Good morning. My name is Brandy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mastercard Second Quarter 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator instructions] I would now like to turn the call over to Warren Kneeshaw, Head of Investor Relations. Mr. Kneeshaw, you may begin.

Thank you, Brandy. Good morning, everyone and thank you for joining us for our second quarter 2019 earnings call. With me today are Ajay Banga, our President and Chief Executive Officer and Sachin Mehra, our Chief Financial Officer. Following comments from Ajay and Sachin, the operator will announce your opportunity to get into the queue for the Q&A session. It is only then that the queue will open for questions. You can access our earnings release, supplemental performance data and the slide deck that accompany this call in the Investor Relations section of our website, mastercard.com. Additionally, the release was furnished with the SEC earlier this morning. Our comments today regarding our financial results will be on a non-GAAP currency-neutral basis otherwise noted. As a reminder, starting this quarter, we have updated our non-GAAP methodology to exclude the impact of gains or losses on our equity investments. We are excluding these items as we believe this will facilitate a better understanding of our operating performance and provide a meaningful comparison of our results between periods. For the three and six months just ended, net gains of 143 million and 148 million have been excluded. Prior year periods were not restated as the impact of the change was de minimis. Our non-GAAP measures also exclude the impact of special items, which represent litigation judgments and settlements and certain one-time items. In addition, we present growth rates adjusted for the impact of foreign currency. Both the release and the slide deck include reconciliations of non-GAAP measures to GAAP reported amounts. Finally, as set forth in more detail in our earnings release, I would like to remind everyone that today’s call will include forward-looking statements regarding Mastercard’s future performance. Actual performance could differ materially from these forward-looking statements. Information about the factors that could affect future performance are summarized at the end of our earnings release and in our recent SEC filings. A replay of this call will be posted on our website for 30 days. With that, I'll now turn the call over to our President and Chief Executive Officer, Ajay Banga.

Thanks, Warren and good morning, everybody. So, a strong performance continued this quarter. Revenues up 15%, EPS is up 17% versus a year ago on a non-GAAP currency neutral basis as Warren just said. These results reflect the continued execution of our strategy as we invest for long term growth. On the macroeconomic environment, consumer sentiment and spending remains relatively strong, with some moderation versus 2018 as expected. We are continuing to monitor ongoing trade negotiations and other economic and geopolitical factors, which are showing signs of weighing on business sentiment in particular. In the US, we are seeing continued growth, low unemployment, healthy consumer confidence, retail sales grew 3.2% versus a year ago ex-auto, ex-gas according to our SpendingPulse estimates and that reflects some moderation from Q1 and from last year. In Europe, the outlook is mostly unchanged, as we continue to see modest growth. UK retail spending remains healthy, although it has slowed somewhat from Q1, according to our SpendingPulse estimates, and of course, the uncertainty around Brexit remains. In Asia Pacific, trade tensions continue to weigh on business sentiment, particularly in China. We are however seeing improved consumer confidence and more accommodative monetary policies in several markets there. And the outlook in Latin America continues to be mixed, as growth in markets like Brazil, Colombia and Chile are partially offset by weakness in Argentina and Mexico. Meanwhile, we continue to drive healthy double digit volume and transaction growth for Mastercard across most of our markets by successfully executing against our strategy and I'm going to give you a few examples of how we are growing our core business, diversifying our customer base and building new areas for our business. So starting with growing our core, we continue to make good progress driving growth across our credit, debit,…

