Mastercard Incorporated. (NYSE:MA) Goldman Sachs Communacopia + Technology Conference 2022 September 14, 2022 1:00 PM ET
Company Participants
Craig Vosburg – Chief Product Officer
Conference Call Participants
Unidentified Analyst
All right, guys. I think we will get started here. Today we’re very excited to have Craig Vosburg today, Chief Product Officer, Mastercard. Craig leads the integrated product management and engineering, overseeing opportunities in multi rail, digital, B2B payments as well as some Mastercard legacy products.
Craig also serves the management committee of Mastercard and previously served as President of North America. So please join me in welcoming Craig to the stage. Really excited to have you.
Craig Vosburg
Thank you. Great to be here.
Unidentified Analyst
Craig, maybe we can kick it off, start the conversation off with a little bit of your background. Could you just talk a little bit about how you came to Mastercard and what your role is within the organization?
Craig Vosburg
Sure, I’d be happy to. Just briefly, I’ve been at the company for 16 years in a variety of different capacities. You mentioned the prior role running our business in North America and for the last year and half since the start of 2021, I’ve been running this integrated product and engineering organization that really looks after all of our different products and solutions focused in the payment space, really focused on driving and executing our business today and making sure that we’re well prepared for the future, given how dynamic the payments landscape is, and the pace of change.
And so, yes, that’s a little bit you covered most of the rest of my background. So why don’t we just jump into some of the questions?
Unidentified Analyst
Sure.
Craig Vosburg
Thank you.
Unidentified Analyst
Well, maybe you can talk a little bit about the team at Mastercard that you run. What are some of the key priorities? And how do they fit into Mastercard’s overall strategy?
Craig Vosburg
Well, our overall strategy, as we’ve communicated really focuses on three key pillars to drive our growth. One is continuing to expand our presence in payments. The second is to enhance our services, our value-added services business to continue to deliver incremental value on top of the payments flow in the payments data. And the third is embracing new networks, where we think we have an opportunity to build on some of the competencies we’ve developed and running a payments network to extend that into new areas like open banking and digital identities.
And the team I look after is responsible for all of that first pillar around payments, where we’re really focused on driving — continue to drive growth in our core cards business, leaning into new payments, innovations, working with fintechs and embracing new kinds of payments, models, account-to-account payments, buy now, pay later, et cetera.
And then importantly, growing our presence in what we consider new payments flows. Things that have historically been outside the reach of the cards network, to target sizable payments flows and things like disbursements and remittances in the B2B space and bill payments, et cetera. And then my team also looks after the open banking aspect of our new networks strategy.
Unidentified Analyst
Got it. Makes sense. So maybe we can dig a little bit deeper into payments. Can you talk a little bit more about what you’re seeing in terms of the expansion of acceptance and how you guys are leaning into driving that …
Craig Vosburg
yes, I’d be happy to acceptance. If you step back and think about what the growth drivers are that underpin our core business, a key component of that has been and will continue to be the secular migration of payments from paper to digital, electronic and digital forms. The acceptance network is absolutely fundamental to our competitive positioning and our ability to lean in ways that can help accelerate and help us benefit from that secular trend.
And I think acceptance is an interesting area, and as much as it often doesn’t get as much attention as some other parts of the business. But there’s nothing more important in my view, in terms of the strategic assets that we continue to nurture and grow. And importantly, it does continue to grow. The size, the reach of our acceptance network doubled in the last 5 years, now more than 90 million merchants growing at a compound annual growth rate of 18% over the last 3 years.
We add a new merchant into our acceptance network on average, one new merchant every two seconds. And so if you think about the scale and the pace at which that continues to grow, it just gives people more and more opportunities to use our products in more locations for more different kinds of transactions. And we’re leaning into that in different ways in more traditional kind of point-of-sale acceptance, evolving acceptance technology, to enhance security with things like the chip introduction that we had a few years back in the U.S.
