August 3, 2011
Along with reporting net income for Q2 2011 of $608 million, up 32.8%, MasterCard’s CEO Ajay Banga and U.S. regional president Chris McWilton also previewed their overall response to the new debit card regulations. The following transcript is courtesy of the Associated Press:
“Q. Have you guys been asked by any of your customers to revisit or renegotiate their contracts at this point, and if so how far are you into that process?
A. (U.S. regional President Chris McWilton): We’re limiting our discussions to issuer contracts to compliance specifically with the regulations. Mainly in situations where we have exclusivity provisions, which are fairly limited on our debit card base … we would have to discuss with our issuers changes in terms and conditions around that.
We believe that the value we provide for our debit network is consistent with the pricing we have in place today. So we think we’re in pretty good shape from a pricing pressure standpoint with those debit contracts.
Q. Will you be responding in any way to Visa’s new fee structure?
A (McWilton): At this point we don’t see a need to match it. We’re going to be thoughtful and very surgical in how we approach the opportunities in P.I.N. and signature debit as it unfolds. There are a lot of moving parts that need to be sorted through and to put in place.
A: (MasterCard CEO Ajay Banga): The basics of everything we have looked at is, we have a lower market share and our position therefore is different. We don’t need to defend as much as find ways to find the chinks in the places that we can build and capitalize on. That’s how we’re looking at it, rather than driving blanket pricing, for merchants large or small or for issuers large or small. We still think our benefit comes from being flexible deal-by-deal and thoughtful deal-by-deal, because of where we stand versus some of our large competitors, who I think are doing things that are appropriate for their market position.”