Mastercard Incorporated (MA)

Investor Update

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Sep 9, 2015

Good morning and welcome everyone, either those of you who are joining us here in New York or those who are joining from the webcast. I'm Barbara Gasper, Head of Mastercard's Investor Relations. And on behalf of the entire Mastercard management team, I'd like to thank you for joining us this morning for our Annual Investor Community Meeting. We think that we have put together a program today, which will address many of the topics that we hear you ask about so It's a combination of formal presentations as well as an afternoon with lunch table discussions and Product Demonstrations. Ajay Banga, our CEO will kick off the morning's formal presentation with some comments about how we are progressing on our strategy. We'll then hear from several members of our management team starting with Gary Flood, who's President of Global Products and Solutions, who will provide an overview of our products and services efforts and then hand it over to 3 members of his team who will take a deeper dive into their areas starting with Craig Vosper, our Chief Product Officer Kevin Stanton, President of Mastercard Advisors and Cathy McCall, President of Global Processing. We'll then move to hearing from a regional perspective starting with Chris McWilton, who's President of our North American Markets. Following a brief morning break, Anne Carens, our President of International Markets, We'll give everyone an overview of our non U. S. Operations and then we'll move on to a panel discussion with 3 of her regional leaders, Dennis Chang from China, Gilberto Caldart from Latin America and Javier Perez from Europe, who will each talk about some of the developments in their areas that we know you want to hear about. After that, Martina Hung Meijon, our CFO will provide the financial perspective for the business and then we'll move on to the Q and A session. After that, Ed McLaughlin will give a quick preview of what's included today downstairs in our project experience area and then Ajay will be back for some closing comments. We expect to adjourn about 12:30. Copies of the slides that we're using today can be found in your handouts or on the meeting app being used here in the room and they're also posted to our website under the Investor Relations section. Additionally, an audio replay of this event will be available for 30 days until October 9. Along with our presenters, we have a number of other senior management here with us this morning and rather than go through and introduce all of them, we have included a list of them with their photos in your meeting materials. To help facilitate the dialogue with our executives over lunch, there is a diagram on page 5 of the meeting materials showing the location of several lunch and discussion tables and the executives who will be at those tables. And executives who are not hosting a table will be stationed around the project experience area, so you can grab them and talk to them there. I do want to Make a special call out to the other members of my IR team, Matt Lanford, Jazel Mezzawani, Christy Lewis and Tina D'Amato for all the work and effort they've done to help put this event together today and all of us will be around if you have any questions or things we can help you with afterwards. Just a couple of administrative items to get out of the way before we get started. As in the past, we will have the ability to take questions from those of you participating on the webcast by hitting the Ask a Question button on the webcast player. 2, our agenda does include a brief 15 minute break. For those of you on the webcast, you do not have to reconnect. You can just stay on. And 3, as a courtesy to our speakers and those around you, we ask that those of you here in the room, please silence your mobile devices. And finally, just a reminder that today's presentations include some forward looking statements about our expectations for future performance. Actual results could differ materially from those suggested by our comments today. Additional information about the risk Factors that could affect future results is detailed in our SEC filings including our Forms 10 ks, 10 Q and 8 ks. Now with that, I'd like to turn the podium over to Ajay. Thank you. Good morning, everybody. And Barbara, thank you very much. This room is pretty cool. I mean, you go see the product room downstairs That's actually quite a stunning room. The best part is free because you get listed in the NYSE and we get it free. And Barbara has the cheapest date you can go out with And she's demonstrating that right now. So I'm delighted to be here. It's a little different in construct with the pillars at the back, but it's a nice place to be. So Hi. I've got maybe want to talk to you for 10, 15 minutes max. 10 is what she wants me to do and try and set the tonality for what you will hear from us Over the course of today, right? So the first part is a slide you've seen earlier and that's those 3 concentric circles. And I use it every time in the company. I use it in every one of our town halls. We use it in our discussions because it keeps us grounded on what we are trying to do. And You know that the innermost circle is the actual portion of the total that is electronic. And we'll come in the next page to the fact that it's still 15%. And the rest of it is what's determined by many things that some of which we can control like the effort we make To grow electronic payments versus cash and check, that's the 2nd circle or the one that we don't control, which is how Personal consumption expenditure evolves over a period of time, which is the outermost circle and that tends to grow at between 4%, 5%, 6% a year, Depending on the year, depending on the dynamics of different markets, but broadly those 3 concentric circles are still where our entire strategy is rooted. If you have to grow the 2nd circle, which means grow the share of electronic payments versus cash and check growing the pie, There are certain sets of strategies you can take to do that from working on acceptance from trying to get after the kinds of payments that have traditionally been in cash Be there very small low value payments in the more developed countries and payments or be there also The larger high value payments like college fees and the like which tend to go outside of the traditional electronic payment system. So There's work to do there. But there's always work to do as well in financial inclusion and that's something you'll see us talk about periodically, But there's now still 2,000,000,000 adults who don't have access to any form of an account and therefore no way for them to participate In the marketplace that we think could be continuously driving our growth for many years to come. And so a certain amount of our Energy and effort is spent on being a leader in the space of financial inclusion, just purely to make sure that that pie keeps growing, But also to make sure that governments view us in a form as being helpful to being a part of their transformation of their country and their economy, Something that you will see up ahead is a very important issue for all of us in this industry. If you want to grow your share in the 15% then it's all about building competitive advantage either with tinkering with your products which you will hear off from Craig. We do that all the time or with new and innovative ideas that you will see downstairs, you've seen in past Product demos, you'll hear about some of them today as well or most interestingly by building bundles of services that are adjacent To the old clearing authorizing and settlement transaction, but that put together give you a nice profit picture, but also give you a very good slice Of a recurring revenue stream that belongs in a different segment of the customer's pocket. And so we're trying to get ourselves into being An integral part of all that. And to do that, you've got to touch transactions. If you don't touch them, if you don't see them, if you don't process them, There's only so much you can do with services and innovation. And so a lot of our effort and energy and the money we've invested and it's close to Martina will tell you it's $5,000,000,000 odd. You've probably already seen it in your slides and most of you as Tom Russo reminded me have probably gone to the last page and Seen our guidance and you don't really give a shit about what I'm going to say right now, because all you really care about is let's get to the number. And please don't do that. So stay with me for a little while and Stay with all our paths. We work hard for you. So we'll get there. We'll get there. It's a good business. That's the main thing. Having said that, That bloody 85% hasn't changed in 6 years. So you guys are probably saying he says the same stuff every time and it's still 85%. And the issue is it's a leaking bucket that we are dealing with. And that's because in the developed world and in the emerging markets, the ratio of cash To total personal consumption expenditure has reduced. It's down almost 200 basis points in the developed world over these last 3, 4 years. It's down almost the same number in the emerging world. The problem is because the PCE in the emerging world is growing way faster And the PCE in the developed world, the weighted average math brings it back to 85%. Now that's kind of a good problem to have because it's got The idea of a long runway of growth, but it can be somewhat frustrating if you're trying to evaluate yourself against how you're doing on the 85. You really are doing well in both different kinds of markets, but the growth of personal consumption expenditure is changing the way this number gets perceived. So there's lots going on in the industry and I'm not going to go through every one of these, but I'm going to walk through 3 or 4 thoughts. There clearly is an accelerating trend in the space of moving payments from cash and check to electronic. There is By the developed world, by the emerging world. Countries in the emerging world that never talked about electronic transactions are now openly saying We want a cashless country, a cashless Nigeria, a cashless Egypt. Even the Indian Prime Minister who India is the poster child for how not to pay your taxes in some ways. But even the Indian Prime Minister is out there publicly talking about the idea Of a cashless society. That's very different from 5 or 6 years ago, when every person we met in the world outside Never paid any heed to the importance of this. So their efforts combined with digitization, combined with all the secular trends Of urbanization and the like is clearly changing the way this pathway to electronic will operate. At the same time, the other side of that is that those very same governments are viewing electronification of payments as critical to their future, Which means they're far more interested in how it builds, how it develops, what the rules of the road are, who the players are and how they will operate in that ecosystem. So we get heightened regulatory interest. And sometimes that regulatory interest as you know is not necessarily your friend. And other times, it actually can be a facilitator for accelerating the shift of electronic payments of shifting into electronic payments. And There are examples in Egypt and examples even in Europe right now, which Javier will get a chance to talk about that could fit into that thinking. Combined with that is a far more demanding consumer experience where they want this omnichannel experience where all of you and I Are doing the same things. We search online, buy in a store and return by mail. We will want That happened in every form of commerce and business we are doing. And so I don't think one replaces the other. It's the seamlessness Of the consumer experience that will determine how well that system works. And that rapidly evolving consumer experience He's also very much a part of what's changing in our world. And then of course there's the whole industry dynamics. You've got maybe Visa and Visa Europe coming together. That's a different place To be the way we've been. You've got new and innovative companies coming into the space. You've got digital giants looking for their space in the sun. You've got banks saying we'd like to operate the way we want to and do the things we think we can do the best with our consumer. You've got merchants Who clearly are occupying a different role than they used to in the payments ecosystem and the power they exercise and how that works. And so There's a lot of things going on in this place. And the one thing I do feel relatively good about is that in addition To the acceleration of the trend for electronic payments and the runway that provides is this demand for adjacent services that I see coming up From every client and every single merchant and bank and government. When you talk to them About loyalty. When you talk to them about safety and security, when you talk to them about the power of data and analytics, When you talk to them about managed services and about the power of payments consulting, there is a very different dialogue That results. It's not that we don't have to discuss how to win or lose a deal. You still have to do that. But there's a very different dialogue There's a very different revenue stream with a very different form that we're building consistently and steadily. And that to me is all that's going on inside the industry. So That's our last my last slide and I've got 54 seconds on that clock. Barbara told me when I started, there's a clock there. It gets to red, it means it's time for you to shut up. And I said, I am color blind. I don't see colors well. So that's one of the problems. Yeah, yeah. So Strategy hasn't changed. Grow, diversify, build. That's the first three things. Grow our core business. If you don't keep growing Credit, debit, prepaid and commercial. I'm not talking about cards. I'm talking about the forms of payment. Credit, debit, prepaid and commercial. People will consumers will either pay earlier, Pay now or pay later. That's not going to change. That's prepaid debit and credit. And then there's a whole commercial space, which hasn't even come up right now what I'm saying, but It will when Craig is on stage. You will see the efforts we're putting into that space. That by the way was not in the numbers of the 85%. That's another Aspect altogether, you will see us very focused on growing at core faster than the market. The second part is diversifying the kind of customers we deal with. And you've seen that over the years, the digital giants, governments are now customers, merchants are customers through The data and analytics service not just payments customers. And so there's a lot going on in diversifying our customers. In the United States, In North America, half our sales force now covers merchants. Half covers traditional issuers. They've both grown by the way, But it's half half. It wasn't that way 5 or 6 years ago and Chris can tell you about that. And then we're trying to build new high growth businesses and that's the adjacent services I was talking about that's principally in that space. So a lot of the investments we've done in the last few years fit into that grow, Diversify and build. But they're built on a platform of the right technology and innovation recognizing that even though we're a B2B business We are not a B2C business. We do have B2B2C. And therefore, going to our bank clients and our merchants And the governments with a deeper, more focused consumer facing insight is a key part of what we're trying to do. That connected to innovation, which Guy Lyons has been driving for us with Edward Clarklin and their team is part of what we've built into everything we're doing. Craig will talk about it. You'll see demos downstairs. Gary will talk about it, but that's what we're up to. That built on safety. And again downstairs in the product demos, you will see the efforts we're doing on securing the consumer, the person securing the transaction And also securing the whole process by which the whole system works. You'll see all 3 with Ajay Bhalla's team downstairs. All that built off the right kind of brand, but built off people. And I'm going to spend a few seconds on the people, because it's a huge transformation inside our company. We used to recruit bankers and consultants and they are very useful for our business. Where we used to recruit 65% of them as bankers and consultants. Today, 65% of our hires are not bankers and not consultants. There are people from consumer firms, from technology firms, from ex government jobs, from merchants and that is transforming The direction of the conversation around the tables in our company, it is completely transformation. Issues are getting discussed that would never have got discussed. Risks are getting taken that would never have got taken. I'd like more discussions, more risks. Don't get me wrong. But this mix Of people joining the company is a key part of what we're doing. Similarly, we're encouraging a very different profile of individual Even in terms of their acceptance of new technology, millennials are clearly different from people of my age group. And we used to be 79% of our company was millennials. In the year I joined, we're now beyond 37%. And so inside our company again It's a very different dialogue and a very different nature of conversation. It's not that people of my age group don't bring the right value. We bring experience, institutional knowledge and capability. I recognize that, but it's the mix I'm talking about. And so Building this world class mix of people both the type of people and their backgrounds, their experiences and then where they are located the final one Where we used to be 60 odd percent of our employee base in the United States, it is now 60 odd percent outside of the United States, While the United States itself has grown in the number of people quite dramatically in that period. So it's not Just maybe a growing here and declining there. It's the nature of the mix that's changing. And that's a key part of changing Where the company is headed. So that's our strategy, grow the core, diversify the kind of customers we deal with in the markets We're dealing with you'll see our efforts in Africa and a large part of that. Build new businesses, but do all that in a base Of innovation, of comprehending the consumer, of technology, of the right kind of people, leveraging the right kind of brand. That's what all Of today is about and you'll see that in the conversations and you'll see it in the product demos. So with that, I'm going to hand it over to Mr. Flood. Thank you, sir. Okay. I think, Ajay has provided a great frame for us. It's interesting. I think I wake up every morning now thinking about grow diversify and build. And it kind of guides my day and my thinking, all right? And if you actually handle the grow part really, really well, you can do amazing things in diversification and building adjacent spaces and businesses, All right. But it's all rooted in understanding an extended stakeholder set. If you think back 5 or so years ago and the type of stakeholders we were concentrating on, it It was a little more narrow than it is today. And as we extended that stakeholder set, it opened up tremendous opportunities for us. So when we think about consumers, great buying experiences, nice and simple. Help me shop and make it frictionless. Financial Institutions, Help me give my consumers great buying experiences. Let me delight them. Merchants, they want to sell more stuff, make it frictionless, Help me get my job done, help me sell things. Governments, financial inclusion, transparency, efficiency, At the end of the day, there's an awful lot of work around the world on making things more efficient, transparent, bringing more people into the formal economy. That's just not a consumer proposition. It's also a merchant proposition. As you bring them in, they need places to shop. They need places to buy things. So the government work is both it's bidimensional, I guess, is the way I'd express it. The digital players, they want to provide great experience to their consumers and payments is front and center, All right. Think about that. And telco's stickiness reach and are great participants along the lines of financial inclusion. If you root this all in what consumers want, which is what all these folks do, you can kind of really guide your activity, very straight, very narrow And stay true to what you want to get done. But at the end, Ajay reflected on the space, the cash space, the 85% how it's moving. I look at this as you have cash conversion, you have digital or physical to digital technology. Therefore, what it opens up for me is more consumers, More merchants and at the end of the day more transactions. So if we stay rooted here and then we apply this discipline Seize to our grow diversify build strategy, we can get some very strong things done. Now, Ajay reflected on you got to grow debit, credit, commercial and prepaid. So we set aggressive objectives for ourselves 5 years ago, all right? And Craig is going to reflect on those and what we did to kind of get there. But when you zero in on that, Leveraging perhaps some of the services we built along the way. It's a very, very powerful proposition. And I'll reflect on some of the bundles. Ajay will reference bundles. I'll reflect on some of the bundles in a few minutes. The diversification on merchants, the middle column, it makes me ecstatic. I've been here this is year 30, All right. We were a financial institution based company. But when I provide a little dimension of what we've gotten done with merchants, governments, telcos, digital players Over the last several years, it's exciting and it's opening up more space for us to get amazing things done. And then on building new businesses, Customers want to talk about what they need to get their jobs done. We have invested in bringing together assets and services that matter, That when bundled together and bundled with our people provide great solutions to our clients, enabling them to grow their businesses, Become more profitable and as a result we grow and become more profitable. So we've invested for growth. Today in a GP and S organization, 70% of my people resources are outside the U. S. They're aligned with Ann's divisions and countries, all right. 30% are with Chris in North America more than enough. But when you think about the transition of our company and the profile, That's a very significant adjustment for us. So the people side that Ajay touched on is huge, All right. The combination of people, technology and services fuels our growth. Now I'm going to spend a few minutes drilling down to each one of these areas for you. We had some fun figuring out how to do this the from to scenario. We were thinking about putting in a slide that was from before Ajay To Ajay, which would have been an awful lot of fun, might have been a career limiting move, but I decided not to do it. But he wanted to do that. From a core perspective, consumer credit, broad based segmentation, all right. From broad based segmentation to targeted value propositions, distinct segments. Payoff for me on this one is the consumer insight that Ajay referenced that Roger and the marketing team drive with Craig and Ed at the foundation of getting things done, right? So the payoff here for me is in Latin America, A platinum revitalization program leveraging consumer insights launched 14 countries first half of this year, volumes up 21%, accounts are up 18%. That's above plan. But that's driven off understanding consumer needs and desires. 