Q3 2025 Mastercard Inc Earnings Call

Speaker #2: Good morning . My name is Julianne and I will be your conference operator today . At this time , I would like to welcome everyone to the MasterCard incorporated Q3 2025 Earnings Conference Call .

Operator: Good morning. My name is Julianne and I will be your conference operator today. At this time I would like to welcome everyone to the Mastercard Incorporated Q3 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press Star followed by the number one on your telephone keypad. Please only press Star one once to queue up for a question as pressing Star one multiple times may affect your position in the queue. If you would like to withdraw your question, press Star one. Thank you. Mr. Devin Corr, Head of Investor Relations. You may begin your conference.

Speaker #2: All lines have been placed on mute to prevent any background noise . After the speakers remarks , there will be a question and answer session .

Speaker #2: If you If you would like to withdraw your question , press star one . Thank you . Mr. Devin Corr , Head of Investor Relations you may begin your conference .

Speaker #3: Thank you . Julianne . Good morning , everyone , and thank you for joining us for our third quarter 2020 earnings call . today are Michael Miebach , our Chief Executive Officer and Sachin Mehra , our chief financial officer .

Devin Corr: Thank you. Julie Ann, good morning everyone and thank you for joining us for our third quarter 2025 earnings call. With me today are Michael Miebach, our Chief Executive Officer, and Sachin Mehra, our Chief Financial Officer. Following comments from Michael and Sachin, the operator will announce your opportunity to get into the queue for the Q&A session. It is only then that the queue will open for questions. You can access our earnings release, supplemental performance data, and the slide deck that accompany this call in the Investor Relations section of our website, mastercard.com. Additionally, the release was furnished with the SEC earlier this morning. Our comments today regarding our financial results will be on a non-GAAP, currency-neutral basis. Unless otherwise noted, both the release and the slide deck include reconciliations of non-GAAP measures to GAAP reported amounts.

Devin Corr: Finally, as set forth in more detail in our earnings release, I would like to remind everyone that today's call will include forward-looking statements regarding Mastercard Incorporated's future performance. Actual performance could differ materially from these forward-looking statements. Information about the factors that could affect future performance are summarized at the end of our earnings release and in our recent SEC filings. A replay of this call will be posted on our website for 30 days. With that, I will now turn the call over to our Chief Executive Officer, Michael Miebach.

Sachin Mehra: Thanks, Devin. Good morning, everyone.

Michael Miebach: We delivered strong results in the third quarter. Net revenues were up 15% overall and Value Added Services and Solutions net revenue was up 22% versus a year ago on a non-GAAP, currency-neutral basis. Our solid performance is a reflection of our winning strategy, our market-leading innovation, and focused execution. We continue to see healthy consumer and business spending in the quarter. With the macroeconomic environment still generally supportive, inflation levels have remained fairly steady and labor markets remain well balanced. Financial markets were near record highs, further contributing to the wealth effect, which helps stimulate spend. Given this backdrop and our diversified business, we are positioned well for ongoing success. In looking at the quarter, our drumbeat of wins continued. Our partnership approach, combined with our differentiated payments propositions and Value Added Services and Solutions, continues to drive wins.

Michael Miebach: This quarter we have multiple co-brand wins with large airlines and retailers, including Japan Airlines, La Comer in Mexico, and Uni-President Group in Taiwan. We have also expanded our relationships with bank partners globally, a testament to the unique value we bring. In the Nordics, we have renewed our strategic partnership with Nordea on card issuance and services capabilities, and we're happy to announce that Mastercard will be Nubank's exclusive network partner in the U.S. as that card program launches. This builds upon our extensive partnership across the Americas. Earlier this year we unveiled the Mastercard World Legend Card, designed specifically for the ultra high net worth individual. We also launched the Mastercard Collection, a set of globally connected premium benefits and experiences for our World, World Elite, and World Legend cardholders.

Michael Miebach: This combined differentiated value proposition helped us win several key affluent portfolios around the world, including First Abu Dhabi Bank in the United Arab Emirates, Saudi National Bank and Doha Bank in Qatar. In Brazil, we are partnering with several banks, including Itaú, Banco do Brasil, C6 Bank, and BTG Pactual on new affluent portfolios, reinforcing our strong credit position in that key market. Moving on from our recent wins, we are focused on executing against our three strategic priorities to unlock long-term growth. I'll touch on each, starting with consumer payments. The consumer secular opportunity is tremendous with $11 trillion in GDV and 1.5 trillion transactions still happening in cash and check around the globe, and even further opportunity with China and account-to-account bill payments. We are targeting these flows by expanding our acceptance footprint across underpenetrated verticals and by opening closed-loop payment networks.

Michael Miebach: Let's look at the rent vertical. The volume of rental payments globally is substantial today. Most of the payments are paid through check or ACH and are recurring in nature, so naturally a focus for us. Through our co-brand and services capabilities, we have successfully unlocked acceptance at scale with partners. This quarter, we partnered with Renti, a rental management platform in New Zealand. This relationship both unlocks card acceptance and includes rich rewards for their customers who choose Mastercard, a powerful example of how we are delivering value across this ecosystem.

Michael Miebach: Moving on to closed-loop payment networks, this quarter we deployed new contactless acceptance.

A powerful example of how we are delivering value across this ecosystem.

Moving on to closed loop payment Networks.

Michael Miebach: Across closed-loop transit systems in Italy, Japan, Chile, and with the Chengdu and Guangzhou Metro systems in China, we've digitized hundreds of systems across major cities around the globe. The simple tap-and-go experience is a great way to shift consumer behavior, and we are seeing strong results. It also can be a transaction multiplier. Rather than buying one monthly Metro card, we see a transaction for each ride. Volumes are up too. Through the third quarter of this year, Mastercard GDV on open-loop transit systems increased 25% year over year on a local currency basis. Not to mention the halo effect this can drive in everyday spend categories, and that is powerful. We're also driving incremental volumes from local stored value digital wallets over the Mastercard network.

This quarter, we deploy new contactless acceptance, across, close closed, loop transit systems in Italy, Japan, Chile, and with the changdu and guangzu Metro systems in China.

Altogether. We've digitized hundreds of systems across major cities around the globe. The simple tap and go experience is a great way to shift consumer behavior and we are seeing strong results.

It also can be a transaction multiplier rather than buying 1, monthly metro card. We see a transaction for a reach. Ride volumes are up to

The third quarter of this year. MasterCard, gdv on open loop transit systems increased 25%, year-over-year on a local currency basis. Not to mention the halo effect, this can drive in everyday, spend categories and that is powerful.

Michael Miebach: Through our partnership with Alipay, a network of 36 e-wallets, we're now expanding cross-border payment enablement to Kakao Pay in South Korea following earlier launches with AlipayHK and GCash. In India, we're working with PhonePe to enable their consumers to transact in person and online using their Mastercard payment credentials. Digital wallets are increasingly partnering with Mastercard because of the value they see in our unmatched global acceptance across hundreds of millions of merchant locations and digital access points. Agentic commerce is here, and we're at the center of it. With our global acceptance reach, trusted brand, and services capabilities, we're instrumental in creating the foundations for agentic commerce. We're now working with key players such as OpenAI on their agentic commerce protocol, and with Google and Cloudflare to set industry standards, all to drive safety and security to Mastercard Agent Pay.

We're also driving incremental volumes from local stored value. Digital wallets over the MasterCard Network, through our partnership with alipay. Plus a network of 36 e-wallets we're now expanding cross-border payment enablement to cacao pay in South Korea following earlier launches with alipayhk and gcash.

And in India, we're working with phone pay to enable their consumers to transact in-person and online using their MasterCard payment credentials.

Digital wallets are increasingly partnering with MasterCard because of the value. They see in our unmatched Global acceptance across hundreds of millions, merchant locations and digital access points.

Genic Commerce is here, and we are at the center of it with our global acceptance reach, trusted brand, and services. Our capabilities were instrumental in creating the foundations for agentic Commerce.

We're now working with key players such as open AI on their agentic, Commerce protocol, and with Google and cloudflare, to set industry, standards, all to drive Safety and Security.

Michael Miebach: We're enabling agents to facilitate transactions over Mastercard's payment network in a secure and scalable way. We already have agents registered and have tools in place for easy onboarding as others are ready. Our first agentic transaction took place on our network this quarter, a pivotal moment in payments. That's just the start. U.S. Bank and Citi cardholders can now use Agent Pay. The rest of our U.S. issuers will be enabled in November, with a global rollout to follow early next year. The beauty of it all is we've made it easy for merchants across the globe to benefit on day one with the same trust and security they are used to from us today. Our acceptance framework enables any Mastercard merchant to participate without significant development or integration, a no code approach for agentic payments. We bring trust and transparency and have the right capabilities and acceptance reach.

To MasterCard agent pay. We're enabling agents to facilitate transaction over mastercard's payment Network in a secure and scalable way.

You already have agents registered and have tools in place for easy onboarding as others are ready.

Our first agentic transaction took place on our Network. This quarter, a pivotal moment in payments and that's just the start US Bank and City bank card holders. Can now use agent pay the rest of our us issuers will be enabled in November with a global rollout to follow early next year and the beauty of it all, we've made it easy for merchants across the globe to benefit on day 1 with the same trust and security. They are used to do from us today.

Our acceptance framework enables any MasterCard merchant to participate without significant development or integration a no code approach.

Michael Miebach: We have strong partnerships with the players I just mentioned and many more, including Walmart, to accelerate the adoption of agentic commerce using cards through Mastercard. Agent Pay and our services play a big role both today, but even more so as we look to the future. Players across the payments ecosystem are partnering with Mastercard and our dedicated consulting teams to ready themselves for agentic commerce. Agents through Mastercard's Insight tokens can make agentic commerce even more personalized. By harnessing our proprietary data, we will be able to provide agents with predictive insights to help drive smarter decisions and recommendations. The shift we're seeing in commerce is creating further opportunity for our capabilities. More consulting, more loyalty, more security and so on. This is the runway for agentic focused services in consumer and business use cases, and we're well positioned to capture this opportunity.

For gentic payments. We bring trust and transparency and have the right capabilities and acceptance reach. We have strong Partnerships with the players. I just mentioned and many more including Walmart to accelerate the adoption of agent Commerce. Using cards through MasterCard, agent pay

In our services, we play a big role both today and even more as we look to the future.

Players across the payments, ecosystem are partnering with MasterCard and our dedicated Consulting teams to ready themselves for agentic Commerce.

Inside tokens Can Make a genetic Commerce even more personalized.

A harnessing, our proprietary data, we will be able to provide agents with predictive insights to help Drive smarter decisions and recommendations.

The shift we're seeing in Commerce is creating further opportunity for our capabilities, more Consulting, more loyalty, more security. And so on the runway, for agentic focus of services and consumer and business. Use cases is long and we're well positioned to capture this opportunity.

Michael Miebach: Like agentic commerce, we believe stablecoins are an attractive and growing opportunity for our network. We believe in offering consumers and merchants the choice in how they transact. For years our network has therefore enabled crypto and stablecoins to be purchased and spent across our acceptance footprint. We have approximately 130 crypto co-brand card programs in market with associated volumes and transactions growing at a healthy clip. We're expanding our partnerships through new deals with ConsenSys on the MetaMask card in the United States and with Binance in Brazil. We also continue to see strong growth in the on ramp as well, with Q3 year to date transactions up over 25%. With spend at crypto merchants moving on to commercial and new payment flows, the B2B opportunity is massive and we are deploying a targeted strategy to capture it. Small business remains a top priority.

Like a Gente Commerce, We Believe stable coins, are an attractive and growing opportunity for our Network. We believe in offering consumers and Merchants the choice in how they transact.

