Michael Miebach
Chief Executive Officer at Mastercard
Thank you, Warren. Good morning, everyone. Let's get right into it. So, the headline is that consumer spending remains resilient and cross-border travel continues to recover. With this backdrop, we delivered strong revenue and earnings growth through the focused execution of our strategy. Third quarter net revenues were up 23% and adjusted operating income up 27%, both versus a year ago on a non-GAAP currency-neutral basis, excluding special items.
Now, the macroeconomic and geopolitical environment remains uncertain. Inflationary pressures have remained elevated and central banks are continuing to take aggressive steps to bring inflation in line. Pensions remain high with the war in Ukraine and the supply of natural gas to Europe is a concern. Despite all of this, unemployment rates remain low, wages are rising, consumer savings levels remain elevated, and credit is readily accessible. In this setting, overall consumer spending has remained resilient. Although, we are seeing some shifts in what consumers are buying.
Looking at our switched volume trends. Domestic volumes remained steady, showing growth relative to 2019 levels, relatively consistent to the second quarter 2022. The trend towards spending on experiences continues. We saw notable strength in airline, lodging, and restaurant spend, with a shift away from categories like home furnishings and appliances. The current mix between retail T&E and other categories of spend is now broadly similar to pre-pandemic levels.
Cross-border. Cross border continues to recover as border restrictions are progressively relaxed. Cross-border travel in the third quarter has reached 124% of 2019 levels. Relative to 2019 levels, most regions are up sequentially, including a notable improvement in Asia. Cross-border card-not-present ex-travel continued to hold up well.
Notwithstanding the continued strength in consumer spending, we will continue to watch the environment [Phonetic] closely, including fiscal, monetary, and other policy actions taken in response to events. This will inform our actions as it always has. Should the market outlook weaken, we are prepared to act quickly to modulate our expenses. As we demonstrated during the pandemic, we have the flexibility to respond quickly across a number of levers and will do so while maintaining focus on our three key strategic priorities. The focus on these areas that will create new opportunities for growth. Let's start by solidifying our positions in payments, complemented by our differentiated services line, and our expansion into adjacent activities like open banking and digital identity.
Moving onto some examples of how we are progressing against each of these. First, we are expanding in payments by enabling digital transformation with our customers, putting volume growth, expanding acceptance, and capturing new payment flows. There are now over 3 billion Mastercards in circulation, supported in part by programs such as our Digital First initiative. Our Digital First solution starts with the ability for a consumer to acquire and then use a new card digitally in near real-time. It's helping customers create a best-in-class digital experience, leading to increased approval rates on average by 2 percentage points, reduced fraud on average by four basis points, and increased spend per active account on average by 10%. To date, we have launched over 200 Digital First customers around the globe. And for [Phonetic] Santander Mexico, Chase in the UK, Citibank, Amex, Hygiene [Phonetic] Spain, and New Bank in Brazil amongst the latest customers to partner with Mastercard to deliver an end-to-end Digital First customer journey.
Also, we're driving growth in volume with new and renewed wins across a broad set of partners. In the US, we recently extended our exclusive deal with KeyBanc for debit, credit, commercial, and small-business as well as deepened our relationship on services. This quarter in partnership with Chase, we've launched a new co-brand program with DoorDash. This deal further expands our presence in the digital food delivery space.
We also went live with the Uber Pro Card and enhanced loyalty and payments experience that will help drivers in Korea to save on gas, fees, and other expenses. In Europe, we are seeing momentum In Italy with Credit Agricole, [Phonetic] securing an expanded deal that includes a credit and prepaid flip, as well as securing the current Mastercard portfolio.
And then, Latin America, we have renewed our exclusivity agreement with Mercado Libre and secured incremental credit share with Banco Scotiabank Colpatria. Overall, another great quarter with notable wins. [Technical Issues] one area that is sometimes underappreciated. That is how we are enabling growth in payments by giving people and businesses more places to use their Mastercard. We have added more acceptance locations in the last five years than the previous 50 years, and we are now accepted at more than 90 million merchant locations.
The preference for contactless payments that grew over the last two years, continues. More than half of the in-person switch purchase transactions are now tapped upfront approximately one-third pre-pandemic and this trend will be bolstered by the adoption of new technologies such as Tap on Phone. However, our technology and global reach enable growth and acceptance, while helping our partners drive their digital strategy. For example, we have signed with McDonald's to use our gateway capabilities, enabling them to easily offer multiple [Phonetic] solutions to new markets beginning in Middle East and Africa.
Finally, we're driving growth in payments by leaning into innovation to capture a prioritized set of new payment flows. We continue to make progress in going after flows in the disbursements and remittances space by expanding into new use cases and geographies. For example, in the US gig economy, we signed a new global agreement with Airbnb to facilitate host payouts using Mastercard Send in select markets. We've also expanded with gaming [Technical Issues] payouts, launching our Gaming Fast payout program. To address the account-to-account, cross-border, and domestic payments, we have signed a deal with Pagero, [Phonetic] a leading global B2B network and solutions provider that provides accounts payable automation to some of the world's largest corporate brands.