Thanks, Ajay and good morning, everyone. So turning to page 3, you will see we continue to perform well. Here are a few highlights on a currency neutral basis and excluding both special items related to certain legal matters as well as the impact of gains and losses on the company's equity investments. Net revenue grew 15%, driven by solid momentum in our core and was slightly ahead of our expectations due to stronger services growth. Acquisitions contributed a minimal amount to net revenue in the quarter. Total operating expenses increased 17%, which includes a 2 ppt increase related to acquisitions and a 5 ppt increase related to the differential in hedging gains and losses versus a year ago. The remaining 10% relates to our ongoing investment in strategic initiatives. Operating income and net income, each grew by 15%, reflecting our strong operating performance and each includes a 1 ppt reduction due to acquisitions. EPS was $1.89, including a $0.02 drag related to our recent acquisitions. EPS growth was 17% year-over-year, with share repurchases contributing $0.04 per share. During the quarter, we repurchased about $1.9 billion worth of stock and an additional $493 million through July 25, 2019. So let's turn to page four where you can see the operational metrics for the second quarter. Worldwide gross dollar volume or GDV growth was 13% on a local currency basis, up 1 ppt from last quarter, in part due to the ramping of co-brand wins in the US, as well as fewer processing days in Q1. US GDV grew 10%, up approximately 2 ppt from last quarter with credit and debit growth of 12% and 8% respectively. Outside of the US, volume growth was 14%, up 1 ppt from last quarter. Cross border volume grew at 16% on a local currency…

Thanks, Sachin. Brandy, we're now ready for the question-and-answer session.

[Operator Instructions] Your first question comes from the line of George Mihalos with Cowen.

Congrats on another strong quarter. Ajay, wanted to ask a question, you brought up contactless, obviously that's been a good driver. How long does it take when you introduce contactless or how long do you think it'll take as you introduce it in sort of a new geography to really peak up and meaningfully drive, I guess, accelerated growth.

So, contactless basically targets low value cash transactions as the first place that it kind of changes the paradigm and the speed of adoption. We've got now 10, 12 markets around the world where contactless has grown very strongly. Australia, Canada, Turkey, Poland, Hungary and the likes, UK. It depends a great deal on how many cards are in the market that are contactless enabled, combined with contactless terminals, combined with the use case for everyday payments. So if the transport system gets contactless enabled, it tends to ramp faster. If it doesn't, it tends to ramp slower. So if you take Australia as an example, where the banks, the acquirers, and the merchant community worked really hard together on promoting contactless, it went from non-existent to being like close to 80% of all transactions, under AUD100 were contactless in four to five years after launch. It was not that case in other markets, but I'd say four, or five years to get to a really large percentage of small dollar transactions with all the effort in the market is a pretty good number.

Your next question comes from Tien-tsin Huang with JP Morgan.

Good growth here again. Just -- if you don't mind, a couple of quick ones, just on the stronger services growth. Maybe, can you be more specific, you mentioned cyber and data. I'm curious if these are project related or more recurring type work. Maybe just a little bit more there and then just on the payback on your M&A, I know you gave that third quarter, look, which is helpful. Is the payback on those types of deals outside of the traditional retail card space and bill pay and et cetera? Is it different than what we've seen in the past?

Let me take a first crack and then Sachin being far more comprehensive on numbers, can probably correct me. But here we go. The first part is the services revenue, a lot of the cyber revenue has recurring competence built into it, because it involves the selling of AI and other products that are sold into banks and merchants and governments in a way that they tend to have re-utilization quarter-after-quarter. What would change is that the volumes going through then change and our revenue profile from them will obviously change, because it's not dissimilar to our current business in that as the volume goes through our cards, we earn more. That's kind of the first part. What is improving our capability in cyber and intelligence, aside from our own efforts of developing new tools and the acquisitions of Brighterion and NuData and all the work we're doing was improving it is, we now see a much larger percentage of our transactions than we used to 10 years ago. We're now seeing 55%, 56% of our transactions, it used to be 40 something percent, every time you see more transactions, the predictive power of your AI tools improves. That's kind of the – that second part, by the way, impacts some of our data business as well. But on the C&I space, it tends to be more recurring. The data and services space, some of them are recurring, some of them are one-off projects. Sachin referred to the fact that you should expect that the third quarter in services maybe a little slower in growth than the second quarter, primarily caused by the fact that the 2Q had enormous growth rates. But part of that is lapping of our comparison to prior, where part of that is some projects in part of our business, like in D&I. So that’s kind of the – D&S sorry, these acronyms confuse me, the data business. And so you've got a mix inside our business where the cyber business is more recurring, the data businesses are fairly high proportional recurring, but it does have some project related work.

