Mastercard Incorporated · NYSE:MA
Mastercard — 2009 ATM, Debit & Prepaid Forum
32 slides from Mastercard's conference presentation, Oct 19, 2009
Slide 1: Debit Business Overview
Tim Murphy Luke Olbrich Group Executive, Core Products Head of Debit, Europe October 19, 2009 Debit Business Overview ATM, Debit and Prepaid Forum Investment Community Update
Slide 2: Forward-Looking Statements
Forward-Looking Statements Today’s presentations may contain, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current assumptions, expectations and projecti
Slide 3: Opportunities: A Good Time for Debit
Opportunities: A Good Time for Debit U.S. – Debit card use has Europe – There is a significant displaced cash, not credit cards, opportunity to capture domestic over the past two years transactions like never before Debit is a fast-growing non-cash payment method globally … & the least-impacted prod
Slide 4: MasterCard's Global Debit Strategy
MasterCard’s Global Debit Strategy • Win new business • Retain and grow customer profitability • Product innovation • Develop/strengthen debit infrastructure October 19, 2009 4
Slide 5: MasterCard Offers a Flexible Global Product Suite to Meet Local Needs
MasterCard Offers a Flexible Global Product Suite to Meet Local Needs ATM PIN Debit Signature Debit • ATM • PIN POS • Signature Debit • Prepaid • ATM • PIN POS • Prepaid • ATM • Prepaid October 19, 2009 5
Slide 6: Global Strategies at the Local Level
Global Strategies at the Local Level Flexible global approach MasterCard's global debit platform accommodates local market dynamics while helping banks drive for profitability and meet consumer needs October 19, 2009 6
Slide 7: Aligning Strategy and Investment to Market Maturity
Aligning Strategy and Investment to Market Maturity Markets across the globe are in different phases Emerging Growth Mature Education & Increased Savvy Portfolio Awareness Utility Segmentation • Build awareness of • Driving usage away • Segmented product the basic product from the ATM to suite to ma
Slide 8: United States and Canada Market Recap
United States and Canada Market Recap
Slide 9: Latin America, Caribbean Region
Latin America, Caribbean Region 45 countries
Slide 10: Debit Strategy: Core Components (LAC)
LAC Region Debit Strategy: Core Components Move ATM Key Customer Transactions to POS Alignment • Expand acceptance across everyday merchant • Secure key customers in priority markets categories • Align product segmentation strategies with • Use education and promotion to change key customers consume
Slide 11: Brazil: Driving Cash to Debit
LAC Region Brazil: Driving Cash to Debit • The largest emerging market in the world1 • Cash is the main payment used; ~56% of Personal Consumption Expenditures (PCE)2 • Annual debit card spending is twice that of credit cards1 • Consumer education is key to displacing cash at the POS 1Lafferty, Worl
Slide 12: Brazil: Increasing Debit Activation
LAC Region Brazil: Increasing Debit Activation • Caixa Economica Federal Debit Program identified debit card knowledge gap • Education efforts focused on consumers and retail branch employees • Resulted in 33% YOY increase in number of debit transactions; 64% increase in purchase volume (Sept.-Nov.
Slide 13: Mexico: Capturing Debit Through Segmentation – Affluent
LAC Region Mexico: Capturing Debit Through Segmentation – Affluent • Affluent have needs for convenience, benefits, security and access • MasterCard built a differentiated debit value proposition for this segment in Mexico • Platinum Debit MasterCard, the first affluent debit program in Mexico, was
Slide 14: Asia Pacific, Middle East and Africa Region
Asia Pacific, Middle East and Africa Region 111 countries
Slide 15: Debit Strategy: Core Components (APMEA)
APMEA Region Debit Strategy: Core Components Enhance Core Debit Product Proposition Innovation • Enhance core products with improved • Complementary technologies to facilitate secure consumer value propositions payments, P2P, contactless and consumer • New products “fit to serve” geographic / • Comp
Slide 16: Australia: A Mature Market
APMEA Region Australia: A Mature Market • Debit cards are the most popular form of payment card, representing two-thirds of all cards issued1 • PIN debit infrastructure is highly developed • Maestro resides on 62% of PIN debit cards2 • Signature debit is relatively new and growing 1Lafferty, World C
Slide 17: Targeting Gen Y in Australia
APMEA Region Targeting Gen Y in Australia • Introduced 12-month signature debit campaign targeting youth population • Segment is credit averse, travels extensively, makes frequent online purchases • Meeting local market requirements led to strong results Campaign drove brand affinity and card acquis
Slide 18: Europe Region SEPA Overview
MasterCard Worldwide Europe Region SEPA Overview
Slide 19: Evolution of SEPA
Evolution of SEPA Current situation SEPA will... • 16 national debit schemes • Provide cardholders with a payment card they can use across Europe • Heterogeneous cardholder experience, domestic debit cards are • Increase competition and transparency not accepted everywhere in Europe • Lower barriers
Slide 20: Multiple Initiatives with a Common Goal
Multiple Initiatives with a Common Goal European European Central Bank Payments Council SEPA Progress Report SEPA Cards Framework Driving a single payment Developing the options, standards area for the euro zone and implementing SEPA DG Internal Market DG Competition and Services Retail Banking Sect
Slide 21: The Payment Services Directive (PSD)
The Payment Services Directive (PSD) Key PSD Components • A legislative initiative covering SEPA from European Commission’s DG Internal Market • New “Payment Institutions” • Approved by European Parliament on • Access to open payment systems April 23, 2007 and effective nationally no later than Nov.
