Ladies and gentlemen, thank you for standing by and welcome to the Mastercard's Q1 2020 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your presenter today, Executive Vice President of Investor Relations, Warren Kneeshaw. Please go ahead, sir.

Thank you, James. Good morning, everyone, and thank you for joining us for our first quarter 2020 earnings call. We hope you and your families and coworkers are all safe. With me today are Ajay Banga, our Chief Executive Officer; Michael Miebach, our President; and Sachin Mehra, our Chief Financial Officer. Following comments from Ajay, Michael 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. Due to the length of our prepared comments today, we plan to allow for an additional 15 minutes for questions, if necessary. 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, unless otherwise noted. 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'd 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 will now turn the call over to our Chief Executive Officer, Ajay Banga.

Thank you, Warren, and good morning, everybody. Our first quarter started off strong and kind of continuing to build off the solid trends and performance that we had in 2019. But as you all know, as the pandemic developed and spread, it impacted our first quarter performance, but the strength in our services-related revenues shows that the strategy we have perused over the last decade to diversify our revenue streams is paying off. Now, this virus has created a truly extraordinary challenge that we need to address together. And like everyone else, we're trying to do our part. Post the execution of our grow, diversify and build strategy, we've built on the solid foundation of our technology, data, brand and our wonderful people. That's put us in the fortunate position of being able to support our clients and partners throughout this difficult period. And you will hear me and Michael and Sachin talk more about this later. At it's core, this is a health crisis and therefore the public health response is the most important policy response in the near-term. It is the critical first step to getting the world's economies back on track. And as we've all been reading, coordinated efforts, such as the sustained implementation of social distancing and the scaling of our healthcare capacity to address increasing needs are having a positive effect. The company over the middle and longer terms will be dependent on the implementation of successful testing processes and the development of effective prophylactics, therapeutics and vaccines. Now, we are contributing through our investment in the Therapeutics Accelerator together with The Gates Foundation and Wellcome Trust. In the mean time, fiscal stimulus packages are being introduced across many markets and this will be a critical effort to provide relief during the downturn for individuals,…

Thank you, Ajay. Likewise. Yes, these are clearly difficult times, which is why we're leaning in, leaning in with our customer to be the best partner we can possibly be, especially now as we work through the containment and stabilization phases together and compare for normalization and ultimately growth. We're staying closely connected and anticipating the needs of banks, merchants, governments, fintechs as well as the end consumers, while executing on our strategic priorities, driving a secular shift to electronic payments, building new revenue streams and capturing new payment flows, diversifying our customer base and geographic reach. All these have been critical parts of our strategy and they will continue to be key enablers driving our success coming out of this crisis. All of this while remaining agile on how we manage expenses to ensure long-term growth. So let me take each of these three in turns to give you an idea on how we are doing this. First off, the secular shift. Now with trillions of dollars of payments still being made by cash and check despite our best efforts, there's clearly an opportunity to drive new transactions to our products, both online and in store. We've seen a dramatic increase in e-commerce in this time of low mobility and we expect some of these behaviors to persist going forward. When we look at our switched volumes in April, card not present accounts for over 50% of volume, which is up from 40% last year. So our drive to offer our customers expanded digital capabilities online and in app is increasingly important and we are doubling down on these efforts. For example, by leveraging our Payments Gateway services, merchants are able to accept digital payments securely and easily. And our Simplify Commerce platform makes it easy for small and…

Thanks Michael. As Ajay and Michael mentioned, this truly is an unprecedented time for us all. Before I get into the numbers, I would like to take a moment to acknowledge the resiliency of the team here at Mastercard. We have maintained their focus in supporting our business, our customers and partners and each other during this challenging period. In light of the current circumstances, I will focus most of my comments today on the trends that we have seen recently, but I will start by walking you through our Q1 results. So turning to page three, here are a few highlights on a currency-neutral basis and excluding both special items and the impact of gains and losses on the company's equity investments. Net revenue grew 5% with acquisitions contributing approximately 1 ppt to this growth. Total operating expenses increased 8%, which includes a 6 ppt increase related to acquisitions. Operating income grew by 2% and net income was up 3%, both of which include a 3 ppt reduction due to acquisitions. EPS grew 6% year-over-year to $1.83, which includes $0.05 of dilution related to our recent acquisitions, offset by a $0.04 contribution from share repurchases. During the quarter, we repurchased about $1.4 billion worth of stock. Let's turn to page four, where you can see the operational metrics for the first quarter, each of which was impacted by the pandemic starting in February and March. Worldwide gross dollar volume or GDV growth was 8% on a local currency basis and was favorably impacted by an additional processing day due to the leap year, has partially offset the declines due to the pandemic. U.S. GDV grew 6%, down approximately 3 ppt from last quarter with credit and debit growth of 7% and 5%, respectively. Outside of the U.S., volume growth…