Yeah. And Tien-tsin, I'll just add to that. So like Ajay said, right, so in the second quarter, this number moves around quarter-to-quarter. As you've seen, even last year, in the first quarter of last year, we had very strong services growth take place. And that's a little bit of function of what are the projects, which are being delivered in a particular quarter, which caused for things to move between quarter and quarter. And that's particularly on the advisor side. So I would tell you in the second quarter, our advisors growth came in slightly stronger, which could be what -- in line with what Ajay said on the consulting side of our business. On the second part of your question on M&A, look, I mean, we've shared with you what we think the dilutive impact will be for the acquisitions, which have been completed -- the couple of things which I’ll remind you is the acquisitions have closed during the course of the second quarter. There's one acquisition, which is Transfast, which closed early in the third quarter. So all of that has been taken into consideration, as we think about forward outlook for acquisitions. We continue to expect that our acquisitions will be dilutive between $0.07 and $0.08 in 2019, and as it relates to the revenue profile, these acquisitions are across different lines of what we do. So for example, the acquisition of Ethoca, which is in the safety and security space, will follow a little bit more, from a revenue model standpoint, along the lines of what Ajay just described. Then there are other businesses such as Transactis, which is in the bill payment space, where it's a function of what kind of engagement volume we get of, those resentments coming into the business and how we charge on the basis of that. So that'll be more in the nature of per bill presented, what kind of transaction fees we charge on those bills.

Nothing has changed in our basic M&A philosophy, which is two philosophies remain. One being, we try and make sure the dilution stops by year two, and therefore becomes accretive in the third year. Secondly, remember that by the second year, the businesses embedded in the core of whatever business they are running, and therefore we don't do a next acquisition after the second year, which means that discipline on buying something and making it work for you by the end of the second year is now fairly strongly embedded in every business line in the company.

Your next question comes from the line of Sanjay Sakhrani with KBW.

I have a question on Europe. The growth in the region continues to remain robust and has been for some time. Could you talk about how long you expect that to persist, because I know you've had some fintech wins and Maestro conversions that have helped. And then maybe you could also speak to any visible impacts from Brexit.

Sanjay, I've been saying this since the day I became CEO that Europe is a growth market for our company, it's now almost 10 years, I see no reason to change that prediction. Europe is a cash dominant market in large parts of the continent even now and therefore the opportunity to convert cash in personal payments remains strong and healthy. To give you an example, just in quarter one of 2019, that's the first quarter this year, we grew merchant acceptance locations in Europe by 10% over the prior year first quarter. And so this is not a developed payments market in the sense -- having said that, the Nordics are, so don’t get me wrong, I'm talking about most of Continental Europe has got enormous opportunity for growth, as yet. There is market share growth as well, which is share growth, not just against our large global competitors, but also against local national schemes, all of whom are finding it hard to keep pace with technology, innovation, and regulation trends. And therefore, they tend to come to us for help and assistance that allows us to get a stronger foothold even in their businesses. And so, and this is all about commercial and B2B. And there's yet another space in the SME and B2B space in Europe that we are growing. So, fintechs, yes, of course, regular banks, yes of course. That's the share growth angle. But just think in terms of cash and acceptance and B2B payments, there's an enormous opportunity, even now in Europe, and I remain very bullish on what Europe is capable of doing. I forgot to answer the Brexit impact for Sanjay. And not sing directly yet, I mean, it's interesting, the UK still remains a market where people seem to be spending and growth in spending remains healthy. So I can't tell you that I'm seeing direct impact there. But guess what, the currency is volatile. Obviously, you expect that as we get closer to October 31. If there isn't clarity, you're going to get more volatility in the market. But consumer spending is still healthy, inbound and outbound cross border flows, pretty interesting yet still, I think in fact, inbound is stronger than outbound. But, the UK still remains an attractive market.

