We were all there cheering and say this is a good thing. It's a discontinuity and we're looking for discontinuities to provide more value in a fast-changing world. What we cannot do is look in the rear view mirror and say hey you know what we have works and it does but I think there are many more choices coming. So constructive competitive paranoia I think is the mindset we need to have and then I think what is at stake is also an opportunity for us.
That's Michael Miebach, CEO of Mastercard, the global credit card and payments juggernaut. I wanted to talk to Michael to get his views on the recent holiday shopping season and what it indicates about consumer sentiment. I also wanted to ask about AI's impact on the security of financial transactions and what the role of credit cards might be in a crypto-adjusted agentic commerce future. Michael, as it turns out, has been asking himself and his company many of the same questions as he looks ahead at 2026 and beyond. So, let's get to it. I'm Bob Safian and this is Rapid Response.
I'm Bob Safian. I'm here with Michael Miebach, CEO of Mastercard. Michael, thanks for being here.
Delighted to be here with you, Bob.
You have a unique vantage point on consumer activity. So many payments run through your system from this past holiday season. Do you have yet any observations about consumer spending or customer sentiment? Any sort of emerging trends or lessons you've seen yet?
Right. You know, when you think about what we do, we facilitate payments all around the world. So that provides a really interesting data set across all sectors, across all countries, 220 countries and territories. Last year we had about 160 billion transactions on our network. So it does provide quite a unique view. The past holiday season, 3.9% was the year-over-year growth. So that's a strong holiday season. You think political uncertainty, trade alignments and all these kinds of things, but the consumer held up well. One thing that I thought was striking is that apparel sales. We see this by categories, we don't see individual Mastercard holder data, but the aggregate data of what are people buying and where are they buying it. Apparel sales had a real moment. 7.8% growth in apparel, really a standout category this particular season compared to last holiday season. Consumers came in early, it's a continuation of what the consumer has done throughout 2025. I can look for a better deal, I can look for a promotion. Black Friday was particularly strong and then you look thereafter. So the savvy consumer is doing that and so are businesses. Businesses were also worried about potentially sitting on inventory through that. So they're trying to sell their inventory and put out offers earlier. So interesting to see what we're going to see in 2026. The word affordability at least in the US has become like this big buzzword and it sounds like you're seeing that in some of the data, that that's where people are leaning. When you look at the 3.9% overall, you would say is that inflation? No, about half is price increases, so pretty tame, and the other half is real volume increase where people were still making investments into the things they wanted to buy.
It's interesting. You must see data every day about spending patterns and changes. I'm curious how that impacts your planning and strategy. I had a CEO on the show out of the tech world recently who said he's now replanning every week, that even monthly is too late. Very different leadership perspective from three-year, five-year plans. Is your system different because of the speed of the feedback you get?
You know, five years ago we rearchitected Mastercard's network. We're in more and more countries around the world. We're facilitating more and more types of payments that might have been from an account to account are now happening on card rails or stable coins or you name it. So we had a rearchitect from that perspective that is not really changing our plans. What is changing our plans is if consumer behaviors and consumer choices are changing in more fundamental ways. Younger consumers like buy now pay later. So we got to have that built into our system. Those are the kind of changes. They are not short-term changes. These are ups and downs from the economy. We capture that. The system can handle that. But where are the payment trends going? Where do we invest to really understand where consumer or business payments are going? The payments need to be smarter, faster, safer, all those kinds of things. That's where we're investing, but that's not from week to week. We look out two, three years and then we make those technologies available for our customers, which are generally banks or large merchants or airlines.
You mentioned buy now pay later. A business like Affirm that went public last year. Is the credit card buy now pay later? What's the distinction? Why do people get so excited about it?