But importantly now a trend towards migrating to contactless payments, better user experience, enabling us to penetrate in particular smaller ticket transactions. In the digital space, leveraging things like tokenization to enhance for the card on file experience, improved security, make checkouts more seamless and convenient. And then a whole new realm of acceptance related activities focusing on cloud commerce and enabling new acceptance devices and new acceptance experiences that target new use cases and new applications.
So for example, taking some of the complexity of this acceptance software that traditionally would sit in a terminal, moving that into the cloud to enable a much lower cost easier to integrate, more seamless acceptance, experience to occur through things like tap on phone technology. And so smartphones, billions of smartphones in circulation are becoming acceptance terminals through the convergence of technologies like 5G that just expand the reach of connected devices and the ability of connected devices to engage in commerce. And with that, to engage in payments, whether that’s your house, your car, your appliances, whatever it may be. And so we’re very excited about the opportunity that we see ahead for acceptance to continue extending our reach, continuing to fuel their growth in that secular migration.
Unidentified Analyst
Yes, makes a lot of sense. Maybe you can talk a little bit about the growth and buy now, pay later. You’ve recently announced several new partnerships for the Mastercard installments program. How’s Mastercard installments progressing?
Craig Vosburg
Well, let me just step back and just articulate a bit on what Mastercard installments is. Another aspect that we’re very excited about this falls into the category of leaning into payments innovation that I alluded to earlier. And something that we see is a very differentiated proposition in the buy now, pay later space. Buy now, pay later has clearly resonated with consumers and it’s been embraced by merchants as a way to increase sales and increase conversion rates.
We’ve deployed Mastercard installments as an open loop buy now, pay later solution that leverages the scale of that acceptance network that I just described. To enable buy now, pay later solutions to be made available to consumers at scale used across the Mastercard network, anywhere Mastercard is accepted, which has a couple of really, I think unique and important benefits incorporated into it.
First for consumers, it gives them the opportunity to take advantage of the power of buy now, pay later proposition, use it much more widely across any place Mastercard is accepted and to obtain those buy now, pay later propositions from trusted financial partners who they already know and work with. In many cases, their bank, but not exclusively banks.
There’s a second area of benefit that relates to the lender. And I use the word lender specifically because this is not a card based program. It’s a consumer loan program. And the lender can be a bank, it can be a fintech, it can be a digital wallet, working with us under the Mastercard franchise construct, to make those buy now, pay later propositions available to consumers who they choose to extend that credit to.
And then for merchants, it’s a proposition they can benefit from without having to undergo technical integration without having to engage in a bilateral agreement and undertake operational effort to implement just by virtue of accepting Mastercard, they’re ready to go in the program. And so it’s an exciting program. It’s been very well received in the marketplace.
We have partners, a long list of partners in the U.S that we’ve announced, new partners in the U.K with partners like HSBC and JPMorgan’s U.K operation. NatWest, others in Australia, a number of partners in the Middle East who will be coming on and of course, we recently announced Apple and Apple Pay –Apple Pay Later as leveraging the Mastercard installments proposition. So we’re excited to see that come to market, it’ll be live in a number of these markets very soon.
Unidentified Analyst
Got it. Makes a lot of sense. Maybe if you can pivot over towards some of the areas of new flows that you’ve talked about. One of those B2B kind of massive untapped opportunity. I want to talk a little bit more about how you’re approaching the opportunity, but maybe we can step back and just talk, how do you think about that opportunity in aggregate? And then maybe secondarily how you guys going after it?
Craig Vosburg
Broadly — looking broadly across new flows, as we shared at our Investor Day, last November, we see roughly $80 trillion opportunity across four buckets of flows that we feel are addressable through products we have in market today or in very late stages of development. And so that covers disbursements and remittances. Its commercial point of sale transactions, B2B accounts payable and consumer bill pay transactions each are sizable flows.