2nd one is consumer debit, safer alternative to cash From 1, it was a general purpose debit program. We've talked about ATM to point of sale, right, the activity. If you remember the 5 step process where we drive behavior. Here, we're going to extend that. We've scaled it. We're probably doing 50 to 60 of those this year versus 20 to 30 in prior years. The movement is extending that around the world, all right? In addition to that, one of the best examples I can use here is Tabak Haji Islamic Payment System over in Malaysia. Certified allow benefits. Advisors work with them to develop a program and actually bring it to market, right? So advisors, if you think about Consulting and Information Services. Ajay touched on managed services. That part's about execution, which is different than what anybody else has. Commercial, Craig is going to talk about. I love going from 30 or 8 to 120 markets. I was here in 1987 when we launched commercial products. Our progress has been amazing. Our investments have been focused and this is a tremendous opportunity for growth. As Ajay reflected, we really haven't touched that much on that, All right. So Craig will get into that. Prepaid is very similar to me, more narrow number of markets to an extended market list. And I think Michael Fiore who runs prepaid for us today reflects on us saying no one is doing more in prepaid than we are. 2 great examples for me, South Africa Transit Solutions, where we have a prepaid card targeted to 15,000,000 transit riders that are going to use our processing capabilities that Cathy McCall provides. Frank, that's an example of a budget solution. Next one is bidvest, which is a travel card provider Based again in South Africa that is leveraging our program management services, all right? If we didn't have our program management services, that deal would not have come our way. Now think about this list, transit solutions, travel management services. Those are 2 very distinct capabilities and customer sets From where we were years ago. So the core business is key. We're on it. We're growing and we're not going to let up. Next is the diversification of our stakeholders. Now I said this chart I love for many reasons. I'll start with merchants. Acceptance based relationship to one where we expanded it beyond that helping them grow their business. The best dimension I could use is the work that our advisors team does with an annual 100% increase in engagements with merchants. We do everything from customer value management to data analytics to gateway services. We help them grow their businesses. And when I think about the growth rate, it's not 5 to 10 to 20 to 30. This is hundreds of engagements over the course of a year, Which is very different from where we were. Governments limit engagement to broader relationships, enabling 900 plus government programs. The types of programs, financial inclusion, benefit distribution, payroll, procurement, it extends to a wide range of services. Telcos, digital players. Not long ago, I think we were having conversations about telcos and digital players might disintermediate us. Yet as we work with them over the course of the years, there's common ground to get an awful lot of wonderful things done for consumers, merchants and financial institutions. Global and Local Engagement, we have over 150 initiatives in 50 markets. If I think about telcos in Nigeria, Working with Etransact and Home Send, which is a JV we have in London to enable inbound remittances to 40,000,000 consumers. Again, a different type of technology and capability and an extended customer set. If I think about digital players, We're engaged as channel partners with Apple, Google, Samsung and others. You've read all those announcements. That work leverage our technology, our people And close working relationships with our customers, issuers, financial institutions as well as the digital giants. So strong progress on diversifying our stakeholder set. Now when I think about building new businesses, if you listen closely to what your customers want, if you reflect back and think through that stakeholder set, The needs that they're looking for, what do they need to do? We've built businesses around loyalty, advisors, safety, security and processing. On the loyalty side, Craig will dig a little bit more into this, but 100,000,000 accounts in over 100 markets. It's a one stop shop. No other payment network has this. This is unique and it differentiates us in the marketplace. Let me reflect on advisors. The ability for us to actually work with merchants, governments, Digital Giants, Telcos and our financial institutions around the world was a journey that we started on in Envysors over 10 years ago. We have resources deployed around the world, consultants, managed services folks and data and analytics resources that can help them grow their business. In many ways, we work with them to grow their business, to drive volume, to drive new account production and to drive revenues. So this is an outstanding example of an adjacent space that clearly differentiates us and helps our customers grow their businesses And in the end, we were ours. Nobody else has this. There's not another payment network that's made this investment. It's unique and it's different. Let me talk about safety and security in multiple layers. We've built an awful lot of capacity into our network to do things for our clients. In some parts of the world, we're screening transactions on behalf of countries and their local initiatives. So we'll be agnostic. We'll do somebody else's transactions and run them through our rules engine. We built in capability and capacity to screen for fraud, where we've actually reduced issuer fraud up to 50%. We've also built in the capacity to help issuers and merchants approve more transactions through better rules engines, reducing bad declines by over 60%. So safety and security aspect is key and making sure that the infrastructure is in place to get that done is key. And at the same time, we can help the business grow and we can make money out of it as well. Now processing is very similar. If you think about processing and Kathy will reflect on this, I love the fact that we're in 65 markets around the world between gateway services, processing and payment gateways. If you're extending these services to your stakeholder set, you need to be involved in their conversations. You need to understand exactly what they're trying to get done with their businesses and that's fundamental, all right? So Kathy is going to reflect a little bit more on processing In a few moments. Now, we've talked about driving the transition to digital, which is a big part of what we've been concentrating on. Digital isn't just about a wallet guys. It's not just about a wallet capability. It's about infrastructure. Sure, it's about a wallet and a container, But it's also about added services like personal payments. So if you think about the infrastructure, security through tokenization, The work we did with MDes, what we've built into our network and what we've enabled. If you think about digital ID and verification, a component of MDes, again, Built into our network and enabled. And then the last part, which is extremely important, is API offerings, enabling developers around the world to create value and Solution Sets off of our infrastructure. Now 80% of our Mastercard credit and debit accounts in the U. S. Are enabled through Ambez. We're extending to other parts of the world. It's fundamentally integrated in our network and Rob runs it just like he runs the network. It's up all the time and it's there for our clients when they need it. If I think about wallets, as I said, it's broader than just wallets, But at the end of the day, Mastercard is a key component of our strategy and has been for 2 years, 3 years. So the digital acceptance mark has been built. We're in 24 markets were extended to 250,000 merchants. On top of that though, when you think about capacity and capability, We've invested in resources to actually help our customers digitize their frameworks. This is the acquisition of CSAM that we made A while ago, we've integrated them in. Their capability, their understanding of technology and how we apply that with our customers, issuers and merchants It's unique and it is different. No other payment company has that, all right? We've made the investment. Ed likes to refer to Mastercard as digital by default. If you have a Mastercard, you need to be digital. So strategically, that is the frame that we're operating off of. Your lives have become more digital. Our enablement has to become completely digital domestically as well as cross border. Faster payments, personal payments, a big part of the digitization experience. If you think about where we were several years ago, we had a program called MoneySend. It reflected Mastercard to Mastercard transfers. Today, we're in a completely different place with the investments we've made in Mastercard Send. We virtually have access to every checking account and debit card in the U. S, About 50% outside the U. S. And when you compare or integrate that with Homesend, which is our JV over in London that has A connection to over 1,200,000,000 mobile money wallets around the world, you have the foundation For an extremely powerful personal payments infrastructure. So when we reflect on this transition to digital much broader than what else. Infrastructure, Standards, Developer Community, Masterpass, I've reflected on, but then the extension of that to include personal payments is critical. Now, competitive advantage. Ajay kind of touched on this. Left side, driving differentiation, right side, driving innovation. Two dimensions to it. Let me reflect again, loyalty. We've invested. We have a service over 100,000,000 accounts. We can work end And one stop shop. Craig is going to talk a little bit more about this in a minute. Advisors and Information Services, we've made the investment in the people. We've deployed them around the world. They provide great expertise to our clients and they leverage all the other adjacent businesses we have to ensure that the solutions are going to solve what the clients' problems are. They can look at the data and understand, create the solution and through managed services execute. Safety and security, in many ways built into our network, Built onto our cards and watching every transaction, fundamental. Now the processing and switching side is also a great foundation. The more you see transactions, the more you can do with them, the more you can enable your clients to grow their business. They grow their business, we benefit. So Kathy is going to reflect on processing in a moment. Now I don't want to move off this slide until I deal with innovation. Gary Lyons is here. Gary came with our acquisition of ORBISCOM 7 or 8 years ago. He's been driving our Labs development for probably the last 5 years. Labs for us has become an unbelievable differentiator. Our clients want to work with us and reflect on what we do and how we do it, All right. You're going to see a series of demonstrations at the showcase. Many of those are reflective of the energy and driving passion of the innovation agenda that Gary has deployed Is pushing through our organization. Mobile Transaction Services. Again, this is CSAM, the engineering talent that can work with our clients And the last as I talk to Labs. Now, if I reflect back, nobody's got mobile transaction services like we do And nobody has labs like we do. Those are unique and clearly differentiated. So in the end, we've gotten an awful lot done, All right. We reflected on growing the core, diversifying our base, building new businesses, double digit revenue growth, double digit GDV growth, share gains. We're not going to let up. Innovation is key, working with consumers and merchants, working with our extended set of stakeholders, Experimenting with new technologies, exploring new data opportunities. You're going to see many of those things demonstrated downstairs in the product showcase. All right. With that, I'll conclude and I'll turn it over to Craig who will build on our core products. Thanks, Gary. Gary touched on a couple of themes that set up the discussion about core products nicely. And I'm going to go into some of those in a little more detail. He talked about the strength of our core products business. He talked about how we're using differentiation and how we're leveraging innovation to help grow our core business. Those are all things I'd like to elaborate on a bit. Let me start a little bit with performance, the performance of our core business. The strategy that we're employing is driving nice results. You can see here through the first half of twenty fifteen, we have very positive Growth in volume across each of our 4 core product areas of credit, debit, commercial and prepaid. Despite some things that you hear us talk about from time to time, Some softness in some important markets around the world. We're seeing very positive volume growth. And importantly along with that Both over the current period and over the last number of years some significant growth in our market share. So what's driving that? It varies a bit by product. But at the core of what's driving our success is creating strong products, Leveraging the capabilities that we have been investing in developing organically or in some cases acquiring to put differentiated product into the marketplace, Ensuring that our brand is delivering strong performance in the portfolios that we support and working very hard to win With our customers around the globe and that's something you'll hear both Anne and Chris talk about a bit more. Just taking a quick run through each of the product areas With consumer credit, you'll see here that while our overall share trajectory has been positive over the last 5 years, The share overall share growth has been a little bit more muted. That's driven by the U. S. And the situation with Chase. However, outside of the Chase situation in the U. S, the broader U. S. Portfolio is growing very nicely And we're posting really nice share gains across our international markets. Again, Chris and Ann will both go into that in a little bit more detail. But in each case and in each of those markets, our consumer credit propositions are strong. We're delivering strong differentiated product into the market and using that to pick up share and engage consumers to drive usage and volume on our products. With consumer debit, nice growth across the debit portfolio from a share perspective on top of an already large base. This is consistent across geographies, North America and our international markets and is consistent across both single and dual message transactions. So we feel good about the performance of our debit business. And then with commercial and prepaid, while both a bit smaller in terms of their absolute contribution to our business, The performance here has been exceptionally good, again both from a growth perspective and a share gain perspective. That's being driven by a couple of things. One is winning portfolios over to Mastercard of existing programs in the marketplace And working to use those product lines as levers to accelerate the migration of cash and check to electronic payments. So I'll touch on commercial in a little bit more detail in a moment. But for here, I'll just emphasize the growth that we have posted has Significantly outpaced the market which has helped us pick up some nice share. And in prepaid, the growth that we've posted which Gary alluded to Has established us at this point as the global leader in the prepaid space. At this stage, nearly half of all prepaid volumes Are being transacted on Mastercard branded products around the world. We feel great about that and that's something we're going to continue to push to drive our growth going forward. So across these areas, we see lots of opportunity for continued growth. They are aligned with the areas you've heard Ajay talk about already, continuing to win share in the already carded space. We estimate in aggregate across these four product areas on a global basis there's roughly $12,500,000,000,000 of transaction Volume already carded and we're working hard to increase our share of that and at the same time working to migrate Those 85% of the world's transactions that are still conducted in cash and check onto our network as quickly as possible. So we're gaining share in a large and growing market and we feel pretty good about that. I touched on differentiation as did Gary in his remarks. These are the areas that we've been investing in To drive that differentiation in our core business in significant amounts as Ajay referenced Roughly $5,000,000,000 over the last number of years to help us differentiate ourselves Across our spectrum of stakeholders. So that might be differentiating in the eyes of a consumer, in the eyes of an issuer, a merchant, partner or a government, All of which are obviously important to helping us grow the business. So for example, and I won't go through all of these, but just as an example in the area of safety and security, Things like our biometric authentication capability like pay with selfie that is on display today at the Product showcase downstairs helps deliver a really cool and unique and intuitive experience that differentiates us with consumers. Something like an enhanced authorization algorithm that enables our issuers to increase their approval rates for their most valuable Customers when they're using our products differentiates us with that issuer. And network level capabilities that would help us for example detect And intervene in the case of a breach a security breach of 1 of our partners can differentiate us in an entire category. Similarly in digital, Gary has talked about P2P already. Mastercard Send is something that's also on Display it today at the product showcase a very cool and intuitive way to for consumers to transfer funds in a P2P capacity, Very unique and differentiating from a consumer perspective. Our credential management capabilities and chip technologies Are differentiating us with merchants for example in the case of private label applications of that technology. And our Masterpass Technology and the suite of capabilities it represents differentiates us with consumers, issuers and merchants. So as I said, I won't go through all of these. But what they all have something in common. They're all squarely aligned with helping us drive growth In share and volume and revenue in our core business. And they're most powerful when they're deployed in combination, the bundles that Gary talked about that help us put truly unique products and solutions into the marketplace. So Let me shift gears then. And I will just mention before I go off that slide, there's a couple of areas that you She highlighted. These are the areas that have really been the focal point of our acquisitions over the last couple of years and are each areas that Kevin, Kathy and I will go into in a little bit more So turning to innovation. Someone told me that all I need is a shortstop And I've got a full baseball team in this picture, which I didn't realize when I put it together, but it actually is true. I also won't go through all of these examples because there's a lot here and Gary's touched on a couple of them already. But I did want to take a minute to talk about how we think about innovation and its role in our business. And it's easy when it comes to innovation to fixate on the bright shiny object. And while we certainly set our sights high in terms of the kinds of transformational initiatives we want to bring to market, The fact is that an awful lot of the innovation that we are bringing to market is close in to our core business and driving near term results for us. So you see in this diagram close to the core things that represent new combinations of products and capabilities that help us Compete more effectively in the marketplace. Gary touched on product line revamps with our platinum product in Latin America. We've done the same in China with that product. By using consumer insights to revamp the bundle of benefits associated with those products to align with the needs of consumers In those regions. Similarly evolving our debit platform to enable its use in ways that are consistent with Islamic banking practices in markets like Malaysia and Indonesia Have helped us in that respect. The next layer out is representative more of new technology, new capability that's helping us Extend the reach of our core products. So for example, creating an easy to use mobile app Built by the developers who joined us through our acquisition of CSAM by the way and pairing that with a financial education platform Has helped us really set apart our solution for the Direct Express Government Benefits Program in the U. S. We're leveraging our loyalty platform to deploy a very simple and seamlessly integrated Debit and credit proposition in Africa to help us go after a premium card segment Through an easy integration, easy deployment across multiple countries. And we're looking leveraging combinations in things like our digital capabilities, Masterpass Host Card Emulation, Loyalty Services and our advisors portfolio optimization expertise to win business With important customers like PKO Bank in Poland. And then again at the transformational edge things that are a little bit farther out you've heard us talk about some of these things in Simplify Commerce is not new. In fact, it was on display at this event last year. As you know, that helps Transform the online acceptance experience for small merchants. That capability will be available in 75 markets around the world by the end of So we're excited with the progress there. And we're leveraging things like our network capability combined with chip applications and contactless Technology to transform the mass transit experience in markets like Colombia and India, even London, as Anne can attest to when she rides the tube to work every day. And Mastercard 8, which I'll mention is also on display here at the product showcase. This is a pretty It's a pretty neat thing. It's a new solution that really helps government organizations, government aid, actually non government organizations and other aid based Organizations distribute aid more effectively, more efficiently, more flexibly to people in need in distressed Environments around the world. And we've piloted this in markets like Yemen and the Philippines. Other markets will be entering soon, But it's a great transformation of a consumer experience in a very difficult environment. It helps those aid organizations save money and helps us generate some revenue in the process. So as I said, I won't go through all of these. You get a sense from this Innovation comes in all shapes and sizes. It's increasingly part of our DNA and is clearly aligned with things we're doing to help grow the business. I think our CEO just injured his foot somehow kicking something distracting me from the front row. But that's all right. That's his prerogative. In any event, innovation is doing a lot for our business. So let me with that as a backdrop, let me shift gears a little bit. I want to go deeper into 2 areas of our business. 1 is commercial, Which is an area where we're seeing great success and results in part through leveraging innovation like some of the things I've just talked about. The other area is loyalty, which has been an area we've been investing in to help enable innovation and differentiation. They also happen to be areas that many of you ask us about from time to time. So we thought we would go a little bit deeper there. So turning to commercial. We've made great strides in our commercial business over the last several years. As you can see here on the left side of this Chart, both our volume and revenue growth has increased at a very healthy clip. And I'll note we're not just riding a rising tide in a strong market here. You can see across the bottom Of that chart that our volume growth relative to the market has been consistently outpacing the broader market. And with that Have come the share gains that I referred to earlier. So this is growing. It's growing and becoming a very nice meaningful business for us. Notwithstanding that growth, there's still tremendous opportunity for us in the future. And you see here, we estimate the addressable opportunity in the Commercial segment to be about $19,000,000,000,000 Significant opportunity across each of the three segments that we think of when we talk about Commercial with SME, T and E and B2B. The opportunity not dissimilar in many respects to the opportunity In consumer, given the relatively low penetration rates of carded payments, but in the case of commercial, those penetration rates are even lower At only 9% or 10% based on our estimates of the full opportunity, the balance here being primarily cash and checks. So again, we see tremendous opportunity here and a long runway for continued growth in the commercial market. The way we're going after that is by driving segment based solutions that meet the needs of Customers in each of these segments. In SME for example, there's an initial challenge in some cases with SMEs of finding them. They're often hidden in consumer banking portfolios. So we're working with issuer partners to find them and then ensure we get the right product into their hands, Products that help with recognition, with control and value all things that are important to the small business owner to enable them to run their business more effectively. And we're doing that with things like in control for business, Which is a product that enables a business owner to set spending parameters on a card product, Limit spending by day or day of week or time of day by merchant name, merchant category, spending amount, a full range of ways in which A business owner can parameterize the program to give them a greater sense of control about how their funds are being spent as well as other programs like frequent business Our easy savings, our small business toolkit, which is an online tool for business owners and simplify commerce, which I mentioned earlier, All of which in different ways help deliver value through savings or convenience, Help small business owners save time which is a very precious resource for them in running their business. And we see with these Products, when we get the right products in their hands, we see spending increases of in many cases up to 40% on these programs, which is very Rewarding. T and E is all about policy compliance, reporting efficiency and vendor managements. We are Working in this space both to win corporate accounts and work with players in the travel sector to Electronify some of the wholesale payments that take place for example between travel agencies and travel suppliers. And we're seeing good results with things like our central travel solutions that use our virtual card technology and in control for business travel, Which again provides data controls and streamlined reconciliation. And then in B2B, Huge opportunities in B2B again revolving around efficiency, process efficiency and vendor insights. We're seeing very strong growth on traditional products like procurement cards and fleet cards in the area of things like office supplies, maintenance and Operations Expenses, Fuel Expenses as well as with virtual cards and are working to identify some new opportunities Displace other forms of payment in some of the large B2B flows that we see happening around the world. In all cases, our commercial products are underpinned by a Pinned by a similar set of capabilities that are important. I've touched on some of the product differentiation. But in conjunction with that, our proprietary smart data platform that delivers analytics and insights to program managers and business owners and our unsurpassed worldwide acceptance, Which is obviously critical in the use of any commercial card program. So these things are delivering results. We're winning deals Across the globe, I won't go through these in any detail just to kind of keep us on track a little bit. But there you see here wins In every region representative with large issuers, with large corporates, with governments, Customers of all shapes and sizes using our commercial card programs. In many cases because of some of those differentiated capabilities I mentioned whether it's Smart data, our in control suite of capabilities or others. Let me turn to Loyalty and talk about that for a few minutes. This as you know is an area we've been investing in A fair amount over the last few years. And the reason for that is straightforward. It revolves around 2 things. 