For years, our network has therefore enabled crypto and stable coins to be purchased and spent across our acceptance footprint.

We have approximately 130 crypto kobrand card programs and Market with Associated volumes and transactions growing at a healthy clip.

for expanding our Partnerships through new deals with consensus on the metamask card and the US and with Finance in Brazil

We also continue to see strong growth in the on-ramp as well, with Q3 year-to-date. Transactions are up over 25%, with spend at crypto merchants.

Moving on to Commercial and new payment flows.

The bdb opportunities, massive and we are deploying a targeted strategy to capture it.

Michael Miebach: Over the last year we have increased small business Mastercard in market by more than 10%. Key to our growth has been working with our traditional issuing partners such as Carrefour Financial Services in Spain, but also through alternative distributors. This quarter we partnered with Zagl, a spend management provider in India, Biz2Credit, a small business financing platform in the U.S., and RTS, a transportation services provider in the U.S., to distribute commercial and small business cards to their customer bases. Similarly, we are working with Instacart in the U.S. to issue small business cards offering rich rewards and instant payouts. Using Mastercard Move capabilities, our virtual cards drive benefits across the ecosystem. Suppliers get paid faster with certainty and streamlined reconciliation. Buyers improve working capital and gain more control over spend, all in a simple and secure way.

Small business remains a top priority over the last year, we have increased small business MasterCards in Market, by more than 10%

Key to our growth has been working with our traditional issuing Partners such as car for financial services in Spain.

But also through alternative Distributors. This quarter, we partnered with zagal as spent management provider in India. This 2 credit a small business financing platform in the US

and an RTS, a transportation services, provided in the US to distribute commercial and small business cards to their customer bases.

Similarly, we are working with instacart in the US to issue small, business cards, offering Rich rewards and instant payouts using MasterCard move capabilities.

Michael Miebach: BVVR will now be issuing Mastercard virtual cards to their travel agency customers in Mexico, and there are plans to expand the solution beyond to South America and Europe. We're making it easier for corporates to use virtual card capabilities within their existing workflows. Now, with more than 10 global B2B and T&E platforms on board, with several regional partnerships also in place, we are working alongside issuers, acquirers, and payment facilitators to embed card payment tools and unlock acceptance within the platforms that buyers and suppliers already use every day. We continue to deliver value to the supplier through simplified reconciliation tools and flexible B2B economics. We have offered flexible rates in the travel space and in the U.S. for domestic business-to-business flows for years. Looking at the U.S. program, we have nearly doubled the number of customers participating over the last two years.

Our virtual cards Drive benefits across the ecosystem suppliers. Get paid faster with certainty. And streamlined reconciliation buyers, improve working, capital and gain more control over. Spend all in a simple and secure way.

Beyond will now be issuing. MasterCard virtual cards to their travel agency customers in Mexico and there are plans to expand the solution Beyond to South America and Europe.

We're making it easier for corporates to use virtual card capabilities within their existing workflows. Now with more than 10 global B2B and fintech platforms on board, along with several regional partnerships also in place.

Working alongside issuers acquirers and payment facilitators to embed card payment tools and unlock acceptance within the platforms that buyers and suppliers already use every day.

And we continue to deliver value to the supplier through simplified reconciliation tools and flexible B2B economics. We have offered flexible rates in the travel space and in the US for domestic business to business flows for years.

Michael Miebach: Given its success, we are scaling flexible rate programs across the globe. Next, Mastercard Move. Our disbursement and remittances capabilities remain strong with over 35% transaction growth this past quarter. To further scale adoption, we are integrating Mastercard Move into leading core banking platforms, including Infosys this quarter, penetrating key markets in EMEA through our partnerships with Worldpay and STC Bank, and in China, we've enabled more ways for consumers to make outbound remittances across our billions of endpoints.

Looking at the US program, we have nearly doubled the number of customers participating over the last 2 years.

Given the success, we are scaling flexible rate programs across the globe.

Next MasterCard move our dispersement and remittances capabilities remain strong with over 35% transaction growth. This past quarter to further scale adoption we are integrating MasterCard move into leading core banking platforms including Infosys this quarter

Michael Miebach: In June, we announced how we have.

Penetrating key markets in emia through our Partnerships with World pay and STC bank. And in China, we've enabled more ways for consumers to make outbound remittances across our billions of endpoints.

Michael Miebach: Embedded stablecoins into Mastercard Move capabilities to support disbursements, remittances, and B2B use cases. This spans pre-funding with stablecoins to sending stablecoins across the globe, which can be received in any local fiat currency or supported stablecoin. We continue to execute against this roadmap, now with pre-funding capabilities in place with customers in Europe, Middle East, and Africa, including Paysend this quarter. Moving on to our third strategic pillar, Services, we have curated an expansive services portfolio featuring security, consumer engagement, and business and market insights. Our services differentiate our payment network and drive meaningful value for our customers. Beyond the transaction itself, we're actively driving growth by further penetrating our existing customers, diversifying into new customer types, and through new innovations. Let's look at each of these. We have extended our reach and share of wallet across our bank customers.

In June, we announced how we have embedded, stable coins into MasterCard, move capabilities to support disbursements remittances and B2B use cases. This spans prefunding, with stable coins to sending stable coins, across the globe, which can be received in any local fiat currency or supported stable coin.

We continue to execute against this road map, now, with pre-funding capabilities, in place with customers in Europe, Middle East Africa, including payand this quarter.

Moving on to our third, strategic pillar Services, we have curated and expansive Services portfolio, featuring security consumer engagement and business and Market insights.

Our services, differentiate our payment Network and drive meaningful value for our customers beyond the transaction itself.

We're actively driving growth by further. Penetrating, our existing customers, diversifying into new customer types.

and through new,

Let's look at each of these.

Michael Miebach: We now have strategic relationships with the retail bank as well as marketing, loyalty, and security officers across several of our customers. A great example is how we're building on a successful partnership with Rogers Bank in Canada. We expanded our collaboration with their parent company, Rogers Communications, to bring franchise prevention security offerings and payment gateway solutions. They are also an initial partner to use our newly announced Mastercard Merchant Cloud offering, which I will touch on later.

Strategic relationships with the retail bank, as well as marketing loyalty and security officers across several of our customers.

A great example is how we're building on a successful Partnership of the Rogers Bank. In Canada, we expanded our collaboration with their parent company. Rogers Communications to bride, fraud, prevention, security, offerings, and payment Gateway Solutions.

Sachin Mehra: We are expanding our customer base across.

They are also an initial partner to use our newly announced MasterCard, merchant Cloud offering, which I will touch on later.

Michael Miebach: Merchants, governments, and digital players. A few key examples from this quarter include the Polish Ministry of Digital Affairs, who will use Recorded Future's threat intelligence capability. Equifax in Australia will be using our open finance capabilities to help inform their customers' lending practices to underserved consumers. Beyond that, we are continuously innovating to further penetrate and grow the $165 billion serviceable market we outlined at last year's Investor Day. We continue to innovate within payments. Last month we launched On Demand Decisioning, a fully customizable rules engine that gives issuers greater flexibility and control of payment authorizations. This is a great example of how our network can help issuers optimize payment portfolios and strengthen their user experience in a fast, efficient way. For the merchant community, we launched the Merchant Cloud offering, Mastercard's acceptance gateway, tokenization, fraud, and insight solutions through a unified platform.

And we're expanding our customer base across Merchants governments and digital players.

A few key examples from this quarter include the Polish Minister Ministry of digital Affairs, who will use recorded Futures, threat, intelligence capabilities,

Equifax in Australia we will be using our open finance capabilities to help inform their customers. Lending practices to underserved consumers.

Beyond that. We are. Continuously innovating the further. Penetrating growth of 165 billion serviceable Market. We outlined at last year's investor day.

We continue to innovate within payments last month, we launched on demand, decisioning a fully customizable rules engine. That gives issues as greater flexibility and control of payment authorizations. This is a great example of how our Network can help issue us optimize payment portfolios and strengthen their user experience in a fast efficient way.

Michael Miebach: Partners can now simply integrate these services into their propositions or resell directly to their customers. This is a great example of how we are delivering our innovations at scale. We're also extending our value beyond the transaction by leveraging insights from our rich and extensive data sets. By combining Mastercard's payment expertise and global network visibility with Recorded Future's leading cyber threat intelligence capabilities, we were excited to recently announce Mastercard Threat Intelligence. Issuers and acquirers using Mastercard Threat Intelligence can proactively detect cyber attacks in order to prevent payment fraud. Mastercard Threat Intelligence complements our existing cybersecurity, intelligence, fraud, scoring, and defense functionalities. To conclude, we recently launched Mastercard Commerce Media, a new digital media network that makes advertising more personalized, relevant, and effective. Advertisers are under pressure to prove that every dollar spent drives real outcome.

For the merchant Community. We launched the merchant Cloud offering MasterCards, acceptance Gateway, tokenization, fraud, and insight Solutions through a unified platform.

Partners can now simply integrate these services into their propositions or resell directly to their customers.

This is a great example of how we are delivering our Innovations at scale.

We're also extending our value beyond the transaction by leveraging insights from our rich and extensive data sets.

By combining mastercard's payment expertise and Global Network visibility with recorded. Futures leading, cyber threat intelligence capabilities. We were excited to recently announced MasterCard, threat intelligence

Issues and acquires using, MasterCard threat. Intelligence can proactively detect cyber attacks in order to prevent payment fraud.

Mastercard, threat intelligence complements our existing cybersecurity intelligence, fraud scoring, and defense functionalities.

And to conclude we recently launched MasterCard, Commerce media, a new digital media Network that makes advertising more personalized, relevant and effective.

Michael Miebach: Mastercard Commerce Media uniquely helps advertisers serve tailored offers to the right consumer at the right time by using our proprietary spend insights.

Advertisers are under pressure to prove that every dollar spent drives real outcome.

Michael Miebach: Once the offer has been served, we're.

Michael Miebach: Able to measure the effectiveness of each ad by linking it directly to a purchase made. Building off our existing loyalty programs and technology, we're able to connect the 500 million enrolled and permissioned consumers and 25,000 Merchant Administration advertisers on day one. As you can see, we're relentlessly focused on delivering value to our customers, and that's why customers continue to choose Mastercard. I'll wrap it up. We delivered another strong quarter. A significant opportunity ahead. Fundamentals of our business are strong. I am very optimistic about the future of Mastercard. Our proven growth algorithm, differentiated solutions, and continuous innovation positions us to deliver, deliver, and win, as we've demonstrated time and time again. It's an exciting time in payments, and Mastercard is at the forefront. Sachin, over to you.

MasterCard Commerce Media uniquely helps advertisers deliver tailored offers to the right consumer at the right time by using our proprietary spending data. Once the offer has been served, we're able to measure the effectiveness of each ad by linking it directly to a purchase made.

Building off our existing loyalty programs and Technology. We're able to connect the 500 million enrolled and permission. Consumers and 25,000 Merchants advisors advertisers on day 1.

As you can see, we're already focused on delivering value to our customers. That's why customers continue to choose Mastercard.

So, with that, I'll wrap it up. We delivered another strong quarter. There's significant opportunity ahead. The fundamentals of our business are strong. I am very optimistic about the future of Mastercard.