Your next question comes from the line of Jim Schneider with Goldman Sachs.

I was wondering if you could maybe just comment on the -- what you did before relative to transactional process growth. It seems like the big drivers there have been, first of all, the move to contactless, but also the reduction in Maestro cards. Can you maybe just kind of give us a sense about whether there's any reason to believe that level of growth in the high teens is not sustainable from here, since it's pretty much at the highest level it's been in, I think, the last five or six years.

Yeah, so Jim, I'll take that one. I think you should think about our switch transaction growth across the vectors, which you just spoke about, which is, as we continue to drive contactless adoption, that's going to be a helpful fact in terms of driving growth on switch transactions. The other piece is obviously the migration, which we're doing from Maestro to debit MasterCard, which should be helpful. What we should also remain focused on is, you'll see, over the years, the percentage of switch transactions for MasterCard, as a company, has increased. And that continues to remain a focus area for us, which is how do we continue to engage to drive more switching over our network, vis-à-vis that of local schemes. So all of these factors are helpful facts in terms of driving the switch transaction growth. Those are things, which I would keep a close eye on as it relates to what the trajectory of growth would look like on a going forward basis.

Your next question comes from the line of Lisa Ellis with MoffettNathanson.

Ajay, I wanted to follow up on your call out to that Mastercard signed an issuing agreement with Paytm in India. It seems like we're seeing an increasing number of examples of this, where these digital wallets are issuing debit cards against the balances, which seems like a pretty significant competitive shift in the environment relative to a couple of years ago, where many of these players would have been at least aspiring to compete with MasterCard. So can you talk about this competitive dynamic? Has it in fact shifted like this? Are you seeing this more broadly across the developing markets and how is working with these players little bit different than your traditional banking customers?

So Lisa, a lot of these guys, at the end of the day, some of them start out by trying to find a way to use bank account to account rails as a way of generating payments. The factors are in so many markets around the world, debit interchange or the MDRs are regulated. And therefore, the economic benefit of going account to account versus going on a debit card has changed quite dramatically over the last decade. And it used to be a one or two market incident of regulation that’s spread quite far on debit, a lot of the Asian markets, India, as an example, has regulated debit card MDRs. And therefore, the benefits, the economic benefits have moved around, as they have in the US where debit interchange is regulated. And so -- and that economic benefit has changed. The tonality of the conversation has changed vis-à-vis, card rails versus account to account rails. Meanwhile, we, ourselves as a company, have adopted the view that offering choice to consumers and merchants and customers about both account to account and card is a good idea. And that's why the investments is VocaLink, that’s why the investments in building out infrastructure with real time payments in the Nordics or in parts of Asia and parts of Latin America or in the Middle East Africa region and that's why all our efforts to build applications and services on top of real time payment rails as well. I believe out over the next decade, you will see more and more of us being sort of rail agnostic, if that's what our customers and consumers and merchants prefer. Because I believe that's the best way to cater to the changing payments landscape.

Your next question comes from the line of Moshe Orenbuch with Credit Suisse.

You'd kind of talked a little bit about the acquisitions and there are a number of them. What might be different about this round of acquisitions that there are more platform, I guess, than perhaps just getting a specific amount of revenues and maybe could you just talk a little bit about how you think they factor in kind of over the course of the next several years.