1 is the capabilities we have in our loyalty business help Strengthen our core business. It helps us deliver more value to consumers, issuers and merchants, which in turn helps drive growth In the use of our credit, debit, commercial and prepaid products. And secondly, it enables us to participate in a pretty large and growing revenue pool for loyalty services, which helps in the revenue diversification of our business. And I will emphasize that 1st and foremost this is about supporting growth, driving growth in our core business. And we're seeing evidence that that's paying off. When we look at the performance of portfolios that for example include optional benefits associated with them things like insurance, We see increases in spending from anywhere to 15% to 30%. When we layer in a rewards functionality on top of that those increases Can be 50% or more. So there's real value in the capabilities these loyalty programs deliver both for us and our partners. Gary touched on the end to end nature of our loyalty portfolio. This is loyalty can mean many things to many people. And here's what we mean when we talk about loyalty. It's a suite of capabilities That includes benefits, insurance, rewards and offers platforms that can be used by issuers or merchants To deliver against their particular strategic objectives in how they want to engage their customers and drive loyalty and increase their share Of those customers' activities. This is a portfolio we've built both through organic investment and acquisitions over the last couple of years And it enables us to do a wide range of things. For example, things like delivering an affluent card program With the right bundle of benefits like insurance and travel services and customer service support, Managing rewards programs for banks or merchants that includes features like being able to redeem points For purchases that are made anywhere Mastercard is accepted, helping merchants target new customers or win share of wallet with existing customers By delivering the right sort of offers and benefits to them or in some cases enabling merchants to deploy turnkey loyalty programs Complete with card programs, with points management, with points redemption capabilities, with program management and program analysis. So this is Gary touched on some of the numbers associated with this part of our business, so I won't go through that. But as I mentioned this is increasingly important in driving the growth of our core business. I did mention as well we've built Some of our capabilities through acquisitions. Pinpoint was the most recent in the loyalty space. This is a strong business, a thriving business that we acquired based in Australia, but with a presence in 7 other Asia Pacific markets And is really providing us with deep expertise and capability in the loyalty space And execution capabilities to be able to complement our core business in that region. Just over a year After closing on that acquisition, we're seeing positive results. We're seeing increases in business with issuers and merchants, Important issuers like Cascale in Australia, which Anne will touch on a little bit later with Westpac and DBS And with large merchants like Dick Smith for example in Australia and others who are using these capabilities all in different ways To augment their own loyalty programs and extend the reach and value that those programs provide to their consumers. So a number of examples here of wins again across the globe. You'll see here issuers, merchants of all sizes. Again, I won't go through any of these in detail, but we do have a loyalty station as part of the product showcase and we'd love to talk to you more about Any or all of these examples or things that we're doing in the loyalty space with our customers. So just wrapping up then. We feel like we're well positioned to continue driving growth. We're delivering growth to date on the strength of strong product propositions and believe we're well positioned to continue that on the strength of The assets we've invested in or acquired and the innovation that's driving our business. And with that, we'll be well placed to continue displacing cash, winning share and driving usage of our products that will fuel our future revenue growth. So with that, I will turn things over to Kevin Stanton, President of Mastercard Advisors and he will talk to you a bit more about our Information Services business. Sorry about that. Thanks, Craig. Good morning, everybody. You've heard Ajay and Gary and Craig now talk about how Mastercard is extending its reach and value. So in that context, I want to focus on how Mastercard delivers insights to an expanding clientele through Advisors Information Services. It is with great faith that I press the green button. Information Services is part of Mastercard's growing Fast growing Advisors business. Now I've spoken to you about Advisors before and why Advisors before, How we enjoy a tremendous data advantage, how our three lines of businesses help our clients Make better decisions with information services analytics, find better approaches to their challenges and opportunities through consulting services and get better results through our executional capabilities with managed services. Our Advisors provides Mastercard with a competitive advantage Against like to like competitors. And even more importantly, in the battle to convert cash to electronic payments, How Advisors provides Mastercard with a competitive edge against local switches and processors. By providing value beyond Payments Advisors is meeting the broader value chain needs of our traditional customers, things like marketing effectiveness Analysis, Inventory Mix and even site location. But Advisors is also helping Mastercard reach New types of customers like manufacturers and the healthcare industry and government just to name a few. Then that way Advisors is helping Mastercard diversify revenue. Advisors drives customer engagements and operational reliance or On a day like today, you might want to call that stickiness. I think the best testament to that point is When advisers is part of an overall relationship, that relationship will perform better on multiple dimensions than one without advisers. So that's a very, very quick review of advisers. I want to take the rest of my time to focus on information services for a couple of reasons. 1, because that's how we usually enter a new vertical and 2, gives me an opportunity to explain How our recent acquisition of APT and Fiveone enhanced our ability to do just that. So let's take a look at how advisors and post services has been growing and where we're going to take it from here. Since 2010, Infoservices has enjoyed pretty healthy growth, Posting a 24% revenue CAGR ex acquisitions during that time. While we touch a great number of verticals, the lion's Share of that growth has happened in 3. In the FI vertical or the financial institution vertical, Barbara you told me not to use abbreviation, Infoservices has added over 200 new clients and expanded its usage within the existing base. Growth has come from retailers as well. We've added coincidentally another 200 more than 200 clients during that time. And again, That excludes clients coming from the acquisitions. And you might ask, what's going on with retailers? Well, primarily The push is that we can help them understand a 360 view of consumer behavior. Let me explain that a little. A retailer Will be able to or may understand how their consumers are behaving within their own four walls. Mastercard data can help them understand how those same consumers are behaving outside of those walls and that's very valuable to them. And finally, we've scaled our offerings in the media vertical, doubling that business in the last couple of years By deploying self-service offerings through established distribution channels in order to accelerate expansion. What's going on there? Well, here We have a unique ability to provide insights that tie online behavior to brick and mortar purchasing, Which is absolutely critical to understand how your campaigns are performing. And I want to emphasize this before any of you get too scared And this is important and I'll discuss why later that all of Advisor's offerings are developed with privacy by design. And by that I mean, We don't receive, need or use personally identifiable information to do what we do. So how do we accelerate infra services going forward? Well, 1st, by scaling our work with retailers and expanding into new verticals Like Telecom, Pharma, just to name a couple. In fact, when you go to the product showcase, you'll find a couple of my colleagues We can walk you through a new offering that was designed for the commercial real estate vertical called Retail Location Insights. And by the way, Retail Location Insights is the product of an employee innovation channel challenge that was run by Labs And it was brought to market in under 6 months. Stop by and check it out. I think you'll like what you see. Now the second way we'll accelerate growth is by taking advantage of some important trends. And one of those trends is the general democratization of And before you all get deflated, let me explain what the democratization of analytics is. Okay. So next time you're in Tacoma, Washington and you're looking for the best Sushi place in that city. Come to New York. But no, if you're stuck in Tacoma, You're probably going to use an app and you may not know it, but you're actually using analytics built into the app and available to you at your fingertips. The same thing is happening within enterprises. No longer the preserve of specialists, analytics are now embedded into the day to day operations Throughout the building and even outside. And I'll give you an example. Take a delivery truck driver. She gets the map displayed on a screen and she's told what route to take and what order to do the deliveries in. That's easy. She understands the map. No big deal. What she probably doesn't understand is that route on the map It's the product of sophisticated logistical algorithms. Yes, I said it, algorithms that draw from many, many data sources And take into account things like distance, traffic light patterns, traffic conditions, road conditions, Topical inclines to maximize fuel efficiency and much, much more. She doesn't need to know about that. She needs a map. Maps usually not enough for me. I usually need my wife with me, but she just needs a map. That's what she does. 2 other trends you can draw from that example. The importance of automating easy to understand and easy to use analytics and The fact that analytics are now being embedded into day to day workflows. Now finally, As I mentioned before, you will continue to see Mastercard Advisors leverage its solid privacy by design foundation as a differentiator, Not just as an obligation, as a differentiator. Consumers are sophisticated about privacy and governments are more and more able to meet There are demands in that regard. So from our point of view, only those companies that have a strong privacy and data and information Security footing will be able to create sustainable revenues in the data and analytics space. Now, Our ambitions to grow as I've described and at pace suggested that we needed to complement Our organic activities with M and A as an accelerant. So in June of this year, we acquired APT, Which is a leading test and learn analytics provider with over 130 blue chip clients operating in more than 10 verticals. APT offers a unique combination of cloud based software combined with unparalleled client care. When you go to the product showcase, in fact, there are 2 of my colleagues, recent joiners from APT, who will be able to walk you through That platform, a test and learn demo. The acquisition of APT complemented the November 2014 acquisition of 51, which was a London based Analytics and Consulting firm that focused on the retailer. They have 50 clients around the world and 51, like advisors, provides soup to nuts analytics, consulting and marketing execution. Coincidentally, both APT and 51 in partnership with our retailer clients, provide insights to consumer packaged good manufacturers or CPGs And the value that a Mastercard combination could bring through Mastercard's data, our brand, our sales force and our global footprint. What I'd like to do with the time I have left is explain how already in the short time since we Acquired APT and Five Point that we have seen the acceleration of sales. We've seen the launch of products incorporating Mastercard data and analytics And we've driven wins with our traditional customers. All right. I'll start with 51 And De Beyankorf. Since 2012, De Beyankorf has been engaged by 51 and now Mastercard Advisors in designing and building a customer engagement platform called Privileged Membership. Devine Corp is the Netherlands' leading and a very smart luxury retailer. The 4 year engagement began with Classic Consulting and then moved to design and implementation through Advisors' extended capabilities. I can't get into proprietary specifics, but I can tell you that the program has been a tremendous success. In the past 10 months, we've continued with the launch The design and launch of an innovative loyalty program that delivers a more meaningful personal and convenient shopping experience to the De Beyankorf customer. By the time this engagement is finished, we anticipate a 4 year working relationship operating in a very intimate level with this client, which is exactly the kind of engagement and stickiness that I talked about. And that's how a Fiveone engagement typically starts. The final step in a Fiveone engagement is to deploy Fiveone's easy to use web based analytics platform that leverages the clients' own SKU data and converts it to recommendations that they can use to operate their business, things like inventory mix and the like. And if the ecosystem is right for it, with the cooperation of the retailer, the same data is repurposed for use with manufacturers that work with that retailer. In the end, Advisors has been able to strengthen 51's value proposition with our data, our analytics, Our consulting and our extended executional capabilities and we've also extended 51's reach to the Mastercard sales force Through Global Relationships and through other acquisitions like Pinpoint. Now In contrast to 51 where we start with consulting in order to end up with an embedded analytics platform, an APT client Relationship begins and ends with automated analytics accompanied by customer care that are designed to drive consumer engagements and Expanded Usage. Through Mastercard Advisors, APT's model can be expanded to include consulting and executional work. APT stands out from other providers of test and learn decision making in 2 particular ways. First, they match Now just by way of a quick background, what APT does is they combine the customer's data with 3rd party data And now Mastercard data, they crunch it on their very, very scalable platform and they return Highly actionable recommendations to the customer. Now, I want to talk to you about APT at Kellogg's. I'm using that phrase very, very carefully because remember with APT, The client uses the platform, all right. You know Kellogg's, I'm sure, and you should know Kellogg's is one of the most intelligent food manufacturers on the planet. Kellogg's wanted to introduce changes to its product assortment Select stores around the U. S. To try some new ideas, I guess, sugarcoating on one side versus another. And They first turned to the APT platform. Now I have to tell you a bit of a story. Before we Bought APT. I attended a users conference with 300 APT users. These are very, very devoted Dave Ortiz of the APT platform. And so much so that they use APT as a verb as in My boss asked me if I APT ed the program before she talked to me, okay? So it's very intense. Here, Kellogg's used the APT platform to compare test store sales to control store sales and measure profit the profit impact of the product changes, The true incremental impact at virtually real time. And now APT will be able to extend that value with Mastercard Data to Kellogg's to help them understand the broader view of the Kellogg's consumers. I don't know things like Where do they shop when they're not buying cereal and that kind of thing. Well, today Kellogg's continues to test new programs using APT including shelf space, optimization Programs, Pricing, Merchandising and Operations. That's all I have time for now. Please do stop by the product Showcase to see how Mastercard leverages data. It excites me. I'm sure it will excite you. I'll just close by saying that these two case studies I illustrate how Mastercard is accelerating progress with retailers and expanding into new verticals Through acquisitions that complement our inherent strengths and our organic activities and that are already delivering wins. So thank you very much for your time. I'm going to now introduce Kathy McCall, who will talk to you about the epitome of operational reliance and Stickiness Mastercard Processing. Thank you. Thank you, Kevin. Good morning, everybody. So I had the chance I think about 2 years ago to come and talk to you about the investments that we were making in underlying infrastructure So that was the work of processing. So I'm delighted to have the opportunity now to come back and tell you what we've been up to in those last 2 years And actually show you how the investments that we've made and will continue to make are really paying off and enabling our customers To access the innovative products that Craig and Ed are after. So let me just take a couple of minutes To look at the what's going on in the world out there that are really relevant in helping us to position why we do the things we do. And Gary talked earlier about this continued shift and the progress that's been made around the world in the shift of cash to electronic payments. But this is clearly identifying I think for both ourselves and our customers the continued investments we need to make in local infrastructure In order to enable the conversion of cash to electronic payments, particularly in the emerging markets. Add to that then the fact that consumers like us Businesses as well are really jumping on the bandwagon of the shift to digital. This is really Encouraging our customers and challenging them in so many ways to look at ways to create innovative new products that actually enable their competitive advantage in markets. And then we look at all of the new entrants that are coming into the payments ecosystem and realizing that this means that they have To make their investments, but are more and more now looking to outsource their implementation work to access global scale, global technology infrastructure in a much more cost effective way. Craig talked earlier about the compelling new propositions that he and his team are building across the world. He talked about utilization of new services like our loyalty services, information data analytics, the consumer benefits. We've got all of our omnichannel work going on as well. But this is requiring us to focus a lot on how the work gets done To enable this functionality and capability. So really it's our investments in processing infrastructure that really offers the choice To the stakeholders in the ecosystem to use our technology global that it is, the global scale and reach that we have To get their work done more effectively to serve their consumer needs. So you can see here This is really the work of the value of the payments ecosystem around the world. In the middle of it you can see the Mastercard switch And this is our core business of authorization, clearing and settling. But as you look across the broad remit of capabilities and functionalities Required to enable the new world is why Mastercard is diversifying across that value chain and actually building out the capabilities That our customers need and expect from us in order for them to enable their compelling consumer propositions. So here we see prepaid management services. And Gary talked about that investment that we've made in the past. But this is really the program management capability that enables us to obviously offer compelling propositions to our customers on the prepaid barrier, but more and more to encourage new entrants into the payments ecosystem and then of course the traditional business of cross border travel solutions. The payment transaction services functionality that's really enabling issuers and acquirers to use our infrastructure, our technology and our services to process payment transactions across the world Safely and Securely. And then finally, the payment gateway services, which is all about enabling this digital revolution, But enabling merchants to accept payment transactions safely and securely. So our acquisition strategy over the last number of years has really been aimed at helping us to fill capability gaps As we look at collaborating with our customers to identify conjoined needs of what we all need to do in order to enable execution. Craig and Kevin talked about the investments we've made in data analytics and loyalty. So I'm going to focus on some of the others that we've done really inside the core So you see here access prepaid. Really that brought to us the necessary program management capabilities that really Supports the emergence of prepaid solutions globally and then enables and brings more players into the ecosystem. We built IPS a few years ago actually initially for U. S. Debit solutions, but it's now the processing engine for Access Prepaid globally And also is a processing engine for our mobile money solutions. The Provus and Trevika acquisitions that we've done Really is enabling our European customers just to access the functionality they need to deliver their compelling consumer propositions and markets, Leveraging our scale and innovation to get the work done. The acquisition of ECS last summer actually seems It doesn't seem that long ago. But the that acquisition really was to enable us to access the really cool and well renowned Access to technology innovation, software engineers and software developers who work with our global People around the world to create innovative products. We also in addition to the Innovation agenda that we can drive out of ECF. It's formed the basis of our standard processing services. Because imagine how cool this would be. We deliver all of the or build all of the innovation that Mastercard brings through its labs and its environments around the world. But we Build it once and we implement many times around the world. This is a very, very powerful proposition for our customers And also enables us to do things in a much more cost effective way. ECS is also actually the Forms the basis of the new technology hub that we announced earlier on in the year, which will bring a whole talented pool of software engineers and developers to work with the global innovation teams in order to execute our technology agenda going forward. That's missing off this slide, but we built MIGS, I guess, a good few years ago to open the gateway in Asia And then used the Dedacash acquisition to give us more global reach. So again, on the basis of the standardized Solutions that we have our aspirations to. We bought the TNS payment gateway services business of TNS In early part of last year just on the turn of the year. And that really will form the basis of enabling us to build a global standard platform To enable merchants and acquirers to transact safely and securely across the world. So really the basis of this slide is to show that we're using these capabilities in ways that are very meaningful for our customers. We're touching the Part of what they need to do in order to execute on their work, enabling them to leverage our investments in new technology And then the scale of our infrastructure as well. So this I think I showed you this map 2 years ago. And I think you'll probably agree with me that this is Somewhat of a tremendous performance, although I said myself, in terms of this couple of years difference. And what a difference a couple of years next. But we continue to drive now alongside our core network of course of nearly 50,000,000,000 transactions That we're switching around the world. We're doing acting out and performing processing services work for 107,000,000 account holders Around the world. We do that through now 65 markets. And that then drives another additional €5,600,000,000 transactions across The network very fundamental and very important as both Ajay and Gary stressed. This is the fundamental basis on which we can continue to add the value To our customers overall in terms of safety and security and access to service. So our local processing capabilities and I'm stressing the word local because the core difference between the global network is You really want to do as much as possible do it once and then the whole world benefits. But the work of processing is much more local because you're touching The customers and how they want their work done. You're doing work on behalf of them. So it's really a local essence and hence the reliance on as much as you can Get global technology and global infrastructure, but people locally who understand how to get work done in the business. That's the business of processing. So our prepaid management capability has really been a significant contributor. Gary talked about this and just dramatically enabling us To grow our Mastercard prepaid solutions around the world. The issuer in acquiring processing functionalities Really then allows us to see more transaction data beyond our switching, which then enables us to enrich our data quality And to provide those value added services that my colleagues have spoken about already. And then finally, the payment gateway services Really allows us to get closer to issuers and to merchants and transform the overall value proposition there. And we're really excited about the emphasis that we're Putting there and also the returns that we're getting. So I think we're clearly focused on our existing customer base, But we're also really looking at ways to attract to support new customers really coming into this payment ecosystem. So let me give you just a few examples. And these I think the examples here really probably underlie why I love what I do. And I love what I do, because I can really tangibly feel and touch the benefits that we and our customers can make together in this payments world. So let me talk a wee bit about Qantas first. So Qantas as we all know Australian airline they've got a pretty sophisticated Frequent Flyer Program. But they wanted to bring new functionality and new use to us, Because they wanted to bring new members onto the program. So we worked with them to build a very innovative loyalty and Payments card together that really changed the dynamics of how their members interact with them. So it provides them with the functionality To store foreign currency because they're learning out they're already planning a rate of flight. It enables them to access cash all over the world. And I guess in addition to the frequent flyer points that they earn, They earn frequent flying points on everything they spend. So their CEO and I love the way she phrased this. Their CEO Brought this to life in saying that the feedback from their members have been absolutely fantastic. When you consider all the different things that this does, It really is the Swiss Army knife of cards. And it really is just exactly what it is. I'll take Shinhan Bank now because Shinhan Bank is the largest Foreign currency banknotes provider in South Korea, a very nascent prepaid market. So we worked with them To enable them to use prepaid solution to offer their consumers access to foreign currency in a far safer and much more secure way. Moving across into payment transactions, I'm going to talk a little about Green Dot. So Green Dot is the largest prepaid reloadable prepaid Card and cash reload processing services across the U. S. They have a huge what they call their branchless network That they deal with in terms of distribution. So 100,000 retail locations. They work with 25,000 of the tax preparation Services they work with online tax preparation. They are online themselves and they're in the app