Status Update

Jul 25, 2013

Welcome to the conference call to provide an update on the EC Proposed Legislation. My name is Trish, and I will be your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded. I would now like to turn the call over to Barbara Gasper, Head of Investor Relations. Barbara, you may begin. Thank you, Trish, and good afternoon, everyone, update and thank you for joining us today on relatively short notice for a discussion about the European Commission's proposed legislation that was issued yesterday. Update. With me on the call today are Javier Perez, President of Mastercard Europe and Noah Hamp, Mastercard's General Counsel. Update. We thought a call would be the most expeditious way to get back to you regarding all of your questions and we are able to take advantage of Javier being here and purchased today, update. Following some brief comments by Javier, we will open up the call for your questions. In total, the call will last update. Finally, I need to remind everyone that today's call may include some forward looking statements. Update. Actual outcomes could differ materially from what is suggested by our comments today. Information about the risk factors that could impact our business update summarized in our most recent SEC filings. And with that, I will now turn the call over to Javier Perez. Javier? Thanks, Barbara. As you saw in our press statement yesterday, we are fully supportive of update on the Easea's goal of encouraging a more secure, efficient, competitive and innovative electronic payment system in Europe. However, we are concerned that some components of the proposed legislation would have the unintended effect of hindering competition and innovation and would be harmful to consumers and small merchants update. Perhaps, let me start by summarizing the 6 key components of the EC's update on the proposed legislation as currently drafted. First, credit and debit interchange will be capped update at 30 20 basis points respectively for cross border consumer transactions within the European up to date. These same rates will then apply to all domestic Consumer transactions in the EEA 2 years after the regulation is approved. It appears update on G and S cards where they provide some form of interchange to issuers. Commercial card interchange rates are not covered. The unroll card rules will be preserved except update for products with different levels of interchange. This provision only relates to cards issued and used within the update. 3rd, surcharging will only be permitted on products that are not subject to regulated interchange update. 4th, a merchant would be able to sign up an acquirer who is established in another country update on that quarter would pay a maximum of 30 basis points, 20 basis points on consumer credit or debit transactions respectively. In terms of co badging, a network would not be able to restrict issuers from putting a competing brand on their card update on their credit and debit cards. Cardholders would choose which brand to use at the point of sale and merchants would be allowed to update on our consumer towards its preferred payment brand or method. Finally, the proposal comes about update on separation of brand and process integration in terms of legal form, organization and decision making. The proposed legislation will not limit Mastercard's ability to charge network fees to issuers and acquirers Other than issuer net compensation, restriction that would limit the amount of incentives that Mastercard provides to issuers update on the update. Since Barbara tells me that separation is the topic where most of you have questions, let me spend a bit more time on this. We believe that the separation component of the proposal is attempting to address a problem update that does not exist with respect to our network. The topic of separation is not a new one. It was brought up in the EC's green paper on January, but actually goes back further than that to the SEPA update on the CARTs framework that was issued in 2,005. Mastercard already complies with that framework, We do not impose a processing requirement for any transaction done in our cards And we have separate pricing for brand and processing. Therefore, Mastercard customers are free to issue Mastercard cards update or acquire Mastercard branded transactions without purchasing Mastercard's processing service. Consequently, In many instances, Mastercard does not process transactions made with 1 of the Mastercard brands. In fact, update. Many of you now know that we process well below half of all POS transactions done on our cards in Europe. And our primary competition comes from domestic processors, many of whom unlike us operate as monopolies update and they will also be subject to the separation requirement. We're still analyzing the full legal and business implications of the separation update. Before we go to your questions, let me quickly review the next steps in the process. The proposed legislation now begins a lengthy process involving debate an amendment by the EU Parliament and the Council of Ministers before it can be adopted. There is no fixed timeline for this process. The proposal could be adopted before the EU Parliament goes into recess in April 2014 update in advance of their elections in June. However, there is a possibility that the adoption of legislation could be delayed until 