We're also growing commercial point-of-sale transactions by targeting small business, corporate T&E, purchasing, and fleet flows. In the US, we announced our exclusive co-brand partnership with First National Bank of Omaha to issue the [Indecipherable] small business card. This product offers small business owners industry-leading access to tools, benefits, and services, with a focus on equitable access to credit, very important.
We also continue to target B2B accounts payable flows by expanding access and reach leveraging our virtual card capabilities. We signed a deal with Marqeta to enable our next-generation virtual card solution Instant Pay. This solution intelligently and automatically sends instant payments to suppliers. We have also signed an agreement with SAP Taulia to integrate our virtual card solutions into Taulia and SAP solutions, enabling their customers to facilitate virtual card payments.
We're also well-positioned to capitalize on the return of travel with our Mastercard wholesale travel program in Bahrain. We signed a deal with Infinios for their online travel agency and travel management company volumes. And in Europe we signed a deal with a fintech Swile while going after B2B travel flows in Europe and Latin America.
As you can see we continue to make steady progress in addressing our prioritized set of new payment flows. Now, turning to services, where we delivered another quarter of strong revenue growth. Our services deliver a diversified revenue stream for Mastercard beyond payments. We accomplish this by adding new service capabilities as well as extending existing service offerings into new and existing customers. There continues to be a tremendous growth opportunity in this space.
First up, we're excited about Dynamic Yield's unique personalization platform, which offers a great example of how we're adding new service capabilities. Since complementing the acquisition earlier this year, we have added dozens of new retail and commerce customers. A great example is Fiona, [Phonetic] a German fashion store. I always share German examples if I can. They have more than 1,400 stores in Europe and we have deployed our content personalization capabilities to additional markets. In addition, we are expanding our capabilities to financial institutions.
Now, beyond adding new services, there is an opportunity to grow by extending existing offerings into new and existing customers. In the third quarter, we signed an agreement with Sky Italia of Sky Group, one of Europe's leading media and entertainment companies to enrich and commercialize a new service to support small businesses. Inverse, [Phonetic] a technology provided to insurance companies is implementing our card-linked services for their micro-savings programs with Generali Insurance in Switzerland.
And in Spain, we have grown our relationship with CaixaBank with one of our largest European Ethoca deals. The deal enables them to provide a more efficient charge-back flow for all the card portfolios. Beyond expanding in payments and extending the services, our third key priority area is embracing new networks. As a reminder, our current focus is on two areas: open banking and digital identity.
This quarter, I will touch on open banking. While open banking is early in the game, it is a tremendous opportunity. We are engaged with a broad set of financial institutions and fintechs, who are increasingly interested in a wide range of use cases. And what's unique and interesting here is that we are the partner that brings what is needed to scale and instill confidence in this space. Things like responsible data practices, consumer protections, and deep compliance. All on top of our robust technical capabilities, broad connect to 3D, [Phonetic] and extensive applications.
So, just to give you a flavor in the US, Quicken, a leading provider of financial management solutions has selected Mastercard as provider of consumer permission data for its popular Simplifi budgeting platform. We're also working with Fidelity, to support their innovation in student loan repayment for organizations that want to help their employees, improve their financial wellness. And then with Jack Henry, which will enable the community -- community and regional financial institutions to be at the center of their accountable and financial lives. They will do this, providing [Technical Issues] the ability to securely see all of their financial accounts, with and within, and outside the primary financial institution in a single view. This will then help enable consumers and businesses to make more informed financial decisions. This is just the beginning with much more to come in open banking.
Before wrapping up, I'd like to share an example of how we are incorporating our capabilities across all three strategic pillars. Our strategy to engage in the crypto economy, leverages assets across payments, services, and new networks. A combination that yields a truly differentiated value proposition. Here, we are deploying our payment capabilities to enable consumers to spend their crypto holdings on card and cashout their crypto wallets via Mastercard Send. This quarter we partnered with Ebonex, who will become our first partner in Australia to issue crypto-funded cards. We're enabling on-prem solutions with Mastercard Send, and recently added five new players in North America and Europe, including Binance supported by checkout.com and Nuvei [Phonetic]. In all instances, we do not handle crypto, but rather take delivery of Fiat currency.
Our services and new networks capabilities are providing identity, cyber and consulting services for market participants. Crypto Secure is an innovative solution designed to bring additional security and trust to this digital ecosystem by helping card issuers address regulatory risks. We also recognize the interest people continue to have buying and holding crypto through trusted [Technical Issues] like their banks.
So, last week, we announced Crypto Source, which is designed to give our financial institution [Phonetic] partners access to a comprehensive suite of buy, hold, and sell services for select crypto assets. This will be augmented with our prudent identity, cyber, security, and advisory services. To support these upcoming pilot programs, Mastercard is extending its partnership with Paxos Trust Company to leverage their crypto asset trading and custody services. As you can see how crypto strategies bring together best-in-class capabilities at scale, all built on our core principles of providing strong consumer protection, safety, and security.
In summary, we delivered another strong quarter of revenue and earnings growth, aided by a resilient consumer and a continued recovery in cross-border travel. We continued executing against our three strategic priorities. We have strong momentum with our customers offering a diverse set of innovative solutions. We will continue to manage our expenses carefully within this macroeconomic environment. And our well-diversified and flexible business model positions us well for the future.
Sachin, over to you.