stores. So generally it's a very broadband distribution of very different products and services. So their challenge was really access To the right technology that can offer the diversity of solutions and services that they need in order to enable that. And they've chosen Mastercard as the network processor and also their network gateway as well access to that in a more and more The Home Retail Group moving over to Payment Gateway Services, You might know them more by their the NEM, their brand NEM. So that's like Homevest, Argus, Habitash Are all part of the Home Retail Group. The really interesting digital case study there and that's what they want To do is to enable an end to end consumer experience that's second to none. And they in reality wanted to move their digital payment experience inside the store. So we've worked with them to enable that for them. And a couple of benefits that came out of that That are really driving significant competitive edge for them. And not only is it the digital consumer experience, But it gives them a view a single view of customer data across all of the group, very powerful as Kevin was mentioning and their ability to target and be very specific around consumer propositions that they can offer to them. I've got Ecobank up here as well. So, Ecobank is a pan African bank. Their challenge was acceptance across 20 markets 20 countries in Africa. So we're working with them Utilizing our mobile point of sale technology to enable them to drive acceptance in the markets that they choose to serve. No, it's not up here actually and I'm looking at the time I'm going about the time here. But it's not up here. But being a very fashion conscious lady, I wanted to tell you about the work that we continue to do with The e commerce and real lifestyle brand now that is ASOS, a startup about 10 years ago and now leading in their field. I love what we have done for them in enabling their digital commerce platform to serve their customers in many, many geographies around the world. And incorporated into that, of course, as we look at inclusive solutions is a priceless campaign that we have added That is continuing to drive more and more loyalty for their customers. So let me just finish up with a few key points here. The first one really is in looking at What got us on this journey was really the strategies that had been described already and over the last few years as well By Gary and Craig and Kevin and my other colleagues really required us to diversify our capabilities beyond our core work of switching to support our customers to get done what they need to get done to access our capabilities And really to support them through the execution phase. These additional capabilities that I've spoken about alongside our core network Really supports the revenue growth across the services spectrum that we've talked today, enabling loyalty, enabling our safety and security strategies And also our Information Services capabilities. We've built out significant functionality, but we've used acquisitions to really fill the capability gaps that we identified alongside ourselves and our customers in order to get into execution phase. So very finished point here is as we drive our strategy Particularly, particularly in financial inclusion. Our investments enable new entrants to come into the ecosystem, new markets to access our infrastructure as everybody works towards the drive to electronic payments. So I think I'm perfectly Ready to say that processing is the foundation of our enabling infrastructure and is a very core ingredient for accelerating future growth Through the use of services in developing compelling propositions. So thank you for listening to me. And I'm now going to Pass over to Chris McWilton, who's going to give you a perspective on our North America markets. Scott Smith to follow a fine Irish lad under the stage. Good morning, everyone, and thanks again for coming and thanks Thank you for your continued support of our company. It was a little bit of nostalgia as I walked into the exchange today, Because it was just under 10 years ago when I had Martina's job, we rang the bell here and took the company public. And Sometimes I think in the day to day firefights and dealing with customers and issues and digital wallets etcetera you lose track of how much Progress you've made in a very short period of time. So when we rang that bell, we were valued at $5,000,000,000 and we went out at $39 a share pre split which is now $3.90 So we've got a great team. It's an incredible business. It's a great industry. And it's a great time To be in this industry. I firmly believe we're going to see more change in the next 5 years than we've seen in the past 50 in this business. So Fasten your seatbelts more to come and hopefully we can do the same thing with the stock price. Obviously, I'll be very happy with that. But anyway, Being in North America is actually a great place to be in payments right now in particular. Obviously, Ann's World is experiencing all kinds of great growth and opportunities as they develop. But I'm excited to be right here in North America. If you look at the digital giants that are starting to get into this space, whether it's Apple or Google or PayPal, whatever the case might be, they're all sort of sitting right in the United States. And they all are Trying to get into the evolution and the migration of cash and check into electronic forms of commerce. The new wallets that are coming out are being launched here in the U. S. So it's a great place to be. Safety and security is top of mind too. We're going to be Coming up against the liability shift for EMV in just a few short weeks. Javier laughs at me every time I talk about that. He What the hell is wrong with you guys in the United States? It's taken you 50 years to get them shipped, but we're getting there and we are committed to the liability ship date. We're not wavering on that if there's any question. And as you heard this morning, whether it's issuers or merchants or governments, everybody is looking for different ways to drive their growth forward. And some of the new services and products and companies we've acquired have enabled us to grow help them grow their top line as well. So with that, let me take a quick tour around North America for you and just put our business in perspective. Obviously, we're still navigating a pretty difficult economic climate. We've seen fluctuating fuel prices. We've seen regulatory intervention on both sides of the border most recently in Canada, the voluntary interchange cap. We've seen a strong U. S. Dollar. Those are things we can't control, but that has significantly impacted inbound cross border, which is a very profitable source of A volume for us. And the consumer, I believe remains cautious in terms of their spend. Over the weekend, you heard reports that gasoline prices were the lowest over Labor Day in 11 years. But we're not necessarily seeing consumers take that savings and spend it on an extra week of vacation or an extra purse or set of pair of shoes whatever the case might be. They're still very, very cautious. And we've yet to see whether consumers have been spooked by what's happened in the markets over the past few weeks, the pretty wild gyrations in market and the I think we're technically in a correction right now. So you have to see where that's going to shake out. But despite all of this, the ups and downs, this business In the U. S. And Canada is strong, it's consistent and it's resilient. In fact, we have delivered 12% compound annual revenue growth for the 5 years ended 2014. So through all the cycles and the Economic crisis and the fuel prices and the Ukraine situation this business just chugs along. In our region U. S. And Canada is a significant Contributor to our overall profitability, it's just about 40% of our total revenue. The U. S. And Canada Represent 2 of the top 5 markets in which we operate and we represent about 35% of worldwide volume. And looking forward things continue to look positive and I think there's a lot of runway left in this business even though we call ourselves a mature Or a developed market from a payments perspective. PCE is expected to grow upwards of 4% going forward. And there are still huge swaths of cash and check In areas like healthcare and rent and utilities that we're going after and are going to get across our network. So like Ajay said earlier, our strategy remains To diversify our revenue, grow our core business and build and sell world class products and services to a whole new set of customers Not only in the United States, but around the world. So I mentioned strong consistent let me get the clicker to work here. There you go. I mentioned strong consistent revenue growth. So the question is how are we doing it? Well, 1st and most importantly, I've talked about this for several years now is revenue diversification. Our business for many, many years The legacy business of Mastercard in the U. S. Was built on consumer credit cards issued by large monoline banks. And that served us very well for a long period of time. But we went through the economic crisis. Monoline Banks fared less well than the more retail oriented banks. And we realized we have to diversify our revenue base. And we have that now. We've got a much broader product mix as well. As Craig mentioned, we've got credit on the consumer and the commercial side. We've got debit. We've got commercial and we've got Prepaid products as well making up bigger portions of our revenue. We've also made Great progress in the co brand space, which I've talked about before. In fact, we're now ahead of our plans to have co brand wins make up for the lost Chase volume. And we now expect that to happen by the end of this year 2015. So great progress in the co brand space. And our customer mix is changing as well. While we do business with the traditional large banks and large merchants, independent banks and credit unions, governments and the digital players now are making up a greater Share of our revenue. And in a few minutes, I'll share some of those recent wins. Kevin mentioned strong momentum in services. These are all great things that we can bundle with a deal when we go out to a merchant or an issuer or a co brand partner and complement our core switching service, Our brand and provide us an opportunity for hopefully some value added pricing. So we've got existing core services. We've got loyalty and information services. We've added CSAM. We've added APT. CSAM gives us the ability to launch mobile applications for Customers whether it be banks or merchants in the mobile payment space. APT, Kevin spoke about Giving us a differentiated solution and a reason to go into a merchant and have a much different dialogue with them than the cost of acceptance. It's a much different dialogue when you're talking about how to drive their Top line then whether interchange is 180 or 200 basis points and how you get it down. So it's changing the tone and obviously complementing what we're trying to do To diversify our revenue. And our world is changing. There are ever evolving technologies. You're going to hear from our technology team Ed McLaughlin and Company later on and Gary Lyons. What we're trying to do is make sure that consumers have the same experience In the mobile world whether it be in a watch, in app, on a phone whatever the case might be that they've had with In the physical world to make sure that Mastercard experience is still robust. You're going to see a lot of those things down in the product showcase. So let's take a closer look at some of the wins we've had this year. Solid start to 20 15%, although we're now into September. So I guess it's not a start anymore. We're coming down the 3 quarters poll here. Solid year with some big wins, some marquee names. 1st and foremost Citibank, our Citi win. We secured A long term partnership with Citi which is the world's largest credit card issuer. It's a global deal. It touches all of our regions including Ann's. And they're a very important strategic customer for us and we're going to work closely with them to drive their business in all parts of the world. We also extended our agreement with Barclays and packaged a lot of the services you've heard about today into that agreement including acceptance And issuance of Masterpass. And up in Canada, we've renewed several large issuer deals up there as well. Talk about independent banks and credit unions for a second. We call them IBCUs in our lingo. We have a dedicated IBCU team. And over the 1st part of this year, we've won several high growth accounts, namely First Tech Federal Credit Union, which we work very closely with And developing some leading edge technology. I'll explain that shortly. And First Tech is a great partner of ours because they serve High technology companies like Hewlett Packard, Microsoft, Intel, Cisco, Amazon and the like. So they're great. They're in the right part of the valley for us. Give us a West Coast presence and we're able to do some neat things with them. We're expanding our business in debit as well. We recently run the pin debit business. I call it the back of the card because it's not branded on the front, the back of the card business with TD Bank. And we've done several other deals in the pin debit space including a flip from a competitor that will also be using our IPS debit processing platform. Prepaid front, our anchor client there is the Direct Express program, which we renewed. It's basically the Social Security program for anybody who's a Social Security That does not have a bank account. They receive their benefits on a prepaid card. We renewed that. It's the largest government benefits program in the world. And on the commercial side, we continue to do very nicely. We're winning with Bank of America and helping them support some of their new customers as well as other Large issuers in that space. So the core business is strong. It's growing and we're winning profitable business. I mentioned co brands earlier as one of our factors of success and we're continuing to see a lot of movement in this space. We know we won't win every time. It's a very competitive marketplace. But since 2013, we've really focused on it and we've won over 40 Co brand deals, both renewals, flips from competitors and new entrants or new players in the co brand space. And from just the flips alone over $500,000,000,000 in volume on those deals. So a little focus has paid off in a big way. We won Costco in Canada. We didn't win Costco in the U. S. And what we're seeing is over the past few years the large merchants have been using their scale to extract economics similar to the way large issuers Have done for many, many years. They're hiring consultants. In just about every case they split the network decision from the issuer decision. And we continue to exercise financial prudence on how far we'll go to win these deals. And some deals we will just say This doesn't work for us and we won't go any further. But again when we're able to bundle services like Kevin and Kathy mentioned You'll hear about in the product showcase, hopefully get a chance to spend some time there. We can bring differentiated solutions to our co brand partners And continue the winning momentum. So we're proud of our success in this space. You will be hearing about more wins in the near future. So stay tuned. Let's turn to innovation because this is the hotbed. This is the epicenter of payments innovation I believe. I think it We need some innovation on the clicker here. Somebody in the back, press on the button. There you go. Like I said, I don't think it's a better time to be in payments right now. We're in the middle of what I call it Walletpalooza with Google Pay, Apple Pay, Samsung Pay, you name it, everybody's got a wallet. Our money is on Masterpass. It's our wallet strategy, but it's more than a wallet. It's a platform. It enables you to deliver loyalty and solutions and rewards etcetera. And we've had great momentum on both the issuance and the acceptance side. So in the U. S, we recently added U. S. Bank, National Bank in Canada up north of the border. Navy Federal Credit Union and SunTrust Are going to be issuing our Mastercard's wallets. And we're also building out acceptance. This is a chicken and egg game. You have to have issuance. You have to have acceptance. And we're doing that. We just announced Burger King, Carnival Cruise Line, Roots Canada, WestJet again up in Canada, Wayfair and we now have 250,000 merchants that accept Masterpass globally. Watch your television, read the paper over the next Few weeks because we're launching a national advertising campaign around Masterpass both in the U. S. And Canada. And I said while our money is on Masterpass as our wallet, we're continuing to support the rollout of other wallets. We want to play with the digital giants In a meaningful way and a thoughtful way. So Apple Pay was announced exactly a year ago today I think. So we launched that. Samsung Pay and Android Pay are now rolling out. And it's just important to remember that these wallets while they're branded Apple Pay and Samsung Pay and Android Pay etcetera they run on our platform, our MasterPath digital enablement platform which also fires up MasterPaths. So that's on the Mastercard front. We continue to keep merchants front and center. We discussed CSAM earlier. Down in the product demo area, you'll see some applications they've developed in the retail, the fuel and the government sectors. And on the personal payment front, I think this also represents a great growth area for us. It's an untapped segment of the market. There have been various parties that have tried to get together To develop the ubiquity you need to have personal thanks, Ivan. Thank you. Thank you very much. Ubiquity to have A meaningful person to person payments network. We have MasterPath Send which enables U. S. Access to virtually all U. S. Debit cards in the United States whether they're Mastercard branded or not. So we can get to our competitors' cards. We can get to our cards through MasterPath Send. And Google is actually leveraging MasterPath Send platform for their push in the P2P space. So we think there's great opportunity there. Again, it all leverages our network and the great job our guys do in technology. Talk to security for a minute, safety and security. We're leading the way here with new standards and new solutions Both in the physical and the digital world. I'll give you a quick update on EMV. It is coming, coming next month, the liability shift. And again, I'm going to tell you we're holding firm to that date. We Have had pushback from various parties as expected, but it's time for this train to get off the station and get us onto a technology That is much more secure at least in the physical world. I think the ecosystem is making great progress on the migration to chip technology. The Payment Securities Task Force which we formed estimates that half of all cards and half of all terminals will be chip enabled by the end Of this year. So that's good progress and we'll see the momentum continue as terminals get refreshed and new cards continue to get issued. One word I do want to make because there is a fair amount of controversy and dialogue about it in the industry is the view of whether chip versus Chip and Signature is preferable over chip and PIN or vice versa. And I want to make it clear to everyone that our position is we are agnostic. It's up to an individual issuer or an individual merchant to decide which way to go based upon their particular facts and circumstances. We don't force, we don't mandate 1 or the other. But what we do do is recognize in the liability shift that if you've invested and go through the effort Of the higher security protocol, you will get a benefit in the liability shift. But again, we're agnostic. We don't favor 1 versus the other. And we're also the 1st in the virtual world to develop tokenization services. And our Protecting the payments space also extends into the ATM channels. We've got SafetyNet, which is now in place in over 90% of the banks in the country. It's an additional layer of security over and above what the financial institutions have already in place in their back office systems. And that's going to be rolled out to the point of sale system Within the next year. We're the only payment network that offers free of charge ID theft protection. And If you have a chance down in the product demo area, I mentioned First Tech Federal Credit Union or Credit Union, Selfie Pay, so biometric authentication. We rolled out with them and piloted them a few weeks back. So leading the way in safety and security, if you don't have the confidence of your customers, We don't have the confidence of consumers. You don't have a business. So this is top of mind for us and I think we're making great progress. So I'm going to wrap up and get you to the break as soon as I get the clicker to win. So I think overall the business is performing Very well as I mentioned 12% compound annual growth rate for the 5 years ended in 2014. 2015 there are some things beyond our control that are tempering our growth. Lower fuel prices, while good for a consumer, They're not spending it, so we're seeing lower volumes caused by that. The strong U. S. Dollar and we have the renewal of a large issuer deal, which Martina and Ajay have talked about on the call. So a few headwinds we're dealing with. But overall, I believe this business has a lot of runway to it. We're winning. We're winning profitable business. We're investing in the future and in the evolution of the business and payments from the physical to the digital world. And we've got a great team, The right place, the right people, the right time. I'm bullish on it. I keep reminding myself we operate in the largest economy in the world. We're the epicenter of payments innovation and we've delivered strong revenue growth consistently in a very dynamic and a very competitive marketplace. So again thanks for your time. And I'm going to have Barbara come up and take you to the break. Chris, you win the prize. I win the prize. You stayed on time. So we are running a little late. We have a 15 minute break scheduled. So we are going to start again promptly at 10:40. For those of you in the room, out the back, beverage tables have been refreshed, restrooms are directly across from the coat check. And we'll see you back here in 15 minutes, Sharpe. Thank you. Okay. Should I start talking? Does everyone want to come and take their seats please? Haven't even got Martina here. I can't stop. Okay. Great. Well, I'm sure everyone's feeling reinvigorated after the break. I used to work in the offshore oil and gas industry. This session and working on an oil platform is the only place I don't have Queue for the bathrooms actually. So it's great. Every year it's the same. Anyway, It's my great pleasure to start talking about the really interesting part of the day really, which is all about the international markets. I was just talking to somebody before the break who was saying to me, boy, is the world changing or what in the last 2 years. And the answer is yes. The world is changing, but our business continues to thrive and grow No matter what seems to be happening around the world. So moving to the first slide, I will when I hit the button properly. Can somebody change the slide? Thank you. We'll start immediately with the numbers. I know you guys love numbers. So Chris talked about that North America was about 40% of the revenue, 35% of the world's GBV. So by subtraction, international markets, 65% of the world's GDV. And you see here You know how it's distributed around the world. And you'll see that Asia Pacific and Middle East and Okay. Are now the lion's share. Latin America smaller volumes good revenues though. And but One of the things to say is look at the growth rates. Around the world, we're between 15% 16% in terms of GDV growth. And I just don't know sometimes how Europe manages to hit these numbers Javier. Javier keeps telling me he's now chatting to RJ and not paying attention. Javier keeps telling me that it's all due to his brilliance, but I'll show you later what's really going on. PCE continues to grow around the world. I mean, R. J. Spoke earlier about the pace of growth in the emerging markets outstripping the developed markets and hence the 85% cash, but it's much more of a cash story in my markets. Look, it's about 91% cash in Asia and in Latin America. And it's even 77% in Europe, Thanks to places like Germany, Martina that are still ready to adopt electronic payments at some point in the future. Fantastic. So Gary and RJ talk to you about grow, diversify and build. What I'm going to talk to you about is really this strategy in action. And I'm going to take you on a little tour of the world now. Next slide please. What's the matter with my thumbs? It's like when I come through JFK, my thumbs don't print properly. Anyway, okay. So here we are. What's going on? Europe, a lot of challenges, a lot of opportunities. The economic environment Remains quite difficult. But as I said, our business is powering up at 16% growth. We've seen a change in the regulatory environment taking that in our stride and we continue to grow. Nationalism, Last year we talked about Russia. We told you that actually Russia would probably impact our business by less than $50,000,000 a year. Actually that's exactly what's happened. And I've got to say that our Russian team have been signing more and more deals with the big Russian players. So it's good news story on Russia. And changing competitive dynamics, well this refers to Things like the Visa put, which could happen this year. I'm not going to say much about that now, but you can ask Questions and Javier actually has a European session after lunch. If you're interested in discussing that, fine. One of the great things about the opportunity side is the regulatory environment is creating more of a level playing field. We'd Still like to see the likes of PayPal in there, but that's good for us. We're Doing more and more merchant business across Europe and I'm going to talk to you about that on the next slide. I've talked to you about the 77% cash. Europe is a really attractive market for us. Look it's got $11,000,000,000,000 of consumer spend And that's about a quarter of the world's spending. It's also got 26% of the world's ecom business. So whichever way we look at it, this is a market where we're going to continue to thrive and grow for the future. So what's really driving the growth? Well, the good news is All of the great things that we're buying are allowing us to bundle products and services to create this superior business model, which allows us to win deals. I mean, we went public. As you know, Chris talked to you about ringing the bell all those years ago here. We went public a while ago and we brought