The financial services industry, by any standard, has forever changed the way business is conducted. Most consumers have a credit or debit card and use bank cards to pay for $850 billion of products and services worldwide. MasterCard alone processes more than 3.6 billion transactions a year for its 228 million cardholders. According to the Census Bureau, the credit card industry accounts for 373,000 jobs and more than $10 billion in wages.
We have the membership to thank for this success. Working in partnership, we've been able to deliver products and services with the value, utility and efficiencies our members' customers require, and a substantial, sustainable return on the investments of the members' shareholders.
But rather than rest on the laurels of our 30 years of accomplishments, I want to provide a perspective for what we can accomplish together over the next 30 years. We are in the midst of a major shift in the financial services industry that, I believe, will make our accomplishments to date pale by comparison. Four key principles will guide our decisions and, ultimately, help shape the future payments services industry:
* The fundamental trend for delivering value to customers, which started in earnest in the late 1980s, will remain at the heart of every banker's retail strategy. Value today translates into added utility and convenience. Soon, information will enter into the value equation, giving cardholders an even more powerful tool. Consequently, a good value positioning is an integral and leverageable asset.
* Consumers will become increasingly comfortable with technology based services. The associations play a key role in delivering products and services that leverage this trend. A solid debit program, a strong ATM network and point of sale processing, as well as the right technology strategies for new payment systems are essential deliverables.
* With their growing comfort level amid the prevalence of new technologies, consumers are migrating away from branches and the traditional bank structure toward alternative delivery channels. Telephones and ATMs now handle the majority of all transactions. While branches will remain, the trend toward electronic delivery will become stronger over time.
* Traditional banking businesses, such as commercial lending, are being threatened. Banks must respond by rethinking their strategies. No doubt, card-related products are at the heart of a truly global payment system. The real payoff is that the credit and debit infrastructure becomes the foundation for a full array of payment products, each appealing to a different segment of the customer base.
Credit cards will remain strong, particularly as issuers strive to tailor products even further by consumer segment, and eventually by consumer. Debit cards add value to core deposit accounts, and the field is wide open for merchandising programs that further enhance the value proposition. Remote banking, while, again, in its infancy in the United States, is a competitive necessity and soon will be a must-have payment option for members and their customers worldwide.
Chip technology provides a wealth of new opportunities -- to enhance current products with additional value propositions with additional value propositions for both consumers and members, and to offer new payment vehicles to round out payment options for the consumer.
Providing more ways to pay affords bankers the opportunity not only to increase their customer base but to enhance the loyalty of those customers in the future.
We have the credit card to thank for the new opportunities in the global payments system. I look forward to keeping up the momentum and taking MasterCard into the next century.
