Mastercard Incorporated · NYSE:MA
Mastercard — Investor Day (November 2021)
73 slides from Mastercard's investor day presentation, Nov 10, 2021
Slide 1: Mastercard Investment Community Meeting
1 ©2021 Mastercard. Proprietary and Confidential
Slide 2: Agenda
Agenda Embracing new networks Strategic priorities 04 Jess Turner, Steve Smith, 01 Michael Miebach Chris Reid 05 Break Expanding in payments 02 Craig Vosburg, Jorn Lambert, Linda Kirkpatrick Financial perspective 06 Sachin Mehra ©2021 Mastercard. Proprietary and Confidential Extending our services 0
Slide 3: Mastercard management presenters
Mastercard management presenters Michael Miebach Craig Vosburg Jorn Lambert Linda Kirkpatrick Raj Seshadri Chief Executive Officer Chief Product Officer Chief Digital Officer President, North America President, Data & Services ©2021 Mastercard. Proprietary and Confidential Ajay Bhalla Jess Turner St
Slide 4: Forward looking statements
Forward looking statements Today’s presentation 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 projectio
Slide 5: Strategic priorities
Michael Miebach Chief Executive Officer Strategic priorities 5 ©2021 ©2021 Mastercard. Mastercard. Proprietary Proprietary andand Confidential Confidential
Slide 6: Significant opportunity ahead
Significant opportunity ahead Tailwinds to payments, opportunities for technology and service leaders Commerce Society Technology Accelerated digitization Payments modernization Cybersecurity New commerce journeys Localization AI and analytics ©2021 Mastercard. Proprietary and Confidential Security,
Slide 7: Consistent winning strategy: three key priorities
Grow our core Consistent winning strategy: Diversify into new customers and geographies Build new areas for the future Executed by Expand Extend Embrace focusing on three in payments our services new networks key priorities: For consumers, To enhance To enable open businesses and transactions and ba
Slide 8: Realizing growth opportunity in payments
Realizing growth opportunity in payments 1 $255T in flows, fast growth, significant untapped opportunity Driving growth in Capturing Leaning into new consumer purchases new payment flows payments innovations Convenience, trust, Infrastructure, Opportunities applications and ©2021 Mastercard. Proprie
Slide 9: Extending services across multiple growth vectors
Extending services across multiple growth vectors >$6.5B in forecasted 2021 revenue1 Enhance the Expand to new Make new value of payments segments and use cases networks stronger Make payments Drive growth through Add value to Open broader offerings to FIs, ©2021 Mastercard. Proprietary and Confiden
Slide 10: Expanding into new network opportunities
Expanding into new network opportunities Fast growing new markets, support payments Open Banking Digital Identity Other new networks Help institutions and Enable identity Explore additional solutions across ©2021 Mastercard. Proprietary and Confidential individuals exchange opportunities in data sec
Slide 11: Our success is powered by…
Our success is powered by… People Technology Brand ©2021 Mastercard. Proprietary and Confidential Doing well Data Franchise by doing good 11
Slide 12: Key takeaways
Key takeaways Expand leadership Differentiated Unlock adjacent in payments services growth opportunities ©2021 Mastercard. Proprietary and Confidential Significant short- Focused strategy, and long-term clear prioritization growth 12
Slide 13: Expanding in payments
Expanding in payments Craig Vosburg Chief Product Officer Jorn Lambert Confidential Confidential Chief Digital Officer andand Proprietary Linda Kirkpatrick Proprietary Mastercard. President, North America Mastercard. ©2021 ©2021 13
Slide 14: Significant opportunity with specific flows targeted for growth
Significant opportunity with specific flows targeted for growth Volume in $ trillions P2M B2B/G2B P2P/B2C/G2C TOTAL Total flows $45 $135 $75 $255 Targeted flows $45 $50 $20 $115 8 20 Consumer bill payments 24 12 B2B accounts payable flows 14 14 Commercial point of sale ©2021 Mastercard. Proprietary
Slide 15: Strategic priorities in payments
Strategic priorities in payments Driving growth in Capturing Leaning into new consumer purchases new payment flows payments innovations Convenience, trust, Infrastructure, Opportunities through applications and ©2021 Mastercard. Proprietary and Confidential ubiquity and customer new technologies and
Slide 16: Consumer purchases