It's yet another payment choice out there. Payments have not been more competitive than they are today. You can pay in stable coins, you can have a push payment, you can have a prepaid payment, you can have a buy now pay later. This goes straight to essentially a personal loan kind of equivalent. So those are choices and if we see them amongst consumers or the customers of our customers, then we make them available. If you are a buy now pay later pure play company, you're going to find large merchants, large brands that are going to have these offers on their websites and in their stores if they have physical stores. The way that we did it, we built it just as an offer into our network. So wherever Mastercard is available, one of our acquiring partners can offer at the checkout terminal in-store a buy now pay later. So JP Morgan or Galileo are partners like that of us, they make that available. The initial craze of buy now pay later died down a bit. I think it's a very credible choice. We offer it and a lot of young people think this is a good idea because it gives you more planability of your interest payments and all that. We also think that loans on cards where you say you pay $500 on a card and you turn that into three payments, many banks just offer that and it's not going into a buy now pay later route but it's the same outcome. In the end, people want more control over their finances and more flexibility to buy bigger things that maybe they cannot afford in the moment and different solutions to that. We're all about consumer choice and we make all of that available.
You're also a brand. I'm curious how you think about distinguishing that brand going forward. This term 'what's in your wallet' has become ubiquitous. That's Capital One, right? In some ways, your customers become your competitors. How do you think about distinguishing yourself in that kind of noisy, evolving market?
Branding in our business is about trust. You're facilitating a payment transaction about somebody's money that it's hard to earn. So what's going to happen if something goes wrong? If you see the two interlocking circles of our brand, it's going to work. It's always on and if something goes wrong I can complain and if I didn't do that transaction and I approve it, we'll get your money back. That is what happens when you deal with Mastercard. 'What's in your wallet' is great but what I personally prefer is 'priceless'. That's one of the most iconic advertising campaigns. We have invested in that a lot. A bank is generally a local institute. Capital One is mostly in the United States but they have customers that travel around the world. So what do we bring? We bring access to Fast Lane in airports. How do you get into the leading restaurant in the city of your choice during your Christmas holiday or how do you get into that Live Nation concert where all the tickets have been sold out? Those are all sponsorship partners of ours. They're all part of our investment into our brand.
I'll sometimes ask a version of this question to an auto company CEO about what they drive. What cars do you carry around? Do you sometimes use a Visa or American Express to test them out?
No, I never touch anything but having a Mastercard in my wallet.
Bob, if I had a wallet, generally it all lives on my phone. That's the first thing. The key word you just used is 'test out'. So I test out a lot of our own cards. Try this new program, try that new program. And how would I ever know how it feels as a consumer if I don't use competitor products? You just have to be careful when I pay with what so people don't misinterpret me paying with another brand and saying I have an issue with that. No, I got to know how it feels and I used to be our chief product officer. So I call our chief product officer and say, 'Hey, I think there's something that we could do better or differently.' I encourage my team to do the same thing. We got to know what's going on.
You don't carry a wallet in the same way. And obviously we've had this drastic evolution from physical cards and checks and even cash to contactless tap and digital wallets.
Is this new standard going to stay or do you think things will keep moving to things like biometrics or face scanning? I know you've talked about more personalized payments. Is that what you mean?
That's not quite what I mean. But when you think payments, it's a constant evolution. So it's not going to stay where it is. It took 10 years for contactless to get what it is today. You tap with your phone, you tap with your card. About two-thirds of global transactions on our network are now contactless. What is now a big driver for the next kind of experiences is where checkout really becomes a non-issue. It just kind of disappears. So we put a lot of focus on making checkout a non-event. An enabling technology for that is tokenization. You take your card data and you turn it into a one-time code that can only be used for the transaction that's securely shot between the different participants in the payment ecosystem. Very safe. Now, you can do the same thing with your biometric identity, your fingerprint or your facial. And that comes along with that transaction token and anybody on the other side can see that is the transaction and it should go through. So it increases security dramatically. We invented tokenization in the payment side many years back and it's now scaling. We made a commitment that starting with Europe, by 2030 every transaction will be tokenized. On that basis, the checkout moment is just going to really recede to the background.
More choice, more opportunities, easier and safer transactions. Michael paints a fairly rosy picture for the future. Now, we dig into AI's impact on the security of financial transactions, what he's doing to unlock new opportunities for Mastercard, and the lessons that people most miss about global markets. Let's jump back in with AI. I worry sometimes that by doing a show like this, someone can take my image and can deep fake me and if my face is my access to my financial life, how do we protect against that? First of all, I'm real, so that's good. This conversation is actually real.