The commercial bucket in aggregate comprised of both point-of-sale transactions and B2B transactions is roughly 35 — $35 trillion of that $80 trillion. And we look at that holistically as an opportunity for us to increase our presence and activities related to commercial payment flows. The carded point-of-sale transactions consists of things that many of you will be familiar with, it’s small business products, its travel and entertainment cards, its procurement cards, its fleet programs, the kind of carded transactions that take place at a point-of-sale. And that continues to grow for us very nicely.
We’ve had some really strong wins in the small business segment that are going to increase our market share and our market presence and we’re seeing a steady rebound in corporate spending around some of those other categories of T&E, as this audience would be indicative of and others.
In the B2B space, which specifically you asked about, the more sizable portion of commercial flows are in the accounts payable category. Fragmented, different needs in the marketplace, an area where we see an opportunity for Mastercard to step in and create effectively an open-loop, two-sided system to enable buyers and suppliers to pay each other more efficiently. And that’s something we’re developing through Mastercard tracks that has multiple components to it. The payment is a piece of it.
But there are other value-added components of that that relate to data transmission, that relate to payments optimization in terms of understanding the ideal way for a supplier — a buyer to pay a supplier based on what that supplier’s preferences are, based on working capital financing. And so that’s a — that is a network that we’re building out.
There are immediate revenue opportunities for us through increasing the penetration and usage of virtual cards as a primary mechanism of facilitating those payments. And we’re seeing that with partners, again, a number of partners around the world in the U.S and the U.K and other markets, embracing that as a way to enable card to account payments, to enable instant payouts, to overlay supply chain financing as a value-added solution. And that’s something we’re excited about continuing to build that.
So we have a nice — I think a nice sort of continuum of opportunities in that space, in terms of what their — what the profile is around time to impact for us. Because there are some real things to drive value that connect back to cards, which are in-market and active. And there’s some other things that we’re building that will require a little bit more time to stand up this two-sided system.
Unidentified Analyst
Got it. Makes sense. I mean, you mentioned it’s a kind of a different market in the consumer payments, different needs and requirements. When you think about that large piece of kind of AP, how do you think about what the right payment mechanism is as the product you just talked about, being multi rail company? So what are some of the other products in the tool shed [ph] that you can use to drive more payments over your multi rail network?
Craig Vosburg
Yes. Well, I think ultimately it ties back very closely to what our philosophy around multi rail payments is. And that’s to offer choice and to create optionality for in the case of consumers to pay the way they want to pay for businesses to be paid the way they want to be paid. And we’re happy to participate in any or all of those. We love our cards rails, and we’d see great opportunity ahead to continue to grow our cards business on the back of our debit and credit rails. But there are other ways for payments to be made over with real time payments, with account-to-account payments, with push payments, leveraging blockchain technology, et cetera. And we want to incorporate really all of those into the range of options that we can help facilitate and the payments flow is that we can help to intermediate.
That’s true in the B2B space as well where understanding in this case, the preferences of suppliers, in terms of how they want to be paid, and the preferences of buyers in terms of how they want to pay and not just how but when and with what terms And with what kind of discounts for changing the timing of payments, et cetera.
These are important insights that can be incorporated into that platform, into that construct that then enable the actual, the timing and the instrument through which the payment is made to be optimized based on the best match between those buyer and supplier preferences. And that’s what we’re building towards and building that in a way that we can benefit from and monetize our — the value that we provide into that environment, regardless of how the payment is actually made.
Unidentified Analyst
Makes a ton of sense. Maybe if we can switch gears to another area of new flows. You just talked about disbursements and remittances is a big opportunity. What are the some of the problems to solve in that space? What’s Mastercard’s approach?
Craig Vosburg
Yes, disbursements and remittances of that $80 trillion that I referenced, we see that as being about $32 trillion. So it’s a very sizable amount of payments flow that includes both domestic and cross border flows. And these are payments that traditionally have I think suffered from a high degree of complexity, a lack of transparency to the stakeholders in that flow, the sender and the recipient oftentimes in terms of how long a payment will take to get to its destination, what the cost will be.