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

[Operator Instructions] And our first question comes from the line of Craig Maurer with Autonomous. Go ahead, please. Your line is open.

Yes, thanks for taking the questions and especially for the additional detail, hope everyone is well. So wanted to focus on two things. One, if you could talk about the exit rate at April 21st? You know that saw a nice improvement. How much do you think is related to recent stimulus efforts and how sustainable do you think that is or dependent on continued stimulus efforts? And second, when we think about cross-border, I was hoping you could help us understand how much of that, the card not present, non-T&E cross-border spend is related to B2B versus consumer activity. Thanks.

Great, thanks. The first part, the part of our fiscal stimulus, while it's tough to exactly figure out what impact that's had, remember that only started to go relatively recently. And remember, that's a fair amount of money in the United States, but outside of the United States, which as you recall 65% of our revenue of 60%-plus comes from outside of the U.S. and the trends when Sachin was speaking were that this third week of April and the continuing trend for the first few days of the next week are global and they're across every region. So I don't know if I could give you a clear answer, but I don't think you can assume that only the fiscal stimulus that's pouring through the system.

Yeah. And Craig, it's Sachin. I'll just quickly add to that back to what Ajay was just saying. Right? So even beyond the week ending April 21, we've seen the same trends continue for the next few days coming into this week. Actually if you look around the globe and you start to see in various countries, where there is a slight relaxation taking place in terms of social distancing measures which were put in place as well as cross-border restrictions which are put in place, we're starting to see a little bit of that stabilization impact come through, for example, in markets like Italy, Germany, Poland, Australia - Austria. We're seeing this come through. And so the point really being that as people start to get out and are getting back to, I wouldn't call it their normal ways, but getting back to being able to move around, we're starting to see that level of spend come through as well. On your second question around cross-border, here is what I'd tell you. That cross-border, card not present excluding travel, that lift you're seeing, which is taking place in the third week of April, there are a few factors which are contributing to this. And you should kind of - just kind of keep that in mind. One is timing of Easter globally is having an impact, but equally if not more important, what we're starting to see is the omnichannel prevalence coming through at various merchants across the globe. So with the crisis hitting, more and more merchants are coming to realize the importance of going into online channels. And as they're going into online channels, they've enabled themselves and they're starting to see the impact of that come through. Other categories where you're seeing some level of spend come through is in areas like clothing, in general retail, I would tell you, in subscription services, in the marketplace activity you're seeing. So you're seeing that come through in all of those metrics there. That's kind of the color I'd like to share with you as it relates to how we are seeing those cross-border trend - card not present trends kind of play out.

Our next question comes from the line of Bryan Keane with Deutsche Bank. Go ahead, please. Your line is open.

I guess, I'm a little bit surprised or is it more variability in the rebates and incentives line with the lower volumes, why isn't there - I know there is - the contracts are structured and there is a little bit of more of an impact on a reduction in the rebates and incentives as volumes decrease. And then secondly just on cross-border and about the higher yields there and how it impacts margins. Maybe you can just give us some thoughts on that as well. Thanks so much and stay safe.