Consumer purchases $37T1 market opportunity to continue driving growth in core payments Acceptance growth Acceleration of digital ©2021 Mastercard. Proprietary and Confidential New use cases and partnerships 1. Source: 2021 – Oxford Economics, Euromonitor, Kaiser, McKinsey, Findex (World Bank), Delo
Slide 17: Acceptance growth driving cash displacement
Acceptance growth driving cash displacement >80M merchants and growing at a ~15% CAGR1 Channel Tap on Phone partnerships Acceptance growth Contactless Cloud commerce accelerators ©2021 Mastercard. Proprietary and Confidential QR code 1. Unique merchant locations (physical or virtual) as of Q3 2021;
Slide 18: Capitalizing on digital growth
Capitalizing on digital growth Digital commerce is growing rapidly Q3 2021 card-not-present volume as a percentage of 20191,2 Bolstering our position in digital with new solutions 145% Card-not-present, non-travel spend increasingly driving cross-border Card on file Digital Q3 2021 cross-border card
Slide 19: New economy use cases fueling growth
New economy use cases fueling growth Innovating with fintechs Mastercard Developers APIs Developer tools ©2021 Mastercard. Proprietary and Confidential Start Path 19
Slide 20: Innovating with banks and merchants
Innovating with banks and merchants Mastercard differentiators Improved global market share position across all core products1 Our Consumer credit Data partnership and insights Consumer debit ©2021 Mastercard. Proprietary and Confidential Commercial Products Priceless Prepaid and innovation marketin
Slide 21: Mastercard Installments
Mastercard Installments Buy Now Pay Later at scale 2022 launch markets Unparalleled acceptance across ✓ Mastercard’s global merchant network ✓ Low touch integration for merchants U.S. U.K. AUS Beyond cards – enables any lender ✓ to extend installment loans through our network ©2021 Mastercard. Propr
Slide 22: Capturing new payment flows
Capturing new payment flows Infrastructure Applications Services Go-to-market Expand Target Overlay Scale network access specific services distribution and reach flows ©2021 Mastercard. Proprietary and Confidential 22
Slide 23: Disbursements and remittances
Disbursements and remittances $32T1 opportunity for Mastercard Send and Cross-Border Services Extensive reach… …and 40+ use cases 10 69 17 card ACH mobile ✓ Disbursements ✓ P2P networks schemes wallets ✓ Remittances ✓ Refunds 300+ 3 40 ©2021 Mastercard. Proprietary and Confidential cash out payment
Slide 24: Disbursements and remittances
Disbursements and remittances $32T1 opportunity for Mastercard Send and Cross-Border Services 650+ distribution partners… …driving volume and revenue growth Volume growth2 ~45% Percentage of ©2021 Mastercard. Proprietary and Confidential Mastercard revenue3 ~2% 1. Source: 2021 – Kaiser, McKinsey, Ai
Slide 25: Commercial point of sale transactions
Commercial point of sale transactions $14T1 opportunity with targeted solutions by segment • Small business cards Target specific • Corporate cards (T&E) flows • Purchase cards • Fleet cards Volume growth2 ~13% • Consulting • Fraud management Overlay services Percentage of • Cyber security solutions
Slide 26: B2B accounts payable flows
B2B accounts payable flows $24T1 opportunity for Track Business Payment Service, virtual cards and supply chain financing • Virtual cards Expand access • Account to account rails and reach • Real-time payments Volume growth2 ~20% • Fraud management • Consulting Overlay services Percentage of • Data
Slide 27: Consumer bill payments
Consumer bill payments $8T1 bill payment opportunity • Card payments Expand access • Real-time payments and reach • ACH • Consulting Percentage of Mastercard revenue2 • Fraud management Overlay services • Identity solutions ~2% ©2021 Mastercard. Proprietary and Confidential • Loyalty solutions Scale
Slide 28: Building solutions to support the crypto economy
Building solutions to support the crypto economy Crypto enablement Crypto services Network access Buy Security and fraud Stablecoins services (CipherTrace) Spend CBDCs Identity services (Ekata) ©2021 Mastercard. Proprietary and Confidential Cash out Custody services Interoperability Rewards CBDC san
Slide 29: Key takeaways
Key takeaways Driving growth in Investing to capture new Leaning into payments consumer purchases payment flows innovation ©2021 Mastercard. Proprietary and Confidential A long and attractive runway for continued growth in payments for Mastercard 29
Slide 30: Extending our services
