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MasterCard Bets on Murphy

To be sure, the two big payments firms do not extend loans to customers, however a decline in processed transactions and purchase volume hit MasterCard's bottom line much more so during the worst of the crisis. Visa was able to offset the negatives since it had more exposure to debit cards, which consumers tend to use for non-discretionary items.

MasterCard is also beginning a new chapter these days, one under its new CEO Ajay Banga, a former Citigroup (C) executive. Banga, who succeeded longtime MasterCard head Robert Selander officially in July, is already leading the company in a "dynamic" way, particularly in Asia, Murphy said.

"In so many emerging markets consumers actually have cards in their wallet, but use them to go to the ATM once a month when they get paid and then walk around with a big pile of cash in their pockets. One of our jobs is to train consumers not to do that,"

-- Tim Murphy, MasterCard's chief product officer.

MasterCard is now winning business in the U.S. debit space - earlier this year it announced a major conversion of SunTrust Banks' (STI) debit platform to MasterCard from Visa. Also during third-quarter earnings, the company said it had also garnered Banco Santander's (STD) U.S. franchise, Sovereign Bank, for debit business. But the smaller platform is still far behind Visa in debit.

"It's important to bring into the market a stream of innovation that is different from what the other guy has that are enough to get customers - whether it's a merchant of a bank - interested in working with us," Murphy says. "Frankly, I think we've done a better job than we've been given credit for over the years in that, but we have not done nearly as good a job as we could and there is so much further opportunity to differentiate and that's my job."

On the other hand, more than half of MasterCard's revenue, despite being more credit-focused vs. Visa, is garnered from regions outside the U.S. - a large contributor to the firm's overall strong growth rates and one that will continue to do so.

"In so many emerging markets consumers actually have cards in their wallet, but use them to go to the ATM once a month when they get paid and take money out and then walk around with a big pile of cash in their pockets," Murphy says anecdotally. "One of our jobs is to train consumers not to do that -- not to use them for just ATM withdrawals, but to use them at the point of sale. It's more profitable for our banks, it's more business for merchants, and it's more secure and safe for consumers.."
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