[{"text":"00N0I00000KT1fD","value":"utm_source"},{"text":"00N0I00000KT1fI","value":"utm_medium"},{"text":"00N0I00000KT1fN","value":"utm_campaign"},{"text":"00N0I00000KT1fS","value":"uterm"},{"text":"00N0I00000KT1md","value":"adgroupname"},{"text":"00N0I00000KT1mx","value":"keyword"},{"text":"00N0I00000KT1nR","value":"creative"},{"text":"00N0I00000KT1ng","value":"devicemodel"},{"text":"00N0I00000KT1nq","value":"placement"},{"text":"00N0I00000KT1ot","value":"target"},{"text":"00N0I00000KT1o0","value":"device"},{"text":"00N0I00000KT1o5","value":"network"},{"text":"00N0I00000KT1oA","value":"matchtype"},{"text":"00N0I00000KT1oF","value":"gclid"},{"text":"00N0I00000KT1nM","value":"campaignname"},{"text":"00N0I00000KT1n7","value":"term"},{"text":"","value":""}]
By Soumik Dey |Aug 24, 2022
Mastercard CEO allays recession fears of economists, and markets, as consumer spending is seen to surge globally.
One of the world's largest payment solution providers expressed little concern over predictions of a recessionary climate looming large over the US and the global economy. Mastercard CEO Michael Miebach, during an interaction with students at the Hyderabad campus of the Indian School of Business on Thursday, assured them there was no crisis.
Miebach said that the banking solutions provider has its ears close to the ground and observes the global economic situation closely. “We are present in more nations than the UN (United Nations). Headlines say the recession is looming, but I do not see it,” said Miebach in conversation with Krishnamurthy Subramanian, Professor of Finance at ISB, former Chief Economic Adviser to the Finance Minister of India, and a leading expert on economic policy, banking, and corporate governance.
“We find consumer spending is healthy, especially cross-border spending is growing. We do not have a crisis. There is no asset bubble going around, and the employment rate is high,” said Miebach on concerns over recession fears gripping global markets.
After a concerning second quarter US GDP report, the recent economic numbers from the US have been encouraging. There was better than expected jobs and manufacturing data recently, allaying fears of an ongoing recessionary phase that could lead to an impending stagflation scenario, akin to what the US experienced through the 1970s.
Replying to Mastercard’s vision for India, Miebach said that India created its stack of payment solutions and resolved many access and inclusion issues. “We as a company look at India and see uncharted territory. We want to play higher up in the value chain here. Leveraging the fintech and banks we want to play in cyber risk mitigation, protecting financial data and data analytics using AI (artificial intelligence) and ML (machine learning),” Miebach told Professor Subramanian.
Pointing to the enormous NPA crisis faced by the Indian banking sector and a subsequent credit crunch till a few years back, Professor Subramanian sought to know if data could play a role in identifying and limiting credit flow to ‘willful defaulters’ – who were primarily responsible for the banking crisis.
Acknowledging that there is a tradeoff between ‘privacy’ and ‘data,’ Miebach shared: “From my interactions with many government officials during my Indian visit, I gathered that the Indian government is open to using data and unlocking the potential of technologies.” He said once the government takes proactive steps on data sharing, tools like Propensity Modeling can be handy to understand who needs money and when and when they are likely to repay.
Miebach, however, warned against too much regulation to protect the data privacy of individuals.
Pointing out that an over-protective stance of the German data regulators had affected innovation levels for the European economic behemoth. “If you see data as a public good, you will pull out innovation.” He said that the state approach often misuses fears about data usage. “We implement privacy by design for all our solutions.”
Getting back to talking about Indian business prospects, in response to a student question at the event, Miebach said: “Cash is our biggest competitor here. Then there are the traditional payment players. We have a wide choice in India, and we see prospects in the data and SaaS (software as a solution) business, B2B payments and can go up the value chain for further value-added services for our partners.”
The Mastercard CEO visited the ISB’s Hyderabad campus along with other senior officials from Mastercard. He also met with Dean Madan Pillutla and Professor Bhagwan Chowdhry, Executive Director, Digital Identity Research Initiative. Miebach also inaugurated the theme of ISB Leadership Summit, 2022, the marquee annual leadership event organised by the students of the Post Graduate Programme in Management.
Miebach made his last India stop at the ISB Hyderabad campus to interact with the students and faculty during this visit before flying home to New York. The campus was honoured to host the Mastercard CEO and touched by his warm and cheerful nature.