Sure. So, Bryan on rebates and incentives, you're well aware about how rebates and incentives are constructed. Right? So there is a variable component and there is a fixed component. And the variable component, which is there moves back and forth based on levels of volumes which are going through the system. The fixed incentives are fixed, they remain fixed. And - so to the extent you're going to see variability is going to be on that variable component. The fixed piece is going to be there. The reality is in the first quarter, you can see from our volumes, we were still growing volumes in the first quarter and you're going to see the impact of that come through. The other aspect you've got to keep in mind is the impact of what I would call new and renewed deals. We had mentioned to you in our prior earnings call that - and you quote about the various deals, which we've kind of entered into, you're seeing the impact of that come through on the rebates and incentives line as well. So really that's what you should kind of keep in mind as to what we're seeing there. Obviously, the variable component will change depending on where volumes ultimately trend out for the rest of the year. The fixed will be what it is. The second question which you've got is around cross-border. I mean, we've tried to provide you as much transparency as we can as it relates to what we're seeing in terms of volume trends. I think the thing to keep in mind in cross-border is there are three different kinds of categories of cross-border. There is what you will think about in the nature of intra-Europe cross-border, where - which is generally lower yielding. Then there is the inter-regional cross-border. And I would break that up into two buckets. The two buckets are there is a long-haul inter-regional stuff and then there's the short-haul inter-regional stuff. And I'd bring that up only because even as you think about how we move from stabilization to normalization, you should think about the fact that you would expect intra-Europe and short-haul inter-regional to come back sooner than normal. And that's just kind of by definition. So for example, if you're in Europe and you can do ground transport between one country and the other country, that would happen more naturally as border restrictions are relaxed and you don’t have - to the various locations. So that's the way you should think about it. From a yield standpoint, intra-Europe low yielding, inter-regional high yielding. So as inter-regional starts to come back, you've got to factor that into the mix in terms of how you’re modeling.

One little comment about margin. I know you asked about cross-border margin, but remember our company has various aspects to its margin mix and one of those which is in - was services, if you remember a few years ago when services were a smaller percentage of our revenue, their margin contribution was also lower and the average margin for our company. That is not the case today. Our services business, all the different lines in it together when you kind of dominate them and look at them, they're very profitable for us as they should be because scale allows us to leverage the fixed cost that we put into building those businesses over a larger volume. So I think as a company, we feel relatively good about where we are on margins. We feel good about some of the revenue diversification. Of course, cross-border is down today and it will be to some extent, as Sachin said, until long-haul intra and inter-regional kind of stuff fix up. That's obvious. And so, we're going to keep doing what we can to keep growing our business in the meanwhile.

Our next question comes from the line of Tien-Tsin Huang from JPMorgan. Go ahead, please. Your line is open.

Really thoughtful presentation. Just to follow-up to Bryan's question that we've incentive line - can we assume that deal activity, that side of it, could there be a pause there here as people saw through the pandemic or could actually accelerate as we see some of your clients embrace contactless and some of your other products? And then somewhat related on the M&A front, it sounds like your appetite is up. Have your priorities changed because of the pandemic or have valuations changed such that you might have more deals in the opportunity set that weren't there before? Thanks.

Thanks, Tien-Tsin. So on rebates and incentives, the point really is we're running our business as we would run our business. You know one of our imperatives is to grow market share. We're constantly interacting with our customers. We're going to do deals. We're going to do renew deals. We're going to do new deals. That's just part of course. And so what you're going to see come through is that activity and to the best I've done and the nature of visibility and pipeline and things which are going on, which is a pretty active pipeline, to be completely honest with you, we factor all of that in terms of how we share with you our kind of thoughts around where rebates and incentives will play out.

On the M&A side, Tien-Tsin - and hi. It's - let me put it this way. There are a couple of things, which we were looking at even before the pandemic hit. Those conversations are continuing and developing, and that's a good thing. There are others that will come up, I'm sure as we go along. I don't know that you should view us as jumping in just because valuations may go down. I think what's more interesting here is that the willingness of the other parties to be able to feel that they may be in a better home with a company like ours that gives them access to distribution, capabilities, geography and capital and liquidity what creates for a better conversation. I view the valuation comment as interesting, but if all you do is jump and the valuations are down, is that really the kind of acquirer you want to be or do you want to be an acquirer of the right time for the right reason. And I think you will find us trying to find the right balance there and get the deals done for what value they bring to us. So we are keeping our powder dry to be thoughtful at a time like this.

And Tien-Tsin, Michael here. The areas of focus haven't really changed, so we're staying true to the strategy, data analytics, cyber, new payment flows, open banking, those are still top of mind for us as we engage in a manner that Ajay just described.

Your next question comes from the line of Lisa Ellis with MoffettNathanson. Go ahead, please. Your line is open.

Glad to hear all your voices, glad everyone is well. Can you, and maybe this is for Ajay or for Michael, talk a little bit about - this is related to cross-border and cross-border travel. As you are in dialogue with governments, your major issuing partners, your major co-brand partners, et cetera, what does the path to long-term recovery and cross-border travel look like like? So in your view, what conditions have to be in place under which you think you'll see both governments be willing to reopen borders and then also people be willing to get back on planes and start traveling? Thank you.