And so a number of complexities associated with that where we see opportunities through the enhanced reach that we’ve been building out partly through our cards network, leveraging Mastercard send and the ability for us to push a payment through our debit rails to reach a variety of endpoints, both on and off our network. And partly through our cross border services, that through which we have account-to-account payment capabilities that in the aggregate give us the ability to reach 100 countries to facilitate payments in 50 different currencies to reach 90% of the world’s population, to be able to facilitate a disbursement or remittance.
And that what we’ve found, interestingly as that reach has expanded the number of use cases, taking advantage of that underlying capability has also continued to expand. So a lot of the early focus for us in this space was on things like P2P payments or funding wallets with partners like Square [ph] or supporting Zelle and others like that in the marketplace to facilitate P2P payments.
But the number of ways in which this capability can be used has just continued to grow. So we’ve seen gig economy employers use it to make payouts to their workers. We see applications in the B2B space, we see health care related payments, we see insurers using it to make claims disbursements. We see aid organizations using it to get aid quickly into the hands of people who need it.
We see of course, consumers making remittances back to family or friends in overseas locations, which we can do not just through the network. With the reach that I mentioned through our network, but also through having connectivity to ACH networks, roughly 70 ACH networks around the world, to real-time payment systems, and importantly, connecting into mobile networks and cash out network so that it includes the — it expands the reach and the extent of inclusion that consumers around the world can use to benefit from that.
And so, more recently, we’ve added gaming payouts, crypto wallet payouts, the use cases continue to grow. The range of partners that are leveraging these capabilities has continued to expand. It includes merchants, it includes banks, its fintechs, its digital wallet providers, its crypto exchanges, the list goes on and on. So it’s an area we’re really excited about. Both because we have that scale and reach because we have this proliferation of use cases that continues to drive demand. And this expanding network of partners who are driving the availability of that to consumers around the world.
Unidentified Analyst
Got it. Makes sense. Switching gears a little bit I mean, you talked about your involvement with the open banking initiatives at Mastercard. Maybe you can just give us an update on your approach to open banking as a whole and then would love to dive into some of the recent announcements with partners you’ve made recently?
Craig Vosburg
Yes, I’d be happy to. Open banking is another area we’re obviously excited about since it gets a call out and as part of our corporate strategy around embracing new networks. And the reason we’re so excited about it is we see first open banking as a very powerful force in enabling innovation and financial service. And doing it in a way where that innovation is powered by the consumer by giving them effectively the right to vote with their data by giving consent to access their data, their financial transaction history with various service providers for those service providers to develop an offer new and creative and innovative products and solutions that the consumers will benefit from.
And so that’s an important starting point and something that we see as a long-term trend in financial services. In addition to that, it’s one where we see a natural role for Mastercard to perform the function of being a trusted intermediary in facilitating that exchange of data and establishing the rules of the road in terms of how the data is accessed, how the data is — how consent is granted, and manage to use the data, how the data is secured, how privacy is protected, all of the things that we think that our brand stands for, and that as consumers engage in the sharing of that data with a Mastercard branded capability, things that they can take comfort and assurance in.
And so we’ve accelerated our activities in this space, in the U.S through the acquisition of Finicity. In Europe, we had a number of ongoing initiatives, which we’ve complemented most recently with the acquisition of Aiia in the Nordics. And we’re building out that capability with the focus on a couple of very specific areas where we see demand and opportunity and the potential for us to monetize. And that revolves in part around establishing connectivity and cleansing and categorizing and having the data available for use between these different counterparties.
But then the layer value on top of that was specific use cases related to lending. And this is an area where Finicity had particular strengths that we continue to build on for consumers to be able to get access to loans, whether it’s a mortgage loan, an auto loan, a personal loan, a card account to provide the underwriter with additional information to underwrite that loan more effectively. Decreasing the reliance oftentimes on a credit score, expanding access to credit to those who need it.
