Credit: Back to Basics€¦ · Credit: Back to Basics Goldman Sachs Investor Conference New York...
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December 8, 2009 Credit: Back to Basics Goldman Sachs Investor Conference New York City Tim Murphy Group Executive, Core Products
Transcript of Credit: Back to Basics€¦ · Credit: Back to Basics Goldman Sachs Investor Conference New York...
December 8, 2009
Credit: Back to BasicsGoldman Sachs Investor ConferenceNew York City
Tim MurphyGroup Executive, Core Products
December 8, 2009 2
“The reports of my
death have been
greatly exaggerated.”
Mark Twain
December 8, 2009 3
Forward-Looking Statements
Today’s presentations may contain, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are based on our current assumptions, expectations and projections about future events which reflect the best judgment of management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by our comments today. You should review and consider the information contained in our filings with the SEC regarding these risks and uncertainties.
MasterCard disclaims any obligation to publicly update or reviseany forward-looking statements or information provided during today’s presentations.
December 8, 2009 4
Continued Positive Retail Sales Growth Retails sales (ex. Autos & Gas) increased 0.2% versus November 2008, signaling the third consecutive month of growth since July 2008
Positive Indications
Source: MasterCard SpendingPulse, November 2009
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Significant Changes in Consumer Attitudes
Focusing on quality & value
Showing new resourcefulnessin spending
Demanding control over finances
Embracing frugality
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MasterCard U.S. Debit & CreditGDV and Transaction Growth
Credit Trx
Debit Trx
Credit GDV
Debit GDV
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Q3 Q4 Q1 Q2 Q32008 2009
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DebitCards
45%
46%
46%
53%
48%
CreditCards
9%
12%
17%
9%
17%
Cash
38%
38%
34%
30%
29%
Checks
5%
2%
2%
7%
5%
Supermarket / grocerystore purchases
Dining out in asit-down restaurant
Gasoline or gasstation purchases
Departmentstore purchases
Drug store purchases
The Shift to Debit Cards isNot Affecting Credit in the U.S.
Source: MasterCard consumer study of usage trends, 2007 through 2009
+18%
+16%
+15%
+18%
+16%
-14%
-15%
-12%
-14%
-16%
-5%
-1%
-3%
-3%
0%
0%
0%
0%
-1%
0%
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Consumer Credit isRetrenching, Not Retracting
Fewer, butbetter performingcredit accounts
Fewer, butbetter performingcredit accounts
Consumer credit spendingis down 2008 to 2009
However, individual credit accounts are making more purchases
At the same time, consumer attitudes are shifting toward more traditional credit roots
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Meeting Consumer Needs Along the Credit Spectrum
MasterCard offers a compelling set of products
and solutions for every type of consumer across
the credit payments spectrum.
Emerging Users
CoreUsers
High-End Users
Value-Added Services
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Emerging Users:Prepaid Starts the Relationship
• Hispanics represent fastest growing segment in theU.S. in terms of purchasing power
• Univision and MasterCard prepaid card offers a culturally relevant, safe and cost-effective alternative to cash
The UnivisionPrepaid MasterCard
Global Insight – 2007 Hispanic Market Monitor
Making prepaida relationshipversus atransactionalaccount
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Emerging Users:Building a Road to Credit
Partner with financial institutions to develop reloadable prepaidcard programs that transition emerging users to credit.
Partner with financial institutions to develop reloadable prepaidcard programs that transition emerging users to credit.
Build distribution through merchantsand payroll direct deposit
Provides a bridge to mainstreambanking products
Fills a major need/desire for unbankedand underbanked consumers
Build distribution through merchantsand payroll direct deposit
Provides a bridge to mainstreambanking products
Fills a major need/desire for unbankedand underbanked consumers
December 8, 2009 12
Core Users:Evolving Needs for Changing Times
Core Users arelooking for...
Control with spending control options like MasterCard inControl
Flexibility through tools that give consumers the ability to maximize the utility of their credit
Choice of differentiated cardholder benefits that are tailored and relevant to consumer
Control with spending control options like MasterCard inControl
Flexibility through tools that give consumers the ability to maximize the utility of their credit
Choice of differentiated cardholder benefits that are tailored and relevant to consumer
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Core Users:A Significant Opportunity
Supply Issues Demand Issues
The Sweet Spot
Core Credit
Consumers who wish to borrow, but to whom banks will not lend.
Consumers to whom banks are willing to lend, but who do not wish to borrow.
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High-End Users:Affluent Consumer Credit
Our affluent strategy is to buildflexible solutions thatdrive true business valueto our financial institution customers.
Our affluent strategy is to buildflexible solutions thatdrive true business valueto our financial institution customers.
Differentiated and innovative products and tools
Consistent cardholder experiences
Usage and preference
Preferred network position among issuers, merchants and suppliers
Differentiated and innovative products and tools
Consistent cardholder experiences
Usage and preference
Preferred network position among issuers, merchants and suppliers
Leveraging theequity in Priceless
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High-End Users:Meeting the Unique Needs of the Affluent
Ameriprise World Elite MasterCard Card
• Unique value proposition for affluent clients
• Best-in-class product based on client and financial advisor research
U.S. Airways Dividend Miles MasterCard Card
• Brand conversion
• Airline co-brand with premium travel rewards
AirlinesAirlines Wealth ManagementWealth Management
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Opportunities Abound
Developing and Emerging MarketsCredit Stronghold Markets
• High acceptance rates
• Wide range of products
• High card penetration
• Slower growth potential
• Consolidation
• Aggressive acceptance growth
• Few products in-market
• Low card penetration
• High growth potential
• Leapfrogging technology
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In Summary
Credit is alive and well…Credit is alive and well…
Opportunities exist along the credit payments spectrumOpportunities exist along the credit payments spectrum
