Mastercard has expanded its work with the largest bank in India, the world’s most populous country, according to comments from the card network’s CEO, Michael Miebach.
In reporting the company’s third-quarter results last week, Miebach said Mastercard had signed a small business-focused agreement with HDFC Bank during the quarter, giving the network an opportunity to sell services to the bank and potentially offer another three million cards.
Mastercard has had a relationship with the bank since 2005, a spokesperson for the card network said by email. The company’s larger U.S. rival, Visa also has a tie to HDFC.
The Indian bank has some 10,000 branch locations and provides services to 100 million customers, Miebach said Thursday on an earnings call.
Miebach called the business expansion an “important” development in “one of the world's most competitive markets.”
The expanded partnership comes as the Purchase, New York-based company to further its build its presence in countries around the world and increase its global market share.
Miebach noted that the card network is cultivating relationships to reach unbanked customers in African countries like Nigeria, to cater to wealthy clients in Switzerland and to build ties in India and Brazil, where those nations’ governments have created national payment systems.
Miebach explained how the Indian government creating the UPI payment system to include more people in the country’s financial system is both a challenge to companies offering services in that country and an opportunity.
He noted news reports since August that UPI may begin to charge merchants a fee to help finance the national payments system.
“We continue to engage in India very effectively with the government, (and) with the private sector,” Miebach said, strengthening Mastercard’s debit card proposition to better compete in the market.
UPI is bringing people “into the digital ecosystem that will graduate to different sets of products, which will include debit, and then eventually credit,” Miebach said. “There is so much opportunity in India as well as in Brazil, where we essentially pursue the same strategy.”
In both countries, Mastercard partners with companies and governments, he explained.
The company’s third-quarter U.S. gross dollar volume rose 6% over the year-earlier period to $867 billion, but a faster 8% rate to a larger $2.08 trillion outside of the U.S., according to the third-quarter presentation. Based on that third-quarter view, the business outside the U.S. makes up about 70% of the company’s volume.
Third-quarter net income climbed 18% over the year-ago period to $4.6 billion as revenue for the quarter increased 14% to $9.8 billion, according to the company’s earnings press release.
