The AI agents in your wallet, with Mastercard CEO Michael Miebach

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0:39Visit Upwork.com right now and post your job for free. That's U-P-W-O-R-K dot com. Upwork dot com. we were all there cheering and said this is a good thing it's a discontinuity and we're looking for discontinuities to provide more value in a fast-changing world what we cannot do is look in a rearview mirror and say hey you know what we have works and it does but i think there are many more choices coming so constructive competitive paranoia i think is the mindset we need to have And I think what is at stake is also an opportunity for us.

1:21That's Michael Maybach, CEO of MasterCard, the global credit card and payments juggernaut. I wanted to talk to Michael to get his views on the recent holiday shopping season and what it indicates about consumer sentiment. I also wanted to ask about AI's impact on the security of financial transactions and what the role of credit cards might be in a crypto-adjusted agentic commerce future. Michael, as it turns out, has been asking himself and his company many of the same questions as he looks ahead at 2026 and beyond. So let's get to it. I'm Bob Safian, and this is Rapid Response.

2:05I'm Bob Safian. I'm here with Michael Meebach, CEO of MasterCard. Michael, thanks for being here. Delighted to be here with you, Bob. You have a unique vantage point on consumer activity. So many payments run through your system. From this past holiday season, do you have yet any observations about consumer spending or customer sentiment, any sort of emerging trends or lessons you've seen yet? Right. You know, when you think about what we do is we facilitate payments all around the world. So that provides a really interesting data set across all sectors, across all countries, 220 countries and territories.

2:49Last year, we're about 160 billion transactions through our network. So it does provide quite a unique view. The past holiday season, 3.9 % was the year-over-year growth. So, yeah, that's a strong holiday season. You think political uncertainty, you think trade alignments and all these kind of things, but the consumer held up well. One thing that I thought was striking is that apparel sales. So we see this by categories. We don't see individual MasterCard holder data, but the aggregate data of what are people buying and where are they buying it. So apparel sales had a real moment. So 7.8 % growth in apparel, really a stick-out kind of category.

3:34One other interesting thing that I saw there in the data this particular season compared to last holiday season, consumers came in early. Probably it's a continuation of what the consumer has done throughout 2025. I can look for a better deal. I can look for a promotion. So the Black Friday was particularly strong, and then you look thereafter. So the savvy consumer is doing that, and so are businesses. Businesses were also worried about potentially sitting on inventory through that. So they're trying to sell their inventory and put out offers earlier. So interesting to see what we're going to see in 2026.

4:10The word affordability, at least in the U.S., has become like this big buzzword. And it sounds like you're sort of seeing that in some of the data, that that's where people are leaning. When you look at some of the post-tariff, certain prices have gone up, others have come down. But it's very interesting when you look at the 3.9 % overall, you would say, is that inflation? No, it's about half its price increases. So pretty tame. And the other half is real volume increase where people were just still making investments into the things that it wanted to buy. It's interesting. You must see data every day about sort of spending patterns and changes.

4:49I'm curious how that impacts your planning and strategy. I had a CEO on the show out of the tech world recently who said he's now replanning every week, that even monthly is too late. Very different leadership perspective from three-year, five-year plans. Is your system different because of the speed of the feedback you get? You know, it's not. We, five years ago, we re-architected MasterCard's network. We're in more and more countries around the world. We're facilitating more and more types of payments that might have been from an account to account are now happening on card rails or stable coins or you name it.

5:30So we had to re-architect. From that perspective, that is not really changing our plans. What is changing our plans is if consumer behaviors and consumer choices are changing in more fundamental ways. Younger consumers like buy now, pay later. So, well, we got to have that built into our system. Those are the kind of changes. They are not short-term changes. This is ups and downs from the economy. We capture that. The system can handle that. But where are the payment trends going? Where do we invest to really understand where consumer or business payments are going? The payments need to be smarter.

6:02They need to be faster. They need to be safer. All those kind of things, that's where we're investing. But that's not from week on week. We look out two, three years, and then we make those technologies available for our customers, which are generally banks or large merchants or airlines. Those are our customers. You mentioned buy now, pay later, a business like Klarna that went public last year. Is the credit card buy now, pay later? What's the distinction? Why do people get so excited about it? You know, it's yet another payment choice out there. So payments have not been more competitive than they are today.

6:38So you can pick, you can pay in stable coins, you can have a push payment, you can have a prepaid payment, you can have a buy now, pay later. This goes straight to essentially a personal loan kind of equivalent. So those are choices. And those are the choices that, you know, if we see them amongst consumers or the customers of our customers, then we make them available. you know if you are a buy now pay later pure play company you're going to find large merchants large brands that are going to have these offers on their websites and in their stores if they have physical stores the way that we did it we built it just as an offer into our network so wherever MasterCard is available and one of our acquiring partners can offer at the checkout terminal in an in-store and buy now pay later so JP Morgan or Galileo our partners like that of us they make that available.