Hi, Lisa. Nice to hear you guys' voice too. We kind of get a little lonely after this locked up thing here. So, here's the thing. What you're asking is the crux of - a crystal ball issue that's a little difficult to get into. But let me give you some thoughts that I’ve picked over time. The first one is, I actually believe that what you will see that seems is happening in China is you will begin with China I think is in more of a normalization phase than, say the United States and Europe that is more in a stabilization phase. Although, even there, if parts of the U.S. begin to open up as we're hearing some governors speak, you may see a change in that over the next two, three, four, five weeks. I just don't yet know how to predict that well. But let's stick to the idea of with China being in more in the normalization phase than the rest of us. There is a long journey for China through that phase. It's not done, they've just begun. But their local travel has begun. Trains have got bookings. Planes locally have got bookings. Restaurants and bars are open in Shanghai and Beijing and Guangdong and places. Wuhan is still challenged. So, that's - we are learning a little bit from China's experience here. And now you got Australia and New Zealand beginning to think of opening up, so I think we'll get some more data from countries that are a little ahead of the curve than the rest of us. Talking about cross-border travel, China is beginning to talk about corridors of cross-border being opened up, which is to your question about does the government feel comfortable about what kind of connections with certain…

Okay. Yes. Fair enough. On a related point just for my follow up that the non-T&E cross-border e-commerce I think is a little bit of a black box at least to us. Can you just comment generally speaking what the composition of that is, like meaning, does it moves and grow in similar ways to domestic e-commerce like non-T&E e-commerce or are there aspects of it that are similar or different like certain regions or certain - is it more media heavy than retail heavy, is there anything unique or comments that you can give about that? Thank you. Thanks a lot guys.

Sure. Sure, Lisa. I'll take that question. Look, I mean, I think first you should recognize that's not an insignificant portion of what the cross-border component is. So it's actually a pretty meaningful portion of the card not present component.

We're trying to stay away from giving you a percentage regarding good try. But that is very good try. Very good.

Already doing all the math on the little lines, I am sure you can.

Let me give you a little bit of color what that comprises of. Right? I mean, there's a whole bunch of stuff, as you would imagine in that, which relates to everything from subscription services, to gaming, to purchases in clothing, appliances, there's all the stuff which kind of sits in that category. So to your point about whether it's more akin to what you would see in card not present in the domestic environment, it's actually some very similar categories would sit in there. The one point I want to make sure that I kind of bring out is we are starting to see a lot of the smaller merchants who were previously not present in the online environment activate themselves to get ready to participate and are actually participating in the online environment. We're starting to see that come through.

We do feed in daily life right now, right these are people who never provided food and grocery delivery online are all getting online in the last 3.5, five weeks in the United States alone. And that's a big change from the - that's true for cross-border as well.

Our next question comes from the line of Darrin Peller with Wolfe Research. Go ahead, please. Your line is open.

Glad everyone is doing okay. Look, it's I think more than second quarter, which - or even recent trends, which a lot of investors are looking through. It seems clear there has been - there is going to be impacts from this that have a more pronounced impact longer term structurally. And so, can you guys just talk through us, if we think of the benefit - the beneficial opportunities from coming out of this, which may include contactless being more accelerated or use of real-time payments versus the potential for things like cross-border to be maybe structurally changed, what are your thoughts of sort of netting it all out? If you just list up what you are seeing accelerated now and can structurally be something that could actually help the payments industry and you guys more pronounced near-term, is it enough to offset some of the potential challenges of folks that not travel as much?

As you can imagine, Michael is kind of devoting his attention to that, that's his future. So here he is. Michael, go ahead.