Sachin Mehra: Thanks Michael. Let's turn to page three, which shows our financial performance for the third quarter on a currency-neutral basis, excluding, where applicable, special items and the impact of gains and losses on our equity investments. Net revenue was up 15%, reflecting continued growth in our payment network and our Value Added Services and Solutions. Acquisitions contributed 1% to this growth. Operating expenses increased 14%, including a full 1% increase from acquisitions, and operating income was up 15%, which includes a 1% headwind from acquisitions. Net income and EPS increased 8% and 11%, respectively, driven primarily by the strong operating income growth, partially offset by a higher effective tax rate due to pillar two and a change in our geographic mix of earnings. The tax rate in the quarter was higher than expected due to a discrete tax expense. EPS was $4.38, which includes a $0.10 contribution from share repurchases.

Our proven growth algorithm differentiated Solutions and continuous innovation positions as to deliver in win as we've demonstrated time. And time again. It's an exciting time in payments, and MasterCard is at the Forefront. It's not it over to you.

Thanks, Michael. Um, let's turn to page 3, which shows our financial performance for the third quarter on a currency neutral basis. Excluding the replicable special items and the impact of gains and losses on our Equity Investments.

Net revenue was up, 15% reflecting continued growth in our payment Network and our value added services, and solutions.

Acquisitions contributed 1 PPT to this growth.

Operating expenses increased 14%, including a 4 PPT increase from acquisitions.

And operating income was up 15%, which includes a 1 PPT headwind from acquisitions?

Net income and EPS increased 8% and 11% respectively, driven primarily by the strong operating income growth partially offset by a higher effective tax rate due to pillar 2 and a change. In our Geographic mix of earnings. The tax rate in the quarter was higher than expected due to a discrete tax expense.

Sachin Mehra: During the quarter, we repurchased $3.3 billion worth of stock and an additional $1.2 billion through October 27, 2025. Now turning to page four, let's first look at some of our key volume drivers for the third quarter on a local currency basis. Worldwide Gross Dollar Volume, or GDV, increased by 9% year over year. In the U.S., GDV increased by 7%, with credit growth of 7% and debit growth of 7%. Outside of the U.S., volume increased 10%, with credit growth of 10% and debit growth of 9%. Overall, cross-border volume increased 15% globally for the quarter, reflecting continued growth in both travel and non-travel related cross-border spending. Turning to page five, switch transactions grew 10% year over year in Q3. We continue to see an increase in contactless penetration, which in Q3 stood at 77% of all in-person switched purchase transactions.

EPS was $4.38, which includes a 10-cent contribution from Sheree purchases.

During the quarter. We repurchased 3.3 billion dollars worth of stock and an additional 1.2 billion through October 27th 2025

Now, turning to page 4.

Drivers for the third quarter on a local currency basis.

Worldwide. Gross dollar volume or gdv, increase by 9% year-over-year.

In the US, gdv increased by 7% with credit growth of 7% and debit growth of 7%.

Outside of the US volume increased 10%, with credit, growth of 10% and debit growth of 9%.

overall, cross border volume, increased 15% globally for the quarter reflecting continued growth in both travel and non-travel related cross border spending

turning to page 5 switch transactions, grew, 10% year-over-year.

Sachin Mehra: This is up 6% since the same period last year. In addition, card growth was 6% globally; there are 3.6 billion Mastercard and Maestro branded cards issued. Turning to slide six for a look into our net revenue growth rates for the third quarter, discussed on a currency-neutral basis, payment network net revenue increased 10%, primarily driven by domestic and cross-border transaction and volume growth. It also includes growth in rebates and incentives, Value Added Services and Solutions. Net revenue increased 22%. Acquisitions contributed approximately 3% to this growth. The remaining 19% increase was primarily driven by growth in our underlying drivers. Strong demand across security, digital and authentication solutions, consumer acquisition and engagement services, and business and market insights and pricing. Now let's turn to page seven to discuss key metrics related to the payment network. Again, all growth rates are described on a currency-neutral basis unless otherwise noted.

In Q3 we continue to see an increase in contactless penetration, which in Q3 stood at 77% of all in-person switched purchase transactions. This is up 6 P since the same period last year.

In addition, card growth was 6% globally. There are 3.6 billion MasterCard and mystro branded cards issued.

Turning to slide 6 for an overview, let's look into our net revenue growth rates for the third quarter, discussed on a currency-neutral basis.

Payment network, net revenue, increased 10%, primarily driven by domestic and cross-border, transaction, and volume growth. It also includes growth in rebates and incentives.

Value added services and solutions. Net revenue, increased 22%.

Acquisitions contributed approximately 3 PPT to this growth. The remaining 19%. Increase was primarily driven by growth in our underlying drivers. Strong demand across security digital and authentication Solutions consumer acquisition and engagement services, and business, and Market insights.

And pricing.

Sachin Mehra: Looking quickly at each key metric, domestic assessments were up 6% while worldwide GDV grew 9%. The 3ppt difference is primarily driven by mix. Cross-border assessments increased 16% while cross-border volumes increased 15%. The 1ppt difference is driven by pricing in international markets, partially offset by mix. Transaction processing assessments were up 15% while switch transactions grew 10% on an unrounded basis. The 4ppt difference is primarily due to favorable mix as well as some benefit from pricing and revenue from FX volatility. Other network assessments were $255 million this quarter. Moving on to page eight, you can see that on a non-GAAP currency-neutral basis excluding special items, total adjusted operating expenses increased 14%, which includes our full ppt impact from acquisitions.

Now, let's turn to page 7 to discuss key metrics related to the payment network again. All growth rates are described on a currency-neutral basis, unless otherwise noted.

looking quickly at each key metric.

Domestic assessments were up 6% while worldwide gdv grew 9%. The 3 PPD difference is primarily driven by mix

Cross border assessments, increased 16% while cross border volumes increased. 15%, the 1 PPT difference is driven by pricing in international markets, partially offset by mix.

Transaction processing. Assessments were up 15%. While switch transactions, grew 10%.

On an unrounded basis. The 4 PPT difference is primarily due to favorable, mix as well as some benefit from pricing and revenue from FX volatility,

Other network assessments were 255 million this quarter?

Sachin Mehra: Excluding acquisitions, the growth of total adjusted operating expenses was primarily driven by increased spending to support various strategic initiatives including investing in our infrastructure, geographic expansion, enhancing and delivering our products and services, and advertising and marketing. Total adjusted operating expenses were lower than expected this quarter, primarily due to the timing of expenses between the third and fourth quarter. Turning to page nine, let me comment on the operating metric trends starting with Q3. All our switch metrics are generally in line with Q2 and remain strong. As we look to the first four weeks of October, our metrics continue to remain strong, generally in line with the third quarter. Of note, U.S. switched volumes saw a sequential decline, primarily due to the expected Capital One debit migration as well as some tougher comps related to weather impacts in 2024.

Moving on to page 8, you can see that on a non-gaap currency neutral basis, excluding special items, total adjusted operating expenses increased 14% which includes a 4 PPT impact from acquisitions.

Excluding Acquisitions the growth of a total adjusted operating expenses was primarily driven by increased spending to support various strategic initiatives, including investing in our infrastructure, Geographic expansion, enhancing and delivering our products and services and advertising and marketing.

Total adjusted operating expenses were lower than expected. This quarter primarily due to the timing of expenses between the third and fourth quarter.

Turning to page 9, let me comment on the operating metrics.

Starting with Q3 all our switch metrics are generally in line with Q2 and remain strong.

Sachin Mehra: Overall, we continue to see healthy consumer and business spending. Turning to page ten, I wanted to share our thoughts for the remainder of the year. The headline is that our business remains strong and consumer and business spending remains healthy. We delivered another strong quarter. The macroeconomic environment is supportive, with balanced unemployment rates, wage growth continuing to outpace the rate of inflation for the most part, and the wealth effect remaining intact. That said, there continues to be some ongoing geopolitical and economic uncertainty. We remain well positioned for the opportunities ahead, driven by a resilient and diversified business model, the significant opportunity for further secular shift to digital forms of payment, and strong demand for our Value Added Services and Solutions.

as we look to the first 4 weeks of October our metrics continue to remain strong, generally in line with the third quarter of note us, switched volume saw a sequential decline primarily due to the expected Capital 1 debit migration, as well, as some tougher comps related to weather impacts in 2024,

Overall, we continue to see healthy consumer and business spending.

Turning to page 10, I want to share our thoughts for the remainder of the year.

The headline is that our business remains strong and consumer and business spending remains healthy. We delivered another strong quarter.

The macroeconomic environment is supportive with balance that unemployment rates, wage growth continuing to outpace the rate of inflation for the most part and the wealth effect remaining intact.

That said, there continues to be some ongoing geopolitical and economic uncertainty.

Sachin Mehra: We remain laser focused on executing against our strategy and remaining at the forefront of payments and services as demonstrated by the innovative new solutions that Michael just highlighted. We do all of this while also maintaining a disciplined capital planning approach. Now turning to our expectations for the fourth quarter, we assume continued healthy consumer and business spending. We expect year-over-year net revenue growth to be at the high end of a low double digits range on a currency-neutral basis, excluding acquisitions. As mentioned last quarter, our rebates and incentives as a percentage of our payment network assessments is expected to be higher in the second half of 2025. We continue to see Q4 having the highest contra percentage relative to the other quarters, primarily driven by timing within the year and normal seasonality for the quarter.

We remain well positioned for the opportunities ahead, driven by our resilient and diversified business model, the significant opportunity for further secular shifts to digital forms of payment, and strong demand for our value-added services and solutions.

We remain laser focused on executing against our strategy and remaining at the Forefront of payments and services as demonstrated by the Innovative new solutions that Michael just highlighted.

The discipline Capital planning approach.

Now turning to our expectations for the fourth quarter, we assume continued healthy consumer and business spending. We expect year-over-year, net revenue growth to be at the high end of a low, double digits range on a currency neutral basis. Excluding acquisitions.

As mentioned last quarter, our rebates and incentives as a percentage of our payment network assessments are expected to be higher in the second half of 2025. We continue to see Q4 having the highest contract percentage relative to the other quarters, primarily driven by timing within the year and normal seasonality.

Sachin Mehra: Acquisitions are forecasted to add 1% to 1.5% to the net revenue growth rate, and we expect a tailwind of 4% to 4.5% from foreign exchange for the quarter. From an operating expense standpoint, we expect Q4 growth to be at the low double digits range versus a year ago, again on a currency-neutral basis excluding acquisitions and special items. Acquisitions are forecasted to add 4% to 5% to this OpEx growth, while we expect an approximately 2% headwind from foreign exchange for the quarter. Now turning to the full year 2025, we continue to expect net revenues to grow at the low teens range on a currency-neutral basis excluding acquisitions. Acquisitions are expected to add 1% to 1.5% to this growth rate for the year, and we estimate a tailwind of 1% to 2% from foreign exchange.

For the quarter, Acquisitions are forecasted to add 1 to 1.5 PPT to the net revenue, growth rate, and we expect a Tailwind of 4 to 4.5, PPT from foreign exchange for the quarter.

From an operating expense standpoint, we expect Q4 growth to be at the low double digits range versus a year ago again on our currency, neutral basis, excluding Acquisitions and special items Acquisitions are forecasted to add 4 to 5 PPT to this Opex growth. While we expect an approximately 2, PPT headwind from foreign exchange for the quarter.

Sachin Mehra: From an operating expense standpoint, we continue to expect growth to be at the low end of a low double digits range versus a year ago on a currency-neutral basis excluding acquisitions and special items. Acquisitions are forecasted to increase the OpEx growth rate for the year by 4 to 5 ppt, while we expect a headwind of 0 to 1 ppt from foreign exchange. Other items to keep in mind on other income and expenses in Q4, we expect an expense of approximately $110 million. This excludes gains and losses on our equity investments which are excluded from our non-GAAP metrics. We expect our non-GAAP tax rate to be around 21% for Q4 and between 20.5% and 21% for the full year. With that I will turn the call back over to Devin.