2015. The final legislation, if approved by the European Parliament and the Council of Ministers, could be different than what's in the initial proposal. Throughout the process, we will be talking to the EC as well as engaging members of Parliament and the Council of Ministers As we work to better understand and clarify the legislation as well as identify Because this is merely a proposal and the language in some of the provisions is not entirely clear, it is difficult for us to comment definitely update on the InvestorCar business in Europe. But let me leave you with a few additional thoughts. We are pleased that the EC is actually thinking about a level playing field for all parties update and clearly intends to include at least part of the American Express business in Europe. The concept of separation applies to all update on both global like Mastercard and the many domestic schemes that exist in Europe today. It may well mean update that this opens up more competitive opportunities for domestic processing. Although the language does not provide clarity as to what is update on our strategy. We believe the focus is on ensuring switching competition, a goal we absolutely update. We're confident that regardless of the final form of the legislation, our business model will adapt as necessary. In other jurisdictions where regulation has been passed, we have been able to work through it. I know that I don't need to remind you update on the Regardless of the new proposed legislation, we will continue to offer our clients update. I guess update. That concludes my remarks. And we are Barbara and now Noah and I will be more than delighted to take whatever questions may be out there. Okay. Thank you, Javier. We're now ready to begin the question and answer period. And in order to get to as many people as possible in update in our relatively short timeframe today, we will be limiting you to a single question. Operator? Our first question comes from Darrin Peller from Barclays. Please go ahead. Thanks, guys. Javier, thank you. Just the first question, you were mentioning the language around the separation of the processing and the brand scheme. Is that were you suggesting that your brand related revenue could be at risk Or not. And then shouldn't that also be that separation also be a material opportunity given the impact of the local networks? I think you started to allude to that. Would they also need to separate between the banks that own them and the processing entities that I would imagine could give you a bigger opportunity to gain share in Europe for that local from those update. All the transactions that are initiated if you like by a Mastercard brand in Europe, Which is proof that indeed not only we have competition, we have a very steep competition in terms update. Let's call it the transactions initiated by a Mastercard product. Now we have been progressing update Well, I've been keeping you updated on that and things like the Netherlands and so on. So it's a clear competition in the market. And yes, we're doing well on that, but we're still far update from where we should be or could be. So indeed, we do that as proven by our progression and the situation today. But it's my opinion that in one way or another, Not everybody in Europe who processes transactions and I'm alluding particularly to domestic schemes, fleet are update allowing that in a fair transparent competitive way. So my view is that as update. This proposal unfolds and my belief is that indeed what the commission is trying to do is to generate some more competition. And if that is the case, we are a player. We're well positioned. And indeed, we will continue to compete update. No. There is a separation between the brand revenue. As you know, we make money In different ways. So one is the transaction processing. That's one thing and this is what we are right now talking about. And the other thing is the branding, Right. So when you put the Mastercard brand in a card, you are getting a bunch of services and there is some fees for update. So those are separate things and we shouldn't mix them. So the brand revenue is one thing and the processing revenue is another. And what this may open for us is the opportunity to continue with our brand revenue, but increase update on our processing services and hence our processing revenue. We do not bundle at all that today as update. As I was telling you and yes, if the spirit of this legislation, if you like, potential legislation is to increase competition, Yes, I believe we are well placed to continue to compete in that space. Okay. Operator, next question please. Our next question comes from Sanjay Sakhrani from KBW. Please go ahead. Thank you. Good afternoon. So just a quick question, understanding that the lower cross border interchange rates over time haven't really impacted you from an economic standpoint. I was just wondering if your relationship with the issuers has evolved in any ways since the rates have gone lower? Thanks. Right. So as you know, we often talk about this. And the answer is, We provide the fees represent a small portion of the revenue that an issuer or an acquirer update on the progress we've made in our business. So, so far, what I can tell you is that the compression of the interchange, Which we have been experiencing for many years now. This is nothing new. I mean, I hate to admit it