There’s an area of need with respect to account opening, establishing new relationships with service providers, which also includes validating that consumers identity, an important add-on from some of the things that we’re doing in our identity management work. There’s applications around initiating payment transactions. And there’s things related to small business, again, largely related to credit, given the challenges that small businesses often have in accessing credit, to being able to increase that flow of data that’s available to support underwriting is a really important component of that.
So we’ve had a number of partnerships on that announced, again, in the U.S and Europe, important ones with Stripe, with many other partners. I know you’ve commented in the past on the Stripe partnership, which will be used to facilitate payments initiation. And we’re excited about that and where that and other partnerships will go.
Unidentified Analyst
Yes, makes a lot of sense. I did want to touch on the Stripe partnership, because this is — it’s one of those things — open banking is one of those things that gets cited as a competitive or disintermediated threat to the card networks. And I think it was great to see that, when we saw kind of open banking oriented account-to-account and payment method show up with Stripe. Finicity was powering it on the back end. Maybe you could talk a little bit about how the U.S market differs from some of the regulatory driven changes in Europe?
Craig Vosburg
Yes. Well I’ll start just by kind of drawing back to my earlier comment, part of our team’s role is to help prepare Mastercard for the future and ensure that we’re well-positioned relative to a very dynamic and quickly changing environment that payments — that the payments market is. A part of that has to do with a convergence of things like account-to-account payment capabilities with open banking, and the opportunities that creates for consumers to give access to their accounts to make direct payments to various service providers. And for some businesses to do that as well.
There’s a couple of ways to look at that is something that could potentially be detrimental to Mastercard, or something that’s an opportunity. And we see it as an opportunity because in many cases, it’s giving us access to payment transactions that we wouldn’t normally see through our credit or debit network. And that’s exactly why we’ve been investing behind these capabilities.
And so with partners like a Stripe, or others who will offer the ability for consumers to give access to their accounts to make direct payments, we can add value into that equation. And we can be compensated for that value by — through providing the data, the connectivity to establish the link to the account, to verify the account, to identify and validate balances and things that are important to increasing the confidence that the payment will actually go through. There’s a whole range of activities that we can and we do provide in that realm that are additive to our business and things that we think will help drive revenue growth for us going forward.
Unidentified Analyst
Makes sense. Over the past couple of years, Mastercard’s made several acquisitions in the fraud and identity verification space, [indiscernible], Ekata, hope I’m pronouncing those right. Can you share some more about your approach to the fraud space as well as any progress that you’ve seen today?
Craig Vosburg
Yes, I’d be happy to. I mean, payments, the way we look at payments, I think for any payment solution to scale and be impactful, it needs to be ubiquitous, it needs to be secure, it needs to have consumer protections, needs to be convenient and intuitive to use. And so the security angle, we invest in all of those different dimensions, but investing are behind the security of the payments that are running on Mastercard’s network through the various rails that we operate, is a really important part of our strategy and the overall Mastercard value proposition.
And so increasing our ability to enhance the security of a transaction before, during and after the transaction is an important part of the value we bring to consumers and what they should expect from us and our brand. And it’s important part of what we bring to issuers and merchants alike, in protecting the integrity of those transactions. And so we’re doing that in a variety of ways. In many cases, just by continuing to expand the range of data elements that we have access to, that we can leverage in different ways to increase the level of confidence of everyone in the ecosystem in the authenticity of a transaction.
And that may be on the front end, as you mentioned, Ekata, as a company that we acquired, that is additive to the universe of data that we have before and during a transaction to authenticate the individual’s identity. In this case, through a lot of data associated with device, footprints and sort of the presence that each of us has across the digital world to be able to connect those data points into what’s effectively an identity score. Combine that with payments data with behavioral data that we see through how people are interacting with the devices that they used to initiate a payments transaction, through biometric data and others. Consolidate all of that information into an identity score that can be delivered, analyzed, scored, using AI and delivered in real-time as part of the payments authentication flow.