Now, turning to the full year 2025, we continue to expect net revenues to grow at the low, teens range on a currency neutral basis. Excluding Acquisitions Acquisitions are expected to add 1 to 1.5 PPT to this growth rate for the year. And we estimate a Tailwind of 1 to 2 PPT from foreign exchange.

From an operating expense standpoint. We continue to expect growth to be at the low end of a low double digits range versus a year ago on a currency neutral basis. Excluding Acquisitions and specialized items Acquisitions are forecasted to increase the Opex growth rate for the Year by 4 to 5 PPT. While we expect the headwind of 0 to 1, PPT from foreign exchange.

Other items to keep in mind on other income and expenses in Q4. We expect an expense of approximately 110 million, this excludes gains and losses on our Equity Investments, which are excluded from our non-gaap metrics.

Devin Corr: Thank you, Sachin. Thank you, Michael. Julianne, you may now open up the call for questions.

Operator: Thank you. At this time I would like to remind everyone, in order to ask a question, press Star the number one on your telephone keypad. Please only press Star one once to queue up for a question, as pressing Star one multiple times may affect your position in the queue. We'll pause for just a moment to compile the Q&A roster. Our first question comes from Brian Bergen from TD Cowen. Please go ahead. Your line is open.

We expect our non-GAAP tax rate to be around 21% for Q4 and between 20.5% and 21% for the full year. And with that, I will turn the call back over to Devon. Thank you so much, and thank you, Michael. Julian, you may now open up the call for questions.

Thank you at this time. If you I would like to remind everyone in order to ask a question, press star, the number 1 on your telephone keypad, please only press star 1, once to queue up for a question. As pressing star 1 multiple times, may affect your position in the queue. We'll pause for just a moment to compile the Q&A roster.

Our first question comes from Brian Bergin from TD Cowen, please go ahead, your line is open.

[Analyst]: Hey guys.

Sachin Mehra: Morning.

[Analyst]: Thank you. Wanted to ask on U.S. payment volume growth. Steady overall activity is evident here.

Devin Corr: Just curious, on the surface, are.

[Analyst]: You just seeing any evidence of trade down or differing consumer cohort behavior, and then just any early views on potential holiday spend?

Hey guys, morning, thank you. Wanted to ask about on us payment volume Grill. So, steady overall activity, is evident here, but just curious on the surface. You just seeing any evidence of trade down or, or differing consumer cohort behavior. And then just any early views on potential holiday spend,

Sachin Mehra: Sure, Bryan, I'll take that question. Look, I mean, drivers continue to hold up really well. You can see that in our metrics, true in the third quarter, continues to be the case in the first four weeks of October as it relates to different segments of the population. When we do our analysis based on looks of the various products we have out in the market which serve the affluent population versus the mass market population, as well as when we look at the amount of spend which is taking place across different categories of products that we have, what we're seeing is continued steady growth both across affluent and mass market. True in the U.S., through across the globe. Overall, the consumer could suspend and really everything we're seeing so far is manifesting itself in the drivers which we're talking about right here.

Michael Miebach: You can expect that consumers.

Sure. Brian. Uh, I'll take that question. Uh, look, I mean, you know, drivers continue to hold up really well. And you can see that in our metrics, uh, true in the third quarter continues to be the case in, uh, the first 4 weeks of October as it relates to, you know, different segments of the population. When we do our analysis, uh, based on looks of the various products we have out in the market, which serve the affluent population versus the mass Market population as well as when we look at, you know, the amount of spend, which is taking place across different categories of, of, uh, products that we have, what we're seeing is continued steady growth both across affluent and mass Market through in the US through across the globe. So, overall, the consumer continues to spend, uh, and, you know, really everything we're seeing so far is manifesting itself in the drivers which we're talking about right here.

Sachin Mehra: At different income levels make different decisions on their spend. You know, discretionary versus non-discretionary. What matters for us is it has to be carded, and that plays in, and that adds up to the resilient trends that Sachin just talked about.

Here. And you can expect that, you know, consumers have different income levels, make different decisions on their spend, you know, discretionary versus non-discretionary, uh, what matters for us is it has to be carded and, uh, that plays in and that adds up to the resilient trends that such and just talked about

Operator: Next question please. Our next question comes from Darrin Peller from Wolfe Research. Please go ahead. Your line is open.

Next question. Our next question comes from Darren teller. From Wolfe research. Please go ahead. Your line is open.

Devin Corr: All right. Hey, thanks guys. Nice results. When I look at VAS at 22% growth, I think it was a few points from Recorded Future. Also, just remind us exactly, but just maybe revisit the underlying drivers that you're seeing. Really, really support that kind of sustainability. If those are going to be sustainable throughout the year ahead of us, the next 12, 18 months, what are they and what's driving it? How much of that could be tokenization that's driving into agentic also going forward? Just a quick follow-up also on the Capital One Discover side. I know you mentioned you included it in the guide. I think that was the debit side. Is there anything on credit you're seeing or just a little more color on that would be great. Thanks guys.

Michael Miebach: All right, Darrin, let me start on the VAS side.

I think that was the that was the debit side. Is there anything on credit you're seeing or just a little more color. And that would be great. Thanks guys.

Sachin Mehra: You know, we took great care in curating the vast portfolio over the better part of the last decade, and we were very keen to find a portfolio mix that is anchored in underlying trends.

Michael Miebach: Digitization, more data, more data, more need for security, more data, more need.

Sachin Mehra: For insights to run a business in a better way.

Michael Miebach: You've heard us say that a thousand times, and it continues to be very true. When I look at the demand on cybersecurity with the rising fraud landscape and more fraud vectors out there, that just continues to power on, and we step right into that with a series of innovation. I mentioned Mastercard Threat Intelligence earlier in my prepared remarks to your question about Recorded Future. Sachin can talk about the points there, but you know that is our data coming together with Recorded Future's.

Sachin Mehra: Right. Intelligence that comes from powerful combination.

All right, so Darren so let me start on the vast side. You know, we took, um, great care and curating the vast portfolio over the better part of the last decade. Um and we were very keen to find a portfolio. Mix that is anchored in underlying Trends. So digitization more data, more data more need for security more data, more need for insights to run a business and better. Where you've heard us say that a thousand times and it continues to be very true. Um, so when I look at the demand on cyber security with the rising front uh fraud landscape and and more uh fraud vectors out there, um, that just continues to power on and we step right into that with a series of innovation. I mentioned MasterCard thread intelligence earlier in my prepared remarks. Um to your question about the recorded future searching in uh, talk about the points there, but you know, that is our data coming together with Master, uh, with before the

Michael Miebach: There are a lot of companies out there with security solutions, but you cannot really outspend all the threat. What threat intelligence does is allow you to be very, very targeted in your spending on cybersecurity. That is really a very powerful proposition for our customers. Just to have one example, when I think about the whole piece about how we help our customers run their business in a better way, drive their top line, consumer engagement, personalization, data, and business market insights matter more than ever before. For us, we have the whole set of solutions. Earlier, when I was talking about our loyalty components, that is a business that today also matters even more. I feel we are sitting on the right trends. I do not see any discontinuity in terms of the demand breaking bound for that.

Powerful, uh, combination. And, you know, there's a lot of companies out there that provide security solutions, but, uh, you cannot really outspend all the threats. So, what threat intelligence does is it allows you to be very, very targeted in your spending on cybersecurity. And that is really a very powerful proposition for our customers. So, just have one example, when I think about, um, the, uh, the whole...

Michael Miebach: The tall order for us is we need to continue to innovate. I think I mentioned like six new innovations around that, and that is what we just have to keep powering on. The innovation muscle in the company is alive and well, and we keep training it.

Sachin Mehra: Yeah. Darrin, I'll just add to what Michael just talked about on VAS, but I'll speak to your Capital One question first. Your specific question around we had growth in VAS this quarter of 22%. Three points of that was driven by the acquisitions that are to going future and Minna, so you had underlying organic growth of approximately 19%. That's kind of one part of the question you asked. The second thing, I'll just remind the key drivers of growth on VAS come across the board. At Investor Day we had shared with you that roughly 60% of our VAS revenues are network linked. So underlying growth in drivers and underlying growth and tapping into that secular shift which we got from a driver standpoint contributed, contributes to VAS growth point number one.

Whole piece about, uh, how we help our customers run their business in a better way. You know, drive their top line, consumer engagement, uh, personalization, data, and business market insights matter more than ever before. Um, and for us, we have the whole set of solutions. Earlier, when I was talking about our loyalty, uh, our loyalty components, that as a business today also matters even more. So I feel we are sitting on the right trends. Um, I don't see any discontinuity in terms of, you know, the demand breaking down for that. I mean, the tall order for us is we need to continue to innovate. Um, I just, I think I mentioned like six new innovations around that, and that is what we just have to keep powering on. So the innovation muscle in the company is alive and well, and we keep training it.

Sachin Mehra: Point number two, back to what Michael said, with the steady drumbeat of new products which are being launched in the market, as well as further penetration of existing products across security solutions, across consumer acquisition engagement, across our business and market insights, these are all contributing factors to the overall growth rate. The last piece is pricing, right? Pricing is tied to the value we deliver. As we launch new products in the market, we can deliver and price for that, and that's what we do. That's all adding to the overall kind of algorithm which drives the services growth. I will say that, and you know this as well, that services growth is something we look at as a long-term opportunity. We look at it certainly, you know, not only for this year, but for years to come.

Yeah. And Darren I'll just add to what Michael just talked about, uh, on vas, but I'll also speak to your Capital 1. Question first, your specific question around we had um, growth investors this quarter of 22%, uh, 3 points of that was driven by the Acquisitions, that recorded future and Mina. So you had underlying organic growth of approximately 19%. So that's kind of 1, part of the question. You asked the second thing, I'll just remind, you know, the, the key drivers of growth on vas come across the board, right? I invest today we had shared with you that roughly 60% of our um, vas revenues, are network linked. So underlying growth and drivers and underlying growth in tapping into that secular shift which we got from a driver standpoint. Contributes to Vos growth point number 1, Point number 2, back to what Michael said with the the the steady

Sachin Mehra: This is an important part of how we are driving the growth of our overall business. On your question on Capital One, look, I mean the debit migration is underway. No surprise there. A few things to kind of just point out there. As you would expect, with the debit migration which takes place, we will lose the associated revenue on this. I had mentioned previously in a prior earnings call that in 2025 we did not expect the net revenue impact from this Capital One debit migration to be material. Just a little bit of kind of context as we go into 2026. There will be further impacts which will come through from an associated revenue standpoint as the cards start to migrate away from us and are migrating away from us.

Drum beat of new products which are being launched in the market as well as further penetration, of existing products across Security Solutions across consumer, acquisition engagement across our business and Market insights. These are all contributing factors to the overall growth rate and then the last piece is pricing, right? And and pricing is tied to the value, we deliver. So, as we launch new products in the market, we can deliver in price for that. And so, that's what we do. That's all adding to the overall kind of algorithm, which tries to the services growth. I I will say that. And, you know, this as well, that Services growth is something we look at as a long-term opportunity and we look at it, certainly, you know, not only for this year, but for years to come. But this is an important part of, you know, how we are driving the growth of our overall business on your question, on Capital 1. Um, look, I mean the debit migration is, is underway. Um, no surprise there, uh, a few things to kind of just point out there as you would expect with the debit migration, which takes place, we will lose the associated Revenue.