Extending our services Raj Seshadri President, Data and Services Confidential Ajay Bhalla Confidential andand President, Cyber and Intelligence Solutions Mastercard. ©2021 ©2021 Proprietary Proprietary Mastercard. 30
Slide 31: Driving growth, differentiation and diversification
Driving growth, differentiation and diversification >$6.5B in forecasted 2021 revenue1 Enhance the Expand to new Make new value of payments segments and use cases networks stronger Make payments Drive growth through Add value to open broader offerings to FIs, ©2021 Mastercard. Proprietary and Confid
Slide 32: The evolution of services
The evolution of services 2012 2018 2021 • Real-time, AI-driven analytics • Early fraud tools • Cyber solutions • Digital first services + + • Consulting • Biometrics • Performance-based, contextual • Marketing services • Data analytics marketing Solutions • Affluent card • Test & Learn • Digital en
Slide 33: Our advantage—unique data-driven intelligence
Our advantage—unique data-driven intelligence Portfolio Consumer benchmarking Cybersecurity engagement Macroeconomic Intelligence Center CyberQuant Loyalty Rewards SpendingPulse Daily Trends Risk Recon Contextual Marketing Economics Institute ©2021 Mastercard. Proprietary and Confidential Identity F
Slide 34: Data and Services
Raj Seshadri President, Data and Services Data and Services ©2021 ©2021 Mastercard. Mastercard. Proprietary Proprietary andand Confidential Confidential 34
Slide 35: Enabling smarter decisions with better outcomes
Enabling smarter decisions with better outcomes Data and Services areas Customer-centric solutions Innovation Smarter decisions Discover Recommend Insights Expertise Our data Analytics Your data Analytics Other data Software Test and learn Discover Recommend Issuer loyalty ©2021 Mastercard. Propriet
Slide 36: Critical driver of customers, talent and technology
Critical driver of customers, talent and technology Growing customer footprint Key source of global talent Cutting-edge technology >3,000 >2,000 ~600 Customers Data scientists, Patents1 banks, merchants, governments engineers and consultants ©2021 Mastercard. Proprietary and Confidential ~4/5 70+ 15
Slide 37: Enhancing and expanding customer relationships
Enhancing and expanding customer relationships Financial institutions Merchants Digital Governments ©2021 Mastercard. Proprietary and Confidential Greece 37
Slide 38: Key takeaways
Key takeaways Enhance the Expand to new Make new value of payments segments and use cases networks stronger ©2021 Mastercard. Proprietary and Confidential 38
Slide 39: Cyber and Intelligence
Ajay Bhalla President, Cyber and Intelligence Solutions Cyber and Intelligence ©2021 ©2021 Mastercard. Mastercard. Proprietary Proprietary andand Confidential Confidential 39
Slide 40: Key trends continue to drive the need for trust
Key trends continue to drive the need for trust Digital Next generation Exponential Digitally native Cyber crime as a convergence, AI, quantum, growth in data generation global industry IoT, 5G & Cloud crypto ©2021 Mastercard. Proprietary and Confidential Pandemic accelerated digitization and shift
Slide 41: Multi-layered security strategy
Multi-layered security strategy Prevent Identify Detect Experience Network Secure Identify genuine Stop cyber Physical and Connecting Layers physical, consumers, attacks, reduce digital stakeholders digital and IoT devices and fraud and find experiences to services worlds companies weaknesses that g
Slide 42: Improving trust in the global digital ecosystem
Improving trust in the global digital ecosystem Prevent Identify Detect Experience Network Layers Eliminating Building Consumer Detecting attacks Enhancing digital Extending services to magstripe and Identity digital and protecting consumer experience all transactions and bringing quantum ecosystems
Slide 43: Driving our strategy forward
Driving our strategy forward Extend into Make new Enhance new segments networks payments and use cases stronger 1 AI: Building a competitive advantage 2 Multi-rail: Extending services to all flows Network of services: Connecting all stakeholders 3 to our services 4 Digital currenci
Slide 44: Working in partnership to enable trust and enhance experience
Working in partnership to enable trust and enhance experience ©2021 Mastercard. Proprietary and Confidential 44
Slide 45: Key takeaways