That’s where we’re leveraging the power of something like an Ekata to build on our ability to enhance security. [Indiscernible], another acquisition you mentioned is more after the transaction, to help with the identification of fraudulent transactions that may have actually occurred. And it’s a communications network that we’ve established between issuers and merchants to be able to quickly communicate in the case of a fraudulent transaction to stop fulfillment of goods and prevent shipment in a fraudulent transaction.
And, in many cases to utilize data to help resolve what is ultimately may be deemed fraudulent, but turns out to be friendly fraud. Someone in your family used your card, you didn’t recognize the charge that can trigger a chargeback process that’s complicated and expensive for everyone. We can help circumvent that by providing more information to the cardholder through their financial institution as to what the transaction actually was. So they can see that it was — in many cases was actually a legitimate transaction. So really important part of our business that doesn’t apply just to the cards business, it really extends across everything we’re doing in different payments flows.
Unidentified Analyst
Got it. Makes sense. Switching gears the crypto. Crypto industry have been impacted by both some of the macro trends we’ve seen as well as some of the industry-specific factors over the last couple of months. How has this impacted how Mastercard is thinking about digital currencies and crypto?
Craig Vosburg
Well, crypto, I’ll frame this in the context of digital currencies as opposed to crypto specifically. Digital currencies, we think of as being Central Bank digital currencies as being stable coins, as being free floating crypto currencies that really are more of an asset class than a payment instrument. There — it certainly has been an interesting time this year for digital currencies, helpful in some ways in as much as we see the area, particularly as it relates to payments, which brings a more narrow focus on stable coins and Central Bank digital currencies as one that is in need of greater regulatory clarity.
And some of the challenges the industry has under gone over the course of this year, I think have heightened what is has been an already understood need, but increased the focus on bringing more regulatory clarity to that sector, which we welcome because we think there’s value in digital currencies. But one of the things that will hold back mainstream adoption and use is regulatory uncertainty.
And so with that — with that said, I would say that the areas that we’re focusing on, haven’t really changed. We’re taking a measured approach in terms of our engagement with digital currencies to focus on a couple of things. One is enabling the use of Mastercard’s existing products, credit and debit products to be used to purchase and redeem crypto purchases that consumers want to engage in as part of — and being the on ramp and off ramp into the crypto economy, utilizing Fiat currency to facilitate the purchase of crypto or then the redemption of crypto into Fiat to be used on a Mastercard product to spend, or transfer through Mastercard send into another account.
And so we’ll continue to do that. We’ve invested in and we will continue to build out a range of value added services to support the digital currency and crypto economy that focus largely on security, on identity, on risk management, our acquisition of CipherTrace that enables us to effectively see every crypto transaction that occurs on a public blockchain and be able to score those things for risk, share that information with partners in our ecosystem, who are also a party to those transactions, to manage risk more effectively.
And deploying, again, Ekata, which you mentioned earlier, as a capability to improve identity management as part of both opening an account and initiating transactions. And so we see an opportunity to provide these services in the crypto economy. And then thirdly, we have communicated that we’re adding select stable coins to the network to — for us to be able to transact in stable coins. I say select because it will only be with stable coins in this case or Central Bank digital currencies once there — to the extent they become more mainstream.
But selected based on a couple of very important principles for us. One is the stability of value. And as we’ve seen, not all stable coins are created equal when it comes to stability of value. The second is inherent consumer protections around data security, data privacy, consumer protections in the event of erroneous transactions. And then finally, compliance, which brings me back to where I started with the regulatory focus.
We need greater clarity to ensure that we understand what the compliance requirements are. And that will be an important component of deciding which of these stable coins we incorporate into our network.
