The likes of Apple and Amazon are becoming bigger threats to incumbent payments companies, but MasterCard CEO Ajay Banga says his company views these players as potential allies.

"All of these companies are thinking about [payments]," Banga said Jan. 31 during MasterCard's 2013 conference call to discuss its fourth-quarter earnings. "What we are trying to do is partner with as many of them as we can."

Just this week, Apple's CEO Tim Cook was hinting at the company's mobile payment plans and Starbucks CEO Howard Schultz went a step further in changing his role to place more emphasis on payments. Amazon is actively seeking personnel to develop person-to-person payment capabilities, and T-Mobile last week launched a prepaid card targeting the underbanked.

MasterCard needs to make sure these newcomers do not view it as a competitor because "we bring some very strong assets to the table," Banga says.

Google Wallet is one such example. The smartphone app allows certain Android handsets to make contactless payments at the point of sale through a virtual MasterCard account. With MasterCard handling the payment, Google can focus on its strengths such as advertising and outreach.

"All of these companies are strong players in the digital world and likely would have a role to play in some way to enable payments for their consumers," Banga says.

MasterCard can also play a role in security, Banga says. This month, MasterCard announced it would stick to its October 2015 timeline for most U.S. merchants to begin accepting EMV-chip cards (fuel merchants have an extra two years). The shift to EMV smartcards is crucial in light of the recent exposure of magnetic-stripe data used at Target and other major retailers, he says.

"EMV in the U.S. is a necessary and critical step because it makes the stolen data less valuable," Banga says.

In addition, MasterCard emphasizes and invests in tokenization, a process of replacing card data with a secure "token" that is of less value to fraudsters if it is exposed.

As more breaches occur consumers will have less trust in the payments industry, Banga says.

"This is not about finger-pointing, because we need to get past all of that nonsense and get EMV in place and get everyone on that bandwagon," Banga says. "We are seeing a lot of progress in EMV and a lot of merchants and banks committed to it."

The combination of EMV and tokenization can be a powerful deterrent to fraud in the future, Banga says.

"We need to redouble our desire to get this done quickly," he adds. "With tokenization, the weakest link in the chain goes away, but EMV is a big arrow in the quiver."

MasterCard reported a 3% rise in quarterly profit, to $623 million, citing more credit and debit card transactions in previous cash-only regions throughout Europe and Asia. The figure included a $61 million after-tax charge related to the opt-outs in the U.S. merchant litigations.

Total operating expenses were up 21%, to $1.21 billion, as the company set aside $95 million for litigation settlements.

Net revenue for the fourth quarter of 2013 rose 12%, to $2.1 billion, from the same period in 2012.

Moving forward, MasterCard will be looking for other deals and partnerships to offset the 2012 loss of Chase's consumer credit card portfolio to Visa, says Martina Hund-Mejean, MasterCard's chief financial officer.

Deals the company has secured over the past two years will provide a "tailwind" for MasterCard going into 2014, but losing the Chase consumer portfolio represents a "headwind" for the company, Hund-Mejean says.

"We expected to see some attrition from that portfolio loss in 2013, but it did not happen," Hund-Mejean adds. "We don't have any specifics in how these cards will migrate, but we are expecting an impact in 2014."

Because of the size of the portfolio, MasterCard can expect to offset some of the loss and may see net revenue growth in 2014 at the lower end of the company's three-year range, Hund-Mejean says.

MasterCard also faced regulatory setbacks in Europe, but the company plans to pursue more partnerships and deals, make investments in person-to-person payments and the MasterPass digital wallet, and expand its influence in payment processing.

"We want to get deeper into the front and back end of the payment process," Banga says. "We don't want to just be a payment transaction switch. We want to use the data available in the digital world and get smarter about processing."

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