Key takeaways Significant new Cyber and Intelligence services opportunities Extend trust to all Leverage AI to Enhance digital rails drive competitive consumer advantage experience ©2021 Mastercard. Proprietary and Confidential Increase access to Expand segment services specific solutions 45
Slide 46: Embracing new networks
Embracing new networks Jess Turner Executive Vice President, New Digital Infrastructure and Fintech Steve Smith Chief Engagement Officer, Open Banking Chris Reid Executive Vice President, Identity, Cyber and Intelligence 46 Restricted
Slide 47: Expanding into new network opportunities
Expanding into new network opportunities Fast growing new markets, support payments Open Banking Digital Identity Other new networks Help institutions and Enable identity Explore additional solutions across ©2021 Mastercard. Proprietary and Confidential individuals exchange opportunities in data sec
Slide 48: Open Banking
Open Banking Jess Turner Executive Vice President, New Digital Infrastructure and Fintech Steve Smith Chief Engagement Officer, Open Banking 48 Restricted
Slide 49: Diverse and growing set of use cases
Diverse and growing set of use cases Enabling Opening up a Boosting your Personal finance Securing a loan multi-rail for new account credit score management money movement ©2021 Mastercard. Proprietary and Confidential 49
Slide 50: Global expansion of Open Banking in 60+ markets
Global expansion of Open Banking in 60+ markets Europe – EEA Russia Canada Ukraine Kazakhstan Moldova Albania US Macedonia Turkey Montenegro Japan Israel South Korea Saudi Arabia Bahrain Taiwan Mexico India UAE Hong Kong Philippines Malaysia Colombia Sri Lanka Singapore Nigeria ©2021 Mastercard. Pro
Slide 51: Broad-based Open Banking progress
Broad-based Open Banking progress Acquisitions Global partners Digitizing Global expansion mortgage lending Australia >85% 2 (closed) of digital lenders in the top 100 using Finicity Canada ©2021 Mastercard. Proprietary and Confidential data (announced)1 Brazil 1. Transaction has been signed and is
Slide 52: Key takeaways
Key takeaways Continue to build out Our global footprint, Clean, quality data an Open Banking technology platforms connections empower network with trust at and value-added consumers and SMBs its core services set us apart ©2021 Mastercard. Proprietary and Confidential 52
Slide 53: Digital Identity
Digital Identity Chris Reid Executive Vice President, Identity, Cyber and Intelligence Mastercard. ©2021 ©2021 Proprietary Mastercard. andand Proprietary Confidential Confidential 53
Slide 54: Enabling frictionless and secure commerce is critical in an increasingly digital world
Enabling frictionless and secure commerce is critical in an increasingly digital world A bad user experience Organizations are Identity fraud is can lead to customer experiencing enormous one of the largest attrition financial impact challenges 50% $56B 71% say they would switch to in global identit
Slide 55: Identity is core to nearly every digital interaction
Identity is core to nearly every digital interaction Digital front door Background checks • Retail purchases • Employment ✓ • Gaming • Immigration • Digital goods and subscriptions • Income verification • Applications for credit, housing, ✓ ✓ Finance and payments loans, etc. • Digital payments • Ret
Slide 56: Instilling trust while enhancing the user experience
Instilling trust while enhancing the user experience Device Document intelligence proofing Identity is the foundation to establish Payment IP trust in a thriving digital economy authorization intelligence • Differentiated capabilities Identity attributes Biometrics • Privacy by design ©2021 Masterca
Slide 57: Leveraging our differentiated data assets and network reach
Leveraging our differentiated data assets and network reach to serve a broad set of customers ~ 10M ~ 5.5k Merchants Financial Partner integrations institutions ©2021 Mastercard. Proprietary and Confidential ~ 650B ~16B Behavioral Identity events data1 1. Consumer-permissioned Source: Mastercard int
Slide 58: Key takeaways
Key takeaways Identity is core to Focusing on instilling Delivering differentiated nearly every digital trust while enhancing capabilities and network transaction the user experience reach ©2021 Mastercard. Proprietary and Confidential 58
Slide 59: Financial perspective
Sachin Mehra Chief Financial Officer Financial perspective ©2021 ©2021 Mastercard. Mastercard. Proprietary Proprietary andand Confidential Confidential 59
Slide 60: 2017-2021 Net Revenue