Unidentified Analyst
Got it. We got about five minutes left. I wanted to hit on the travel recovery that we’ve seen really take place over the last, call it 9 months. Can you talk about some of the insights that you’ve seen in the business as the world economies have reopened and travelers kind of resumed?
Craig Vosburg
Yes. The travel of course is a really important sector for us to drive significant spend and importantly cross border spend. Obviously, travel was hit hard throughout the early stages of the pandemic. But what we’ve seen throughout the pandemic and its various phases is consistently when people have the opportunity to travel, they will travel. And we saw that first with respect to leisure travel, bouncing back where people — there was a lot of pent-up demand for people to visit family and friends to go on vacations, that has continued. Not something that we see as a pent-up demand that was a bubble, but that’s just sort of a part of life for people and an important part of life. And we see healthy demand for that really anywhere people are able to do that.
Business travel has also come back, frankly, a bit more quickly than we anticipated it would at the start of the year, which is encouraging to see. There is some choppiness in terms of travel patterns globally. Asia continues to lag, given some of the lockdowns in China, some ongoing restrictions to entry in Japan. And so Asia for us, in Q2 was still at about 60% of pre-pandemic levels of with cross border spend. Other markets, the U.S., the U.K., Canada, for example, had exceeded pre-pandemic levels of cross border travel.
Earlier this year, we’re at about — in Q2 at around 118%. 118% is overall. I think those three markets were 110% of pre-pandemic levels. So back above where we were, but still not back to where we would have been had the historical growth rates continued without interruption. So we’re encouraged by the trends. We see continued upside for those — for the ongoing recovery of travel and what that’s going to mean for our business. And we’re particularly excited about that, because we feel well-positioned in the travel segment, given a lot of the portfolios and the partners we have with travel oriented programs with the likes of American Airlines and JetBlue and other players in the travel space in really in geographies around the world. And so, fingers crossed that those trend lines continue. But certainly the demand is there.
Unidentified Analyst
Makes sense. The last couple of minutes, maybe you can hit on some of the regulatory issues that have come up over the past couple of months. There’s been some new proposed legislation, the Credit Card Competition Act to increase competition for credit routing in the U.S. And how is Mastercard position for potential change in regulation?
Craig Vosburg
Well, I guess, I’d say there’s a couple of thoughts on that. One, there’s a lot of competition in the credit space already. I can tell you having run our business in North America for 5 years there, there wasn’t a day when I wasn’t fighting hard and our team wasn’t fighting hard to either win or retain customers on both the issuing and on the merchant side of the ecosystem. And so there’s intense competition around the credit market already.
I think there’s a lot of things that need to be understood, As it relates to the potential to regulate and the impact, most importantly, that potential regulation could have on each of the various stakeholders, but perhaps most importantly, the consumer. And the regulation as its proposed, and I think it has a long way to go before we will see where that goes. But as its proposed would — it would limit consumer choice. It would take important benefits away from consumers. That are a function of that choice.
Consumers make choices around, which products they’re going to use based on that products value proposition which includes benefits and rewards. It includes safety and security. It includes what their rights are and protections in the event of a fraudulent transaction, their ability to dispute and resolve erroneous transactions. There’s a range of things that the extent to which that product can be incorporated into their lifestyle with digital capabilities, a wide range of things that go into that decision. And by the way, it’s not just the consumer that’s benefiting from that, obviously, the financial institution community and the merchant community benefits significantly from the availability of these credit products as they exist, increased spending power, tons of investment that goes into security and expanding the utility of the network and innovating to meet the needs of consumers where and how they need to be met.
And so this is an area that I don’t think is fully appreciated and understood. And you asked where and how we’re engaging. We’re working hard with decision makers and policymakers to ensure they understand what the full implications of this kind of proposed regulation would be.
Unidentified Analyst
Very good. I think with that we’re out of time. Everyone join me in thanking Craig for time here today. Great discussion. Appreciate [indiscernible].
Craig Vosburg
[Indiscernible]. Thank you.
Question-and-Answer Session
Q –
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