7:26So the initial craze of buy now, pay later has died down a bit. I think it's a very credible choice. We offer it. And a lot of young people think this is a good idea because it gives you more plannability of your interest payments and all that. We also think that loans on cards where you say, let's say you pay$500 on a card and you turn that into three payments and many banks just offer that. And it's not going into a buy now, pay later route, but it's the same outcome. So in the end, people want more control over their finances and more flexibility to buy bigger things that maybe cannot afford in the moment and different solutions to that.

8:03We're all about consumer choice and we make all of that available. You're also a brand. I mean, and I'm curious how you think about distinguishing that brand going forward. You know, this term like what's in your wallet has become ubiquitous. That's capital one, right? In some ways, your customers become your competitors? Or how do you think about distinguishing yourself in that kind of a noisy, evolving market? So branding in our business, it's about trust. So you're facilitating a payment transaction, it's about somebody's money, that it's hard-earned money. So what's going to happen if something goes wrong?

8:39So if you see the two interlocking circles of our brand, you know it's going to work. It's always on. And if something goes wrong, I can complain. and if I didn't do that transactions and I approve it, you will get your money back. So that is what happens when you deal with MasterCard. So what's in your wallet is great, but what I personally prefer is priceless. You know, that's one of the most iconic advertising campaigns. We have invested in that a lot. You know, a bank is generally a local, rather local institute. You know, Capital One is mostly in the United States, but they have customers that travel around the world.

9:10So what do we bring? We bring access to, let's say, Fastlane in airports. How do you get into the leading restaurant in the city of your choice during your Christmas holiday? Or how do you get into that Life Nation concert where all the tickets have been sold out? Those are all sponsorship partners of ours. So they're all part of our investment into our brand. And I'll sometimes ask a version of this question to like an auto company CEO about what they drive. Like, what cards do you carry around? Do you sometimes use a Visa or American Express to like test them out? Or like, no, I'm never going to touch anything but having a MasterCard in my wallet.

9:49Bob, if I had a wallet, so generally it all lives on my phone. That's the first thing. The key word you just use is test out. So I test out a lot of our own cards. So, you know, try this new program, try that new program. How would I ever know how it feels as a consumer if I don't use competitive products? You just have to be careful when I pay with what so people don't misinterpret me paying with another brand and saying, you know, you have an issue with that. No, it's really, I got to know how it feels. And, you know, I used to be our chief product officer. So I call our chief product officer and say, hey, you know, I think there's something that we could do better or differently.

10:25And I encourage my team to do the same thing. We got to know what's going on. You don't carry a wallet in the same way. And obviously, we've had this drastic evolution from physical cards and checks and even cash to contactless tap and digital wallets. Right. Is this new standard like going to stay or do you think things will keep moving to things like biometrics or face scanning? I know you've talked about more personalized payments. Is that what you mean? That's not quite what I mean. But, you know, when you think payments, it's a constant evolution. So it's not going to stay where it is. It took 10 years for contactless to get what it is today.

11:05So you tap with your phone, you tap with your card. It's about two thirds of global transactions on our network are now contactless. What is now a big driver for the next kind of experience is where checkout really becomes a non-issue. It's just going to disappear. So we put a lot of focus on making checkout a non-event. And enabling technology for that is tokenization. So you take your card data and you turn it into a one-time code that can only be used for the transaction that's securely shot between the different participants in the payment ecosystem. Very safe. Now, you can do the same thing with your biometric identity.

11:45It would be your fingerprint or your facial. And that comes along with that transaction token. and anybody on the other side can see that is the transaction and it should go through. So it increases security dramatically. So we invented tokenization in the payment side, you know, many years back and it's now scaling. So we made a commitment that starting with Europe, that by 2030, every transaction will be tokenized. On that basis, you can do really the checkout moment. It's just going to really recede to the background. More choice, more opportunities, easier and safer transactions. Michael paints a fairly rosy picture for the future, but he's also quite aware of the double-edged nature of progress that AI and global markets and disruption require new perspectives and new vigilance.

12:33We'll talk about that and more after the break. Stay with us.

12:40this is mike nicholas capital one business customer and co-founder of anset uncles a plant-based restaurant and community space in brooklyn new york and he's telling us how they started a product line we already had a space in the community the food was an extension of our lifestyle and our values so we know we wanted to create something that was an offshoot to that our pepper sauce that's my grandmother's recipe that's like a liquid gold right it's If someone wants to approach us and ask us, what do we do? We provide flavor. Growing a product line is no small investment, but Mike and his wife and co-founder Nicole were able to manage with the help of their Capital One Business Card.

