News

MasterCard CEO keen to convert cash into cards

September 28, 2012

During a visit to a St. Louis-area MasterCard global technology center this week, MasterCard CEO Ajay Banga said the company was focused less these days on its plastic competitors, Visa and Amex, and more on its paper competitor, cash.

According to statistics cited in a St. Louis Post-Dispatch report on Banga's visit, 85 percent of consumer transactions worldwide are conducted via cash or check, with the ratio of paper to plastic standing at one-to-one in the U.S. and a surprising three-to-one in tech-savvy Japan.

"You can think about getting more of the electronic share, but then there's the other 85 percent, and every percentage point we take from that is a very big gain for us," Banga told the Post-Dispatch.

In fact, the U.S. market share of the card brand (which ranks below Visa and Amex in the U.S., measured by dollar volume) has fallen 12 percent since 2006, though the loss has been made up — and then some — by gains in the global market.

And now the brand is extending its reach further: next year in the U.S., Social Security recipients will have to decide whether to receive benefits by direct deposit to a bank account or by way of a MasterCard payment card. MasterCard also has a government benefits distribution agreement in place with the Indian state of Punjab.

"My case [against cash] is very simple," Banga told the Post-Dispatch. "Cash is expensive. It is not free. I want a public dialog to happen on the cost of cash." The Post-Dispatch report did not say whether Banga thought this dialog should also address the cost of plastic.

For more on this topic, visit the trends/statistics research center.