that I'm this old, but I remember very well when I first started in this business, update. And so far, we've been able to more than compensate with incremental services, with incremental benefits to both sides, issuing and acquiring to more than makeup for whatever, let's put it this way, Compression there may have been in the interchange. So and pricing has always been a competitive thing. Pricing is always subject to competition. So to answer your question in a perhaps simplified way, of course, we always have competition in pricing. Of course, we're always under pressure on pricing, But we have been able to weather well the let's call it the reduction of interchange that has been happening in Europe for now really quite some update. Sanjay, hi. It's Noah Hanft. And if I could just add from a global perspective, we have now experienced regulation in other markets, update. Decreased interchange fees in the U. S. On the debit side in Australia as well. And in all these update this has had no effect and no impact on our network fees. So we're confident because it's already so competitive on the network fee side There's going to be no increased pressure on our fees. Perhaps one example even closer to heart is my native country of Spain, where update. Actually, we just experienced recently a pretty deep reduction of interchange. And again, we've been able to deal with that actually quite well. Operator, next question please. Our next question comes from David Togut from Evercore Partners. Please go ahead. Thank you. One question for Noah, if I might. David, could you please speak up? We can barely hear you. Yes. Can you hear me now? A little bit better. Okay. Noah, can you address the question of what would be required for legal separation of update on Mastercard's branding business from the transaction processing business today. Yes. I think in In terms of Javier's articulation in the beginning, he's essentially said what we know. The proposal doesn't give a lot of detail. So I think Kind of what all we have is kind of what you see in there. So I'm not clear what more I could add on that at this point. I see. And then just a quick follow-up if I could for Javier. Same question really to create independent organization and decision making update for both your branding business and your processing businesses. What would be required today to achieve that? And up to what extent do any of those conditions already apply a Mastercard? Well, I think Noah has Perhaps if you want some background to that, I mean, what I can tell you is that in the past, we already had an independent company in Europe. It was called EPSS, if my memory serves me right. That was actually providing processing services to the Mastercard Europe update. Operations. So it is not unusual. It's happened before. But obviously to really answer your question in the detail you are Asking, we don't we can't. That's not what I tell you. We do need to understand better what it's meant or what the intention is. If I if you think about it a little bit as to what may be intended, right? If the intention is to generate incremental competition, I think that You don't need a very profound separation, right? The only thing you need is that if today somebody is not allowing that, update. Everybody is allowed to compete. Coming to that marketplace, take for example a domestic scheme, okay? And so everybody can go there and say, hey, We're now going to go and bid for this business for this transaction business. So I would assume that that's the logic Behind the proposal? Yes. The only thing I would add is that we're pretty comfortable that the language of the Proposed regulation doesn't require a change at the holding company level. So having that being the case, we're confident that however it comes out and if Ultimately approved, we'll be able to adapt our business to comply with it. Okay. Operator, next question please. Our next question comes from Jason Kupferberg from Jefferies. Please go ahead. Thanks guys. So one of the aspects update You referred to is getting rid of the consumer surcharging on the cards that are covered by the interchange cap. So that would seem to be an incremental update for you guys, can you give us an idea of how widespread surcharging has historically been across the EU In terms of which countries and or verticals have used it the most? Look, there are some examples, but update Not very prevalent in Europe. You know that perhaps the only thing that at this point that comes to mind is for example some airlines I can think of a couple of countries where taxis when you want to pay for a taxi, you may be asked Nevertheless, yes, I do believe that's a positive. I believe that the update on the consumer experience is a good thing and I believe there's some clarity around this. It is a update. The only thing I would add is that we do note that the unregulated schemes and And by that I mean American Express's proprietary business at least as it appears from the language would face surcharging. So as I said higher price update Teams would face potential surcharging and we would not. Operator, next question please. Our next question comes from Craig Maurer from CLSA. Please go ahead. Yes. Hi. Thanks for taking the time today. There's some language in Article 8 that seems to indicate that a scheme can impose update on fees or other obligations, if their