13:19Working with Capital One Business, we're able to leverage our limits and utilize those points, making sure we can continue the scale at the speed that we need it to go. To learn more, go to CapitalOne.com slash business cards. Before the break, MasterCard's Michael Maybach shared insights about the 2025 holiday shopping season and what it'll take to differentiate a brand in 2026. Now we dig into AI's impact on the security of financial transactions, what he's doing to unlock new opportunities for MasterCard, and the lessons that people most miss about global markets. Let's jump back in. With AI, I worry sometimes that, you know, by doing a show like this, like someone can take my image and can deep fake me.

14:09And if my face is my access to my financial life, like how do we protect against that? First of all, I'm real. So that's good. This conversation is actually real. So, you know, we recognize there's an arms race going on, you know, and AI is fueling the arms race. So there's those of us that defend the digital economy and then there's the hackers and the fraudsters. So tokenization is only one aspect of the arsenal of tools that we need to deploy. For example, you know, the speed with which you type on your device. your device can tell if this is a left hand or right hand and let's say the fraudster type with a different speed a different pressure and is recognized well that's not cannot be the same person then there's location data well you're actually in another place because you just did a transaction over here somewhere this transaction's come with somewhere else or it's completely out of your buying pattern and that would also be different so there's multi-layered security.

15:17Where the journey is really going is to leverage generative AI for cybersecurity and fraud prevention is where you start to predict what is the most likely next fraudulent card number or the next card number that will be befrauded. Let's say your card details, for whatever reason, you've stored them with some merchant a few years back. You have even forgotten that and that merchant is hacked. Those kind of scenarios happen all the time. So what we do through a company that we've acquired in December 2024, Recorded Future. We scan the world out there and all the corners of the internet and dark web to see where is there fraudulent card data that's out there.

15:58And then we flag that to your bank. So both sides are arming up. And we've invested, I think over the last six years, like$11 billion into our safety and security. So that's a big topic to stay ahead of the game. There's predictions that when you look up to 2030, that, you know, it's about 15 trillion of fraud out there by 2030. If it were a country, you know, internet fraud, and that would be the third largest country in the world. So there's a lot going on. It's a big part of our business, and it's a big part of us saying that we're promoting trust and payments across all types of payments because we're investing into that.

16:39Yeah, no, it's, you know, AI is a great tool for identifying potential fraud, and it's also a great tool for perpetrating fraud. Exactly. And it's an ongoing battle. We're not really sure where that's going to net out. Somebody comes out with the latest cool technology, but it's just cool and not safe. You know, that is what standards are designed to do. So we're partnering with Google and others to do exactly that. in the world of agents doing payments on behalf of people in an AI world. So you've got the next kind of open flank if you don't put in standards early. So collaboration is really important amongst the industry, but also then with the regulator.

17:20So that safety and security is recognized by regulators in a way that doesn't stifle innovation. And that's where we spend a lot of time with regulators and governments around the world on the same thing. You've been working with OpenAI and Google and Cloudflare on agentic commerce standards. Is this vision of AI agents doing buying for us? Is this a near-term reality? Or do we still have a long way to go before that can come to fruition in any substantial way? I don't know the answer to that. But I can tell you a lot of people are going for it right now. The question is, will this be a zero-sum game?

17:59This is now the only thing I'm going to do. Most likely not, because we've not seen these complete changes with new technology emerging. I think it's more choice. I think we see gradual change, but we will not see gradual change if you deal with an agent and that agent is not an accredited agent that is known and understood in the payment network as in that is actually the agent that it claims. And that's problem number one to be solved, which we have solved as MasterCard agent pay. The other problem to be solved is what happens if something goes wrong? How do you say, well, actually, I never asked the agent to buy this?

18:35How do you prove that? So there's an audit trail there. There's a lot of technology behind it to do the same thing that happens in payments today, where you could just say, well, I never did that. So we're just doing that. And I think with where we are on that, it is now following the same standards. So this is kind of live now. then we have some real opportunity in here that might be a significant change. I think agentic commerce and agent-driven purchases on behalf of a consumer can also level the playing field in terms of competition on the merchant side. So our small business can now compete in a very different way because the agent looks at everything that's out there.

19:15Joe's travel shop somewhere, they can compete. And because they are recognized, participate in the ecosystem, and they will be on a several playing field. So I find that an exciting thought. More choice for consumers, more competition, a chance for small business. I think that has a lot going for it. So maybe we see some shifts, but I don't think a dramatic change. As you look at how AI will impact your business, how much do you think about sort of what you build yourselves versus what you would acquire or partner to use? So, you know, what sets us apart in a world of AI, or what sets anybody apart in the world of AI is your data set.