Thanks, Ajay. Hey, Darrin. So when we look at what is changing in terms of, let's say, consumer behaviors or business behaviors, it is little early. As you were saying, it's a little earlier to cast a vote on when and how travel is coming back, but we are engaging out there trying to understand commissioning research, all of that. But there is a few things that are pretty obvious, pretty clear and they're coming through in the numbers already, at least on a relative basis. And the first is this push to e-commerce and digital. So here, people are getting used to, let's say, virtual entertainment, e-sports, people are getting used to consuming via delivery service while they might have gone outside before, so there is some behavior patterns moving towards digital and we believe that will continue to persist. So anything that we do that's related to our digital capabilities, be it in the cyber space, be it in our underlying digital solutions, we should benefit from that. We look at that as a continuous tailwind. Even for the displacement of cash, it's not only displacing existing electronic payments, there's a net increase that we explained - that we expect versus cash. Now, talking about cash, one other thing that I expect coming out of this is that the attitude towards cash will be more negative than what it was before. But even in the most hold out countries, I gave you the example on the German cooperative banks earlier, you start to see a shift to online in e-commerce away from cash even where you could use cash. And that is, to your question Darrin, clearly contactless is going to be the way that will help benefit from that trend. The numbers are astounding, the last quarter…

And the only thing I'd add there is that if you - in a time like this, and it's clear that those who are suffering much worse than others, everybody is suffering. Those who are suffering much worse are those who had less to start out. Getting the economy somehow working better for inclusion when we come out of this I think will become an even more important issue with governments and with thinkers around the world. It's not a coincidence that it's the midst of August. We've announced our commitment to go from $500 million to reached to a $1 billion over the next two years. 50 million small businesses in that and 25 million women entrepreneurs is what we're going to try and reach as a company to facilitate their ability to participate in a better way in the economy as it comes out of COVID. There's a reason why this is a really good time to double down on thinking of that time. We've shown we can do it because we've demonstrated the $500 million. We think we can do even more.

Hey, Darrin, one last point. One last point that I feel particularly passionate about, and that's the B2B space. So we've been talking about B2B as a significant opportunity for a number of years now. So when you think about the impact on global supply chains and so forth, what we expect is that the drive towards digitization of supply chains and creating more flexibility is going to only increase. So we believe there's going to be some tailwind in accelerating the - our participation in B2B flows as well.

And our next question comes from the line of Jason Kupferberg with Bank of America. Go ahead, please. Your line is open.

Good to hear from you. Just wanted to talk a little bit about interchange rates and network fees. I think you had already announced plans that some of the interchange rate updates in the U.S. were going to be delayed until July, if I'm not mistaken. Is that still the plan or should we assume the changes in either interchange or network fees for that matter are perhaps off the table this year just to help merchants from experiencing even more pressure amid the COVID environment?

Just to be clear, interchange rates, the changes were not just about increasing interchange. We were talking about [indiscernible] merchants would have different changes to their interchange, just to be clear. So the reasons that those haven't gone through is because they were linked up with a whole bunch of technology releases and right now the real challenge for any merchant, any bank who is trying to navigate their way through this with most of their people working out of home or from home or with people struggling to meet the new business models as they don't need new technology changes in the midst of this. So what we decided to do was to postpone all that. I have no idea when we'll do it again, not fixed yet, depends a little bit on how the environment goes and that's how we'll manage through it.

And then Ajay just wanted to get your quick thoughts. What you've got in terms of the shape of the U.S. recovery?

But - U.S. recovery. Back to what I was telling Lisa a little bit, I think it all interconnects there. I actually believe that, and this is just a guess, but I believe that the next couple of quarters, you will begin to see the United States as states open up come a little bit out of this stabilization phase into the normalization phase. I do believe that the therapeutic will help enormously. I believe that Americans are actually quite resilient and their ability to sort of want to go back to being who they are, which is essentially social beings who like being with each other will lead to a certain kind of behavior pattern. We need to do it carefully because the probability post summer, if you believe, those who know the signs, probability post summer of this having some kind of a recurrence hopefully at a lower level, we'll be better prepared and we'll have the therapeutics and our hospitals will be in better shape and our reaction plans would be in better shape. I think that would probably be what happens, and so you'll see some such things come and go. And I think then by the time the year end comes around and people have been through that phase, we'll probably see more confidence. And if by then the news of the vaccine front is good, then you will see a better improvement in the early part of next year, going into the middle and latter part of next year. That's the way I think about it. I don't think we are in this in the short-term. I think this is a medium term thing to plan for. I believe that's how you should build your business and manage your liquidity and think about your employees and clients and shareholders at this point. And that's how we are running our company, in those four phases and we're all talking that language, so that our budgeting, our expense thinking, Michael's drive on prioritizing what we do and what we don't do is unbelievable. And I think that's part of what we're trying to focus on and stay focused with this four-phased thinking. It helps us all talk the same way. Otherwise when you're a global company and China is in a different state from the United States, you know what, it's very confusing to understand underlying trends. But now, we're not confused. We call them in one stage and alternative we'll see how we go.