our European business in day 1. This means We are the only global network of our type in the world and that makes a difference with the way we do business in Europe. Because when we do business with big issuers in Europe, we tend to do business across many different geographies. A great example of that is a deal that we did recently with UniCredit where we signed up a 5 year deal spanning 10 countries with them. That's the classic European deal. And also apart from dealing with traditional issuers like them, we're also very, very attractive to the cool new players, The sort of people you have in the U. K. Market like Metro Bank and also like Virgin Money, Which is absolutely fantastic. And I'm really looking forward to getting one of their cards with Anarchy in the U. K, the Sex Pistols. Fantastic cards in case you haven't seen them. Yes, RJ just rolled his eyes there. That Card barely made it through the firewall, I have to say. Anyway, so merchants, wonderful merchant business we've got across Europe. And We are diversifying with merchants. One of the things I love is Carrefour for example has been a brilliant relationship for us. But I nip off the plane in Milan and I can use my contactless card to buy something in Carrefour in Italy. That's the way that Europe has rolled out. Not only that, but we're building strength as a digital giant. You know that we've launched Apple Pay in the U. K. I can use and I can't remember was it Gary or somebody said earlier So I can use Apple Pay to go on the Tube. It was probably Craig to go on the Tube in London. Fantastic. And actually, transit we're looking at around the world. Why are we so interested in transit? Well, the Spend on transit is something like $518,000,000,000 a year, Huge number. And I'm talking across the IMK world and 42% of that is still cash. So there's an enormous growth to come in that area. And we are hitting that growth strongly in Europe. We're already out there with contactless in the metros in St. Petersburg, in Moscow. We're working with Mesabi. We've brought up the ability to buy train tickets online in Athens. This is the kind of thing that we're doing. And the whole mobile ticketing space is a big growth area going forward. So I'm confident with all of the things that we're doing and the things that you heard from the product group from Kevin, advisers by the way, Europe is our biggest user of advisory services. But and we rolled out SafetyNet across Europe, our fraud solutions Probably one of the first rollouts in the world. And so all of these things are combining to give us fantastic strength, which is why our future growth is really all about expanding acceptance, winning more deals, processing, Because still in Europe, we're seeing less than half the transactions. So think of the growth that we've got there if we touch more transactions. But we're really differentiating our product and going for digital acceleration. So that's the European story. Now what's happening in Latin America? Well, it's great because apart from Javier here today, I've also got Gilberto Caldart, who runs my Latin American region. And he's here to answer your questions at lunch also about what's happening. But there is macroeconomic slowdown. We're seeing that in big geographies such as Brazil. We've seen Venezuela really contracting this year because of the change the devaluation of the currency, The control of foreign exchange and so on hitting the cross border traffic. But On the other hand, there are other countries in Latin America that are really moving in a different direction. I mean for a start, there's a massive amount of Cash over 91% cash in Latin America and some of the governments are really stepping up saying I want to change that. And so an example of that is the Uruguayan government has said that they're going to give a 2% VAT break on anybody who uses electronic payments. This is a kind of positive action that can really change the way things are in Latin America. And the other thing is You probably saw from Kathy's diagram that it was only really in Brazil that we were switching traffic. Everything else was open for new business. So we're really starting to double down and focus on Switching in the other countries. And when I say the other countries, we're continuing to make inroads in Mexico, Colombia, Chile and these kind of things Jill Berto can cover with you. So that's the things that are changing in Latin America. What's really happening on the customer side? Well, Latin America like many parts Of the emerging world are starting to really change the whole acceptance landscape because in order to reach The commercial business with small to medium sized players that Craig talked to you about, you've really got to have a different acceptance model. The traditional acquirers, they don't really hit it there. So what we've been doing is we've been working with payment facilitators across places like Mexico. And by the end of the year by working with 20 different payment facilitators, we're reaching 100,000 new sub merchants in Mexico. So and not only are we just reaching them obviously with the traditional methods, but we're actually rolling out and bundling prepaid with mPOS solutions. And so all of those new digital capabilities combined with the traditional products are reaching the endpoints in that way. In Latin America, financial inclusion is a big story because there's 300,000,000 people excluded from the financial system. And that's a pretty big chunk of the continent. So we've got 18 programs there. We've got them with traditional players. We've got them with new players. You heard me talk about VanStecki last year, a big player in Mexico again. Well, they're rolling out 6,500,000 cards, which will really impact financial inclusion there. And what about transit everyday spend? I love the thing I think the Mayor of Bogota was the one who said You know that really an advanced city is not where the poor drive to work. It's where the rich use public transport. I think it's kind of funny when you think of America, but okay. So the thing is that Well, the thing is that we're working with transit systems around the world to do exactly that to enable Everyday payments across public transport in this case we've brought a contract with capabilities on the buses in Colombia. Very soon the London taxis will accept your card and maybe London will become one of those sophisticated cities at long last. But so these are the sort of things that are working across Latin America. Now on to Asia Pacific. Well economically still very challenged. You've got cross border impact Especially with FX headwinds happening in Asia, there's a normal regulatory pressure, countries looking at nationalism. But apart from that, we're preparing in the Chinese market. And I'm really pleased today to have Dennis Chang with us who's going to talk to you a bit more about what's really happening in China. And I must say his English is a downside better than my Mandarin, but that's probably his English is actually perfect. It's not my Mandarin's non existent. Anyway, so the thing is the Chinese Domestic market opening up is a challenge to us because there's a lot of things for us to think about, but it's also a fantastic opportunity for us. When you think of The size of China, the growth of China, the sophistication of China in many ways. A big ecom market with the big ecom players. I think it's sort of 10% of the traffic now is ecom in China. So a tremendous amount to do there. China is obviously one side of the Asian story. India is another great side of the Asian story, which is really driving change. And especially with the new government focus on inclusion, digitization, you've heard a lot about that. But the sort of things we're doing in India is partnerships with the big trade body that reaches something like 60,000,000 Traders across India. And we've been recognized by the Finance Minister for working with these guys to try and create a new Payments landscape for the country. And the good news for Asia is that the latest World Wealth Report Has said that Asia has just overtaken North America in terms of wealthy individuals. So that's an interesting And what it is doing is driving our affluent portfolio growth across the continent. So you can see that all of these trends are having a massive impact. And Asia by the way Has 92% mobile penetration, which means that many of the products could be mobile first in the future. So what's really happening? I know that I think Craig probably mentioned through the Pinpoint acquisition that we won the Spans the whole of Australia and deals with 100 credit unions, banks and building societies. And we've done a fully integrated packaged service for them because they offer an end to end payment capability. I mean that's in addition to winning deals with West Pac Air New Zealand, Malaysian Airlines, people like Central Department Store, which are effectively the Harrods of Thailand. So a lot of very good core business being driven out of Asia because of the acquisitions that we bought as well. And on top of that, we're working in the mobile So I was talking about mobile first. Mobile penetration in Thailand is 100%. 77% of consumers in Thailand can use the Internet through their telephones. They're smartphones. And card penetration is only 30% on the credit card side. So you can see that in order to really grab the business in Thailand, you have to go for a digital strategy first. And so what we've done there is we're working with Trumov who are a big telco in Thailand And we're using our virtual card technology to actually allow people to use their telephones to buy online to do the e commerce experience. And we're also combining that with prepaid. So This is the reason why you've got things like prepaid growing in a very rapid way in many parts of the world. It's starting to become a preferred product in some geographies ahead of say debit, very interesting. So future growth in Asia is also going to come from the SME segment. I mentioned India is a great example of SME growth across the geographies. And also you've got fantastic MPOS players there. I think we've just reached 32,000 new SMEs working with just 2 Mpos players in India. So the market is sometimes concentrated in the digital space and it allows you to grow. What about the Middle East and Africa? Listen you can't talk about Middle East and Africa without mentioning the geopolitical situation. There are some tough markets. I mean we all watch the TV. We have seen the exodus of people from Syria into well mainly up into Europe. And so this is not an easy situation that we're in here and it's a challenging one. But still Middle East and Africa is our fastest growing region in the world. And the reason is that it has some very wealthy geographies And we're working with governments in that area to put in whole new ecosystems in places like Egypt. And we're also looking at new payments options that are emerging in places like Africa. And I'll be describing some of those on the next slide. And in addition to that, because of things like the refugee crisis that you're We're also working with aid organizations and have been for quite a while. But downstairs you're going to see Our MCA demonstrations which are marvelous and allowing Organizations like the World Food Organization to reach out and to give electronic means of payments to refugees to be able to buy things when they're not in their home country. So these trends are all affecting our business in the region. If I look at what's actually happening in terms of cash displacement, well as I said massive government engagement on financial inclusion. You've heard stories in South Africa. You've heard them in Nigeria. The latest one this year is that the Kenyan government have decided that every Kenyan over the age of 18 is going to have a card. It's a Huduma card. And they're going to be able to both pay and receive on these cards. So they're going to be able to receive government benefits. They're going to be able to Pay their taxes, their government tolls everything to do with that. I mean it is going to revolutionize the way that payments occur across the country. And we know that Kenya was one of the first markets into the mobile space. So the fact that they're taking this action is really exciting. We're building Kathy mentioned that ETF, which is an acquisition we did in India. It's allowing us to build processing capabilities around the world. We've built a processing hub in the UAE and we're starting to deploy From that, we're bundling services with our advisors and we've got lots of new go to market strategies whether it's at the upper end, the very wealthy end of the market in certain parts of the Middle East or whether it's in parts of Africa where we're working with banks who've never really done card business before and we're having to give them a full end to end service which is called Card in a Box. And now you know RJ often has said to me in the last couple of years, when the heck is this card going to get out of the box, Ann? You've been talking to me about this card in the box I'm doing this because he's talking to Javier again. A card in the box thing and he said, but the truth is it's out of the box So, Ajay, I mean Boeing, we sold 30 deals in the first half of the year, so fantastic growth. And I think The runway in Mir is going to be wonderful. By the way, I'm going to start coughing now, so they can give me some water on maybe a gin and tonic. We'll save it till later. I'm teasing. So that's the story across Middle East and Africa. And have I overrun time or am I 2 minutes ahead? You know what, I'm going to get such slack when I anyway, okay. So The thing is we started about growing, diversifying and building. And I think the message here is the world is becoming a more complex Place geopolitically. However, the pace of growth across markets is accelerating And the secular shift is accelerating as you can see in Europe. And the capabilities that we have to bring to market And layer and layer and layer on top of each other and distribute in a global way around the world is causing us to gain market share across all of the continents in IMK. And it's a really exciting story. And now I'd love to hand over 3 minutes late to the IMK panel who are going to tell you what's really going on, on the ground. Thanks guys. Thank you. Okay. So now we're going to hear from the guys that live it and breathe it every day on the ground. And let's start with the economic environment, which is a little bit different in each of your respective areas. So, so, Cal, DART, in Latin America, There's no shortage of media reports about particularly Brazil. And Brazil is your largest market and actually one of Mastercard's top 5 markets. So what's going on there? Are we talking about a recession? Are we talking about a depression? And How is all of this stuff affecting the payment space? All right. I keep teasing Danny that China needs To grow more than Brazil, we'll grow more. But anyway, jokes aside. So what's going on in Brazil? I think you're all Following, we are going through a major crisis, which is not just an economic crisis, it's a political crisis, it's a governance crisis. All of that is kind of making an impact into the economy. So the forecast stock that Brazil is going to shrink this year for about 2 or 2.4 percentage points in terms of the GDP. The next year might come back and Shrink the economy by 0.5 percentage point. And we expect that to kind of carry on for the next couple of months. And eventually Out of 2017 is going to resume the growth. All of that is kind of of course forecasts. I'm Brazilian, so I'm optimistic. I expect that that will get better. So all of that is having an impact on our industry. But our industry is very resilient. There's a lot as Jan was mentioning a lot of cash to be displaced in Brazil. So first half of the year the industry has been growing about 10% a little bit over 10% compared to 18% same time last year. So it's kind of a substantial reduction. The good news is that by the great job that our folks are doing on the ground with financial inclusion, getting into new payment flows, we are growing above market About 4 to 5 percentage points. So we have a very resilient business there. One of the examples I like to kind of just mention very quick It's the roles we're making in transit. We were just chosen a couple of weeks ago by the Curitiba City. I don't know if you're Familiar with Brazil, but Curitiba is the largest city in south of Brazil is the 8th most populous city in the country. And they've chosen Mastercard as a brand for their transit system, which we are now starting to roll out. It's just one example. Then many other examples of what we are In terms of new payment flows with government subsidies and financial inclusion. So I'm cautiously optimistic about. I think it's going to Continue a couple of months and then next year we should kind of resume a little bit more of the growth and keep displacing cash there. Okay, great. Thanks. And China grows more and then spits up. Well, Dennis, we'll give you a couple of minutes to Think about your response to Caldar here. So I'll move to Javier instead and say the economic headlines, while they're certainly Not as bad as what we see coming out of Brazil maybe. They're still not great for Europe. But Mastercard Europe despite these bad economic headlines still seems to be growing. So what's your secret? Barbara, I'm almost insulted by your question. I think it was obvious it was said before. We're much Better looking and more intelligent than others. I think we're right. But anyway I know you say that all the time. I was hoping maybe there's a different answer. In addition to that, you have some interesting things happening in Europe. I mean, we've been growing for as you have seen quite well for quite Some time, but there's some good stuff happening. We tend to talk about the legislation on a negative light. But there are some good things about the legislation. One of those as you know well is the reduction of interchange across the board. Now we have some large economies in Europe like for example Germany where High interchanges were really an issue and that deterred some of the very large merchants from accepting cards altogether, Let alone promoting them. You have digitalization. Anne mentioned how she can tap and nicely get into the tube these days. In London that's important. We've seen high pickups. For example, in Poland when we introduced NFC, we have a mandate Sorry, a arrival date for NFC in Europe on 2020 and all terminals are NFC equipped. So There's a number of things that are happening in a market where historically we didn't have too much of a good penetration. You saw that already as well. People are still using A lot of cash. So some good things are happening in the market. That's the first point. The second point it goes back to our own situation In Europe, look, I mean, it's pretty intuitive. It's very difficult for a local organization or even A regional organization to compete with a global company. We saw it this morning. Look at all the wonderful stuff This company is doing across the world in all segments, in all products, all kinds of future whether it be safety, security and all of the It's very hard if you don't have the means, if you don't have the capacity to invest to replicate that. So we are in a privileged position. We're well placed. We are capitalizing on that and hopefully we'll continue to do that. Okay, great. So Dennis, I don't know how you want to respond to your colleague here about China needs to grow faster, but We've definitely seen the headlines saying that it's been slowing down recently. In fact, the government has even taken some actions on the currency. So how is the economic environment impacting China? And maybe more specifically since today in China, A big piece of our business other than when I come to Shanghai would be when Chinese nationals are traveling overseas and it's the cross border Business that Mastercard takes advantage. Has that all changed what you're seeing from that standpoint because of what's happening in the economy? Yes. So indeed the macroeconomics in China is slowing down for sure. But long term looking at the longer term of things developing, I think the payment market in China is still very promising, very strong. So if you look at the slowing down, It is part of the reason is that the government is steering the economic growth model from a more investment led model to a more consumption led model, right? There's a huge transition happening. And that for the long term will be tremendously good for the payment industry to start with. If we look at the slowing down, we're talking about a potential risk to the official target of 7% GDP growth this year. We're looking at a potential PCE slowing down to just shy of 10%, right? To China, this is slowing down. But these are still pretty strong growth numbers to look at. Good enough for you, Caldar or you want more? Yes. And the FX And if you look at that, right, so it's nothing like what we've seen in other markets. For example, in Russia, you're talking about Russian travelers Seeing a deterioration of their currency of some 45% versus the peak time. What happened in China was last month was 4% to 5% depreciation, right? And that is not immediately Chinese travelers' travel decisions in any way. And indeed, if we look at the first half of this year, there's really strong Cross border traveling happening from China. So my answer to the Brazilian situation is I'm going to look at where they send more Chinese traveling to Brazil. Indeed. So and that travel behavior is fueled by a few things. To start with, you have The growth of personal consumption power, right? So the ability to afford cross border travel is growing Tremendously in China and that still is the case. But more importantly, I think there's an underlying driver, more technical driver to that as well. And that is the access To travel visa or travel conditions. So take myself for example, right? So Before the age of 27, I don't have a personal Visa at all and that is not available to most Chinese people. That has changed. And we start it started with Tier 1 cities where you have more Chinese consumers having the ability to have Visa and then passport To go outside of China. It now extends to Tier 2 city and more and more Tier 3 and Tier 4 cities, right? And it's a controlled process, But it is happening. And also countries like the U. S. Is now granting 10 year travel visa to Chinese travelers, right? So we're still seeing really strong cross border traveling growth. And right now, if I look at the corridors, right, so Hong Kong, The U. S, U. K, Australia, these are really, really good top travel destination for Chinese. This year, we're also starting to see Japan and Korea Recording very strong growth. And I think Brazil is probably going to be the next one. And that's the base of our business in China right now. It's about cross border. It's about outbound traveling and inbound traveling. Okay. So not only are the economic Situation is a little bit different across each of your regions. But from the regulatory front, we do see a lot of differences, But some similarities as well. Dennis, I'm going to stay with you because probably the single biggest question we get from this audience is What about the Chinese domestic market opening up? So and Ajay and Martina have continued to say we expect to be technically ready to process in China in 2016. But there's obviously more to just being technically ready. So you give us just a quick update on where things stand right now? Sure. So let me start by reviewing the timeline of things, how things The PBOC, the central bank, the payment regulator of China is right now evaluating comments From this consultation phase, from the preliminary regulation they issued in early July, we expect this to Complete perhaps in 60 to 90 days, right? After which, we expect the final regulation to come out, At which time, all the license applications can be submitted. And PBOC will have 90 days to come back with their answer. So if things stands according to this time, we're hopefully looking at Towards the end of this year, we will see something from China. So then okay. So that's the process. So now where is Your team in terms of moving forward and getting ready. Yes. So we are doing a lot of Thanks. But in terms of preparing for the entrance into the domestic market, There are maybe a couple of key components relating to our preparation that I think is worth mentioning. There are others. But the 2 key ones are Getting to an operational readiness and getting to a market readiness, right? There are other things. For example, we need to build Our internal supporting functions to prepare for that. We need to, for example, make sure that in our brand awareness It's still there, but with a new context being that we are now both International and going forward more domestic, right? So all this needs to happen. But really it's about operational Readiness and market readiness, I would like to delve into a little bit more. So by operational readiness, I mean the need to bring all our infrastructure and Technology into China. And with the issuance of the preliminary regulation in early July, When we look at that, we figured we have got a pretty good sense of what is required on top of what we already have On the ground. So we're working on it. And as Ajay said, we are looking to achieve full readiness operationally by the end of 2016. But there's more to that, right? So it's not just about technology. It's also about how our business is prepared Towards this huge new opportunity. So in terms of market readiness, we're looking at a few things. For example, How to get issuing, right? And how to build more merchant acceptance ahead of the actual opening of the domestic market? How do we determine the right products and services for the market? And how do we participate in the pricing in the market? So in a nutshell, so when we look at issuing, right, we are already We already enjoyed really, really strong partnership with all Tier 1 and Tier 2 banks in China through the past 30 years of operating there. And we're continuing to continue to foster that strong relationship. But mostly that we're going to look at the next layer of banks to expand our customer base to be able to serve more geography. So we're talking about the Tier 3, Tier 4 banks in China, 100 of them. We're starting to work with them to Onboard them into our world of services. That, in our mind, will provide a strong growth engine for our domestic business in the future. Likewise, on the acquiring and on the acceptance side, we enjoy an existing working relationship with all top tier acquirers in China. But we are looking to expand the coverage to more acquirers. And in this case, it's going