Sachin Mehra: That being said, there are some contractual obligations which will help offset some of this financial impact in 2026. Net net, there'll still be an adverse impact from a net revenue standpoint. I just wanted to make sure you guys had some context as we go into 2026 as to what that looks like. Specifically on credit, we continue to have a very robust partnership with Capital One on credit, and we don't see that changing as our partnership continues to grow and things are going well there as well.

On this. Um, I had mentioned previously in a prior earnings, call that in 2025. Uh, we did not expect the net revenue impact from this Capital, 1 debit migration to be material. Uh, just a little bit of kind of context as we go into 2026. You know, there will be further impacts which will come through from an Associated Revenue standpoint as the Cards start to migrate away from us and our migrating away from us. That being said, there are some contractual obligations which will help offset some of this financial impact in 2026 net. Net, will still be a

Uh adverse impact from a net revenue standpoint but I just wanted to make sure you guys had some some context as we go into 2026 as to what that looks like specifically on credit. We continue to have a very robust partnership with capital 1 on credit. And you know, we don't see that changing um as as our partnership continues to grow and things are going well there as well.

Sachin Mehra: I think there was one other aspect in your rather long question, Darrin, and that was about tokenization. I just want to not answer that. On the tokenization front, we're in the billions per month and that has totally scaled. We started to build out a set of services around tokenization and we started price for that because that comes back to Sachin's points of value that we provide and it's in great demand. We see that's a massive differentiator for us as many of our other services versus local payment networks and local alternatives and hence the demand keeps going.

I just want to not answer the not answer that. So, um, on the tokenization front, um, you know, we're in the billions uh, per month and uh, you know, that has totally scaled. We started to build out a set of services around tokenization and we started a price for that because that comes back to such as points of value that we provide and it's in great demand. So we see that it's a massive differentiator for us as many of our other services versus local uh local payment networks and local Alternatives. Um and hence the demand keeps going

Devin Corr: Thanks, guys.

Operator: Our next question comes from James Fawcett from Morgan Stanley. Please go ahead. Your line is open.

Thanks guys.

[Analyst]: Thank you very much. I wanted to ask about the evolution and enablement that Mastercard is providing for agentic commerce. Can you talk a little bit about how not only Mastercard is helping accelerate that, it seems like, but any of the unique threat or risk and even legal issues that need to be considered and how we should think about tracking the growth in agentic commerce and its contribution. Thanks.

Our next question comes from James faucet. From Morgan Stanley, please go ahead. Your line is open.

Michael Miebach: All right, let me start with that. This is a significant development, and I think there's two lenses to look at it. The first is, you know, what we're.

Thank you very much. I wanted to ask about um the evolution and and enablement the MasterCards providing for agentic Commerce, can you talk a little bit about how uh not only MasterCard is helping accelerate that it seems like but um any of the unique threat or risk and and even legal issues that that you're that need to be considered. And, and how we should think about tracking the, the the growth in agent to Commerce and, and its contribution. Thanks.

All right. So, let me start with that. So this is, uh, ah, uh,

Michael Miebach: Seeing is behavioral change driven and powered by generative AI and bots, and so forth, where search behavior is changing.

Sachin Mehra: That's on the consumer side, if we start right there.

Michael Miebach: Consumers are migrating their search increasingly to their favorite chatbot, and they're asking their queries there, and they get potentially better answers. Who knows?

Sachin Mehra: That behavior shift is changing.

Michael Miebach: It still feels like you're searching for something and then you're going to some sort of a checkout. The other lens on this is it's really quite a significant paradigm shift for the payment ecosystem because in the payment ecosystem what happens is there's now an extra party that has entered the realm and that is the agent. That comes with a lot of those aspects you just talked about in your question. There's legal questions, there's a security question. If I break it down and some of the things that need to.

Sachin Mehra: Happen in a world of agentic commerce.

Michael Miebach: Is this a real bot? Is this a bot that we believe matches up to Mastercard safety and security standards? We will certify and register bots out there. That's what Mastercard Agent Pay does. That's what we do. That's what we do today with participants in the ecosystem. Nothing really new from us on a perspective, but it's a new party.

Significant development, and I think there's 2 lenses to look at it. The first is, you know, what we're seeing is behavioral change, um, driven and powered by generative, Ai and Bots, and so forth, where search behavior is changing. Um, so that's on the consumer side. Uh, if we start right there, so consumers, are migrating, their search increasingly. So, to, um, their favorite, uh, chatbot and their asking their queries there and they get, uh, potentially better answers, who knows, but that behavior shift is, uh, is changing. But, you know, it still feels like you're searching for something and then you're going to some sort of a checkout. The other lens on this is, it's a really quite a significant paradigm shift for the payment ecosystem, because in the payment ecosystem, what happens is, uh, there's no, an extra party that has entered the realm and that is the agent. So that comes with a lot of those aspects. You just talked about in your question is, there's legal questions, there's a security question. So if I break it down in some of the things that need to happen and in a world of

Michael Miebach: Not really visible to the consumer in that way, but certainly driving some complexity.

Genetic Commerce is, you know, the first is, you know, is this a real bot? Is this a bot that we believe matches up to Mastercard's Safety and Security standards? So, um, we will certify and register bots out there. So that's what Mastercard Agent Pay does. That's what we do. That's what we do today with participants in the ecosystem. So nothing really new from us on a perspective, but it's a new party. Um, not really visible to the.

Michael Miebach: Potentially for merchants, for issuers, for every other party, because that is just a new flow for the transaction.

Sachin Mehra: I think the next thing to think about.

The consumer is in that way, but certainly driving some complexity potentially for merchants, for issuers, and for every other party, because that is just a new flow for the transaction.

Michael Miebach: question is how will merchants deal with all of this.

Michael Miebach: Earlier I used the word no code approach.

Michael Miebach: We have learned this during the day of the various wallets that were out there. It is not easy for merchants to consume this. What we have done here is we created a merchant framework that allows us to engage with merchants and with other parties that bring out protocols like Stripe and OpenAI and so forth to.

Um, I think the next thing to to think about is how, um, will Merchants deal with all of this early, I use the word no code approach.

Sachin Mehra: Make this very easy for merchants.

Michael Miebach: That is important.

Michael Miebach: The merchant needs to know that.

Michael Miebach: Agent on the other side that we have certified is actually the agent. We have to pass through that information and ensure that the circle closes.

Sachin Mehra: We're doing that. There is still the question of.

So, you know, we have learned this during the day of uh, you know, the various wallets that were out there, it is not easy for merchants to consume this. Um, so what we have done here is we created a merchant framework that allows, uh, you know, us to integrate, uh, engage with merchants and with other parties that brought bring out, protocols, like, stripe and open Ai and so forth to make this very easy for merchants, so that is important. The merchants needs to know that uh, the agent on the other side that we have certified is actually the agent. So we have to pass through that information and ensure that the the circle closes, we're doing that.

Michael Miebach: What is in focus today. Very much so is the consumer the person they claim to be? Consumer authentication needs to continue, but it now needs to flow through a somewhat more complicated transaction. All of this is happening now. The tricky part is if you have asked an agent to buy you something in a chat, and then in the end you challenge that transaction, who can prove who's right? Is it the consumer? Is it the merchant?

Sachin Mehra: What happens?

Michael Miebach: What do you do on return policies and various other things? Those are all complexities that we're pretty good at solving in today's world and that we're pretty busy solving in the future world. That comes down to some of the aspects that you've talked about in your question. Where is the legal and regulatory framework on this yet?

All that. There's still the question of what is in focus today. Very much. So, is the consumer the person they claim to be? Consumer authentication needs to continue, but it now needs to flow through a somewhat more complicated transaction. So, all of this is happening. Now, the tricky part is, if you have asked an agent to buy you something in a chat, and then in the end, you challenge that transaction, who can prove who's right? Is it the consumer? Is it the merchant? What happens? What do you do on return policies and various other things? Those are all complexities that we're pretty good at solving in today's world, and they were pretty.

Sachin Mehra: You know, this is not something that's.

Michael Miebach: Specifically contemplated, that will evolve over time. Basically, it takes parties like us.

Michael Miebach: Who focus on safety and security, and not trust.

Michael Miebach: Because only when there's trust, this whole.

Sachin Mehra: Space will actually evolve.

Michael Miebach: Our set of services around this will.

Michael Miebach: Assist in this effort that I have that I just described. I think it's also important to note.

Sachin Mehra: This is an opportunity for us to.

Michael Miebach: Drive our business forward, because if we do this work better than anybody else, that's a tremendous opportunity for us.

Michael Miebach: Some of the things that I.

Michael Miebach: See that we have built in our portfolio here to power agentic commerce is, for example, on the point of challenging a transaction. We bought a company a couple years ago called Ethoca.

Michael Miebach: What they do is they provide.

Michael Miebach: Transaction detail at the moment of a chargeback to a consumer that says, hey, you actually did this transaction because you were here at this time doing the following. The same can be done with this audit trail that would be capturing out of the chat that I talked about earlier. That is one example. There is identity solutions, there is merchant services, there is advisory, et cetera. The whole host of services will help us make this a safe and secure.

Michael Miebach: Ecosystem and live up to the opportunity that we all think it could be.

Michael Miebach: Everything I just said does not stop at consumer. You can transport the same logic into the B2B context for other use cases that will emerge over time.

A tremendous opportunity for us and some of the things that I see that we have built in our portfolio here to power. Agentic Commerce is for example, on the point of challenging a transaction. We've bought a company a couple years ago called ethika and what they do is they provide transaction detail. At the moment of a charge, back to a consumer that says, hey, you actually did this transaction because you were here at this time, doing the following, and the same can be done with this other trail. That would be capturing out of the chat that I talked about earlier, that is 1 example. Um, there is a identity Solutions, there is merchant services, there's advisory Etc. The whole host of services will help us make this a safe and secure ecosystem and you know live up to the opportunity to also think it could be and everything I just said, does not stop at consumer. You can transport the same logic into the beacon, B2B context for other use cases that will emerge over time.

Operator: Our next question comes from Jason Kupferberg from Wells Fargo. Please go ahead. Your line is open.

Devin Corr: Good morning, guys. Thanks. I wanted to come back to the topic of opening new acceptance channels on the consumer side. You mentioned rent. I feel like that's been targeted for a while, hasn't really taken off. I'm wondering what you see as some of the catalysts to unlock those volumes or the interchange models changing at all. Any other newer acceptance verticals you see as emerging would be interesting to hear about. Sachin, if you can just give us a quick word on M&A pipeline, I think it's been almost a year since that Recorded Future. That would be great. Thank you.

Our next question comes from Jason. Kupperberg from Wells. Fargo, please go ahead. Your line is open.

Good morning, guys, thanks. Um, I wanted to come back to the topic of opening new acceptance channels. Um, on the consumer side, you mentioned rent, I feel like that's been targeted for a while. Hasn't really taken off. I'm wondering what you see as some of the catalysts to unlock those volumes or The Interchange models. Um, changing it all and just any other newer acceptance verticals. Uh, you see as emerging would be interesting to hear about, um, and then Sachin, if you can just give us a quick word on m&a Pipeline, I think it's been almost a

Year. Since that recorded future, that would be great. Thank you.

Michael Miebach: Right, going into underpenetrated verticals where there's ingrained behavior for many.

Sachin Mehra: Years, you know it takes a little bit of time.

Michael Miebach: I feel we're starting to make some real progress here. I gave you an example from another part of the world, New Zealand. Here with Bilt, we've made a lot of progress here in the United States. You know, a lot, if you ask in your circles and young kids who pay their rents, they're dying to pay on Bilt.

Sachin Mehra: Our rewards, loyalty programs, all that behind.

Michael Miebach: It is an important differentiator. I really feel there is momentum there.

