It's always a treat when I get outside of Yahoo Finance HQ in New York City and visit companies where they live and breathe. Like I love doing this stuff. This is just what I do and I'm in the zone. For this episode of Power Players, I am in Purchase New York, headquarters for Mastercard. You know Mastercard. You've used their cards. You've seen them on TV. You've seen those priceless commercials. I'm going inside the future of Mastercard with CEO Michael Miebach. We're going to talk about everything under the sun.
Michael, good to see you again. It's been a while actually since I've seen you in the flesh. So, thanks for doing this. I appreciate it.
Years. Well, we still look both great.
Completely overdue. Yeah. Happy to have you here and this is like purchasing your, this is the mothership for Mastercard. I mean, how often, I mean, you spend a lot of time in here. You're always traveling around, right?
I don't spend a lot of time here. But you know since it's the home of priceless, it's always good to come back and reconnect at the mothership with all my colleagues here but then you know we're a super global company.
Yes we're listed proudly listed here in the US but we're a truly global business and I want to be out there and see what's going on in China, what's going on in Europe, what's going in in you know just recently in Africa.
What I think folks don't appreciate is the history of your company. This is what 60 years. 60 years. 20 years of our IPO to celebrate it on the day after Labor Day this year. 20 years. What would surprise someone about the history of Mastercard?
You know, it started off as a proposition to pay a meal in New York. And now we are positioned since we have our license in China, it'd be the most global way to pay. Nobody could have had an idea that that would ever work like that. It was hard work for 60 years building a global financial network, building one of the most powerful consumer brands. I think is surprise over surprise. But today I do come across surprises because we continue to innovate. We continue to imagine how value is exchanged, how money moves and our brand doesn't even catch up with this. So I talked to a customer and they said let's talk about cards and said well why don't we also talk about agentic commerce? Why don't we also talk about stable coins? And yeah, well, what do you guys do? And they said, let me tell you what we're all doing because it's happening so fast. All of this just started really last year.
Did the business start with a card?
But you always like integral to the plumbing of the
We are today if you look at it.
Plumbing is a great word. Maybe you know the way we like to think about like the operating system of the digital economy.
I don't want to discount it by saying plumbing. You said it fancy. I'm just looking for words here. Like we're taking this in real time.
So, yeah, we're kind of the operating system. So, like how is value exchange today? 220 countries and territory. So, we're that infrastructure, but we're not an infrastructure company as such. You know, we are also a data company. We're an insights company. We help our customers i.e., you know, banks for example, FinTech make better decisions to run their business. We're a customer consumer experiences company. Priceless, everybody knows priceless. And we enable priceless experiences through our partners for consumers. We do all of the above and more.
So when you I think I originally talked to you kind of when you got this job maybe 2022
Feels like yesterday. I don't know what it feels like for you.
Well, it feels like you know there's this comparison between human years and dog years. So it does feel this was an intense period.
There were a few things other than COVID that went on since.
How did you get acclimated so quickly during that period?
You know, it was interesting and we announced the leadership transition here in this building on the 25th of February 2020 actually. So, it was only weeks later. Nobody went anywhere. Nobody traveled. And to get acclimatized with this job to pick up your term, the team around the table needed to, okay, here's a new leader. We're all trying to figure this out. And we all said to each other we don't have a plan there is no playbook for a pandemic that has a gelling function so team rallied okay what do we have to do we have to meet our customers where they are so if anybody has a digital business they're probably going to do better and we have to accelerate that business if you have a physical business with a shop then nobody can leave their house that's a problem so we were adjusting to that in real time. Fortunately we have a lot of data and we could see how behaviors were shifting. So we threw a lot of kind of established beliefs out of the window at the time and said we got to rethink this time. In those periods in those years 21 22 digital only businesses scaled like crazy. We because we're having a leg in the physical economy as well as in digital economy our revenue got severely impacted. You know what that does to a team? You start to get very frugal. You focus really on resiliency. We said we cannot have that ever again. So we invested in technology at that time and said we have to be much more flexible. This was just becoming our sole obsession as a team and it really gelled.
