Mastercard Inc. president and chief executive Ajay Banga says he’s “very, very optimistic” about the Secure Remote Commerce initiative to reduce clutter on online checkout pages.
Banga’s comments came Tuesday morning as he reviewed Mastercard’s results for the third quarter, a period in which U.S. purchase volume rose 10.7% year-over-year to $385 billion and profits jumped 33% to $1.86 billion.
EMVCo, the standards body owned by the major global card networks, recently submitted a draft of its proposed SRC standard for comment by merchants, processors, and card issuers. SRC will create a so-called common buy button to replace the plethora of brands on e-commerce checkout pages, with the goal of reducing consumer confusion while enhancing transaction flow and security.
Some payments executives questioned how the new system will work, and some retailers have expressed worries about their continued access to lower-cost PIN-debit networks once the new system is in place. But Banga believes the button will solve major e-commerce problems affecting merchants, merchant acquirers, and card issuers, including clutter on checkout pages and the operational hassles of supporting multiple payment systems. Once up and running, the common buy button is likely to replace such online payment options as Mastercard’s Masterpass and Visa Inc.’s Visa Checkout.
Clutter reduction and operational simplification both “are appealing to the entire community,” Banga said on a conference call with analysts. “I think they [EMVCo] are actually building this infrastructure the right way for all the different stakeholders in the system.” He added that “my general view of this thus far from all the interactions is very, very optimistic.”
Mastercard expects SRC to make its first appearance in the second half of 2019, but full rollout will take three to four years while issuers and merchants test it, according to Banga. “It’s going to be a run, it’s not going to be something that’s going to end in a 100-yard dash,” he said. Visa’s CEO, Alfred Kelly, last week expressed support for the SRC initiative.
While SRC is moving to the starting gate, Mastercard’s existing payment machine hummed along in the quarter ended Sept. 30. U.S. credit card purchase volume rose 9% year-over-year to $205 billion while U.S. debit card purchases jumped 12.6% to $180 billion. Adjusted for local currency effects, worldwide purchase volume increased 14.9% to $1.08 trillion. Switched transactions rose 11.7% to 18.8 billion.
The higher volumes pushed Mastercard’s net revenues up 17% on a currency-neutral basis to $3.9 billion from $3.4 billion in 2017’s third quarter. Net income rose 33% to $1.86 billion from $1.43 billion a year earlier, with 9 percentage points of the increase coming from the recent U.S. corporate tax cuts, according to Mastercard chief financial officer Martina Hund-Mejean.