to be not only banks, but also The payment service providers who are specializing in acquiring services, we're expanding our reach. We are going to build acceptance Where it matters the most to our customers. So it's going to be the Tier 1, Tier 2 cities, the big cities, concentration of our customer in this geography. It's also about national retailers and also key merchant categories. And right now, our cross border acceptance is more about Inbound traveling, right? And so that's a more T and E type of merchant. We're going to expand into the more everyday spend type of merchants. You mentioned pricing and I know that's a question we get a lot. So just Briefly, what can you say about that? Yes. So right now, you may or may not know that right now, the merchant discount rate in China is regulated in the offline space. It's a different story in the online space. It's much less regulated. More competition is allowed. There is new regulation Being drafted at the moment. That can potentially change that. We still don't know how much that will impact our ability to participate in the pricing. I won't be surprised indeed in a market like China where I would think long term wise pricing It's going to be low for this market. I wouldn't be surprised about that. But I think we will be looking at More opportunities to participate for sure. Okay, good. Javier, we've talked about European regulation for years years. And one of the things we get questions about the interchange caps all the time. But the one thing that We don't seem to talk a lot about is the separation of the scheme and the processing that requirement of the new regs that comes in next June, I believe. So how do you see that affecting your world in Europe? So Barbara, let me say that There is no need for divorce. They were never married, okay? So We have never linked brand and processing. We have been compliant with the SEPA principles forever. In fact, We've talked about this before. You know that unfortunately we process around 40% Of all transactions in Europe, I. E. We do not process 60%. So we've never been married. So the impact though there will be some impact to us. So there will be some operational impact because that separation of scheme and processing, Although we don't know finally what it's going to look like yet because it's under the European Banking Authority has to now interpret the law And then provide some guidance. But to the best of my knowledge and for what we can see today is all about kind of Organizing the existing resources we already have within Mastercard in order to be to create A discrete separation between the two. So the good news though is that that is not the case for everybody. That is the case for Mastercard. That is not the case for everybody. There are particularly local organizations in Europe, which do bundle Brand and Processing. And that's where the opportunity comes in for Mastercard. And it's the law, but it is at the same time the market. The large so you got the large issuers, which is talked about some of our wins. Some banks Operate across Europe and the world. Therefore, they want to centralize their transactions. So they want to see those transactions going cross border. We are in a great position to allow them to do just that. The same is true with the acquirers. Part of the legislation, we haven't talked about this yet, but we can. For those of you that will come to my session after this one, I'm sure it's going to be all of you. So Just so you know that one of the biggest complaints we've had in the past is that people can't get close to Javier's lunch table because the first group of people sit down and they never leave. So and the poor man never gets to eat lunch. So this year instead we're going to give him a chance to eat lunch and then we're going to have a separate session with Javier at 1:30. So we'll talk some more about that. But we haven't talked about this, but remember that the legislation does also talk about central acquiring. That's important. That means that you can be in one place and centrally acquire transactions from across Europe. That means somebody is going to have to bring those transactions To that central location. And that is of course true as well with the large retailers. For us retailers they want to simplify the way they do things. They want to simplify the checkout. They want to have the same process in Poland or in the U. K. Or in Spain or in Germany everywhere. So they need also to centralize those transactions. So we welcome that part of the legislation. We're well placed to help our clients make that happen. And we see good stuff coming out of that, but more after lunch. Great. Thanks. Caldart, Brazil is usually our largest market, but I've heard you talk about several examples in some of your other markets where regulation most people think regulation equals bad, but there's some it sounds like there's some good opportunities for us in some of the other markets. So can you Share some of those examples. I see the red marks, so I'm going to go quick on it. But clearly, I think the message It's not color blind. The message in Latin America from a regulation point of view outside of Brazil that is most advanced in terms of regulation Is that regulation equals opportunity. And as Jay mentioned at the beginning of the conference That more and more we talk to regulators that look into promote financial inclusion, reduce use of cash and pass policies that We'll create more competition into the marketplaces of Latin America. And I want to quick just kind of go through 3 examples of it that are very recent if you will. One is Colombia. So the government of Colombia just passed a policy or a bill to reduce 27% the cash usage between now and 20 By making their payments being electronic and also promoting conditions for that to happen. So it's kind of a clear Push in a market where less than 10% of the private consumption expenditures go through electronic payments, one example. The other example very quick is Chile where the government is opening up for more competition into the acquiring side And also bringing non financial institutions to issue prepaid cards to service other payment flows in the marketplace. It's happening. It's happening as we speak. It takes some time for that to kind of place itself and work, but it is another example. And the last one which kind of opens up a lot of opportunities for us is the Mexican case where 2 years ago Legislation was passed to open up the switching market. And we've been working hand in hand with the regulators and preparing ourselves. It's taking some time, But it's happening that we will touch transactions in Mexico and that is the case of Colombia and that is the case of Chile. So Clear in our case all the regulation that we've been seeing coming out equals opportunities kind of more Penetration of electronic payments in Latin America. Okay. Thank you all. Again, Gilberto and Dennis will be having lunch table discussions, so you can get a little more detail from them there. And then Javier is going to have his own session at 1:30. So thank you to my panel. And now we're going to turn the program over to Martino. Thank you, Barbara. So hello everyone and thank you for joining us here in New York or listening in to our webcast. I know this has been a long morning. You have been very patiently sitting here. We have a few more things for you to do. I'm going to pull this morning's session together from a business driver and Financial perspective point of view. But then we have a Q and A. So all of your pent up questions demands you can ask them. We're going to have then Ed McLaughlin talk a little bit about the product showcases that you can see down on the 6th floor right after this session finishes. So my comments, I'm going to do 4 things. First of all, I'm going to have a look at the July August numbers As well as our financial performance for 2015. Then I will be talking about our capital planning principles. Thereafter, I will provide us for an update on how we invest for growth both from a past perspective as well as from a future perspective. And then finally what you've been all waiting for, I will be discussing what we see for Mastercard's long term growth and our financial performance expectations for 20 16 to 2018 and yes, here's a 3 year period. Now, let me see if I can work this clicker or it does work. Good. Starting with 2015, our year to date business drivers. So let's review our current quarter's data through the end of August. The as reported numbers that you see on here reflect the data that we reported in the prior earnings calls. And the July August growth rates as you know Reflect processed growth metrics, which as you know is the only data that we have available intra quarter. And as you can see, The trends are about the same on average when you compare the July August data against the Q2. Based on these drivers, our expectation for the full year 2015 are essentially unchanged since our last earnings call. We continue to navigate through a number of headwinds that we've been talking about a number of times during the year. There are things like the lower gas prices that Chris was already talking about that not have that have not yet translated into other consumer spending, Our local currency headwinds, difficult situations in Russia and Venezuela as well as the larger upfront deal incentive amortizations. Before I move on, I want to mention to you 2 items. First of all, on the tax rate, you should continue to model a full year tax rate of about 27%, so there's no change. However, I do want to remind you that we are in the midst of closing out several tax audits and they might result in a benefit to our tax rate within the next 6 months and that could actually be as early as this quarter. But I can't give you any numbers around that until the tax audits are completed, so just stay tuned on this topic. And the second Item is that we have recently made a decision to terminate our U. S. Pension plan, which reduces our benefit exposure while locking in An annuity return for those employees who elected to not take a lump sum distribution. And that will result actually in a pre tax Charge of around $80,000,000 which you will see showing up in our Q3 financial results. We will be excluding this charge as a special item due to its one time major and it has nothing really to do with our underlying business operations. Here you can see our progress against our 2013 to 2015 performance objectives. So while we exceeded actually our minimum expectations for the 2013 to 2014 period, For the 2013 to 2014 period, 2015 has been a bit more challenging for all of the reasons that we just talked about. We're still coming out though within the objective range we expected to achieve though at the lower end of the net Revenue and EPS Growth Ranges. So let me peel the layer of the onion a little bit for you. When looking at our projected EPS growth for the 2013 to 2015 period, I just want to Quickly walk you through the various components of our expected performance, which were all contemplated in the objectives. So certainly the largest contribution to EPS growth will come from our solid underlying operating performance And that's driven by the top line growth together with the investment that we have investments that we have made as well as managing our expenses prudently. But over the 3 year period, we expect to see a benefit of about 3 ppt from taxes as a result of better aligning our tax structure to our business footprint And that does exclude the benefit that we might be getting from the most recent tax audits that I just mentioned. And also as you can see, we expect a benefit of about 4 ppt from our share repurchase programs over the last few years. So let me now switch gears a little bit and talk about our capital structure. Our guiding principles have really not changed. We want to preserve a strong balance sheet, liquidity and credit rating all in order to make sure that we make the right investments in order to keep The long term growth going. And given the strong cash flow capability that this business has, we expect to have cash flow after pursuing our growth strategies, which we would target to return to shareholders like we did before. At this point, our bias does remain towards share repurchases as it provides just more flexibility from a business point of view overall, But we continue to regularly review the dividend level. We will continue to evaluate our debt equity mix As we had established our access to the public debt market earlier last year, but keep in mind that we need to preserve Our strong A credit rating, which is an important consideration for both issuers and acquirers when they evaluate the settlement counterparty risk of their payment network partner. And here are some numbers. Since 2007, we have returned more than €14,000,000,000 to shareholders Through either dividends or share repurchases. Just to put that a little bit in context with what Chris was saying that when the company went public Public at roughly $5,000,000,000 of cap market cap. So it's $14,000,000,000 since 2007 that we've returned. And as you can see on this slide, Over the last 3 years, we have significantly increased our return of capital to shareholders raising it to €3,900,000,000 in 2014. This year you can see we are continuing this very strong trajectory having already returned about €2,900,000,000 through August and that does include the 45% increase in the dividend that we did beginning in February of this year. And we have about €1,600,000,000 of share repurchase authorization left at the end of August and we will likely be returning this year even more than we did in 2014 to our shareholders. So now let me turn to how we have been investing back into our business. So over the last 5 years, we've been able to deliver substantial Bottom line growth, while still investing in the critical areas that continue to drive future growth for the company and for its shareholders. Not only have we made significant organic investments, which resulted in the achievements that you just Heard from all of my colleagues this morning. We have also acquired a number of businesses which allow us to Either expand or leverage existing capabilities, again, as you heard from the examples that we talked this morning about. So all of you know that we have a very disciplined framework that we apply when evaluating acquisitions. We have strategic, operational and financial criteria that any acquisition must meet. But we know that it takes some time to see returns from these investments and Especially for some of the most recent investments that we have made over the last 18 months, it's relatively early days yet. However, when it comes to acquisitions we made a few years ago, the benefits are clear. We would have never gotten to where we got to in the prepaid space as Greg was talking about without excess prepaid program management capabilities, particularly in the area of multi currency cards. And DataCash which is another one of our older acquisitions has allowed us to leverage its world class fraud capabilities across e gateways. So going forward, you will see us do more of the same to drive future growth. So for example, we will continue To invest in geographic expansion and having heard Dennis just China really comes to mind at this point in time even though there's always like one Step forward and 2 step back, Dennis. We're going to have to work on this one. But even without knowing that the final what the final regulations might involve, We expect that over the next couple of years, we will need to invest at least tens of 1,000,000 of dollars to be both technically and market ready to compete as a player in China's domestic payments market. We will also continue to further invest in the digital space, as we can drive more electronic payments both in store and online. And we will continue to invest in our services areas such as safety and security, loyalty, information services and processing. Let me tee up a little bit the drivers of long term growth. And we are really not seeing any significant changes from what You have heard us say before. So as you know the macroeconomic environment is of course important for us. PCE growth, the secular trend All play an important role, but other macroeconomic factors such as the oil prices, Foreign Exchange, International Travel and Trade are very important to our business. In addition to the macroeconomic environment. The technological advances that we've been able to drive make it easier and easier for consumers and for merchants to transact in a digital way be it in store with a mobile phone or simply making a more secure and faster payment online. And this in turn presents an even larger opportunity for us to displace cash. At the end of the day, our core Product business is the foundation of our business model. And as Chris and Anne both mentioned, our ability to successfully sign New and renewed deals that make economic sense for us really depends on us continuing to Expand our product offerings that differentiate us from our competitors. Driving financial inclusion will help the world To reduce cash will help us to put infrastructure in many countries who still don't have it and it will expand our geographic footprint And that's really key to growing our business and the investments in it are really important. But beyond our core products, We look to expand our presence across the payments value chain. You've heard that theme this morning too. One of our bigger opportunities is in the area of Information Services and Data Analytics. So by coupling the current capabilities that we have in our advisers unit together with the vast warehouse of anonymized data with the new capabilities like APT and Side 1 that you have heard about from Kevin. We believe that we can offer value added solutions to a variety of our stakeholders be it issuers, be it merchants, be it other companies. Additionally, you heard Kathy McCall talk about how we are Standing beyond our traditional switching role to get into the various adjacent areas of processing. And that does not only allow us to touch The transaction that we might not be currently switching and therefore is giving us of course the data that we otherwise might not be seeing that We really need in order to power the analytics business, but it has also added to our capabilities in areas such as prepaid. And all of this work could actually open up more opportunities as countries are opening up Their domestic switching and processing businesses, so the competition to their local schemes. So with that as a backdrop, let me look at how these drivers translate into long term volume and revenue growth. The left side of the chart should look fairly familiar to you. Here you see the contribution from PCE and secular growth to purchase volume growth Adjusted for the markets, we cannot compete against domestic processors. And our market opportunity from volume remains about in the 8% to 10% CAGR range over time. So really no change from what you heard from us say over the last many years. Similar, when we look at the factors driving revenue growth over the long term, we still see that our business can produce Lowtomidteensrevenuegrowth, which is what we have said again many, many times. And this is the long term growth perspective. I just want to spend a minute on the different factors driving revenues. So looking at our traditional core business, core products, You just learned from my or you just heard from my colleagues that it continues to be a solid driver of growth. But you also heard from Gary, from Greg, from Kathy, from Kevin that over the last few years we Carefully expanded our services business through organic and through M and A investments. And these businesses are key assets that differentiate us from our competitors. They complement our core business. They allow us to compete effectively in the marketplace. And in fact, they now represent roughly a quarter of our revenues and produce a higher revenue growth than our core business. Beyond the mix of core and services, other mix factors impact our revenue growth over time. So these include what you all know domestic versus cross border transaction, credit versus debit versus cash, Whether we process the transaction or whether we switch the transaction or whether we not. We are not assuming Any significant amount of net pricing in here. And of course, we hope to continue to compete in the market for expanded relationships with existing customers and to attract new ones. So here is now what you've been all waiting for. Our performance objective for 2016 2018 and By the way, these include all M and A transactions that we have made to date. Based on our strategy and execution capability, We do believe that that business can deliver a net revenue CAGR in the low double digits over the 2016 to 2018 period. This does not assume a significant revenue uplift in this period from any new domestic China business. And additionally, Local foreign exchange will continue to be a headwind as the emerging market economies continue to be stressed and thus impacting They are currencies. We keep the 50% we kept the 50% operating margin minimum in here. Remember, we are not managing to that 50% margin target. Rather, it's the minimum margin level that we expect that our business can generate even after considering all the right investment opportunities for growth and managing our expenses prudently. We expect we are expecting an earnings per share CAGR in the mid Teens over the 2016 to 2018 period. And this does include an assumption of continued Sizable share repurchases, though those are driving a slightly lower benefit in the past given the share price. We are also assuming that the tax rate will be around 28%, 29% over the 3 year period Likely starting at the higher end of this range in 2016. So you can see when you take those two factors out that we expect The underlying operating performance for the future to be fairly similar to what you've seen over the last 3 years. All of these objectives are on a constant currency basis and they exclude future M and A activities. So thank you. And now let me turn back the program to Barbara and I think I'm inviting my fellow executive committee members up to the stage for the Q and A session. Yes, you're up. No, you don't have to bring a chair. There's a chair here for you. There's water on some of the tables. Okay. So now we're ready to start the Q and A session. Where's the clicker? There we go. Okay. And for those of you in the room, please wait till you have a mic before asking your question. And remember to please state your name and your affiliation for the benefit particularly of the management team here. For those of you who are using the Meeting app, you also have the opportunity to ask questions through the app with the ask question option. You do that by tapping the question mark in the upper right hand corner of your Again for those listening in, we also have the ability to take your questions and you do that by hitting the Ask a Question button on your webcast player. In order to get to as many people as we And in our allotted time, we ask that you keep your questions brief and limit yourself to one question and one very brief Follow-up. We're going to start the program here in New York in the room. And can we raise The house lights a little bit so that people on the stage can actually see the people in the audience. And cut the 3 if you don't mind. Right in my eyes. That is as good as It comes straight in your eyes. Can we lower the lights up here maybe to help that too? Okay. Brian, why don't you offer the mic to somebody? So really that has not changed in what we even had embedded in the last 3 year guidance. First of all, I think most of you know that in our Core business, when we transport extra transactions on our network, our margin is around 80%, 85%. And what we have done is we have really looked very critical at the business and we had made decisions in terms of what kind of investments we actually have to make in order to keep the long term revenue of the growth of the company going. And that's where you see the differential between that 80%, 85% to the 50 And so that's why we said we are not really guiding towards the margin expansion. However, Depending how the revenue comes in from time to time, there could be some margin expansion coming, but it's not that we are targeting at this point in Now for the future period for the 2016 to 2018 period, I have to remind you what you just heard this morning. First of all, with the governments really pushing a lot of cash displacement to electronic forms of Payment is a huge opportunity and with the technological advances is a huge opportunity, but that requires investment. So we obviously want to make sure that we preserve some of the investment capability of this company. That's what we had put into here. And there are 2 areas that I can call out for you specifically. You heard it this morning already. But one is China, Right. China, you don't really know when we actually can make additional money in China on the top line. But we do know as You heard from Dennis that we're going to have to invest money and that is likely going to happen before we make extra money out of China. And the second big area is still the digital area. With all of the things that are going on, we will have to continue to make some sizable Investments and expanding that in order to take advantage of the long term opportunity. We've been competing in those areas for a while with the other networks and the other players in there. In fact in the commercial space, it's not just AmEx or it's also all the relatively dysfunctional methods Currently in the commercial space. So in the travel space, I think Craig mentioned travel, we're competing against Between the travel companies, the airlines and the guys who handle all the bookings, the relatively inefficient way of reconciling and getting payments In the door particularly for non IATA certified. That's nothing to do with AmEx. It's we've got a chance to bring our capabilities To the table and the virtual card number is a key part of that which is something we own and have a patent protection on. So it's not Amex per se or Visa per se or somebody else per se. It's just great market opportunities in that space We're going after. We've been doing it for a while. I mean the commercial session today was because over the last few earnings calls A lot of people began to ask me questions about what we're doing in commercial. In the last earnings call I told them, you know what we'll just cover it at Investor Day, So everybody can get an idea of what we're up to. That's why it was brought out here. But the work in commercial started some years ago. It's just that we think there's a long runway yet To grow in that space. My view of what we're trying to invest in and it probably answers the question for some of the others is that I think that Commercial will be a relatively important place to grow and invest in with a relatively shorter time frame of payback than say services, Which are very important for our future because they are building a whole new set of revenue streams that go around the payment transaction And enable us to be embedded better and tap into different wallet sections of that customer, but they take longer to pay back. And then the longest to pay back will be investments in new geographies like in the case of China. You heard Michael Mieback a couple of sessions ago of Investor Day Talking about our investments in Middle East Africa. They're only now beginning to show us the kind of revenue and profitability Dynamics that we'd like to get from there. And he still has to put a whole lot of investment back in there on acceptance and issuer expansion. So the nature of this business requires you make money out of what you're doing in your core business. And if you really have a 10 year perspective, Start putting money back into these developmental activities. That's why I'm keen to not try and commit to constant Margin expansion as the basis for how the company should be managed, but to consistent franchise growth and revenue growth With smart management of expenses, but growing for tomorrow. So 10 years from here, we're still a really solid relevant player in a new digital world With new geographies, with services built well, that's what I'm trying to get done broadly. I just gave you my closing remarks, but maybe we can skip it. I was prepared for you. You're saying you go to college, right? You get a Question and you only know 3 answers. Who gives a shit what the question is? You just give the answer you want. It's called politics. So does that mean I get 5 minutes back on the agenda because you just You'll get it back. Jason? Jason Kupferberg from Jefferies. Just two quick ones. First of all, what are the embedded assumptions in the 3 year guidance around rate of rebates and incentives? And then just going back to the conversation on process transactions. Can you give us a sense on a global basis today, What percent of your transactions are you processing? And how should we think about that evolving over the 3 year guidance period? So let's start with the last question. You mean switching probably off the end settlement, right? Yes. You're all about switching 5 out of 10 transactions. And You're reminded by my name, Barri. 