Michael Miebach: We are very specific not to pick a whole host of different verticals because they all have their intricacies. We focus on health care as well. We focus on tourism, and we gave plenty of updates over the last couple of calls on that. It is trying to use our existing set of solutions, but then find.

Michael Miebach: A nuance that makes a difference.

Michael Miebach: Find those partners like Bilt and RENTI in this case. I do think we are making progress. It's a tremendous opportunity that we laid out from a target market perspective, and we're chipping away at it.

Sachin Mehra: Jason, on your question on M&A, just stepping back, our philosophy around M&A remains pretty much unchanged. It's always been strategy led and it will continue to be strategy led. When we have something from a strategy standpoint which we need to accomplish, we step back and think about, you know, do we want to build, buy, or partner? To the extent we think it's appropriate to actually buy, that's where M&A comes in. The pipeline is robust. We are very, very deliberate about how we go about filtering through and funneling through on that pipeline to make sure it's on point and it's going to deliver the synergistic value that we expect to deliver as part of that. I would say the focus areas will remain very similar to what they have in the past in terms of how we have gone about executing on M&A.

Sachin Mehra: It's been primarily focused on services. That will continue to be the case on a going forward basis. On occasion, if there's areas around the payment network side that we need to do stuff, we'll certainly look at that as well.

Hey, Jason with your question on m&a. Look, I mean, just stepping back our philosophy here on m&a remains pretty much unchanged. It's always been strategy LED and it will continue to be strategy LED, right? And so, uh, when we have something from a strategy standpoint, which we need to accomplish, we kind of think step back and think about, you know, do we want to build by or partner and to the extent, we think it's appropriate to actually buy, that's where m&a comes in. Uh, the pipeline is robust, we are very, very deliberate about how we go about, you know, filtering through and funneling through on that pipeline to make sure it's on point and it's going to deliver the synergistic value that we expect to deliver as part of that. So look, I I would say the focus areas will remain very similar to what they have in in the past in terms of how we have gone about executing on m&a. It's been primarily focused on Services. Um that will continue to be the case on going forward basis. Uh and then on occasion, if there's areas around, you know, the payment Network site that we need to do stuff. We'll certainly look at that as well.

Operator: Our next question comes from Bryan Keane from Citi. Please go ahead. Your line is open.

Devin Corr: Yeah, guys. Hi, good morning. Two just kind of follow ups on agentic commerce. Michael, maybe you can help us understand how Mastercard maybe can take share in agentic commerce. Given your position and versus competition, what can maybe differentiate you and who would you be taking share from? Then just a clarification for Sachin on the Capital One migration, the debit migration, you know, how much comes off in 2025 versus 2026, and then I guess with the contractual obligations, then it's a very small headwind in 2026 and maybe a little bit of a headwind in 2027 if that's one time. Just some quantification there. Thank you.

Our next question comes from Brian Keane from City. Please go ahead. Your line is open.

Hi, good morning. I 2 just kind of follow ups on a gentic Commerce, Michael. Maybe you can help us understand how maps are card. Maybe can take share in a genetic Commerce. Um given given your position and verse competition.

What, what can maybe differentiate you and, and who would you be taking share from? And then, just a clarification for Sachin, on, on the cap 1, uh, migration the debit migration, you know, how much comes off in 25?

Michael Miebach: Right.

Sachin Mehra: Hey Brian.

Michael Miebach: On the share side.

Uh, versus 26. And then I guess with the contractual obligations, then it's a very small headwind in 26 and maybe a little bit of a headwind in 27 if that's 1 time. Just some quantification there. Thank you.

Sachin Mehra: First of all, I try to lay out that we have a differentiated problem position overall for agentic commerce.

Alright, hey Brian. So um, on the share side,

Michael Miebach: We hope to be positioned well with partners out there who look to.

Sachin Mehra: Get into the space and work with us.

Michael Miebach: Now the share part that you were.

So first of all, I I I try to lay out that we have a differentiated proposition overall for agenda, Commerce. So we we hope to be positioned well, um, with uh, with Partners out there who look to get into the space and work with us.

Sachin Mehra: Talking about beyond services goes into the.

Michael Miebach: Payment side as well.

Sachin Mehra: One thing that I think is.

Michael Miebach: A pretty obvious opportunity is this is going to be very hard to do.

Sachin Mehra: For local payment networks, if you look around, you know, the various kind of local payment systems.

Michael Miebach: That exist in Europe and Asia.

Sachin Mehra: Big markets for us is an opportunity for us to continue to.

Michael Miebach: Drive up our switching ratio as we've done in years. This gives us another kind of field to execute on.

Sachin Mehra: I think that's the first thing to say. There's another aspect here on, you know, where we'll have to see how it works from a share perspective. The general nature of its agentic commerce driving more transaction is a good opportunity for us to drive share to start with, because what might have been one basket at one merchant might now be a very broader set of recommendations from a bot that gives us multiplicity of opportunity.

On Services goes into, uh, the payment side as well. So, 1 thing, that I, I think is a pretty obvious opportunity, is this is going to be very hard to do for local payment networks. So, if you look around, uh, you know, the various, uh, kind of local payment systems that exist in Europe and Asia, uh, and so forth. Uh, big markets for us is an opportunity for us to continue to drive up our switching ratio as we've done in years and this gives us another kind of feel to to execute on. I think this is the first thing to say, there's another aspect here on, um, you know,

Michael Miebach: To get into the flow and provide.

Sachin Mehra: The kind of solution that helps us get this over to us.

Michael Miebach: I think one other thing to keep.

Sachin Mehra: In mind is kind of when you look at the agentic and you think back about the days where everything was in store and what kind of services portfolio we had and the opportunities we had to apply services and drive differentiation for us versus others, and then it went online, there was a whole different set of solutions that were suddenly needed to keep the online transaction safe. At agentic it's going to be even more opportunity for us to do that. Those are all lenses on how we look at it. Most tangible near term, one would really be as this plays out, not near term as in the next month, but near term as in the next year, possibly when agentic commerce really gets momentum to compete versus local payment solutions.

where we'll have to see how it works from a share perspective, but the general nature of a genetic Commerce, driving more transaction, uh, is a good opportunity for us to drive, share to start with. Because what might have been 1 basket at 1 Merchants might not be a very you know broader set of recommendations from a bot that gives us multiplicity of opportunity to get into the flow. And you know provide the kind of solution that helps us uh get this over to us. Um, I think 1 other thing to keep in mind is is kind of when you look at the genetic

And you think back about the days where everything was in store and what kind of services portfolio, we had in the opportunities, we had to apply, uh, uh, services and drive differentiation for US versus others. And then it went online. There was a whole different set of solutions that were suddenly needed to keep the online transactions saved, and then genetic, it's going to be even more opportunity for us to do that. So those are all lenses on how we look at it. Most tangible near-term 1

Sachin Mehra: Yeah, and on Capital One, like I said, look, I mean the conversion is underway. We expect the conversion to complete in 2026. I mentioned that there is, you know, an offset due to the net revenue loss as part of the conversion, you should not assume that the offset completely negates the impact of the lost net revenue. I'm not going to size for you exactly what the amount is that we're expecting in 2026, but it is fair to assume that the headwind in 2027 will be there because you no longer have the benefit of that contractual obligation offsetting in 2027. If you're looking on a year over year basis, what you're going to see is you're going to see an adverse impact in 2026 by virtue of this conversion.

Would really be as this plays out not near-term as in the next month. Uh, but near-term as in the next year, possibly, when a gentic Commerce really gets momentum, uh, to compete, uh, versus local Payment Solutions.

Sachin Mehra: On a year over year basis, you will see, you know, in 2027 an adverse impact as well just because the contractual obligation is no longer benefiting us in 2027.

Yeah, and on Capital 1, like I said, look, I mean the conversion is underway, we expect the conversion to complete in 2026. I mentioned that there is um, you know, an offset to um, um, to to, to the net revenue loss as part of the conversion, you should not assume that the offset completely, um, you know, negates the impact of the of the last net revenue. I'm not going to size for you, exactly what the amount is, that we're expecting in 2026, but it is fair to assume that the headwind in 2027 will be there because you no longer have the benefit of that contractual obligation of setting in 2027. So, if you're looking on a year-over-year basis, what you're going to see is you're going to see a adverse impact in 2026 by virtue of this conversion. And then on a year-over-year basis, you will see, you know, in 2027 and adverse impact as well. Just because the contractual obligation is no longer benefiting Us in 2027.

Operator: Our next question comes from Harshita Rawat from Bernstein. Please go ahead. Your line is open. Hi, good morning, Michael. I want to ask about Mastercard Commerce Media. Can you expand upon the announcement? Looks like you're bringing together a lot of your assets across offers, loyalty, personalization, maybe talk about the early feedback from advertisers you've received, distribution channels, how will it work? The release also talked about kind of like a high return on ad spend. Can it sustain at these levels of escape? Thank you.

Our next question comes from hersa robot from Bernstein. Please go ahead. Your line is open.

Michael Miebach: Thank you, Harshita.

Hi, good morning. Uh, Michael. I want to ask about MasterCard, Commerce media, can you expand upon the announcement? Looks like you're bringing together a lot of your assets across offers, loyalty, personalization, maybe talk about the early feedback from advertisers you've received distribution channels, how will it work? And the release also talked about kind of like a high return on ad spend. Uh can it sustain at these levels of your scale? Thank you.

Sachin Mehra: From the data, we plastered Times Square with Mastercard Commerce Media. A lot has happened. We were out there with advertisers.

All right. Thank you Marcia.

Michael Miebach: We're out there with publishers.

Sachin Mehra: Those are the both kind of.

Michael Miebach: Parties in this ecosystem today.

Sachin Mehra: How that industry works is kind of one of the problems to solve is can you really attribute the ad spend? This is one of the problems that we can solve here because we can tie it to a specific transaction, a specific purchase that went through our network. That brings us a different, you know, gives us in a different starting position for all of this. You know, when you go and you want to enable somebody to place the right app in the right ad at the right time, you need more data to do that. We do have proprietary speakers, spend data, and insights from our permissioned 500 million consumers that sit in our loyalty programs and 25,000 merchants. That is a very unique position that we are in other competitors.

So from today, to be plastered, Time Square with Commerce media. Um, a lot has happened. So we were we're out there with uh, with advertisers. We're out there with Publishers. Um, so those are the both kind of parties in this ecosystem. Um, today, um, how that industry works is, um, kind of the 1 of the problems to solve is, can you really attribute the ad spend and this is 1 of the problems that we can solve here because we can tie it to a specific transaction. A specific purchase that went through our Network. So that brings us a different, you know, gives us in a different, uh, starting position for all of this.

um,

you know, when you go and you want to enable somebody to place the right app in the right ad at the right time, um, you need more data to do that and we do have proprietary spend data and insights, uh, from uh, our permission 500 million. Uh, consumers that sit in on our loyalty programs and 25,000 merchants,

Michael Miebach: There are other players out there who haven't been in this business. We've been in loyalty for a long time and we just started to look at this. This is a whole different approach for us to get into business that go straight beyond the payment transaction as I framed it earlier on. The initial reception is interested. We have a set of big players on both sides of the equation, and I mentioned advertisers and publishers who are engaging with us to drive this. It's also pretty early days when we launched it, so I can't really have anything to share from a numbers perspective other than there's demand. Let's go and do this because the proposition position is pretty clear.

Go and do this because the proposition is pretty clear.

Operator: Our next question comes from Tien-Tsin Huang from J.P. Morgan. Please go ahead. Your line is open.

Our next question comes from Tingen Wong from JP Morgan. Please go ahead, your line is open.

[Analyst]: Nice results.

[Analyst]: Of course.

