Mastercard CFO Sees Resilient Spending Fueling Growth in Services, Stablecoins and UAE Deal

Key Points

• Mastercard expects resilient spending on travel, dining, entertainment, cross-border payments and emerging categories such as AI subscriptions, crypto purchases and digital-wallet funding to support growth despite geopolitical uncertainty.
• Services now generate nearly 40% of Mastercard’s revenue, with growth opportunities in cybersecurity, fraud prevention, data and consulting. The UAE domestic-switch agreement could allow Mastercard to process nearly all UAE debit transactions while providing the underlying technology and security services.
• The acquisition of BVNK strengthens Mastercard’s stablecoin capabilities, including interoperability and white-label wallets, with potential applications in business payments, remittances, person-to-person transfers and tokenized assets.

Mastercard NYSE: MA CFO Ling Hai said the company remains focused on top-line growth, supported by consumer spending resilience, cross-border travel and non-travel payments, services expansion, and targeted acquisitions.

Speaking at a conference in his first month as CFO, Hai said his capital-allocation priorities are to invest in organic growth, pursue acquisitions that add capabilities or speed to market, maintain a strong balance sheet and positive operating leverage, and return excess capital to shareholders through buybacks and dividends.

Hai, who has spent 17 years at Mastercard in management roles across Greater China, Europe, Asia and international markets, said his operational background provides insight into the factors that shape the company’s financial results.

Spending Trends Remain Supportive

Hai said the macroeconomic environment remains supportive of both consumer and business spending. He pointed to continued U.S. spending on travel, movies, dining and entertainment, while describing travel demand as broad-based across both affluent and mass-market consumers.

While the war in the Middle East has created uncertainty and affected regional travel patterns, Hai said Mastercard’s diversification across markets, payment flows and revenue sources helps support resilience. He said operating metrics during the first four weeks of August were in line with the first four weeks of July, including cross-border travel and non-travel activity.

On cross-border spending, Hai said Mastercard divides activity into travel and card-not-present, excluding travel. He said the Middle East conflict had a negative impact on inbound and outbound travel in April, but the year-to-date effect has been less negative than the company expected. Outbound travel recovery continued through the second and third quarters, he said.

Travelers have adjusted destinations rather than stopped traveling, according to Hai. He cited Canadians traveling less to the U.S. and more to Europe, as well as Europeans traveling to Asia outside the UEFA season.

Non-travel cross-border activity includes traditional e-commerce, recurring subscriptions, digital assets and digital-wallet funding. Hai said emerging spending categories, including AI-platform subscriptions, crypto purchases and transfers into wallets such as Revolut and Wise, are contributing to growth. He also cited crypto-related spending from Venezuela after U.S. dollars became available to consumers there.

Diversification and UAE Domestic-Switch Agreement

Hai said Mastercard sees continued opportunity to convert cash transactions into digital payments, including in developed markets. He noted that cash remains close to 50% of retail commerce in Japan, according to his remarks.

He identified three pillars of diversification:

• Geographic expansion, including opportunities in Southeast Asia, Eastern Europe and Africa.
• New payment flows, such as business-to-business payments, cross-border remittances and person-to-person transfers.
• Services, which Hai said account for 40% of Mastercard’s revenue mix.

Hai highlighted Mastercard’s arrangement with the Central Bank of the UAE as a model for addressing payment sovereignty initiatives. Mastercard is becoming the technology provider for the UAE’s domestic switch and has established a joint venture with an entity owned by the central bank, he said.

Under the arrangement, debit transactions are mandated to run through the domestic switch. Mastercard will serve as the underlying technology provider for the domestic solution, which uses the Jaywan domestic brand. Hai said Mastercard expects to process almost 100% of UAE debit transactions once implementation is completed, while also providing services including cybersecurity.

“We are the alternative in the context of the sovereignty agenda,” Hai said, adding that Mastercard views the approach as strategically important and potentially replicable in other markets.

Services, Cybersecurity and Stablecoins

Services represent nearly 40% of Mastercard’s net revenue, Hai said. About 60% of services are attached to the company’s network, while the remaining portion includes data and insights, consulting and advisory services, and merchant loyalty offerings.

Hai said artificial intelligence could support longer-term services growth, particularly as AI increases the sophistication of fraud, scams and cybersecurity threats. Mastercard’s security offering spans cybersecurity, identity, fraud prevention and scam prevention, he said.

He pointed to the company’s Recorded Future acquisition as an example. Recorded Future provides intelligence related to the dark web, compromised credentials, phone numbers and addresses, according to Hai. Mastercard has developed a network-attached product called Threat Intelligence that is distributed and priced through its network, he said.

Mastercard closed its acquisition of BVNK on Aug. 3, the same date Hai became CFO. Hai said BVNK adds stablecoin interoperability capabilities and supports a white-label wallet that Mastercard’s customers can use to store, convert, receive and send stablecoin assets.

He said stablecoins may have more relevant use cases in business payments, cross-border remittances, person-to-person transactions and tokenized assets than in traditional person-to-merchant payments. Mastercard intends to participate in the space even if stablecoins represent only a portion of payment flows, he said.

China and Competitive Discipline

Hai said Mastercard will remain acquisitive when opportunities support its growth strategy, whether by expanding the core payments business, adding services and new payment capabilities, accelerating market entry, or bringing in talent.

On competition, he said Mastercard seeks to win deals profitably rather than “at any cost.” The company uses services, new products and customer co-creation to differentiate beyond pricing and incentives, he said.

In China, Hai said Mastercard’s domestic license, granted two to three years ago, remains a medium-term revenue opportunity. The company is working with Chinese banks on credit and debit issuance, expanding acceptance, and working with digital companies including Alipay, WeChat Pay, Meituan and JD.com.

Hai said international cardholders can now use tap-and-go transit access in Shanghai, Beijing, Guangzhou, Shenzhen and Chengdu. He said Mastercard’s expanding domestic acceptance and issuance capabilities in China are helping support both Chinese consumers’ outbound travel and acceptance for foreign visitors using Mastercard cards in the country.

About Mastercard (NYSE:MA)

Mastercard Incorporated NYSE: MA is a global technology company that operates a payments network connecting consumers, financial institutions, merchants, governments and businesses. The company facilitates electronic payment transactions, including credit, debit, prepaid and commercial payments, by providing the infrastructure used to authorize, clear and settle transactions.

Mastercard's products and services include its Mastercard-branded payment cards, digital payment tools, contactless payment technology and payment solutions for businesses and governments.

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