First of all, I would say, most of our acquisitions, even over the past few years, have been platform oriented or in a couple of cases oriented towards skill sets we didn't have. So years ago, we bought a company called C-SAM, which gave us access to 450 mobile technology engineers, which would have been quite a challenge to hire organically. But the majority of our deals, be it merchant loyalty programs or Pinpoint from Australia or these last ones have all been platform or some service oriented of that time. So take Applied Predictive Technologies of the data and services space, that gave us a testing and learning platform or take NuData that gave us AI platforms for cyber security. So I'd say most of our acquisitions tend to connect back to wanting to be the owner of a platform, so we can add into what we have, and then sell as a bundled service in our system. That's kind of what we're trying to do. So, I don't see these as being dramatically different on that logic. I think what's getting interesting is that we're seeing more deal flow than we ever did, you've always seen a lot of deals and picked one or two or three out of 20, 30. We see many more deals in the last two years than we saw in the first five years. I think part of that is they're seen as a credible acquirer, who tries to develop the company we acquire and stitch it into the kind of businesses we have and then give people opportunities to grow in a career growth. So we’re not seen as an acquirer who comes in to plant the Mastercard way of doing things. I would tell you the things like APT and NuData and Brighterion have taught us a great deal that we didn't even know before we bought them. So I think that benefiting enormously from our acquisitions, both culturally for our mother company, but also in the cross flow successes between the two of them. I don't see that as very different for an Ethoca or a Transactis or a Transfast or a Wise. I can see all of these having similar patterns.

Your next question comes from the line of Bob Napoli with William Blair.

A question on B2B payments. Ajay, you'd mentioned that you haven't even scratched the surface internationally. I was wondering if you could maybe, Sachin, give an update on trends in that business in the US, growth rates, any signs of acceleration, the AP automation piece, and is there -- is the international market far behind the US in the growth of B2B payments.

Yeah. So our B2B business, Bob, as you know, you should think about as things we've been doing for many, many years on the commercial side, catering to the small business universe, the T&E side of the business, our fleet card management side of the business, that business continues to grow well. There still remains a lot of opportunity from a secular shift standpoint, I would tell you, in that part of the business. We continue to grow that nicely. We've got some very solid platforms, which you're familiar with, which support the growth of that commercial business. The more recent stuff, which we've done as it relates to the B2B hub, again, we're seeing good interest from our customers in that. So like we said previously, those things take time, the adoption curve on those things is something which is a multi-year adoption curve process, but still shows a lot of promise because it's solving pain points in the business. Then I think about the new and different stuff. For example, we announced just in Ajay’s comments earlier today, we talked about the partnership we've established for our Mastercard track capabilities with OpenText, again, early days, but shows a lot of promise because it's solving the real pain points on the B2B side as it relates to compliance and onboarding of customers, in this instance, in the automotive segment. So, I think you should think about our B2B business across multiple spectrums, this business we've been in, which continues to grow healthily, which delivers revenue right now. There's other businesses we've invested in over the last few years, which are starting to show good trajectory and traction. And then there are other new things which we're doing such as Mastercard track, which are just getting going, which will pay off over the longer term, and not much has changed in terms of our views on the opportunity there, both in the US as well as from a global market standpoint.

Is the international market further behind the US market? I would imagine the opportunities are –

Yeah. Bob, the answer to that question is yes. The answer to that question is clearly yes. We announced last quarter, our partnership with [indiscernible] for example, in Australia, that would be an example of again, taking the lead from what we did in to the B2B hub in the US and taking it overseas for an opportunity, which exists there as well. This quarter, we talk about our agreement with Nationwide, which is primarily taping towards the small business space in in Europe. Again, a big opportunity there. So I think the answer really is yes, things typically start up in the US and there's opportunity globally on this as well.

Your next question comes from the line of Jason Kupferberg with Bank of America Merrill Lynch.

Just one for Sachin and one for Ajay. I'm just starting on the domestic assessment, it looked like the revenue growth there decelerated about 300 points in constant currency. So just wanted to get some color on the drivers there and maybe what moving parts we should be considering for the second half in that revenue line. And then maybe Ajay, if you can just go a little further on SRC now that we're getting closer to actually live implementations. What's the plan in terms of educating consumers there? Will we see actual targeted advertising kind of like what we had seen historically with Masterpass?

