Payment Methods

MasterCard CFO On X-Border, EMV, Brexit And PayPal

Not too much to be alarmed at, especially bigger picture, according to MasterCard Chief Financial Officer Martina Hund-Mejean.

Speaking at the William Blair Growth Stock Conference on Wednesday (June 15), Hund-Mejean, in an interview with Bob Napoli, an analyst with William Blair, said that not much had changed with the overall business climate since results were announced this past earnings season. Drilling down a bit, though, the executive offered some insight as to how some separate and even nascent trends have been shaping up in the weeks since the company reported results.

Overall volume growth into the end of May, she stated, is running at about 9 percent, down a bit from the 10 percent called out at the last quarter’s end. Beyond that, another significant business driver has been cross-border volume growth, which Hund-Mejean stated is “very, very similar to what we had before — 11 percent or so. And then, we have process transactions, which is also [a] really good indicator in terms of what people are obviously doing across the world, and that has been the same number as what we saw in April at around 14 percent.”

In a separate line of questioning, Napoli asked how MasterCard may be planning for the possibility of a Brexit, which will come to a vote next week and may shake things up internationally. Hund-Mejean stated that, “from an operations point of view, there is really no issue for us … our network has been set up for 210 countries and territories, and we have to be respecting the laws and the regulations at every country. And I don't believe that the U.K. will be immediately changing their laws and regulations. In fact, I would presume, this is a presumption, that PSR will be continuing to adapt what the EU regulation was in the payment industry that have been passed last year.”

As for the continued competitive relationship with PayPal, where the two companies also share a business relationship, the card CFO noted that, in the current process, “you basically take your MasterCard, you fund the PayPal wallet and then you pay the merchant; the merchant doesn't really see that this is a MasterCard transaction … The second issue is, of course, ACH theory. We don't like ACH theory, right? I mean, it's clear, we want consumer choice. We want the consumer to be deciding what they want to do. Do they really want to link their checking account? And do they want to link any of their card product? … Hopefully, there is something that we could do together more in-depth with the company. But, I think, I don't know yet.”

The transition may be months in the rearview mirror, but EMV and its official debut in the United States have brought some issues to light, said the executive: “There are two issues really we're trying to address. One is when you dip your card, it looks to you if the transaction takes longer to complete, but it's actually not true, OK?"

“It's the same time as a mag type transaction, but remember when you swipe the card, then you're busy actually putting the card back into your wallet. So, you're not thinking about all the transaction happening, but if you keep your chip card in there, then obviously you're still like: Can I pull this chip card out, right? So, we are all having a little ADD on this one, I know.”



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