Slide 22: Impact for MasterCard
Payment Services Directive PSD has very limited impact on Impact for MasterCard as most of the requirements have been in place MasterCard Changes involved focus more on the creation of such requirements for SEPA Credit Transfers and Direct Debits October 19, 2009 22
Slide 23: SEPA Cards Framework (SCF) Timeline
SEPA Cards Framework (SCF) Timeline March 08, 2006 Jan. 01, 2008 Final approval by EPC of SEPA-compliant products available SEPA Cards Framework by banks/providers to consumers and merchants MasterCard SCF and Bank SEPA Compliance Implementation End of Q1 2006 Dec. 31, 2010 National and internationa
Slide 24: SEPA Cards Framework Update
SEPA Cards Framework Update • Virtually all cards in Europe are now enhanced with an international, SEPA-wide brand • More than 90% of all terminals now accept Maestro • 2007 DG Competition and resulting EPC “clarification” effectively promote the maintenance of the national schemes until competing
Slide 25: SEPA Driving Increased Inter-card Scheme Competition
SEPA Driving Increased Inter-card Scheme Competition 2007 2009 Monnet Enhanced inter-scheme competition for payments from new entrants like MasterCard—from approximately 17 ATM and POS schemes to over 20 today October 19, 2009 25
Slide 26: What's Changed Since the Launch of SEPA?
What’s Changed Since the Launch of SEPA? Retailer Retailer Before 01.01.08 Irish Acquirer Driven Issuing Bank Any Acquirer Retailer Choice After 01.01.08 from Anywhere Issuer Driven MasterCard has begun processing domestic debit in virtually every European country October 19, 2009 26
Slide 27: MasterCard Positioned to Capture a Large Opportunity in Europe in Light of SEPA
MasterCard Positioned to Capture a Large Opportunity in Europe in Light of SEPA Dual product “Worldwide PIN debit solution, with “Global debit proposition” proposition extensive European acceptance” Europe debit card numbers1 Europe debit card share1 MasterCard 63% Largest card share Visa 33% Others
Slide 28: Five Pillars to Drive Debit Growth for MasterCard in Europe
Five Pillars to Drive Debit Growth for MasterCard in Europe • Enhance dual product offering • Deliver on issuer agreements • Get merchant preference • Increase processing • Develop infrastructure October 19, 2009 28
Slide 29: Retailer-Driven SEPA: Central Acquiring, Increased Choice
Retailer-Driven SEPA: Central Acquiring, Increased Choice Under Pan-European Brands • BP introduced first major rerouting of co-branded local brand-Maestro cards as Maestro-only in the Netherlands • Completely transparent to consumers ... with Maestro matching the local PIN scheme • Now driving dome
Slide 30: Issuer-Driven SEPA: PAYBACK Launch of Maestro-Only in Germany
Issuer-Driven SEPA: PAYBACK Launch of Maestro-Only in Germany • Most successful loyalty program in Germany; 2 out of 3 households have a PAYBACK loyalty card • Re-launching existing PAYBACK merchant-only debit card as a free PAYBACK Maestro card • A decoupled debit card available to all PAYBACK loya
Slide 31: Retailer and Issuer SEPA Migrations Drive MasterCard Business Across Europe
Retailer and Issuer SEPA Migrations Drive MasterCard Business Across Europe Austria • In Austria, all banks have migrated from the local brand to Maestro • In Ireland, individual issuers have migrated the brand/cards to Ireland Maestro-only and retailers are rerouting co-branded cards as Maestro • I
Slide 32: MasterCard's Global Debit Platform
In Summary MasterCard's Global Debit Platform • Focus on profitability • Address diverse customer needs • Ensure effective market-level delivery October 19, 2009 32