7 years ago or something, it was a rollout of 10 transactions. So despite all of the work that we're doing, there's still a huge One way quite frankly in terms of getting more and more process transactions. And the capabilities that Kathy was talking about Together with our switching capabilities hopefully will get us our hands around some of the more difficult countries, right? So in terms of the first question, we don't really break out incentives or rebates So what I gave you is the net revenue number, which obviously bakes in what our view is. And The one thing that I did say in my prepared remarks is that the net pricing, so which is basically any list prices We might be able to do and take some time to time depending on the value of the service that we're bringing a product or service that we're bringing to the market less Any deal incentives that we have to do obviously in our deals, but we think that that is a fairly Small contribution if any in our top line. Ryan, you want to hand somebody to the mic? Hi, it's Lisa Ellis from Bernstein. Couple of quick ones. First, can you talk a bit about on the with Mastercard Advisors with some specific examples, How that business is driving the core business? How they're linked? For example, with the Kellogg example or one of those that you gave earlier. Your mic is not working. Sure. So I'll take the advisers question. We'll start on that one. So I guess, Kevin really in Advisors has 2 things. 1 is differentiation, the other is dollars. That's how he kind of thinks about it. The differentiation part comes from how we turbocharge. We actually call it force multipliers. The ability for the consultants, the data analysts And then the managed services folks to go in and actually work with our clients on growing their business. So they'll do all types of engagements. They'll go in and analyze the situation. It could be optimization, could be usage, could be line utilization, could be cross border transactions, could be authorization rates and approval rates, Could be digital account acquisition, could be direct selling account acquisition. They actually can help people build businesses and then turn the businesses over to them as well. So they're embedded in many of our customers. And in partnership with the account teams, they're completely synchronized on the objectives of the account, All right. And then we deploy assets. Kevin deploys assets which are pretty much they're very transitory. So we can move them region to region, country to country to actually tackle the opportunities. But it's all driven off things that are going to improve our customers' portfolios. And in the end, it helps them grow business and helps us grow business. I think one of the sort of proof points is I mentioned earlier that advisers was a big driver of our business in Europe. And I don't think that there's any significant deal that we've done in Europe in the last couple of years that hasn't had a big advisers Component in there, I'm looking at Javier as I'm saying this. And not only does that create stickiness, what Kevin mentioned, But it also increases the revenue you earn off the deal, because actually if your advisers are in there helping the bank manage their portfolios, Then the volumes get driven up in the deal. And that's a pretty interesting result. We're starting to really track that now. Thank you. I just came back from Europe. I forget last week. I've been traveling a bit little confused. But I was in with Javier in Italy and in Germany, right? And we met clients there both in both those places Home Advisors was the key starting point of the relationship. In fact, one of the Italian clients is our Single biggest advisors client in RBS region and has consistently done business with us on everything from improving their own portfolio To targeting new customers to figuring out ways to improve the efficiency of their operation. They've done a whole range. So advisors connect directly to the core in some ways, but there's also portions of advisors in the analytics and consulting business That may not connect directly, but enable you to have an envelope around the customer where you become much more interesting to them and much more valuable to them. And your C level dialogues in that customer are of a completely different quality from what you would be if all you were discussing was Give me another 2% share of your credit card book. And that's kind of where this is going. Thanks. The follow-up was quickly on Mastercard Send. I think when you launched that back in May, it was quite B2B oriented. Today's the dialogue was very P2P oriented. Can you just talk a little bit about as that product's rolling out, as Do you see it more targeted towards directly competing in the P2P market? Sure. Just a moment on Mastercard Send. Think of it as a base capability that's absolutely unique in the marketplace that will allow us to get Consumer funds into their real bank account in near real time, any account in the U. S. We're also expanding that internationally with all the accounts that we That foundation technology has a lot of great implications. So large corporations looking to disperse, Advertisers looking to give benefit back to consumers, consumers wanting to send money to each other. So you'll see any number of examples and we have several downstairs of how we can use Send has a capability to enable all sorts of consumer benefit. Ryan, do you want to give somebody the mic? Hi. Thank you. Sanjay Sakhrani, KBW. I guess I just wanted to follow-up on the EPS guidance or expected range. Just the lower bounds of that range has been lowered. Could you just talk specifically to what's driving that? And maybe just the tax rate Edging up next year or over this 3 year period. Could you just talk about that as well Martina? Yes. So first of all on the tax rate, we make as you heard 40% of our business in the United States and that comes at a 35% tax rate. And yes, Congress is doing something about it. That's just Life at this point in time. And so even when we have a lot of our revenues and profitability outside of this country, It's very difficult to be making up that differential in order to drive it back down to the 27% that we're expecting this year. Especially this year, we have a number of discrete In there, right? So naturally, the tax rate would always be trending up unless we can do something from a structuring point of view. And that's why we're saying, look, It's a 28%, 29% over the period. Of course, we're going to continue to look at how we optimize things, but that's our best guess at this point in time. In terms of the ranges, I don't really think the ranges have changed much, other than that we're dealing with a number of things That on the top line and we've already talked about the investments, so I'm not going to go off with that. But on the top line, As you can see, we've been not really putting the China opportunity in. And we are still this year, we've been hit by about 2 ppt on local FX. And that is kind of one of the points that is really tough To get your hands around in terms of how is that going to change when you continue to see where the bricks are at this point in time and what's happening in the currency markets. And it might come through I don't expect it will be quite up to the 2 ppt, but it could be easily 1 ppt and that's what we baked into these numbers. One thing on the tax thing Sanjay, we started this work about the time I had joined and Martina and I had a conversation About our tax rate at that time. And clearly, we were in the low 30s Martina? Right. 32% or 33%. 32% or 33%. And we said we've got to get this to fit the footprint of our business because it doesn't make any sense to be paying that number when those days 55% Of our revenue was coming from outside of the U. S. She and her team have worked along with a bunch of people in Anne's space and with Chris' team and even with the product guys and ONT to build this thing in a way that I think can give us a 28%, 29% Sustainable tax rate. I don't think it will go down too much further until the mix of taxes changes much more. That's a 300 basis point, 400 basis point move In this period of time sustainable. The only reason you're getting 27 to go back up is because you've got one timers in there, which we are trying to discount for, So it doesn't get baked into the base. That's all. There's nothing else going on with the taxes. There's actually good stuff going on there. And just my follow-up. You guys were pretty acquisitive over this 3 year period. How should we think about the go forward acquisition pace? And how large can these acquisitions be? Thanks. Our industry doesn't have A great deal of very large acquisitions unless there's some colossal deal that happens tomorrow, but there's nothing of that type. And so it tends to be in the smaller scale And size. I don't have a good way to give you a sense of comfort about what deal I would do or do not do. I'll tell you what, we look at about between 1530 deals in a year maybe, right? Sometimes more because we're adding on our investments. But If you look at deals full M and A purchases, if you look at those, we do it in the previous years, we've done 1 or 2 in a year. It's just that last year Had a bunch of them come together this year that is 2015. I'm already thinking 2016. I got to survive 3 months. But You've got a mentality that says that we will be in the business available to be a good acquirer, but that's not what's driving any We are thinking it's if the deals are available, they're in the deal flow, they fit what we're trying to do either in commercial or in services. That's where you'll see the majority of our energy and effort going in. Hazel, you got somebody in the back there with a question. Thanks. Don Fandetti at Citi. I was wondering if you could talk a little bit about you have the EMV liability shift coming up. Wanted to get your sense if you thought there was going to be any sort of Confusion at the point of sale. And then can you talk a little bit about what that might do to digital? And then lastly layer in Like your views on contactless dual interface in the U. S. If you think that could Sure. I think there will be some level of consumer Confusion, but the U. S. Consumer tends to be pretty flexible in learning new approaches to use things. You get an iPad that comes with a A box and you press the start button and people figure out how to use it. So, dipping a card into a terminal and waiting a few seconds versus swiping it It's not a massive change in behavior. That being said, you're going to see some queuing issues. I mean the secret is out that EMV Authorization is slower than Mag Stripe authorization. We saw it in our own cafeteria where we put in EMV terminals. We had to add cashiers because It takes much longer for the transaction to actually get authorized and swipe through. So as I mentioned in my remarks, The momentum is good. Terminals are being installed. Chips are being put on cards. They're issued into the marketplace. So there's a good Chicken and egg momentum building. You're going to see consumers get much more comfortable with using contactless in Smartphones, it started slow. It's starting to pick up steam. The merchants are starting to turn on the NFC capabilities at the point of sale, Which will be very helpful. And all the terminals going out now, if you look at them, they're fully functional. So they've got MagStripe, they've got Chip, they've got PIN pads, they've got NFC capability, they'll do everything. So it's just a matter of time before consumers figure out how to use what they have in their wallet And use what the merchant has available and get through it. But like I said, I'm glad we're finally getting there and we're going to cut down. And contactless dual interface cards, do you think that Comes to the U. S. Contactless cards, does that come to the U. S. At some point down the road? I mean, we had contactless cards For a long time, I think what you're going to see though is digital wallets in smartphones being the equivalent of a Contactless card. I think you'll see more of that than more issuance of NFC enabled cards. Got it. Thank you. Just to give some international data 7 out of 10 transactions now in Australia are contactless on our network. And one of the reasons for that is the Australians have taken the contactless limit up to A100 dollars which means you can just about buy any decent day to day thing that you want to buy contactlessly. Also on the London Underground, we're doing we're Seeing over 1,000,000 taps a day. So and it happened really quickly. It happened within the first couple of months that it got up to that level. So I think consumers adopt really quickly. Okay. Hi. Thanks. Chris Prendler from Stifel. Not to be dead horse, but just want to go back to the guidance for a second. Low double digit revenue growth really impressive Earnings growth of 15% or so for the 3% to 4% contribution from buybacks suggests not much operating leverage at all. So I just wanted to see if I could ask it a different way. I felt like the acquisitions you've made over the last couple of years have been a little bit of a headwind. I would have thought that headwind would have lapsed by now, so you sort of grow into those acquisitions. So can you maybe call out a little bit of the investments you're making besides China? And then Chris, As you pointed to earlier that the amount of change we're facing in the industry, it seems to me that the static authentication and static credit card numbers Or something that may not be around for much longer just given the threat from fraud and the cyber criminals out there. So can you talk about some of the investments you're making on that front to take The payments industry is the next level. And is that something you're talking about in the next 5 years, we won't actually have a card and you have to change your company's name at some point maybe? You do the first one. I need clarification on the second one. Just on the first one, right? I mean the investments that we have done over the last 18 months Really they come to fruition more in the later part of 2016 2017 period. So you still have a little bit of headwinds baked Into our guidance for 2016, but then it's turning around a positive trajectory 2017 2018. And by the way, When you look kind of at the top line, right, contribution of acquisitions by 2018, it's about 1%, Okay. So we're not talking about a huge number, but it's 1% in there. Chris? Yes. Can you clarify the question? Do you see cards as a form factor? Yes. It seems like having a static card number and a CV number and something that A criminal could have a database in Russia. It seems very common these days. So part of the change you're talking about in the next 5 years, is that Part of it is biometrics. How are we going to move away from sort of a static number to a more dynamic thought of the Sure. Well, you're seeing EMV is part of it. So you've got a dynamic number being generated there. You're going to see hopefully someday tokenization on cards as well. You're seeing tokenization in the mobile payment space. So securing the payment that way. You're seeing biometrics fingerprint technology whatever the case might be. So there are different authentication methods and you have to think about authentication in the physical world and the digital world which we lay at night Thinking about I don't think static I don't think cards themselves are necessarily going to go away. If you think about it, you've got one of the world's greatest inventions a 2 by 3 inches piece of plastic. It fits in your wallet, fits in your purse. You can go anywhere in the world and use it To buy anything pretty much anonymously. So I think we're going to continue to see the evolution And the momentum of different form factors like smartphones. But I think cards are going to be around for a while. We haven't reached the tipping point yet on mobile payments. Apple getting in the game was certainly an elephant stepping on the scales, but we're not there yet and we're going to continue to see momentum and make sure that that's There's a lot of energy going into biometrics and other forms of identification Into the transaction. But that may happen I mean you've got cards on which you can actually use your fingerprint On the card itself as a way of being showing up as authenticator. You've got selfies. You might still use that in conjunction with a card or not. I'm not sure that digital means only a non card based divide. That's what I'm saying. So I'd be careful jumping to that conclusion at least for the next 4, 5, 6, 7 years. Out 10, 12 years everything may change. And I might be able to look at Chris and transmit money just by looking at him, which would be cool, potentially if he gives it to me and so. But Yes. Look at me, stare at me. Pretty much it will happen in the next 2 years. The thing that's interesting is what you see in Africa, I think it's like eco cash. They introduce mobile payments and then they come and they say, can you actually link a card to this service because the card can do point of sale, Card can go into an ATM machine. And so they move from the digital back into the physical. It's quite interesting. That's why the two things will coexist for a while. Okay. I'm also trying to figure out exactly what the expense Levers are and the growth opportunities that you're investing in. Maybe you could just touch on India. So we haven't talked about that at all. And I'll Yeah. Sure. So I think India has got a huge potential opportunity because of the amount of cash in the system And the effort that's going on over there to get cash out of the system. The challenge in India is twofold. 1 is the Level of infrastructure in the country in terms of acceptance is very poor. And it's not even as we've got a lot of smartphones. So it's not that you can say somehow the smartphone will drive a payment methodology. So there's a whole space to be gone through right now To think about how infrastructure will get built on acceptance of electronic payments. The issuing of biometric IDs to 600,000,000 Indians was originally meant to be connected by using a dongle on a cell phone to be able to identify with your fingerprint Your ability to pay even in a small village shop that portion of the expansion is yet to happen. What's really going on is opening of accounts And issuing people with debit cards. But there's very little actual utilization of those accounts happening yet. Like in all these countries, I find that last mile to be the most hard work and the most investment and effort that's going to be required. So what we're doing in India in the meanwhile is work with the government on things like scholarship disbursements and use cases to make those accounts get used. But in the meanwhile, Trying to work as hard as we can on expanding acceptance. India has a 1000000 merchants who accept electronic payments. There's probably another 50,000,000 merchants We don't touch this stuff. And getting to them is a big problem because none of them pay taxes. So It's just not this is going to be a long slog over the next, I would say, 10 to 12, 15 years before you get To a stage where it's going to be a big payback. It's important. It's interesting. It's growing well. We're making good money out of cross border both inward and outward bound. Tourism is prospering. That's a good thing. So there's a lot of money and growth that will come out of India. But the idea of this 1,000,000,000 people sitting in cash Converting over, I'd say, 10, 15 year kind of thing. Okay. We promised folks that are listening in on the webcast, We'll take some questions and a number of them have already been asked, but here's one that has not been. So this is probably Gary and or Ed. What are Apple Pay and other digital wallet technologies friend or foe? And are you seeing any impact to your business from either of these either positively or negatively. All of the digital environments we work with, we see as incredibly additive to what we're doing in the network. We want to make sure we have a pledge if you're a Mastercard cardholder that you can have a great experience in any environment that you want to use. And if you think about it, every one of these environments reinforces our value proposition to the consumer. That you can use your Mastercard today at tens of millions of merchants Around the world, you can get access to all the new technologies that you want to use. In fact, yesterday, we've announced you may have seen our Digital Enablement Express program To make it as easy as possible for valid token requesters that we've approved to come into the network and get access to a wide range of credentials. And we think that we'll actually accelerate the movement to being able to enable any device consumers have for safe and secure commerce using their Mastercard. So we see this as absolutely additive. It allows us to reach new commerce flows. It allows us to reach new merchants and everything which moves out of the physical world Into the digital world eliminates our primary competitor, which is cash. So we see 100% electronic transactions through those environments. So it's great for our consumers and it's great for growth of the network. I want you to understand that that's the balance at the end of the day. It's not that we don't recognize That this world holds threats and this world could hold disintermediation as much as it holds opportunities. Don't get me wrong. We get the idea. We're just trying to make sure that we use what we have as assets to be players in that space. So people want to work with us And use our network and our technology and our skills and our safety and security and the loyalty and rewards and all those things we were talking about. So they want to work with us to enter into the space of payments. We get the threat idea, but I think we've shown that if you engage In a constructive innovative way, you can actually be part of the value chain and not somebody who's watching. So 4, 5 years ago, it was The telecom companies, the MNOs who were talking about how they could do payments without us or even the banks for that matter. And as you know now 50 of the MNOs around the world which are the largest lot are all partners of ours in some way or the other. Does that mean that the threats got away? No. It could come back at some point in time. But at least we're working together and we've got a pathway of possible growth. So That's the context of Ed's answer. Tien Tsin? Cool. Thanks, Barbara. Just one a couple of questions. Just on The push towards Info Services and Adjacent Services, I'm curious what the impact is on margins, the incremental margins on that business versus Your core business, what does that look like? And then is there any measurable impact on revenue yield? And I have a follow-up. Yes. So let me give you a little bit of a So what I said in my remarks that our services businesses, so those are all the components that you had seen listed on the chart is about 25% of our revenues, right? So the core business is about 75% of the revenues. That 25 Percent of revenues has about a 40% margin at this point in time. So it is lower clearly than what we're producing in our core business. In fact, as I was telling somebody in one of the breaks that just like the rest of our business engine, you have a High initial investment in some of these. And then you've got a variable cost versus extraction yield that changes over a period of time, Because you're able to build capacity. A pinpoint acquisition has a fair amount of capacity in it. But when you buy it, it's a large One time purchase, large as in relative to what I would do organically. That's kind of built into the thinking of where we are today with the margin. Our general belief is that there's no reason and we haven't we have built that thinking into our commitment on margins going forward that we believe we can improve The margins of that services business as throughput goes through it. That's kind of what we're doing. We've already seen some of that happen over the last, I don't know, 3 years, 4 years Kevin In most of these, but there's more space there. Okay. So incremental margin there. It's a good place to meet, Andrew. It's It's got stickiness. It's got different wallets. It's got growth and it's got a margin profile that