brand is on a card, but it is not the brand that is used to process. Does this change at all anything around your branding fees, or that thought process around assessments? Thanks. Update I believe if I'm not mistaken that's the language that relates to assessment type fees as opposed to brand fees Or it's a question about co badging. I think it's what's Article 8, is it co badging? Yes. So the co badging provision actually addresses the inability if Again, if it's reject issuers that wish to have multiple brands on their cards. So the update, for example, let me add to that, just some clarity around that. We've always seen and acted and feel update that you could consider competitors to Mastercard in many ways where we don't co badge with. We today do co badge update with pretty much all domestic schemes in Europe. So we don't feel that Again, that we are restrictive in any way in order to cobatch with people. And the logic is very simple. If somebody can come to me with incremental volume and transactions, I have no problem with that. In fact, that's a good thing, because again, we can provide better service to our clients. We can provide better return to our shareholders. So, and again, I don't see any we do it today and I don't see in there any issue with our fees From what I can read. Operator, next question please. Our next question comes from Radev Gorgios from Bernstein. Please go ahead. Yes. Clearly, the EC is trying to foster competition in the switching business. So I kind of have a 3 part question. Who are the competitors or set of competitors that could pose an incremental competitive threat catalyzed by these new regulations that are being proposed. Secondly, Do you see any scenario of increased competition specifically occurring in your cross border switching business? You've talked some already about domestic, but in the cross border area, is there any scenario of increased competition that could occur as a result of these regulations? And then 3rd, what advantages can you use to respond competitively if in fact additional competition is fostered update. Right. So first, let's talk about who are the players out there today. I don't think that This framework or this potential legislation changes the players in any way. I mean, the players will be the same. I think what we are discussing here is the opportunity that increasing that competition will present to the existing players, update All of them, not just Mastercard to go and penetrate those pockets of transactions that today update. Have not been possible to penetrate. So that's one thing. And let's and so with let me now turn on to the second part of your question, which is the cross update. Let me tell you that again in cross border, we do not process all our transactions. There is quite a few update on our financial results. Thank you. Thank you. Thank you. Thank you. Update. So again, we don't tie, we don't bundle domestic or cross border. And today, there are many examples of both, Whether it be domestic or cross border in Europe. So as far as the opportunity is concerned, well, you know how much we process Less than 50%. So in as much as we all those transactions are put in place, We will try to go after that. Operator, before we go to the next question, no, I think you have one point you wanted to update on the Article 8 question that Craig Moore asked. Yes. I thought it answered that question. I think my answer was incomplete. And it relates to Transactions under that Article 8, if we do not process. And in that case, we're not able to impose volume based fees, but our additional card fees are permissible under the language of that provision. Just wanted to be clear on that point. Okay. Thanks, Noah. Operator, next question please. Our next question comes from Brian Kane from Deutsche Bank. Please go Hi, guys. Let me just ask a high level question. Is there any risk from this regulation to your revenue stream? In particular, I understand that some of you're not doing all the processing, but what about potentially losing some of the brand or processing through co branding or some of the changes and that's going to happen via cross border. Thanks. Frankly, I think we're exposed every day To that, as I was telling you, we don't bundle. Anybody can reach an agreement with anybody, any country with any other country, any issuer with any acquirer, update. I think that the market is what it is. And again, in as much as Again, pockets of transactions which are inaccessible today become accessible, that's an opportunity. So but We do compete every day. Really, this is in a way business as usual, if you like from that perspective. Yes. I'll just as I mentioned before, we have dealt with depressed interchange. It's not something that we seek, but our business has adapted to it in every market and there has not been a revenue impact update Anywhere. Operator, next question please. Our next question comes from Chris Brendler from Stifel. Please go ahead. Hi, thanks. Good afternoon. Javier, I was wondering if this legislation in any way would impede the progress update on SEPA and the progress in Mastercard gaining domestic processing share, a la the Netherlands and the smaller deal you had in Italy, it seems like this creates uncertainty for Issuers and Banks in Europe, maybe I'm reading that wrong. Right. Look, in Let me say that what we object about