So Jason, I'll take the first one, domestic assessments, you’re right, they grew at 13% this quarter, in line with our GDP growth rate of 13%. That's down sequentially from a 16% domestic assessments growth rate in Q1. That is primarily due to the lapping of certain pricing that was put in place last year. And from a trajectory standpoint, you would continue to see the pricing effect of that marginally come down as the year progresses.

And the part of SRC, yeah, once we get the testing completed and we get the current Masterpass merchant uploaded into SRC and we start rolling SRC out for the broader marketplace, you will probably see the whole industry making substantial effort, banks, networks, acquirers making substantial efforts on marketing and promotion to get consumers used to the idea of the fact that this one button has the simplicity of checkout that you would expect in today's digital world, you would see that coming, but I'm talking it’s still a few months away before that kind of stuff starts.

Your next question comes from the line of Don Fandetti with Wells Fargo.

Ajay, on cross border, can you parse out a little bit the different trends in e-commerce versus T&E in terms of growth? And then just a follow up on the commercial? I know there's been some talk in the industry that maybe it's been a little bit or some concerns around growth in commercial, can you just clarify how you're feeling on commercial spend overall?

I’m getting good on commercial spend overall. So that part is exactly where Sachin just answered. The part about cross border, e-commerce, cross border growth is in the high double digits, high teens kind of thing. And that's a good number for us. If you remember, it’s stronger, because you remember the whole crypto currency purchases, stuff that we talked about, well, that’s lapped. So, some part of the cross border growth improvement quarter-over-quarter is the lapping of the cryptocurrency effect that you saw back in 2018. And that's the real benefit we're getting out of that. The travel kind of expense, cross border tourism, by and large, cross border tourism is still alive and well. You would find changes in where people are going, so take China. In China, cross border growth from Chinese card holders is actually up this quarter over the prior quarter. But it's primarily due to increased travel, not just to where it began to happen, which is Japan and Australia. But this quarter, you’re seeing some travel to Europe, to Germany, to Canada, to the United States as well. And that goes in and out, depending on which quarter and what's going on. But by and large, travel, tourism is still intact, doing okay.

And I'll just add right here, which is we continue to see double digit growth in cross border volumes across all regions and for full year 2019, we continue to expect cross border growth rates to be in the mid-teens.

Your next question comes from the line of Bryan Keane with Deutsche Bank.

Hi guys, just want to ask about Ajay your comment about now seeing 55 or so percent of transactions that you guys are switching, can you just talk a little bit about where that percentage can go over time. Obviously, there's an economic lift there for you as well. Maybe you can talk about that throughout the model, maybe higher yields and then it sounds like it pushes services revenues higher. So just thinking about the different implications there.

What I can tell you is I expect 55% to keep growing, but I'm not going to be able to tell you what number I expect this year, next year, the year after. The reason for its continuing growth, there are multiple reasons. One reason is that local payment schemes that I was mentioning struggling to keep pace with innovation technology with cyber security, with regulations, and that gives opportunities for companies like ours to come in part or happened to show that our transactions are protected or better service to have more analytics behind them and that allows us to grow. That's happening all across Europe as an example. It also happens when regulatory environments change, like some years ago, they changed in Brazil, and they're beginning to change in Colombia, they're changing in Argentina. And as they change there, you tend to begin to see more of your transactions, because the locally formulated scheme, either no longer has control, ubiquitous control on where the transaction is routed. And the control choice now goes to merchant on issuer, so it kind of changes the dynamic in the marketplace. That's behind some of this growth in what you're seeing. And then obviously, certain kinds of technologies allow you to see more transactions, contactless in many markets allows you to see more transactions than the old Mac stripe or chip cards could do. And so there's a number of things behind the 45 becoming 55 or 40 something, I forgot the exact number 10 years ago. I think they were 42%, 43% coming up to 55 odd percent now. I expect to see that continuing to grow. And yes, the implication of that is that it does help us with the predictive power of our data, both in cyber and in our data and services businesses, and that does allow us to bundle our solutions better for merchants and banks. That is correct.

Your next question comes from the line of David Togut with Evercore.