And our next question comes from the line of Ramsey El-Assal from Barclays. Go ahead, please. Your line is open.

And thanks for taking my question. I wanted to ask a question on China and your news that you're sort of - things are progressing there in terms of your ability to get into the domestic market. Putting aside COVID impact, looking to sort of a future state maybe where things are more normalized, are - how crystallized are the kind of partnerships and infrastructure that you need to generate revenue in that market? Have you kind of put pen closer to paper in terms of your - and can you comment on your kind of strategy and even tactics that you're going to need to kind of deploy to begin generating revenue in the market?

Well, first of all, we've already got a great business in China and that's generating revenue today even though the --

I meant, domestic. I meant - absolutely, yeah. Yeah.

Domestic, yeah. Okay. So we - because otherwise in the current business, we're outperforming on new card growth, the new cards per share, we're doing programs with a bunch of people, we've even done something with the Shanghai Metro, which is a little more oriented there where the first transit deal actually in China is with the Metro. It's the world's third largest software system by the way, by passenger traffic volume and that's rebuilt up over the last few days. Now, we're going into third quarter this year, tens of millions of international travelers to Shanghai, which I hope there will be, will be able to pay at the fare gates with QR codes using their Mastercard in a Shanghai Metro app. That's the kind of work we're doing, not just bank issuance, but actually enabling a lot of the activity that enables us to be embedded in the payments ecosystem in China. The domestic one, we are deep in the process of this year post getting the license application in principal approval. Over the course of the year, we will go through all kinds of things including national security evaluation of the technology and the infrastructure of the ground, that work is progressing at pace. We have not hit that - we’re not cutting back on that. That's our medium and long-term future and we are keeping on running with that. There is nothing new, I can tell you on that because that’s like - it will take its time, it will take time to work its way through. It's still a year away and Michael probably add some more to that.

Yes and Ramsey the conversations with our existing partner on cross border obviously extending into domestic partnerships and most importantly, one thing that we’re using this time for why we do the technology development with our partners of NUCC is driving up the acceptance. Currently our team is out there in the market very actively ensuring that our acceptance footprint is as good as it can be once we get approval from the PBOC to go live. So that's really the focus.

That's super helpful. I didn't know you could actually be in their selling acceptance side. So that's good to know. Thanks for taking the questions.

No, that's what’s been going on. That’s exactly what we're focused on because remember Mastercard acceptance in China used to be principally driven by the cross-border demand for it, which meant it was by the nature of the beast in certain markets, certain kinds of verticals or if you're doing getting it out there into where it should be, so that it can become a real payment system domestically as well.

And our next question comes from the line of Harshita Rawat with Bernstein. Go ahead please. Your line is open.

So can you please zoom in further on travel and provide some color on your area of exposure on tourism versus corporate travel and also just still a very curious based on all of the research, et cetera you’re doing, what your customers are saying, what are the different scenarios, we could be looking at here in terms of corporate travel being just very weak long-term with tourism recovering a little bit faster. Thank you.

Well, you get two kinds of points here. So here we will get one point of view that says corporate travel will take a long time to bounce back and actually people will begin to travel in a personal basis at least intra-region and in those corridors, I was referring to earlier. And the other point of view is that actually when business will start interacting again. How do you rebuild supply chains, how do you rebuild business connectivity, you will need to have a degree of corporate travel recommence. And prior analytics don't serve well right now because prior analytics never had a shutdown of so long. Even 9/11 was a few days of impact to travel of this type. And then it came back, even the financial recession. So we went through in 2008, 2009 didn't have this kind of a shut down, I mean oil demand in the world in the financial recession went down in the single digits is down 30% right. So we’re talking a very different scenarios. I’m lost to give you an sort of an analytic view from prior times, prior times frankly corporate travel came back very quickly and personal travel came back a little slower. I don't know what will happen this time. Not sure, yet.

Our next question comes from the line of Sanjay Sakhrani from KBW. Go ahead please. Your line is open.

