Any one of our customers, particularly in this world, is trying to cut through the clutter of offers and rewards and everything that's out there, trying to engage their customers in different ways, and those, we build out a portfolio of tools to do that. In particular, I want to call out personalization here. How do you get an offer to somebody at the right channel, at the right time, at the right moment that feels like it's Harshita's offer or Michael's offer. That's what Dynamic Yield does, bought in 2021, tremendous asset for us. One example in the engagement and acquisition and engagement space, data insights. Earlier, I talked about the macro picture, and this is a fast-moving world. We, as a source of high frequency, global data on what's going on in the world, we can take that data and translate it into messages from our customers, business insight at the macro level through our Economics Institute and you break it down and you get into more detailed proposition through our analytics and insights business. That is a significant differentiator for us. We built that out a few years -- quite a few years ago, and it's been a winner for us. And then you go into the world of open banking, of real-time payments, that's another category. And finally, you have the whole space of gateway payment processing and tokenization, because tokenization is a service for us as well. So it's a very broad spectrum. It's in these 5 categories that I just described. It's around the transaction. but it's also very flexible. We can pick and choose. Digital identity isn't just for payment transaction. I could do digital identity for account opening, and we've done exactly that. So it's a very versatile portfolio anchored in safety and security and data insights and somehow linked -- 60% of that linked to our payments transaction, all powered by the data that's underlying. We have a lot more data than many of the services competitors that are out there. So to your point about a competitive landscape, yes, there are some networks who are also building out services strategy. We've been at it the longest. And this is why this is such a substantial part of our business, 40%, nearly 40%, the $11 billion. But there's a lot of other competitors who are specialists in these individual areas that I just talked about. And for us to win against specialists, really the differentiator is the data that we have that they don't have. We might have similar technology on personalization, but we also have a lot of data to put this in perspective and make an even better offer. So we're excited about all of that, and it is the big differentiator on the payment side back to the virtuous cycle.

There's so much to unpack there, Michael. We only have a few minutes left. So before we close out the session, what are the key messages you want to leave the audience with?

So I want to come right back to the beginning. There's this fascination with the macro and we all do think about it. But I'm seeing that when I talk to our customers, they are kind of tired about it. They want to talk, I need a partner, I need solutions now that help me pivot and drive my top line, and that is the kind of tool set that we have. It's important to understand in the macro also that we are one of the most diversified businesses that you can imagine. We are in every country. We are in payments. We are in services. We're tied to digital economy. We're tied to a desire for safety and security. We're tied to a desire for more data insights. All of these are fundamental secular trends. Keep that in mind when the next headline crosses and say, "Oh, what does it mean for the networks?" Well, there's a lot of -- the big part of our business that we'll just power on, as we've seen in COVID. as we've seen in a period of high inflation and supply chain rewiring and as we are seeing today. So I think that's important. And it's also -- it's a team that has now seen all of this. The current management team, yes, there's always changes, but we're basically together since COVID, and we've gone through that. And we've seen the levers that we can pull and how to react and pivot and meet our customers wherever the latest headline takes us and be flexible and a trusted partner.

Fantastic, Michael, I learned a lot. Thank you so much for your time.

Thank you, Harshita. There you go. Thank you.