this really is The fact that we're putting we're loading all the cost onto the consumer, right? I mean and we don't think that's right. We think the cost of a transaction should be borne by both sides, right? The both benefit, the one selling and the one buying. And what we're trying to do here is to put the burden only on the person buying that they have to pay for everything. We don't think that's right. Now at the same time, is that going to be Let me put it this way. Is that going to be a situation whereby the consumer is going to stop using the cards or the issuers are going to stop issuing? It's not a good thing, but at the end of the day, we will continue to manage and it depends on your view update on the outlook for the Q1. And so on and so forth. But we've gone through this before. And again, I think that you have the answer in the market. And I think that we are well positioned to take advantage of the situation, if you like. I don't know Noah if you want to add something to that. The only thing I would add is that the notion of opening up domestic switching Via the separation provision, I think presents an opportunity for us and it is consistent with the separation provision. So I think rather than impeding separate progress That could in this situation actually have a potentially positive impact. Okay. Operator, next question please. Our next question comes from Julio Quinteros from Goldman Sachs. Please go ahead. Hey, guys. Thanks. I have one question. I actually just wanted to follow-up. I think Rod sort of asked a question, but I'm not sure we got the answer on what you guys would do from a competitive perspective. So all things being equal, if interchange update, just kind of made the same for everybody in the space here competing in Europe. Can you just maybe go back and help us get a sense for update on what has to change about your go to market strategy assuming that you can't use interchange as a way to differentiate, what other things can you do to continue to sort of gain market share, Continue to grow in the areas that you guys have been focused on. So more from a strategic perspective, what would be the things that you guys could employ as far as potential mitigation strategies? Okay. I love you for that question. What can I say? I mean, I could spend a couple of days on your question here. No, it's a great question. Joking aside, I think that Mastercard is successful in the market, Not because of interchange, but I would like to believe that we are providing some benefits to our clients That frankly are better than our competitors. I mean, what I always say is that you got to remember that in Europe, Our competitors, one of them is Visa, no question, but you remember you got to remember that they have a different structure than Mastercard, update. So whatever come up with a global improvement, we can put it in place rapidly and swiftly. It's available around the world for our clients. Our competitors cannot do that. We have an advisors organization, which is global, which can bring our European customers learnings from around the world. We have a system that is bigger and therefore more efficient because we have a global system. I'm talking about transaction processing. The list goes on forever. So I understand the importance of interchange, don't get me wrong, it's Fundamental and it's really important, but I think that we win business not only because of interchange. I think there are many other things we do, right? We do well at our brand and so on and so forth. So I think we will continue to do well. I mean, that doesn't mean, of course, that our competition is not going to get tougher And it's not going to get more aggressive and all that kind of stuff. Absolutely. But I'd like to think that we will continue to provide good value to our clients. Okay. Thanks, Javier. Next question please. Our next question comes from moshi khatri from Cowen and Company. Please go ahead. Thanks. Can you talk a bit about the process itself? So obviously, it's going to take some time until we get to the final version update on the question, what should we expect to next week? And then update on the vendors, are you guys going to be involved in terms of providing your puts and takes in terms of where this thing should go directionally? Yes. This is Noah. I think what we anticipate is a fairly extended process. Now that the proposal has been released, it goes through goes to the European Parliament. I think it's almost a certainty that there will be proposed amendments and that will begin a process where we will be engaged we'll continue to engage with the European Commission. And by the way, we have great respect for the commissioner and the commission. So we will continue to engage with them as well as interact with the members of the European Parliament as well. I think in this particular situation, there's been A lot of outreach by a number of consumer groups all across Europe and small merchant organizations Because of the adverse impact on consumers that Javier alluded to, so it will not be obviously just our voice, but update on the number of consumer groups and other organizations articulating concerns about the at least some of the provisions of the proposed regulation. In any event, it will move through in order to be approved, it will have to be approved by the European Parliament by a majority as