Thank you and nice to hear that you guys are doing well. I guess I have one question and a follow-up clarification, when we think about the scope of cost containment efforts where exactly are you guys, I'm just trying to think about how we should think about the progression of cost saving opportunities if things get worse or things get better and then I'll just ask the second question upfront or second now. In terms of the relationship wins that are affecting rebates. Is there a revenue contribution that comes in this year or is that more spread out over multiple years? Thank you.

Yes, Sanjay. I will take, actually I will start with the second question first and then we'll get on to the expense. So on your question around the relationships, which we're either renewing and or building new relationships with. Look, you've got to think about it in the context of things which are existing customers. You probably will start to see the revenues, we’re already seeing the revenue of that come through and to the extent that expanded deals, you will see the revenue of that come through on a sooner basis than you would see in the nature of new relationships where you’re flipping portfolios or you're starting a de novo program or something of that sort. So I think it's a little bit of a mixed bag. So you see that kind of come through. I don't see the trend on that by the way being any different than what we've done historically when we signed deals in the past, whether the new deals or renewals, that pattern is pretty much what we're expecting on a going forward basis. As it relates to operating expenses. Let me just give you a line of sight as to what's going on from an operating expense standpoint, I know Michael will share a little bit more about the various areas we're focused on. First, specifically as it relates to the numbers, you can see based on my comments earlier that in the second quarter, we’re sharing our thoughts around how we’re looking to take a decline in our operating expenses in the low single digits range and that's a ramp-up from where we were obviously in the first quarter. I would tell you longer-term, the way you should think about expenses is the following. We have flexibility in our expense base, we're going to do the smart thing, we’re going to do the prudent thing, what we don't want to do is jeopardize the long-term growth prospects of this company, we will remain nimble depending on how the economic environment is playing out and will exercise that prudence from an expense standpoint across the various line items as are appropriate, as part of that process.

Yes, and then Sanjay. That was a pretty comprehensive answer, but just one thing I want to say that you called it out earlier, the two guiding factors are not only the long-term growth in the strategic investments, also market readiness and customer demand. So we would not be going out right now with something that the market is not ready with because everybody's busy addressing COVID-19 and what they should do about it. So there is a couple of initiatives like that, that we’re deferring basically and we’re keeping our broader tie to bring them back to market as and when needed and customer demand is the other thing. Right now we see huge demand for investments and improving, further improving what can be done on cyber. So we can continue to double down there, but you can imagine like promotions in the travel space is just not what is a sensible thing to do right now. So that's kind of how we think about it, customer demand, market readiness and then keeping the strong, the long-term stuff in mind and that gave you the categories earlier.

All right. I think we've got to the end of allotted time. So Ajay, any final comments.

Thank you all for your questions and I’m going to wrap up with a few closing thoughts. I know we kept you a little longer than usual, but that's not mistaking that COVID-19 has created a tough environment. But you can see that we’re beginning to get to the early signs of stabilization. We believe our diversified business model will allow us to successfully navigate this and capitalize on opportunities as we come to normalization and ultimately back to growth. We’re carefully managing our expenses. So we will continue to invest in the area that differentiate our company and enable us deliver on our grow, diversify, and build strategy. So you should see us doing things like in services, so the data analytics, and Cyber & Intelligence that we think drive real value for our customers to diversify our revenue base, they enable us to win market share, or in digital solutions like our gateway and digital debit products that enables e-commerce. On an account-to-account capabilities, including most importantly our real-time payment rails that help us to address new payment flows and some ideas in areas which we’ve been investing in for a while like open banking and digital identity. I don't have a crystal ball, you could see that I couldn’t answer some of your questions about where this could go, but I do think we will see certain trend will stand out, the world will be more digital and the secular shift to electronic payments will accelerate. There will be a deeper focus on cyber security and data analytics. Cross-border activity will come back but in phases over time. And importantly, governments will increasingly be open to partnering with the private sector in areas where we bring clear value, real-time payments and cyber security and identity services are examples of that very open view of partnership. We’re heavily invested in these, we are focused on these and as Michael said a little while back and Sachin and I did before that, we have no doubt we will be well prepared to capitalize on these opportunities as they come our way. So thank you for your continued support of the company, be safe, be well. Thank you for joining us today. I'm looking forward to actually being able to see people and shake hands and give somebody a hug once in a while once we get past this. Thank you very much.

Thanks everyone.

Thank you. Bye-bye.

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