Annual CEO Letter

Powering economies and empowering people through good and challenging times

May 1, 2023 | by Michael Miebach

The global economy has faced one crisis after another in recent years. In early 2023, we’re seeing the continued challenges of higher inflation and shocks to the banking industry.

Yet, I remain a pragmatic optimist. That's because I have seen just how resilient people can be, how quickly they can recover and the positive impact they can have. The payments industry has and will continue to play an important role in these efforts.

Shaping our future

Our company has been built over decades to be the payments backbone for an increasingly digital world. Mastercard is a uniquely well-diversified business across geographies, customer segments, products and services. That has helped us to create value and to be a constant, reliable resource through economic cycles and geopolitical changes.

Mastercard is leading today's digital evolution, enabling a broader set of payment flows, critical services and digital tools in more places. We’re delivering better experiences, helping to speed up commerce, grow local economies and support more resilient communities. We’re making commerce safer and smarter by building new tools in cybersecurity, biometrics, personalization and sustainability.

Our teams have shown time and again the flexibility, commitment and know-how to grow our business and navigate through uncertainty. They take the foundations of our franchise and rules and evolve for today’s needs. Our results prove it.

Last year, Mastercard was recognized as one of only seven all-star companies in The Wall Street Journal-Drucker Institute Best Managed Companies list and we again led our industry in the IMD Future Readiness list. We celebrated the 25th anniversary of Priceless, a key differentiator for our brand and our business. We were recognized for our world-changing ideas, as a great place to work, and as one of the world’s most ethical companies.

As we reported this past January, 2022 was a strong year that brought significant momentum into the new year. We grew gross dollar volume (GDV) on our network in 2022, rising 12% to $8.2 trillion. That growth includes how our teams drove the business to make up for any impacts from the suspension of our Russian operations. Cross-border volume increased 45%. Last year, we surpassed 2 billion tokenized transactions a month across more than 110 countries.

With that as a foundation for 2023, here’s how we plan to keep growing and deepening the digital economy all over the world:

Our teams have shown time and again the flexibility, commitment and know-how to grow our business and navigate through uncertainty.

Delivering on commitments

At our investor day just over a year ago, we shared a strategy that is based on three central pillars:

01. Expand in payments
02. Extend our services
03. Embrace new networks

Expand in payments

For much of our history, Mastercard has been known for card payments. It is the core of what we deliver in expanded relationships with partners and customers including Citizens Bank, Santander and NatWest. This consumer card business continues to be healthy. There’s plenty of runway ahead – in both the consumer and commercial segments – as seen in the continued shift to electronic payments.

People are looking for more opportunities to tap into the convenience and safety they associate with Mastercard. While it may seem like you can use a card virtually everywhere, our work on acceptance is never finished. In the past six years, the number of merchants accepting Mastercard payments has more than doubled – to nearly 100 million locations. We are growing through Cloud Commerce, a cloud-native service that makes it easy for the smallest business to start accepting payments without an investment in new hardware.

However, we also recognize there’s not a one-size-fits-all approach. There are areas where a card payment may not be the best fit. That’s why we are working to support the range of ways people and businesses want to pay and get paid.

It comes down to being simple, frictionless and secure in every instance. We’re doing that in consumer card payments and by focusing on four additional flows – disbursements and remittances, commercial point of sale, business-to-business accounts payable and consumer bill payments. These areas are increasingly becoming a larger part of our business with more growth potential – an estimated $80 trillion in GDV.

In commercial, we’re building on a strong foundation and expanding into small business, travel and entertainment, and fleet cards – similar to programs people use in their personal lives but with tailored benefits for their business.

Mastercard Send and our cross-border services expand our ability to deliver domestic and international payments securely to 90% of the world’s population. There’s also our industry-leading work with virtual cards, providing businesses with an effective solution to do more with their capital and their data.

And we continue to responsibly explore and evolve our activities with blockchain technology, working with players and partners across the industry. This complements our work with governments as they explore digital currencies and learn what may be required, from interoperability with traditional systems and commerce to connecting across borders.

It comes down to being simple, frictionless and secure in every instance.

Extend our services

Services are constantly driving greater value and enhancing our payments solutions. Building trust. Delivering insights. Making our customers smarter and stronger. Our consulting and managed services teams have a long history in helping financial institutions understand the trends and make their portfolios perform even better.

