Career & Success

MasterCard CEO: Challenge Conventional Wisdom

The payments technology executive discusses the cash economy, staying humble, and knowing when it's time to move on.

May 29, 2014

| by Bill Snyder


After nearly 30 years of experience at global enterprises including Nestlé, PepsiCo, and Citicorp, Ajay Banga landed the top job at MasterCard in 2010. Five years later, MasterCard’s stock has more than tripled to $70 a share, while net income increased from $5.5 billion in 2010 to $8.3 billion in 2013. But Banga points to another metric that he sees as emblematic of a forward-looking company: “When I started, millennials were 9% of our customers; four and a half years later, 34% are millennials.”

Here are five key management lessons he shared with a group of Stanford GSB students at a “View From The Top” event on April 14.

Challenge Conventional Wisdom

Despite what many people think, the market for financial services is far from mature, says Banga. There’s still plenty of room for increasing the market for payment cards when you consider that in the U.S., nearly 50 percent of retail transactions are still conducted in cash. Offshore, that number rises to 85 percent. What’s more, in the U.S., 40 million people don’t have a bank account; in Europe, 93 million. Solving that problem in the undeveloped world takes creativity, which in turn creates opportunity. Last year, MasterCard issued cards to 13 million pensioners in Nigeria. The card doubles as ID and a vehicle for electronic payments. Social benefits are loaded directly onto the card, along with cash from other sources. In contrast with the relative safety of an electronic transaction, there are estimates indicating that more than 40% of the cash payments that move from government social benefits to recipients is stolen along the way, says Banga.

Know When to Leave

There are a lot of reasons to change jobs or to angle for a different position within the same company. First and foremost, counsels Banga, it’s time to leave a job when you’re no longer learning new things. “In my case, [I changed jobs] when I felt I had learned what I could; my mind was flat, and I had reached a point where I was stagnating.” And when you reach that point, he says, “don’t procrastinate. If you want to move jobs or move roles within the company, think about it, but go for it.”

Don’t Be Afraid to Reorder the Chain of Command

There are typically many organizational layers between the CEO and the internal teams charged with bringing new technology to a large business. Banga took a different approach. He created a free-standing group within the company called MasterCard Labs that reports directly to him. “I keep them safe from the lunatics who run MasterCard’s asylum,” he jokes. “I told them, ‘Here’s the money; you choose the project. I need two commercially viable projects after two years. If I don’t get them, I’ll fire the whole lot of you,’” says Banga. He did not have to fire them. The company now has four new technology projects incubating.

Stay Humble

If you’re not willing to learn from people, and to adapt and adjust you can’t be in a company like [MasterCard] and succeed, says Banga. I don’t know that you can divorce that from success. You can be successful without humility, but you won’t enjoy it as much.”

Look for Opportunities Where Others Have Not

There’s so much talk about the hypergrowth of the Chinese and Indian economies that too many business leaders are overlooking an opportunity that’s quite literally under their noses: the United States.

“I’m a big bull on the U.S. I still think it is the most exciting economy in the world. Banks have come out of the crisis with their balance sheets in better shape — though arguably they need to do more. Households have come out of the crisis with their balance sheets in way better shape, and companies have enormous amounts of cash on their balance sheets,” says Banga.

Outside the U.S., the nations of ASEAN “will be an unbelievable driver of growth,” says Banga. “The ASEAN economic community is coming together, and when it comes together, they are going to create an economy that will be $3 trillion with 600 million people, and they are talking about $500 billion in infrastructure in the next five years.”

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