well as the Council update. So it is a rather protracted process. I'm not going to speculate how long it will take, but obviously it takes update. In the course Of doing so and interacting on these issues, we will of course as others will point out any update Of the unintended adverse consequences to consumers or others from the proposal. Operator, next question update. Our next question comes from Don Fandetti from Citigroup. Please go ahead. Yes. Javier, I wouldn't want you to comment on specifically Visa Europe, but I was just curious is your sense that they would have that same separation currently in place? And Would this change your competitive relationship with Visa Europe in any way? I think your question was, does this change the competition with Visa Europe in any way? I really don't think so. I think that the competition with Visa will continue to be the same. So I don't see because the proposal puts Mastercard and Visa Europe on the same footing. It moves towards a level playing field with Amex and it potentially opens up opportunities for domestic processing, I guess will be the summary, if I could do that. So, no, at this point, I don't see it. No. Operator next question. Our next question comes from Tien Tsin Huang from JPMorgan. Please go ahead. Thanks so much for hosting the call. I just want to ask you covered a lot already. Just, Javier, just interchange as a percent of total revenue for banks in Europe, Can you compare that for us to the U. S, for example? Is it lower, meaning the European banks rely more on consumer direct fees than maybe the banks update in the United States. Just trying to give a sense of how important interchange is as a percentage of the total. And maybe as a follow on to that, Can you just give us a rough sense of your revenue exposure to credit versus debit in the region? Thanks. It's difficult for me Tien Tsin to give you A detailed answer to your question. But perhaps generally speaking, if you got very large differences within Europe For a variety of reasons. You've got countries like the Netherlands where the locally they update. Things like interchange, for example. So you got other countries where historically the acquirers have been Paying for terminals, for example, which then drives a higher cost, sometimes included in interchange, other countries where it's different. So It's very difficult to really give you a European thing. I mean, and this is part of the issue, right? This is part of the problem, which Why many member states are saying, well, but the rates that may be applicable in say France, for example, May not be the same in Poland or in Sweden or in the Netherlands, simply because in the Netherlands there is bilateral since instead of interchange And has been some legislation, right? So the perhaps to say if update Staying with the general view, just to say that my sense is that the reliance of the European banks On interchange is a lot less than the U. S. Banks. I mean, take it put it this way, you know that the euros Have historically been providing almost as a service, the card to when you open an account, you get a debit card. That has been the practice in Europe and this is because the Europeans have also taken into consideration the fact that cards update. Save money. So when a client goes to a branch, a client of a bank goes to a branch, if they have to go through the window Undo a cash transaction, boy, that takes a lot of time, takes a lot of money for the bank and a lot of time and money for the client of the bank. So They have been compounding that into their business cases, if you like. So it's just difficult at this point to make a comparison for me. And on the revenue exposure, Javier, we're not going to comment on. You know, Barbara, you're not going to let me comment on that. Good answer, Javier. Update. Okay. Operator, next question. Our next question comes from Gil Larrea from Wedbush Securities. Please go ahead. Yes. Thanks for update. So I think it is clear that the U. S. Trying to foster competition here and we've talked a lot about the competition that would be on the processing side and opportunities that update. But I would assume that they also would like there to be competition on the scheme front, what we call brand. And I think earlier you talked about the fact that you've always had the possibility of competition and that's going to be going forward. But Wouldn't things change now? These European issuers are going to look at what happened in the U. S. And realize they're going to lose a lot of revenue, update Same time, they may end up putting Visa Europe, which means they won't own a U. S.-based scheme, but they'll also update on the 1,000,000,000 of dollars they'll get from Visa in exchange for that. So wouldn't that from that perspective an issuer in Europe realizing they're going to make a lot less money, Their fees to you are not going to go down. They no longer own a U. S.