[Analyst]: Just following up on a few of the questions asked already. Just thinking about this build versus buy for Mastercard and Michael, your comment on carefully curating the vast portfolio. On the build side, it feels like you've announced a few things. Cloud platform, Harshita just asked about the Commerce Media Network. Are these the recent build projects? Are they moving the needle in VAS in the near term from your perspective? On the buy side, there were some press reports about Mastercard's interest in crypto infrastructure. Can you comment on that, and just your appetite in general for infrastructure versus services assets?

Hi, nice results. Of course, just, um, following up on a few of the questions asked already, just thinking about this build versus buy.

For, for MasterCard and Michael your comment on carefully, curating the the vast portfolio. Um, on the build side that feels like you've announced a few things Cloud platform Rita just asked about the conversation Network are these the recent um,

Build projects. Are they moving the needle, invest in the near term from, from your perspective. And on the buy side, there was some press reports about mastercard's interest in crypto.

[Analyst]: Thanks.

Infrastructure. Can you comment on that and just your appetite in general for infrastructure versus Services assets? Thanks

Michael Miebach: All right.

All right. So um

Sachin Mehra: You know Mastercard has been. You all know I've been the Chief Product Officer before, so I kind of know a lot about organic innovation and so forth, and we have been very good at that over time. We have also been very focused on leveraging the acquisition lever whenever we could and whenever it makes sense. Strategy led, as Sachin talked about earlier. Somewhere in the middle is where you find some of these recent announcements like Mastercard Commerce Media, what Harshita just talked about. I see that as a pretty big bet for us. It's a really unique position that we bring to the party. There's clear interest in the market, so we feel this is something that will make a difference, otherwise we wouldn't do it. It's also early days, and there isn't just one big bet.

You know, MasterCard has been, you know, you all know. Uh, I've been the chief product officer before. So I kind of know a lot about, uh, you know, you know, organic Innovation and so forth. And we have been very good at that over time.

Sachin Mehra: There are a few things that we're trying at any given point in time. They get some preferential funding in the company and so forth that we push forward. That's a discipline that we've built out over years on top of our everyday organic innovation. Commerce media, On Demand Decisioning as I talked earlier, and a few others that are coming. That's been a strong quarter, but we felt like rather than giving you bits and pieces every quarter, we thought we'll take this quarter and put everything together to show you that the innovation muscle is all well and it's not just about buying companies out there. We are not commenting on market rumors. You would have not expected me to say anything else. Yes, I saw that article as well.

Um, but we've also been very focused on uh you know, leveraging the acquisition, um, uh, lever whenever we could. Um, and whenever it makes sense, strategy LED as such in talking about earlier. So somewhere in the middle is where you find some of these recent announcement like Commerce media. What harshita just talked about. You know, I see there's a pretty big bet for us. Uh, this is a really unique position that we bring to, uh, uh, the party. Um, there's clear interest, uh, in the market. So we feel this is, uh, is something that, uh, that will make a difference. Otherwise we wouldn't do it, uh, but it's also early days and, you know, there isn't just 1, big bet. So, there's a few things that were given trying at any given point in time, they get some, you know, prefer preferential funding in the company and so forth that we push forward. That's a discipline that we Spilled Out over the years, um, on top, of our everyday, organic Innovation, so Commerce media on the on demand, decisioning as I talked earlier, um, and a few others that are coming. So there's been a strong quarter.

Um, but, you know, we felt like rather than giving you bits and pieces every quarter. We thought we'll take this quarter and put it everything together that you show, uh, to show you that the Innovation must go is all well, and it's not just about, uh, in a, a buying companies out there now, um, we are not commenting on Market, rumors, you would have not expected me to say anything else. Yes, I saw that article as well.

[Analyst]: Fair enough. Thank you, Michael.

Fair enough. Thank you, Michael.

Operator: Our next question comes from Andrew Schmidt from KeyBanc Capital Markets. Please go ahead. Your line is open.

[Analyst]: Hi Michael. Hi Sachin. Thanks for taking the question this morning. I wanted to ask on cross-border volumes. Cross-border volumes have been remarkably resilient and very consistent here. Maybe just comment on the sustainability, the drivers of sustainability on a go-forward basis, and then if we peel back the layers for both card-not-present and travel, card-not-present and card-present travel, if there's anything to call out in terms of verticals or corridors that's worth mentioning in terms of shifts you're seeing. Thanks so much.

Sachin Mehra: Sure Andrew, I'll take that. Look, just to set the stage from cross border, right, the value prop on cross border continues to resonate across the consumer base as well as across businesses. Cross border is a combination of consumer spend as well as business spend which is taking place there. That value prop is alive and well and people are using it and leveraging it and they see some significant benefits as a result of that. That in combination with winning the right portfolios, which is what we focus a lot on, which is winning the right kinds of portfolios which could be, you know, cross border heavy affluent portfolios. Case in point, Michael talked about Japan Airlines, right? Great example.

Hi Michael. Hi Sachin. Thanks for taking the question this morning, I wanted to ask and cross border. Um, cross border volumes have been remarkably resilient, um, and very consistent here maybe to just comment on the sustainability, the drivers sustainability that go forward bases. And then if we peel back the layers uh for both um car, not present and uh travel karna, president Cara present travel. If there's anything to call out in terms of verticals corridors, that's worth mentioning in terms of shifts, you're seeing thanks so much.

Sachin Mehra: When you win a co-brand portfolio or, for example, the renewal with American Airlines, these are important portfolios to win because they actually help sustain that growth rate on cross border because when people buy, you know, take those products, they're actually using them in the cross border environment. Winning the right portfolios is important. Number two, it's the effort which goes into the daily blocking and tackling to drive cross border volumes. We have a team inside of Mastercard Incorporated which actually spends a lot of time focusing on pulling the right levers to drive optimization of cross border flows because it's not as easy as it sounds. Very often what happens is you've got to stimulate spend in the acquiring corridor so that people pull out their Mastercard card when they're actually traveling overseas.

Sure, Andrew, I'll take that. So look. I mean, at the just to set the stage for cross border, write the value prop on cross border continues to resonate, um, across the consumer base as well as across businesses, right? I mean, cross borders is a combination of consumer spend, as well as business spend, which is taking place there, and that value prop is alive and well, and people are using it and leveraging it and they see some some significant benefits as a result of that. That in combination with winning the right portfolios, which is what we focus a lot on which is winning the right kinds of portfolios, which could be, you know, cross border, heavy, affluent portfolios case in point. Michael talked, about Japan Airlines, right? Great example, when you win a a co-brand portfolio or for example, the renewal with American Airlines. These are important portfolios to win because they actually help sustain that growth rate.

Sachin Mehra: We'll work across borders in our teams to ensure that we've got the right level of focus to drive spend across important corridors. Really important. I'm going to just bring it together. Value prop works. Winning the right portfolios, driving optimization across those portfolios. Last but not the least, being present across both card present and card not present. Really important. You can see strong growth in card not present. It's been running at roughly 20% growth on card not present ex travel for cross border. It's all the things that we do every day to execute on that, to be present and have our acceptance available in those cross border channels which makes that come to life. That is partially also sustained by something which Michael talked about earlier. He talked about how Mastercard Incorporated products are used in the on ramp for stablecoins and for crypto.

Was driving optimization across those portfolios and last but not the least being present across both card present and card, not present really important. You can see strong growth in card, not present. It's been running at roughly 20% growth on card, not present, X travel for cross border. Um, look, I mean, it's all the things that we do every day to execute on that to be present and have our acceptance available in those cross water channels, which makes that come to life. Um, you know, that is partially also sustained by something, which Michael talked about earlier, he talked about how

Sachin Mehra: That comes into card not present for the ex travel. When you have that kind of growth coming through there, that's coming through in these metrics as well. Overall, I would tell you, I won't give you a forecast, I know you're looking for that. I will tell you that the underlying fundamentals of what drives our cross border volumes is very much intact.

[Analyst]: Thank you Sachin.

MasterCard products are used in the on-ramp for stable coins and for crypto. Well, that comes into car, not for the next travel, right? So when you have that kind of growth coming through there, that's coming through in these metrics as well. So overall, I would tell you, I won't give you a forecast. I know you're looking for that. Um, I, I will tell you that the underlying fundamentals of what drives our crossborder volumes is very much intact.

Thank you, sir.

Operator: Our next question comes from Timothy Chiodo from UBS. Please go ahead. Your line is open.

Our next question comes from Tim, Tim chiodo from UBS. Please go ahead. Your line is open.

[Analyst]: Great, thank you. I want to talk a little bit more about that cross-border acceptance. When either Mastercard or maybe an attempt by another local or another competitor looks to build out that global acceptance, I was hoping you could talk through what you need to do that, right? Is it things like licenses, relationships with merchants and PSPs or acquirers? There's a branding aspect, there's customer awareness, there's probably a bunch of infrastructure investment. If you could just elaborate on just how much of a moat and how challenging that is. Lastly, somewhat related, to what extent do you think it's possible, and some have done this, that competitors could more partner on this rather than build it out on their own, and what the difference is in the two approaches. Thanks a lot.

Great. Thank you. I want to talk a little bit more about that cross border acceptance. So when either Mastercard or maybe an attempt by another local or another, competitor looks to build out that Global acceptance. I was hoping you could talk through. What do you need to do that? Right. Is it things like licenses relationships with merchants and PSPs or acquirers?

There's a branding aspect, there's customer awareness.

There's probably a bunch of infrastructure investment. If you could just elaborate on just how much of a moat and how challenging that is.

Sachin Mehra: Right, so it sounds like you worked in our industry for a while because you just gave a good pot of what it takes to do this. If you take steps, step back and look at the list that you just talked about, it just tells you it's hard to do, it's difficult to do, and took a long time to build it. That's important. Different players have tried to replicate some of that and it continues to be the better proposition that's out there. It's driving a lot of value because it, you know, with 100, whatever, 50 million acceptance points, whatever this number is, it is very hard to replicate. For us as a company, we're well positioned with our domestic license in China to continue to drive that footprint.

And then lastly, somewhat related, to what extent do you think it's possible? Some have done this: that competitors could more partner on this rather than build it out on their own? And what are the differences in the two approaches? Thanks a lot.

Sachin Mehra: The complexities that come in is indeed you have to be a global player and act local, understand the local regulatory system. You have to understand the local partners because remember, we are the global fabric that sits on top of this. We're not doing the last mile of this.

Right. So, um, it's like you worked in our industry for a while because, uh, you just gave a good pot of what it takes to do this. And if you take a step back and look at the list that you just talked about, um, it just tells you it's hard to do, it's difficult to do, and it took a long time to build it. Um, so that's important. Um, different players have tried to, uh, replicate some of that, and it continues to be the better proposition that's out there. It's driving a lot of value. Um, because it, uh, you know, with, you know, 150 million acceptance points, uh, whatever the latest number is, um, it is very hard to replicate. And for us as a company, you know, we're well positioned with, uh, our domestic license in China to continue to drive that footprint. Um, the complexities that come in is indeed, you have to be a global player and act local, um, understand the local regulatory system, you have to understand the local partners, because remember, uh, we are the global fabric that...

Michael Miebach: This is why it's really important.

Sachin Mehra: For us to continue to build partnerships around the world that drive the cross-border acceptance, you got to help them drive preference for us. You got to ensure that the user.

Michael Miebach: Experience that they provide to the consumer.

Sachin Mehra: At the point of interaction is a compelling one. It's easy, it's all that, and it's delivering the standards that we put out for us to ensure that the Mastercard transfer transaction actually comes through. One of the most critical things about all of this is that in the end you need to have you.