Good to see your P27 partnership in the Nordics leveraging VocaLink. Can you talk more broadly about VocaLink’s positioning on the European continent ahead of the launch of SCA on September 14, and, when we go live on September 14 with secure customer authentication, what do you expect to happen in terms of transaction authorization and approvals in Continental Europe?

I expect a lot of fun. So let me walk you, first of all, September 14 is an important date. But there's also been some announcements that there will be some flexibility in the enforcement of SCA at a national level from the European banking authority. I think a month or two back, they gave out some clarification on that. That will be interesting, because you'll get some degree of friction caused by the fact that there will be different enforcement's in different countries. And I think that could lead to some consumer confusion, some merchant confusion, some issuer confusion. So we're going to have to work our way through this over the next few months, as this happens. What we’re trying to do is focus on our customers, help them better understand their requirements, provide them with solutions to help assist with their compliance on SCA. I continue to believe that we’ll be very individually advantaged during this process, if you stand by them, as they try and meet the needs for what the regulation of PSD2 requires. Remember, there is connected stuff around open banking there, which is everything from connecting to protecting to resolving for disputes by working that through with a number of countries, we've launched in the UK, launched in Poland, we're in the process of doing that kind of work in different parts of Europe. VocaLink is not the only entity that is helping us do that. It’s cardrails, a counter count rails, it's actually more to do with the cyber intelligence and data services businesses, that there's a lot of opportunity in PSD2 in Europe. VocaLink, as a whole in Europe, and in Continental Europe, the Nordics would give us first physical presence once it's fully implemented across Continental Europe, because otherwise we were in the UK, in the case of Europe, and no one knows where the UK will be on November 1. So this gives us a foothold on Continental Europe as well by the time we get this implemented over the next few years. In the UK, all our contracts have been extended out by a substantial number of years on what VocaLink provides both the bank contract, the link contract and the faster payment contract. Of course, some years later, there will be RFPs and all of those, we’re busy making sure we are well positioned for those.

Understood. And then as my follow up, what is your expectation for the adoption of pay by bank in Continental Europe or consumer ACH payments, once we go live September 14?

Yeah, I don't know yet. Like I said, September 14 isn't a real switch on it. It's got some switch on angles, and it's got a bunch of demos attached to it. So the like may or may not come on fully on September 14. Do I think of pay by bank as a great opportunity? Yeah, just remember this. That comment I was making to Lisa earlier, the incentive to switch to paying by a bank account direct debit, the economic incentive for a merchant to help advance that or for a merchant to therefore give better benefits to their consumers to choose that as the way to pay as compared to paying by some other method has reduced as the economic difference between the MDR and debit cards and the cost of a fully loaded account or account payment are taken into account. And so this is less of an economic argument as compared to a preference argument. I consider lots of Europeans who think of paying with debit as a natural way of paying as compared to paying with credit. They think of debit as safer. I suspect a number of them will adopt pay by a bank or pay by a bank account as something they understand and appeals to their way of planning for their financials. I think that's the way this will grow as compared to some very strong economic or pecuniary opportunity benefit to consumers and merchants, which means it'll be a slower bill.

Your next question comes from the line of Darrin Peller with Wolfe Research.

Ajay, more broadly, I mean, your volume trends continue to remain really strong, even in to the July period, and you still maintain a pretty good spread to most of the competition across a lot of volume growth metrics. Can you just comment, I mean, is this just solid macro trends, or how much of this is actually market share in your mind or other technology innovation driving growth, just maybe you could try to parse out and if you think there's anything of this kind that you're seeing that would change that current volume anytime in the next half? And then just quickly Sachin also, cross border revenue, it was up a little more, the underlying cross border volume growth rate, is there anything on pricing there, should we expect that [indiscernible]?

Sure. So you’re right. Cross border assessments were up 19% in the second quarter, which is about 3 ppt more than what you saw on the driver at 16% growth and that was due to pricing, which is partially offset by mix. And you would -- pricing continue for a few quarters going forward. So nothing more early on that, Darrin.