-based scheme and they have a few $1,000,000,000 to spend. Wouldn't they try to update. Create a really low cost scheme that doesn't necessarily have the bells and whistles that you and Visa provide, but will help them adapt update to this very, very different environment. Look, it's always a possibility, absolutely. You've seen it Before many times, I mean, you still have a lot of what today our domestic schemes in Europe Used to be Pan European, right? I mean, think about things like what we have in Spain or Portugal For France, they used to be together and associated in some ways. That has disappeared sort of thing, simply because the economics haven't really worked out that way. Update. Now you also remember the whole story about the 3rd scheme for sure. You remember Monet, which was just to name one, there were others. This is just one of them That in the end, it was not all that economical. So again, and it's really down to, yes, Of course, there could be some extra money in the system and you could say, well, maybe that money that comes from Visa Europe could be invested Into duplicating something that already exists, that it works well and is efficient and is great? It could be. Update I just don't I don't frankly, my own personal opinion, I think that's going to be hard. This is Noah. We of course can speculate in terms of what will happen, but we do have kind of real life examples in the market where Issuers were denied interchange revenue or significant reductions in Australia and the U. S. Debit. And we know that the reaction has been that cardholders, consumers have paid the price. In Australia, I think it was the study showed that nearly $500,000,000 In car fees were added to Australian consumers and free checking in the U. S. Post Durban was dramatically decreased, I update. 50% or thereabouts. So that is one kind of reaction that we see. Operator, next question. Our next question comes from Bob Napoli from William Blair. Please go ahead. Thank you. The reduction historically around the globe, if you had a reduction in global interchange like that, have you seen in markets that are That have a much higher percentage of cash. Have you seen much faster adoption? I mean, is there are there some potential benefits here from growth of electronic payments. It's a good question. I don't have any data on it, but obviously we've talked about some of the down Lower interest change rate that will open up category merchant categories and increase Merchants, so that is something that if this is adopted, we'd have to kind of watch over time. Okay. Okay. Our last question comes from Tom McReyn from Janney. Please go ahead. Thanks for squeezing me in. Just a question on the merchant acquiring piece. It seems like most of the proposal has to do with kind of the whole payment side value chain surrounding update on pricing activities that are controlled by the 4 point network brands like Mastercard. So why would EC kind of folding in kind of the merchant acquiring piece on the cross quarter stuff. If you can just kind of conceptually lay that out that would be helpful. Thanks. I'm sorry. I didn't get your question. I apologize. It seems like most of the EC proposal has to addresses 4 party networks and the network schemes And either the pricing interchange and how that's established or other activities controlled by 4 Point Networks, but Then there was this language surrounding the merchant acquirers and I'm wondering, which are not necessarily owned by network. So if you can just help me understand why the merchant acquiring piece was also kind of folded in this whole grand effort by the EC? Yes. Update I think two points I'd make. First, the commission is seeking to encourage cross border acquiring consistent with the separation. Separately, there are provisions about unbundling and requirements on acquirers in terms of disclosing terms to merchants. And that is something that we actually have in our rules today and we've kind of reached that understanding with the commission Previously, so that those would not require any change in our current construct. Perhaps and if I could not, the good update And the reason why we did that also is because there are a lot of there's a lot of common practice in Europe whereby a lot of retailers today, They're getting bundle price, right? In other words, instead of interchange, plus they're getting update pricing from their headquarters for everything integrated. Now that conceals the fact that there are some very expensive schemes in Europe like AmEx update for PayPal, which has very expensive fees and that's not transparent to the retailer, particularly the medium and smaller sized retailers. So That clarity will bring awareness to the retail community and they will really truly understand that there is a very, very meaningful difference between schemes, the 4 party schemes to use the terminology, which are much cheaper and other schemes, We turn on and they're much more expensive, right? So that yes, we see that as a positive. Of course, clarity is always good. And for us being the cheapest in Europe, this is a good thing. Okay. Javier, I think you have just a couple of closing comments for us before we sign off. Yes, Barbara. In closing, I just update. I want to offer one really one final observation. Although there remain some open questions about both update on the ultimate form of any legislation and what actions we may need to take around our business model. I can assure you that Mastercard is committed to remaining competitive in the European marketplace. Update. So with that, thank you all very much for being with us and for your time today. Thank you all for joining us. Hopefully, this call has served to answer update for most of your questions. If you still do have outstanding questions that we didn't touch on today,