We continue to integrate our acquisitions to make services a growing part of our revenue. Recently, our Dynamic Yield team introduced a new platform that brings aggregated consumer spending insights into its proprietary software to help retailers and brands deliver even greater personalized offers.

We challenge ourselves to look beyond the traditional set of solutions. We're applying foundational principles and controls around privacy and data responsibility while pushing ourselves – and our partners – to think differently so data can be used to create efficiencies and make smarter decisions.

Then there’s the world of cyber. We switched (authorized, cleared and settled) 126 billion payment transactions last year. Each and every one was supported with the highest levels of security. In the last three years, Mastercard prevented $30 billion in potential customer fraud losses through AI-powered systems that we have built and evolved over the years. Our recent acquisition of Baffin Bay Networks adds to this by helping to identify and mitigate cyber threats our customers might face.

Embrace new networks

We’re extending into adjacent spaces and networks to leave no white space uncontested. Open banking and digital identity present new opportunities to extend the value of our brand, both as standalone offerings and in synergy with our core payment capabilities.

Just look at the continued growth in open banking – the secure, permissioned access to financial data – and the demand for lending use cases, among others. Our technology is helping to power a Pay by Bank offering, an ACH payment directly from a bank account wherever Mastercard is accepted. It starts with the consumer saying how and where they want to securely share their account information. And it has the potential to take the pain out of – and add security into – recurring payments such as rent, utilities and healthcare.

Similarly, our identity services activities are using consent-driven insights to help banks, merchants and other businesses determine if their “customer” is a genuine user or if it’s a fraudster. We are providing risk-based analysis, peace of mind and brilliant customer experiences across transactions and other digital interactions like new account openings.


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Defining new technology and value

We have come a long way from the creation of the Mastercard network. We have made it easier for our customers to connect with Mastercard for whatever their needs might be. Today, our hybrid approach blends legacy and cloud technologies to enable more innovation, deliver greater reliability and do so in a regulatory-compliant and sustainable manner.

The emerging technologies we’re creating and constantly innovating enable new partners and power new opportunities through the agility and scale enabled by the cloud, the speed and intelligence in quantum computing, and the potential of blockchain.

It's our responsibility to ensure that these technologies can come together and solve real problems. This future of payments requires an equal focus on privacy and security, including a responsible approach to activate AI. Without that foundational trust, people will not embrace new technologies, potentially weakening the digital economy’s growth.

Fueling a strong culture

What we do is important.  As an organization, we place great emphasis on how we work together, deliver impact and, with that, ensure our resiliency.

Culture can be a competitive advantage, and it is strongest when teams feel a powerful connection to each other and have shared goals and a clear path to grow and win. Today, the Mastercard Way focuses on three areas – creating value, growing together and moving fast, all with a foundation of doing the right thing.

Our 29,900 colleagues across the globe have diverse backgrounds and experiences, but they all are mission-driven, talented and passionate people. Whether they are engineers or programmers, product managers, consultants or finance specialists, they all are pulling toward a shared goal and common purpose.


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Ensuring a sustainable social impact


We have the fundamental belief that businesses cannot thrive in an unhealthy and unequal world. That’s why our significant commitment to sustainable economies and social impact is necessary. Addressing our environmental impacts and enabling financial inclusion are smart for our business and the right thing to do for society. They give people full access to their money. They bring a farmer’s crops to a wider digital marketplace. They help with greater connectivity and allow more people to participate in today’s economy, no matter where they are.

That strengthens the resilience of our communities, grows prosperity and delivers long-term value creation with new customers. We are only one part of a much larger story, but I am proud of the role that we play with our partners across the public and private sectors.


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Delivering on the vision, executing on our strategy

Yes, there are many external challenges, but there are also clear opportunities. I believe in our long-term growth potential because of our differentiated strategy, people, production and solutions.

Earlier, I talked about our momentum coming into this year. We are using that to our advantage – to reinforce our value to our customers, to deliver on our commitments and to imagine new ways to apply our skills, creativity and experience.

Our ambition is to power economies and empower people.

It’s what we have continually committed to. It’s what we have consistently delivered on. That track record is what makes Mastercard valuable and integral to our partners. Our ambition is to power economies and empower people. Our activities and programs enable a stronger ecosystem that helps us all be more resilient to whatever lies ahead.

That is why I’m optimistic about our future.

Thank you for your continued support.

Michael Miebach
CEO, Mastercard