19:57Models, all those kind of things are going to commoditize over time, but the data that you have is absolutely central. And that's how we started our conversation, talking about our data. It's non-personalized data, but it's global data. It's high-frequency data, high-quality data. We have like 19 million rules that we apply to sanitize our data and then start to extract insights from that. Now, that puts us in a really good position in the world of AI. So, you know, when it comes to building agents, do I see ourselves in the business of building agents? No, that's really anyway, not our business as a network.

20:31We're an AI company because we have a lot of data and we use that data to drive better insights and drive more value. I do hear from some folks that like there's a push to sort of integrate this, but they don't necessarily see the value from it yet commensurate to what they have to invest in it. I think most company leaders you would talk to, everybody's trying to make their own operation more efficient on customer service and so forth. We do the same and we see some good value there. I find it's more interesting when you apply it on the product set and what are we selling and how are we driving value for others.

21:05Let's go back to the cybersecurity side of things. So we're leveraging generative AI there to scan what is out there, predict the next fraud. This particular solution is called Muscat Threat Intelligence. In the first six months of market testing, we have taken down 9 ,500 fake merchant sites. We saved$150 million in fraud. Now, that's real value. That is not real value. You would have been able to create with machine learning and traditional rules-based artificial intelligence. So this is a gen AI at work, next generation. So there is real value there. But is it, you know, it's going to transform the world because we're looking at, you know, AGI.

21:48That's not that. It's very specific use cases that make a lot of sense and drive value right now. And that's actually where our focus is. You mentioned the global nature of MasterCard's business. You operate all over the world. You personally worked in Africa and the Middle East. I know business media tends to be quite U.S.-centric. and I'm curious what you think is being overlooked. Are consumers the same or different in different places? Like what lessons have you learned about the global consumer or if there's a global consumer? You know, there are things that are commonly true. People want safety, security, but then the circumstances are very different.

22:31If you go to an emerging market into a rural area, what means an easy payment? If it's on a feature phone versus a smartphone, that's a whole different and, you know, just engagement. There might not be a bank available. So you're actually doing this through your phone company. Circumstances, infrastructure, all that is very different. In Africa, most of financial services are driven through phone companies and those are our partners. There are no limitations through legacy technology in some of these markets. You just think of things in a very different way because you're not held back by legacy technology.

23:05You build something brand new, which we then export and say, this is actually great. So we're going to take that to other parts of the world. The leapfrogging idea out of emerging markets, I think that is overlooked to your question. Back to the arms race, the fraudsters and hackers don't care about borders. They don't care about countries. So if we have a world of digital islands where different governments do their own thing and they don't agree that cybersecurity is an issue that needs common tackling, then we're going to have a problem. I think that is overlooked. Given all these different pieces that are moving around and what you're managing and looking at, what's at stake for MasterCard right now?

23:47If you look at the tectonic shifts in the world, that provides, certainly when it comes to technology and payments, some interesting discontinuities. Agentic commerce, for example, suddenly there's this additional entity, the agent, which is run by some company potentially. You know, it's like the large LLM company. So that's an opportunity for us to engage in a very different way and, you know, create a lot more value for our shareholders and for MasterCard by engaging upfront, being proactive, leaning in. Stable coins is another discontinuity. So I think our mindset of we will always lean in.

24:28And it's always providing choice. Is the right mindset? We just have to do it and have to be out there and have to be out there fast. When the Genius Act, you know, was signed last year, we were all there cheering and said, this is a good thing. It's a discontinuity. And we're looking for discontinuities to provide more value in a fast changing world. What we cannot do is look in the rear view mirror and say, hey, you know, what we have works. And it does. But I think there are many more choices coming. So, you know, constructive, competitive paranoia, I think, is the mindset we need to have. And I think what is at stake is also an opportunity for us.

25:07Well, Michael, this was great. Thanks so much for chatting with us. Well, thanks, Bob. I appreciated the conversation. I want to double click on the phrase Michael uses at the end of our discussion, constructive, competitive paranoia. It's a compelling concept, especially for a world facing so much transition. To turn discontinuity into opportunity, we need a mindset that keeps us on our toes and also open to new ideas. That openness is the constructive piece, which is so critical. I also have to tip my hat to Michael for acknowledging that he uses competing products to test them out. The fact that he's wary about being seen doing so reflects the unforgiving nature of our media ecosystem.

25:55But in this arena, as in so many business activities, a little bravery is worth the risk. I'm Bob Safian. Thanks for listening.