How did you what did you learn about yourself in those early days? Six months into this job, first time CEO, you're it's a pandemic. You're seeing numbers that nobody's ever seen before. And look, I really firmly believe a lot of executives that managed to that period have set themselves up for success five to six years later because of that what they went through.
It was a big learning. Well, one of the things that I picked up was it's good to be in the office. So every day I drove to the office including my predecessor who was our exec chair for a period of time. Every day we showed up here and there was five of us. One gentleman from our canteen company who was brave enough to come in this office. Yes. Yeah. It was five of us, security person, one of my colleagues who brought his dog because his dog sitter wasn't around any longer. And this was the think tank, the group being with people was important at the time. But the people aspect is the bigger point that I want to make is there was a lot there in leadership that came to the forefront where everybody was dealing with fundamental things in their lives. There was fears and you know kids were at home and people had to just adjust their lives in dramatic ways. So the empathy part of leadership just dialed up. You know, I had a very technical job before as a chief product officer and suddenly there was this other element and it just in a short period of time probably balanced me out a bit. I hope for the better. That was very helpful. You back to the first your first question, we really accelerated making this company more resilient. We invested in the fundamentals technology and saying probably we will have more change in the coming years than we've seen in the last 20 years since the IPO or 15 years at that time or in the last 60 years even. So it's accelerating more. We have invested in those years from 22 to 23 completely rearchitecting our global network. So the people side of it investing in resilience and making our technology much more flexible making the fundamental point is not about the card despite the fact that we are called Mastercard but when you see us out there you don't see the word you see the two interlocking circles that generally stand for trust and we're becoming a company that is basically involved in driving value exchange of any kind.
How has the business changed versus when you took over? What are some of the biggest changes?
Diversification of our revenue is kind of like for example something that investors observe. So there's a big part of our business that helps us differentiate a Mastercard payment from another payment. Let's say a local payment network in country ABC that will be that payment is most likely not as secure as a Mastercard payment because we have more data to train our models to approve decisions your payments to be good or not good in a much more effective way. So those services we sell them to our customers, we sell them to other customers that use payment networks and so forth. So this diversification in cyber security space massive that's a big change our geographic spread we used the time to be in more markets and open more offices around the world so that we are more global most notably China we now have domestic license in China that increases our footprint absolutely dramatically in the underlying infrastructure part of payments there's something that you know people in our industry call rails so behind the terminal. Yeah, there's this wire that goes into something that's the card rail, which is our global network. Where does it even exist? Like, it's just out there in the air somewhere. It's the ether. It's in the ether, but you know, it is in a set of data centers around the world. So, it's very physical in a way. So, we invested in that network and that has much more reach today. And if you take today's geopolitical landscape and you compare it to five years ago. So during COVID we saw supply chain fragmentation generally speaking with you know goods couldn't flow. So countries were asking themselves well what do I do if I can't get what I need? So I need to be more self-dependent. Today we have that accelerating with more geopolitical pressure that further accelerates fragmentation in the global political geopolitical landscape. So imagine you're a global company like ours. We need to be able to adjust more flexibly in our network what a country wants in their country and what a country is quite happy to consume from other countries. So that was all in that year we basically the notion was run anything anywhere. If we deal with India and they want it like this great then we can do that and if we in another country yet again something else it's to ensure that it's not thousand flowers bloom but some sort of an organized fashion to adjust to a more fragmented world. That is how the business has changed. So today we can do that. Just today we announced the partnership with the UAE for exactly that. We're going to be their national payment switch. That's a big deal. If we hadn't done the homework back in the years 22 23 we couldn't be able to do that today in a world where everybody every company is trying to engage consumers and compete for the next company that's also trying to engage that same consumer better offers that come in your email some of them feel super random and you just delete them I do that
I assume they're coming from an AI bot
Yeah yes but that would be a bad AI bot most likely
So you know insights consumer engagement big topic big part of our business today.
It was at the time but we grew that much more. We acquired Dynamic Yield is a large company you know it was originally busy in the personalization space right offer at the right time that feels if you permit the data to be used in your personal context with your personal preferences. Wouldn't that be helpful? So you don't have to delete everything. It just comes in the right way.
Well I never delete anything from Mastercard just because I'm sorry. I never delete anything from Mastercard.