So on transaction growth and GDP growth for like, the two broad pictures. One of course, macro spending environment by consumers and in the B2B business, it’s still good. Has it moderated towards -- compared to the prior year, yes, but it's still relatively healthy. There are pockets of concern on macro spending. I think China is something that everybody has now begun to talk about, which is a challenge and it’s stressed. Mexico is slower, but there are other markets are doing better. So, Brazil is doing better. The US is holding strong. The UK is holding up, parts of Northern Europe are doing fine. India is doing okay and Japan and Australia are doing okay. So there are markets doing okay, that's the macro trends. Are we growing share? Absolutely. And we've been growing share consistently for a while across product categories. But growing share, this business doesn't change share growth from, you don't grow share by 300 basis points in a quarter. You grow share by incrementalism mostly, even if you win big deals in one country, the combination of that country contributing to the total world spend is still a smaller number. And so share grows and share gives you a consistent tailwind, but its first a macro and secular and second share growth. And third remember, we’re smaller than some of the other competitors in some of these overall numbers, because of our position in different markets that tends to make the percentage number look better. It's a combination of all three. I believe it's a little bit of all three going on. So you should take that into account.

Your last question comes from the line of Craig Moore with Autonomous Research.

Considering my peers have circled the wagons on all the enormous positives, I thought I’d ask on some of the few controversial items. First, can you discuss the Australian proposal to completely eliminate interchange by year end? And if you can comment on the fact that the UK Supreme Court has agreed to hear the class action case against Mastercard.

First of all, Craig, Tim Murphy is delighted to get a chance to speak on the UK. So let me go ahead with that.

Sure. Great, thank you. So, we feel very good about the decision of the Supreme Court to look at -- to approve our appeal, we’ll take that forward in the next couple of months. Just to context on that issue, this is one of the first major cases in the UK, looking at their new collective action or class action law. We think the appellate court said too low a standard and that would produce an outcome in the UK that was not intended under the law. So we think this is great opportunity for the Supreme Court to come to a more balanced decision and then we'll proceed on that basis. But we’re very pleased with that approval.

And then the Australian proposal, it’s not just Australia, wherever you come to zero interchange or MDR in a country, I continue to believe that no economic incentive for increasing either acceptance or digitization of payments, doesn't make sense to me. At the end of the day, if there is a value being derived by an entity, be the consumer, be the merchant, be the bank from doing something, and somebody else is providing the capability for the value to be derived, in this case, particularly, if merchants are deriving some value from digitized payments, be it ticket sizes, be it lower test, be it better cash management, be it lower expenses and collecting, there's a series of studies around the world that demonstrate what digitization does for the merchant community in terms of benefits for them. And I believe that in some way, incenting the providers who enable that digitization acquirers, processors, issuers who take on risk expense, and the capital allocation that is required to enable this is a sensible business model. So going to 0 just says, I'm not going to do it, and you need to find a way to do it anyway. And I suspect that’s not the smartest way to go about it. But you know what, at the end of the day, countries will make decisions. Our job is to help illustrate to them through research, through logic and through experiences in other markets, what we believe to be conducive regulatory systems. And then when they make that decision, our job is to work with it the best we can. That's been our approach for years, that’s the approach we’ve taken in Australia as well. I consider Australia to be a very important market for our company. We are market leaders there in a number of categories with the Westpac recently, we are definitely market leaders in more categories. And I consider our presence in Australia to be that of a responsible payments partner for the Australian Government and the ecosystem, and I will keep trying my best to work with them.

So few closing thoughts. We continue to execute well against our strategy. We just had another strong quarter of revenue and earnings growth. We are really pleased to further extend the reach of our real time payments capabilities with the P27 win in the Nordics. We look forward to working with all our new colleagues from our recent acquisitions. And with that, thank you for your continued support of the company. Thank you for joining us today.

This concludes today's conference call. You may now disconnect.