2017- 2021 Net Revenue Net Revenue ($B)1 19 17 15 15 12 2017-2019 CAGR 17% 2 ©2021 Mastercard. Proprietary and Confidential 2017 2018 2019 2020 2021 1. All figures rounded to the nearest billion; 2021 forecast as of October 28, 2021 2. Growth rate on a currency-neutral basis; includes acquisitions 6
Slide 61: Multiple growth vectors
Multiple growth vectors Sizeable Significant Differentiated Building Strong untapped opportunity services new long-term consumer + across new + + = portfolio networks growth payment flows and use potential opportunity cases ©2021 Mastercard. Proprietary and Confidential 61
Slide 62: Sizable consumer payments opportunity
Sizable consumer payments opportunity Sizing the opportunity Addressing the un-carded opportunity by… Q3 2019 Q3 2021 2021 P2M opportunity Accelerating card-not-present2 41% 45% ~$45T1 Driving contactless penetration3 30% 48% Of which ~$20T1 is carded Growing acceptance locations4 ~61M >80M ©2021 Ma
Slide 63: Sizable consumer payments opportunity
Sizable consumer payments opportunity Cross-border recovery Growing market share2 As a percent of 2019 Cross- Market share Market share border growth across growth in 16 of the recovery all regions top 20 markets potential driven by 100% 97% travel 64% Recent wins ©2021 Mastercard. Proprietary and C
Slide 64: Significant opportunity across new flows and use cases
Significant opportunity across new flows and use cases Targeted flow Percentage of ($T) net revenue1,2 Disbursements and remittances ~32 ~2% Commercial point of sale ~14 ~7% B2B accounts payable ~24 ~2% ©2021 Mastercard. Proprietary and Confidential Consumer bill pay ~8 ~2% 1. Excludes account-to-ac
Slide 65: Strong services portfolio
Strong services portfolio Services by the numbers… ~21% ~24% ~35% 2018-2021 2021 net revenue Of 2021 net revenue net revenue CAGR growth ©2021 Mastercard. Proprietary and Confidential Note: All figures are on a currency-neutral basis, include acquisitions and are based on 2021 forecast as of October
Slide 66: Services revenue breakdown
Services revenue breakdown >$6.5B revenue Key revenue drivers % Recurring Authentication, Cyber and Cybersecurity, intelligence Transaction growth, subscription fees High ~$3.7B Fraud & Risk Insights and analytics Transaction growth, subscription fees High Data and ©2021 Mastercard. Proprietary and
Slide 67: Focused investment priorities
Focused investment priorities Payments Services New networks • Geographic expansion • Cyber and intelligence • Open Banking • Digital enablement • Data and analytics • Digital Identity • New use case applications ©2021 Mastercard. Proprietary and Confidential • Multi-rail solutions Foundational enab
Slide 68: Capital planning priorities – unchanged
Capital planning priorities – unchanged Strong Long-term Return excess Capital balance sheet business growth capital to shareholders structure Preserve strong Invest in strategy- Return excess Migrate to a more balance sheet, led organic and capital with bias normalized mix of liquidity and credit i
Slide 69: 2022 – 2024 performance objectives
2022 – 2024 performance objectives 1 Key Highlights Net revenue CAGR % High-teens • Expand in payments • Assumes annual carded market growth of 4 10-11% 5 • Cross-border travel returns to 2019 levels by the end of 2022 Annual operating • Extend our services margin2 Minimum 50% • Deliver 20%+ service
Slide 70: Long-term revenue growth potential
Long-term revenue growth potential Annual revenue growth potential4 P2M ~$45T1 Services 9-10% carded Share market volume CAGR2 Mix Market volume/ Pricing Low to mid- transactions Applications teens opportunity New networks ©2021 Mastercard. Proprietary and Confidential Targeted new flows and use cas
Slide 71: Key takeaways
Key takeaways Strong financial outlook driven by… Sizeable untapped Significant Differentiated Building consumer payment opportunity across services portfolio new networks opportunity new flows and use cases ©2021 Mastercard. Proprietary and Confidential Delivering positive Continue to operating lev
Slide 72: Appendix
Appendix ©2021 ©2021 Mastercard. Mastercard. Proprietary Proprietary andand Confidential Confidential 72
Slide 73: Appendix A - non-GAAP reconciliation
Appendix A - non-GAAP reconciliation Long-term performance objectives 2022-2024 3-Year CAGR EPS1 Forecasted GAAP Low-twenties Gains/(losses) on equity investments2 2% Special items3 (1)% ©2021 Mastercard. Proprietary and Confidential Forecasted non-GAAP Low-twenties 1. Based on 2021 forecast as of O