Michael Miebach: Ensure safety and security because as people.

Sachin Mehra: Worry that you know, what happens if something goes wrong, where's my data going, what happens if this transaction is a.

Michael Miebach: Fraudulent one, etc., etc.

Sachin Mehra: Those are all aspects of this. By the way, they reflect a good chunk of our services portfolio that we also offer to those partners that drive that experience acceptance for us in market. All of these come together. I think it's hard to do. There will be others that come at it. So far I think this is.

Sits on top of this, we're not doing the last mile of this, and this is why it's really important for us to continue to build, uh, Partnerships around the world and drive the cross border acceptance. But you got to help them, you know, Drive preference for us. You got to ensure that the user experience that they provide to the consumer. At the point of interaction is a compelling 1. It's easy, it's all that, and it's delivering a standards that we put out for us to ensure that the MasterCard transaction actually comes through and 1 of the most critical things about all of this, is that in the end, uh, you need to have to ensure Safety and Security because as people worry that, you know what happens, if something goes wrong, where's my data going? What happens if you know this transaction is a fraudulent 1 etc. Etc. Those are all aspects of this and by the way they reflect a good chart uh good chunk of our services portfolio that we also offer to those partners that drive that acceptance for us in markets. So all of these comes together. So um, yeah I think it's it's hard to do. There will be

Michael Miebach: Just the most differentiated proposition that's out there.

Sachin Mehra: Earlier, you know, there are different cross-border solutions for different types of payments that we're also active in.

Michael Miebach: Because it's not just P2M.

Sachin Mehra: There's, you know, Mastercard Move where you have B2C disbursements and gig work.

Michael Miebach: Payouts and so forth.

Sachin Mehra: We're doing that, leveraging our network in bidirectional ways to do the same.

Michael Miebach: Thing to keep this resilient proposition. Can you just repeat the second part of your question?

Others that come at it. Uh, and so far, I think this is just the most, uh, differentiated proposition that's out there. Uh, we earlier, you know, we there are different, uh, different cross border solutions for different types of payments that were also active in because it's not just p2m. Uh, there is, uh, you know, a MasterCard move, uh, where you have b2c dispersement, and gig work payouts, and so forth. So we're doing that leveraging. Our network, uh, in bidirectional ways, uh, to do the same thing to keep this, uh, resilient proposition. Can you just re

Sachin Mehra: There was a particular angle you were after?

[Analyst]: It was around the ability to do this by partnering with other networks rather than building it on your own. To what extent you thought there was maybe quality or other differences.

Repeat the second part of your question. There was a particular angle you were after.

Sachin Mehra: Yeah, you know, there's other networks. It's an interesting angle.

Michael Miebach: Let me talk about where we see.

Sachin Mehra: Partnership opportunity, and I talked about that with digital wallets.

Michael Miebach: You know, this is right now a particular opportunity.

Sachin Mehra: There's a clear trend that, you know, in some parts of the world, people.

Michael Miebach: Love wallets for, you know, a range of reasons.

Sachin Mehra: The stored value digital wallets that I mentioned with Alipay Plus and so forth out in Asia, that is a great partnership because they provide a particular local solution.

Michael Miebach: We provide global acceptance.

Sachin Mehra: The combination of that makes a great opportunity for partnership. General processors, acquirers, those are different types of partners. Occasionally we see competition coming in, but it's pretty clear that for us, we have a need to find ways to.

Michael Miebach: Partner with people that can cover the.

Sachin Mehra: Last mile for us.

Michael Miebach: It's never an either or.

Sachin Mehra: We always look for opportunities, even for people where in certain pockets we do compete. We'll find other ways to partner to drive the reach of our network.

Sachin Mehra: Yeah, and I'll just add, Tim, to that point which Michael just made. Look, at the end of the day, right, when we build out acceptance, we're building out acceptance both for domestic and cross-border. It's not like you're exclusively building out acceptance cross-border. Back to your question around the sustainability and how difficult or not it is for others to compete, it's a question of what your global footprint is. To the extent we've got thriving domestic businesses in many, many, many countries across the globe where we built out the acceptance footprint, that serves us not only in the domestic volumes, but certainly serves us from a cross-border standpoint as well.

Clear Trend, that, you know, in some parts of the world, people love wallets for, you know, a range of reasons, uh, the stored value digital wallets that I mentioned, uh, with alip pay plus and so forth out in Asia. That is a great partnership because they provide a particular local solution B provide Global acceptance to combination of. That makes a great opportunity for, for partnership General processors acquire us. Those are different types of Partners. Um, they're, you know, occasionally, we see competition coming in but it's pretty clear we, uh, that for us. We have a need to find ways to partner with people that can cover the last mile for us. So it's never an either, or we always look for opportunities. Even for people where in certain Pockets we do compete. We'll find other ways to partner to drive this the reach of our Network.

Yeah, and and I'll just add, uh, Tim to that point which Michael just made. Look at the end of the day, right? When we build out acceptance, we're building out acceptance both for domestic and cross border. It's not like you're exclusively building our acceptance across borders. So

Sachin Mehra: Yeah, every transaction starts somewhere domestically.

Back to your question around sustainability and how difficult or not it is for others to compete. It's a question of what your global footprint is to that extent. We've got thriving domestic businesses in many, many countries across the globe where we've built out the acceptance footprint, right? That serves us not only in the domestic volumes but certainly serves us from a cross-border standpoint as well.

Yeah, every transaction starts somewhere, domestically.

[Analyst]: Excellent. Thank you both.

Sachin Mehra: Yep.

Thank you, both.

Operator: Our next question comes from Sanjay Sakhrani from KBW. Please go ahead. Your line is open.

Yep.

Our next question.

[Analyst]: Thank you. Pricing, such as you mentioned, has been a tailwind this year. I'm just curious, can that trend continue in 2026 to a similar degree, I guess. Also, when I think about it, that core payments business, do you think there's still decent pricing power there? I have one quick follow-up on the Capital One data disclosure. I'm just trying to think about the step down in volumes sequentially. That seems like a significant number given how early the Capital One transition is. Maybe you could just help us think about that. I know the revenues are separate. I'm not necessarily as concerned about that. I'm just thinking about the optics of the volumes. Maybe you could just speak a little bit about what we should expect as we move through the fourth quarter and into next year in terms of the magnitude of impact on U.S. volumes.

Sakrani from KBW. Please go ahead. Your line is open. Thank you. Um, so pricing such a new mentioned it. Um, as well has been a tale.

Curious.

[Analyst]: Thank you.

Sachin Mehra: I'll take both questions here on Capital One. Right. Remember when I was talking about the first four weeks of October on U.S. volumes? It's certainly the Capital One piece as well as the lapping effect due to weather impacts we had in 2024. It's a combination of both of those, which reflects on the 8% number that you're seeing in Q3, going to 5%. It's important to also look at what the growth rate in September was because 8% is the average across all of Q3. It's kind of this step change which takes place as cards migrate that you're going to start to see the volume come down. Candidly, the cards are migrating over and they will continue to through the course of the fourth quarter and going into the early part of next year.

Can that Trend continued in 20206 to similar degree? I guess. Also, when I think about it, that core payments business. Like, do you think there is still decent pricing power there? And then just I have 1, quick, follow-up on the capitol 1, um, data disclosure, I'm just trying to think about the step, uh, down in volumes sequentially. Um, you know, that seems like a significant number given how early the cap 1 transition is, maybe you could just help us think about that. I, I know the revenues are separate. I'm, I'm not necessarily as concerned about that. I'm just thinking about the Optics of the volumes, but maybe you could just speak a little bit about what we should expect. As we move through fourth quarter, and into next year, in terms of the magnitude of impact on us volumes. Thank you.

I'll take, uh, both questions here on Capitol 1, right? So, remember when I was talking about the first 4 weeks of October, uh, on us volumes, right? Um, it's certainly the capital 1 piece as well as the lapping affect you do weather impacts, we had in 2024 so it's a combination of both of those which reflects on the 8.

Sachin Mehra: I feel like at the end of the day, that's something which is just the reality that's well understood, that's well contemplated in every bit of guidance that I've shared on 2025. I've kind of given you a little bit of a look into what the puts and takes for 2026 are as it relates to Capital One as well.

Sachin Mehra: Can I say one thing?

Sachin Mehra: Sure.

Sachin Mehra: There are a few questions on Capital One, and of course that's, you know, Capital One is an important partnership, but it's not the only partner we have in the U.S. We keep winning on the other side. If you zoom out and you look at it from a global perspective, it's a truly global company. We have 27,000 bank partners and we win a lot. Share's been up, which we shared with you at the investor day. There's a lot of winning going on. I think it's always good to keep that perspective. There will be shifts and puts and takes here and there, but overall the trend's been pretty positive and we continue to win.

% number that you're seeing in Q3 are going to 5%, but it's important to also look at what the growth rate in September was because 8% is the average across all of Q3. So, it's kind of this, you know, step change which takes place at Scott's migrate that you're going to start to see the volume come down and candidly. I mean, the cards are migrating over and they will continue to, uh, through the course of the fourth quarter, and going into the early part of next year. So I I, I, I feel like at the end of the day, you know, that's something which is just the reality. That's well, understood that's well. Contemplated in every bit of, you know, uh, guidance that I've shared on 2025, and, you know, I kind of giving you a little bit of a look into what the person takes for a 2026 hour as it relates to the capital 1 as well. Um, and just to say 1 Thing. Sure. So, you know there are a few questions on Capital 1 and of course that's you know, Capital 1 is an important partnership but it's not the only partner we have in the US. So

Devin Corr: Yeah.

Sachin Mehra: Sajid, your question on pricing. Look, at the end of the day, if we do our job right, there's no reason why we cannot price for the value we deliver. We continue to deliver new products in the market, we can deliver incremental value in existing products, and we price that. If you continue to do our job right, as we've done this year, we'll do ensuing years. We feel like there's an opportunity both across the payment network side of the business as well as Value Added Services and Solutions. Generally feel pretty good around that.

We keep winning on the other side and if you zoom out and you look at it from a Global Perspective, you know, as a truly global company you know like we have 27,000 Bank partners and we win a lot shares. Been up which share with you a investor day so there's a lot of winning going on and I think it's always good to keep that perspective. There will be shifts and puts and takes here and there. But overall, the trend has been pretty positive and we continue to win. Yeah. And S you any question on on, on pricing? Look, I mean at the end of the day, if you do our job, right? Right? There's no reason why we cannot price for the value. We deliver we continue to deliver new products in the market. We can deliver incremental value and existing products, and we price for that. And so if you continue to do our job, right? As

Devin Corr: Thank you, Michael. Any closing comments?

We've done this year. We'll do an ensuing years. We feel like there's an opportunity both across, you know, the payment Network side of the business as well as the value, added services and solutions. So generally feel pretty good around that.

Sachin Mehra: Yeah, I'd love to continue to talk, but we're just slightly over time. Thank you again for joining the call past hour. We covered a lot of ground together.

Michael Miebach: We appreciate your support all the time. This is always the opportunity to.

Sachin Mehra: Thank those people that make it all.

Thank you. Michael. Any closing comments? Yeah, I'd love to continue to talk but we're just slightly over time. So thank you again. Um, for uh, joining the call past our we we covered a lot of ground together. Um, we appreciate your support, um, all the time and this is always the opportunity.

Michael Miebach: Happen here at Mastercard, our colleagues.

Sachin Mehra: Thank you to you all and we'll talk to you again in the next quarter. Thank you very much and take care.

Sachin Mehra: Bye bye. Thanks, everyone.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect. Sam.

Thanks everyone.

This concludes today's conference call. Thank you for your participation. You may now disconnect