could be pretty Yes. Now it makes sense to push that and bring more business back to the core. I think it makes a lot of sense. Just my quick follow-up, just the nationalism topic, I've been thinking about that one a lot. Yes. Curious, Is it versus the last time we got together, is it a net positive or is it a net negative? Because there's conflicting themes out right. With Visa Europe potentially combining with Visa Inc, that's positive for Global. So I'm curious what your latest thinking is. Thanks. It's a great question. Depending on the day of the week, I feel it's a positive or it's a complete pain in the ass. So right now, it feels a little bit positive. And the reason for that is that things like what's going on in different countries around the world regulatory interest and nationalism Tends to create hurdles and benefits. And depending on which country is doing it at which point of time, either the hurdle is in my face or the benefit is in my tail, right? Hi. It just depends on the week. So it's a hard question Tien Tsin. I don't have a clear answer. It actually changes regularly. Like right now For an example, the idea of being able to enter China and get into the marketplace with A constructive relationship with the government where they want us to come in and bring capabilities that's attractive. The other side of that is they're going to want us to do a lot of things on soil, which is different from our traditional way of doing things. Now Fortunately, we've already done some of that work in China over the past few years, but we now have a clear idea of what else we need to do. So there's an expense side to it, but there's a great revenue side to it too. So I don't know whether it's a positive or a negative. I would be delighted if there was No nationalism and I could just work out of St. Louis, Missouri, but I have this little feeling that's not going to happen for the next 10 years. Well, in addition to that, it's the overlay of the whole political situation, right? So we also know every day of the week either the U. S. And China are friends Or there are some difficult issues which could go all the way to potential sanctions, right? And it would be foolish to think that that does not impact our How we deal with countries around the world? It's us clearly. Brian? Yes. Hi. It's Brian Keane. I guess, Chris, just there's been a lot of Talk about some of the deals and you mentioned the Costco deal that was pretty price competitive and then you're talking about a few flips. So Obviously, there's a lot of interest in is the margins in that North America business getting pressured by some of these contract negotiations? It's something we've been dealing with for a long, long time. I mean there's I don't call it margin compression, I call it yield compression just to Help Martina with her operating leverage. But in the co brand space, you've got very competitive dynamics right And a lot of that is just driven by the fact that there's another player in the mix. So you've got an issuer, you've got a network, you've got a merchant or a sponsor. They all want Some piece of the equation. And we are very thoughtful about what makes sense how far to go on these deals. But like I said, we've managed through this for a long, long period of time and we have different levers we can pull. There's value added services we can add on information services to offset some of that yield pressure. But so far so good and we continue to win and win in ways that we can make money. We want to grow, but we're not going to grow it at in a form that makes it hard for us to look ourselves in the mirror at night and say That is the right deal for the right economics for the right positioning for the future. That I think you'll find us doing. We'll lose some deals in the process. We'll win some. But overall, we're headed in the right direction. That's kind of what we're trying to do. Okay. And then just as a follow-up Martina, on the long term revenue growth, there's the 3 other factors mix, Pricing and share. Can you just give us some of the swings? Is mix definitely a positive the way you see the future? And then Price, is there areas that you see potential areas of price? And then of course on share, do you plan on being able to continue to take share? Yes. On Yes, for sure, right? I mean, our guidance does assume that we're going to expand our existing relationships and for sure trying to win new ones. And just Don't think about winning new customers just about financial institutions, right? Because as Gary was talking about, we are working with a heck of a lot more different Stakeholders around the world. So it's not just financial institutions. It's really expanding on with all stakeholders. In terms of the two other items, right? On pricing, I already told you that from a net pricing point of view, I. E. Less price, less deal pricing, I expect a very, very small if any contribution. And then from a mix point of view, That really depends. I mean, you guys have seen that swing around, right? It depends somewhat cross border, Whether our outside Europe cross border grows more than inside Europe and that obviously has some mix impact. It depends on Where the people are using the cards first at the ATM and then later going to POS and how much that business expands. So it's very tough For me to give you a rule of thumb here, but I think how I think about it, you're probably going to see very similar Phenomena is what you've seen in the last 3 years going forward. This is the beauty of this business, right? Well, To one extent, it's the beauty of this business. These kind of factors do not change in a flash. They They're just there. They're evolutionary. They develop over time. And over time, we get better and better, Adam. I think one of the things the product areas It has some margin potential going forward is commercial. And you've seen that we're growing, but we're growing off quite a small base Compared to our consumer portfolios, regulatory changes can drive banks to start to recognize commercial customers that they've previously given consumer cards to. They've previously given consumer cards to. You're seeing some of that occurring in places like Europe. Also if you look at a big bank's portfolio, you'll find if you look at their lending portfolio to corporate customers, Only 15% on average of that portfolio is carded. And that compares with That might be up in the 30%, 40% range. So what it says is and I think Craig alluded to this, You've got a lot of banks out there that are lending money to commercial customers. They're not even thinking Of giving them commercial cards, yes. And yet the return on a commercial card business is significantly higher than a consumer portfolio. So that's really why we're thinking of using our analytics, our advisers and all of the things that we know to identify these customers for these issuers to help really grow that business around the world. I think about what Kevin's made a point a number of times as you go into these relationships. So if you get to a certain point you do a deal then it's around optimization. And Kevin's point earlier about the deals where advisors has been fully embedded, which are becoming more and more if not all, the performance of the deal is better, right? Then you work with a client and then you look at the other services that we have and how those services can work into that relationship And extend the profitability and extend the revenue growth and the yield. So it's kind of interesting how it all kind of lines up, right? And I think advisers has been a real Strong focal point for us as we've embedded them systematically, Javier throughout Europe, Gilberto through LAC, Chris North America. I think that is a real key focal point for us as we go forward. The other big driver of revenues cross border And we're looking at putting our loyalty products to work in that. So for example, we bought True Access a couple of years ago. Well, we've been working in Gilberto's area in Latin America. And we've been giving some of the Latin American issuers the ability to embed True Access into the cross border offering. So when Latin Americans travel up to America, they get more reward points if they use these cards. And what we're seeing in the early uptake of this is, it's increasing the spend 2 to 3 times on the card. So if you're very focused and very targeted in these high margin areas, you can impact the change. So the other side of all this is you've got a company that relied upon one form of selling, which is the Clearing, authorizing and settlement business at FIs as the key of our business. And in truth that's still Where the key is because around the world accounts are held through banks. And without selling to them, you don't get to play. But what's interesting It's the kind of services they're buying from us is expanding. There is consistent discussion about the pricing of what was the core business, But these other services have got a different profile of what's bought and what's taken. And then you've got these services have the ability To go well beyond just FIs as Martino was saying to merchants and governments and get into them As well. So it's an interesting mix change that's going on inside the company. And one of the biggest things we have to work on Over the next few years, if we want to grow the services business well is to have the right kind of sales force That not only comprehends our original core clearing authorizing and settlement business, but it's trained and competent at selling a bundle. It's very different from just selling the transactional capability of signing up for your card book or your digital payment That's all of what's inside a lot of the thinking and the guidance that you get because that guidance you're getting comes out of our Strategic plans and our near term planning and all this is embedded in those numbers. If you think about it, one of the best examples of that is I think Kathy Across gateway services, processing and program management, she has a competency map that isn't built by those business lines. It's built by competency. And then when opportunities come to us, she's in a position where she can pick this, that and this to provide a solution that's very different than what anybody else can provide, All right. And she's in the middle of bidding on a couple of books right now where it's because of that uniqueness, A settlement system from here, a points engine from here, something else from here, all right? And it's that application, that ingenuity That's going to I think set us apart a little bit more over the next couple of years. Okay. In the back, Jim? Yes. Craig Moore. The expanding discussion of biometrics is interesting in that it has the potential to lower fraud rates across all channels. And I was wondering if there is a future that would include lower interchange tier or something similar For biometrically authenticated transaction. And secondly, things like Apple Pay have the ability to dramatically increase conversion, But we're missing Apple Pay and services like that potentially in browser, which is a huge hole for that capability. Are we going to see that maybe for even this holiday season? Thanks. Go ahead. Go ahead. On the interchange question, I mean, interchange is meant to balance issuance and acceptance. So there are a number of factors that go into that and they flex from Year to year, you can have a year where you've got very high credit losses, you can have a year with very low credit losses, you can have high fraud losses, low fraud losses, etcetera. So it's very hard to Specify the impact that improved fraud at the point of sale is going to have on interchange rates because there's so many variables that go into that. We can try to open up a new acceptance channel, which may drive down net effective interchange rates. Lots of moving parts there. But I think it is a good sign that we're going to have lower fraud rates with EMV in the U. S. And I think it's one of those cases where we're going to have to see over time what that does to interchange rates. But It's hard to specify one direction or another. One thing for sure is going to happen is I think over time the distinction between Card present and card not present rates will start to disappear not immediately, but over a long term period of time because you can have situations where Not having a card present is actually a more secure transaction than having a card present. So you'll see that change in how we think and define interchange taking place As the technology rolls out. Okay. I'm going to take one more question from the That's the ultimate forward looking statement, Because that's some time out. That's some time out. Yes. From one of our European investors who's probably ready to go home for dinner now. And this one is for Martina. How do you prioritize capital? European investors only ask questions from Germans, is And it's a German investor too. Yes. Okay. How do you prioritize capital given so many opportunities like China digital Services etcetera. That is actually the beauty of the business. When we look at our annual budgeting process And we are just starting that process to the fun of my colleagues. There are hundreds of projects and actually It's really tough to find a bad project in this business. But as every company, we have only limited resources. We can only do so many things. So what we typically do is, we think about investments in 3 buckets, right? The short term bucket, which is kind of up to 18 months and Things like putting salespeople and commercial street on the feet on the street That returns usually a fairly quick ROI. So we obviously would like to do these kind of things. We have a medium term bucket, which is Typically the 2, 3, 3.5 year pocket. And that's things like prepaid for instance. It took us about 3 years to get really this business up and running. And then we have a long term bucket. And in the long term bucket, you have a number of things in there. You have I would put China in there. At one point in time, there will be A significant return on China. We all know that. In every industry that goes into China, it happens, but it can take a very long time as well as you have To gate the investments before that. But I also would put into that bucket things that we're building out from a digital point of view. Digital infrastructure, I think we would be hard pressed to tell you today that when we just talk about Masterpass as a platform, what kind of ROI you're going to get back. But we do know that if you're not there in digital, you're not going to be able to power the transactions of the future. So That's how we think about it when we put our annual band together. I say to my colleagues and they know that they say it to their people, There is no long term without a short term. And so we're going to have to make sure that we can get all of these things lined up year after year after year and obviously put it under the Strategic timeframe that we look at when we look at our strategic plans, right, which is a 5 to 10 year period. Okay. Ryan, you want to hand somebody the mic? Jim Schneider from Goldman Sachs. One question About Europe, you talk about the long term opportunity for processing share gain due to the unbundling between brand and processing fees. In what countries do you think will be the first for that to be a real opportunity? And in what time frame? Javier? There is a country dimension for sure. And I think you could Think about that and kind of look at the domestic schemes in Europe today. So think that countries that have a domestic scheme, There could be an opportunity there. That will be the first dimension that you should think about say France, say Denmark And so on. And some that are partial like Germany or Italy, for example, which have a domestic debit scheme only, but not credit. So that's one dimension you should think you should be thinking about. The other one is the dimension of The large pan European players. So you're going to see retailers who want to centralize things. So Independently of whether the domestic scheme moves or doesn't move, you will see some players Extracting transactions from certain markets and bringing them forward to a central location. So you'll see that with retailers. You will see that with issuers. And you will see that with Central Acquire. So that's where I expect most of the action to happen and it's in fact where it's already happening. That's helpful. Thanks. And just as a quick follow-up, regarding M and A, you've talked consistently about processing and analytics being the main focus areas for you. Is that still the case in the next 3 years? Or are there other areas you would consider sizable acquisitions? So we actually talk about more than just Processing and the Data Analytics Information Services area. We said loyalty. We're not Everywhere in the world, yet from a loyalty point of view. We also said from a safety and security point of view, so in the fraud space, That we're continuously looking for properties there. And the last area is kind of catch all area technology. Ed McLaughlin and Gary Lyons, they're always looking after the next crazy thing from a technology point of view. And that might be some acquisitions. I was there too. So those are the 5 areas. Okay. I think we have time for one more question. Brian, give the mic to somebody. Ajay, Could you introduce me? Oh, bloody hell. Give the mic to somebody else. I'm just kidding. Mark Lane from William Blair. How are you? Loan buy side question. Visa Europe, let's just assume that Visa buys Visa Europe. Can you assess the positives and the negatives for Mastercard from such a transaction? And Are you convinced that it's a net positive or you're not sure? Or what are some of the variables that you'd weigh? Well, A lot will depend on how the deal is constructed clearly, right? Because that will determine what the market looks like when the deal is completed. But so let me put it for you this way. Out some years once the Deals done and the technology platforms are migrated and the people have been brought in and the cultural changes have been done All of which by the way we've lived through in Europe twice over as a company and it does take a little while To get that done. Once that's done, it makes one of the advantages that Anne talked about earlier, which is we are truly a global scheme Talking to some of the clients in Europe that advantage will go away and there'll be a level playing field on that front between them and us. Well, between here and there is a fair amount of time frame. That's the first part. The second part is that The level of attention and effort they're going to have to put in to get their technology migrated and not to mention money is also has some implication for what their pricing strategy would need to look like that probably would be some form of a near term positive for us Because they're competing and winning when we are not an association and Visa Europe currently is. If they were to look at that matter a little differently As a way of compensating for their investments then that may give us some opportunity in the marketplace pricing, business, revenue, growth, Sure. The 3rd angle is that once the large transaction happens and a number of the institutions there Take their money and put it to their bottom line. Then the question is what's their view going forward? And how much into the forward will they be able to be Open to what they'd like to do with their future relationships. That could be a positive as well, if it's not way out there. So It depends how the deal is constructed. I've been watching it for a while. It's something that I can't impact, but I can do things With it, once I know the deal is happening, we've been preparing for this deal to happen since the day I joined the company because I kept getting told it's going to happen this month. So we've got a lot of good ideas in place and actually we're itching to get a chance to do some of those. So we'll see. We'll see. Okay. Thank you very much. Before I turn the mic over to Ed McLaughlin, I want to just go through Two quick details. 1st lunch will be available as you walk out. Please grab a boxed lunch. As you make your way out to the elevators, the product showcase and the luncheon tables are both down on the 6th floor. The product showcase and the luncheon tables are both down on the 6th floor, so you have to go down one floor in the elevator. The one thing that I did forget to mention about Javier's breakout session at 1:30 is in that session we're also we've also I invited Dana Lorberg, who many of you have met before. She's one of our network experts, but she was very instrumental in the work that we did connecting NSPCA to Mastercard. So if you have questions about what we did in Russia, Dana is your lady to speak to you on that. And then the product showcases, we've got 11 different stations. I can't impress enough on you is that this is your chance to talk To the product experts, the people who live and breathe this every day, please take advantage of it and talk to them and learn about what they do. With that, I'm going to turn it over to Ed McLaughlin, so he can get up here and defend himself and his group about all the crazy things they do So I just want to take a quick moment to welcome you to what we're doing next with the product showcase, because this is your opportunity to See a lot of the products, the services, the capabilities that we've talked about today. But as Barbara said, I think more importantly, Give you a chance to talk and go deep with the leaders in Mastercard who are actually responsible for these initiatives. And this year, what we've done We've grouped it really into 5 themes. The first, I want to know you have a lot of questions about is how are we leveraging our data. And for that we've picked 2 examples. 1 is an acquisition, APT that Kevin talked about, about how we can work with merchants to leverage their data, To leverage APT's expertise to test and learn and answer essential business questions. And I think the essential question we're looking at here is should I introduce A low cost tuna melt. So make your vote and go see how APT does it. But next to it, we have something which is probably even more interesting. This is something that came out of the Mastercard Labs innovation exercise, which is our retail location insights. Merchant can ask a very different question. Where should I open my new restaurant? Well, suddenly we can use the transaction data we have. We can use that view of economic activity to give them insights they never had before for where to optimize their business by selecting retail locations. And for those of you who live and work Manhattan, just the example seeing the data based view of how commerce happens in Manhattan is really unique thing to see. So that's just some of the examples of leveraging our data. Next, we talked about protecting our transactions, the safety and security. So you can go in deep with the people who are building and running our digital enablement system MBS. You can see Apple Pay and get a Preview of Android Pay and Samsung Pay that will be built on top of it and see how we're using Masterpass to connect consumers directly and Safely to their financial institution for digital commerce. We also have other examples, how we're verifying identity online And you can even see the selfie pay. I've taken this thing like security of facial recognitions and biometrics and made it compelling We even fund for consumers to use all the while strengthening the transaction building affection for the Mastercard brand. I have a few other innovation examples we want to highlight, one of which which we talked a little bit earlier in the Q and A session is Mastercard Send. This was described as a breakthrough technology when we introduced it earlier this year. The ability for corporations for individuals to move money directly From the bank account they have directly into someone else's bank account in near real time. It's a fundamental change to the type of Services that are available out there. There's a lot of great businesses that can be generated from that and we'll show you this happening in real time downstairs. Two other examples, the CSAM acquisition we had, now our mobile transaction solutions, can see how we're using it to help retailers Engage with their customers better. And another great example is the Direct Express program from the U. S. Government For people to receive social security benefits, not only are we powering that prepaid program, we've actually developed the application To help consumers manage their accounts. So it's a great example of the synergies in the business. But we also know The key to digital is unleashing the power of third party innovation. So we also have our open API and services and how we're engaging with the developer community To use Mastercard services to extend the network and create all sorts of new solutions. So we've had a global set of hackathons. You'll see some of the results from that are out there, But how we can engage the development community in ways we never had before. And then one of the examples that Anne mentioned and one that we're very, very proud of, Which is Mastercard Aid. This is how we've taken capabilities that Mastercard had to address a real problem in ways that never could have been solved before, To safely and efficiently move benefits to the people who need it the most, when they need it the most, working with non government agencies. But it's not simply about getting them sustenance. This is also the first steps to financial inclusion and sustainable economic development in those communities. And then driving preference for Mastercard. So you can see the loyalty solutions that Craig talked about earlier with pinpoint And how that adds and enhances value. And things we're doing with priceless, with priceless cities and the priceless platform To make every Mastercard experience that much more valuable for cardholders. And then we end with the Mastercard network that irreplaceable asset that ties all of this together globally. So again, I hope you take the opportunity to go in deep on some of the things we're talking about, Talk with the leaders who are driving these into the marketplace. And I think you'll really see this is how we've been able to gain share year over year. This is how we're diversifying our business by adding new services and capabilities and engaging with new partners and really see how we're bringing the strategy we discussed today to life. So with that, I really look forward to seeing you downstairs and I will turn it to Ajay Banga for a few closing comments. No. Ajay Bangas delivered his closing comments earlier during the Q and A session. So with that, thank you and I'll see you all downstairs.

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