The AI agents in your wallet

Note: Transcripts are automatically generated from episode audio, and are not fully corrected for spelling, grammar, and formatting.

MICHAEL MIEBACH:  We were all there cheering, and it said this is a good thing. It’s a discontinuity. And we’re looking for discontinuities to provide more value in a fast changing world. What we cannot do is look in a rearview mirror and say, “Hey, what we have works.” And it does, but I think there are many more choices coming. So constructive, competitive paranoia I think is the mindset we need to have. And then I think what is at stake is also an opportunity for us.

BOB SAFIAN: That’s Michael Miebach, CEO of MasterCard, the global credit card and payments juggernaut. I wanted to talk to Michael to get his views on the recent holiday shopping season and what it indicates about consumer sentiment. I also wanted to ask about AI’s impact on the security of financial transactions and what the role of credit cards might be in a crypto-adjusted agentic commerce future.

Michael, as it turns out, has been asking himself and his company many of the same questions as he looks ahead at 2026 and beyond. So let’s get to it. I’m Bob Safian, and this is Rapid Response.

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I’m Bob Safian. I’m here with Michael Miebach, CEO of MasterCard. Michael, thanks for being here.

MIEBACH: Delighted to be here with you, Bob.

Copy LinkConsumer spending trends and the rise of savvy shoppers

SAFIAN: You have a unique vantage point on consumer activity. So many payments run through your system. From this past holiday season, do you have any observations about consumer spending or customer sentiment? Any sort of emerging trends or lessons you’ve seen yet?

MIEBACH: When you think about what we do, we facilitate payments all around the world, so that provides a really interesting data set across all sectors, across all countries, 220 countries and territories. Last year we’re about 160 billion transactions through our network, so it does provide quite a unique view. The past holiday season, 3.9% was the year-over-year growth. So that’s a strong holiday season. You think political uncertainty, you think trade alignments and all these kinds of things, but the consumer held up well.

One thing that I thought was striking was apparel sales. So we see this by categories. We don’t see individual MasterCard holder data, but the aggregate data of what are people buying and where are they buying it? So apparel sales had a real moment. So 7.8% growth in apparel, really a stick out kind of category.

One of the interesting things that I saw there in the data this particular season compared to last holiday season, consumers came in early. Probably it’s a continuation of what the consumer has done throughout 2025. “I can look for a better deal. I can look for a promotion.” So the Black Friday was particularly strong, and then you look thereafter. So the savvy consumer is doing that, and so are businesses. Businesses were also worried about potentially sitting on inventory through that. So they’re trying to sell their inventory and put out offers earlier. So interesting to see what we’re going to see in 2026.

SAFIAN: The word affordability, at least in the US, has become like this big buzzword.

MIEBACH: Right. Right.

SAFIAN: And it sounds like you’re sort of seeing that in some of the data that that’s where people are leaning.

MIEBACH: When you look at some of the post-tariffs, certain prices have gone up, others have come down. But it’s very interesting when you look at the 3.9% overall. Is that inflation? No. It’s about half price increases, so pretty tame. And the other half is real volume increase where people were just still making investments into the things that they wanted to buy.

SAFIAN: It’s interesting. You must see data every day about spending patterns and changes. I’m curious how that impacts your planning and strategy. I had a CEO on the show out of the tech world recently who said he’s now replanning every week that even monthly is too late. Very different leadership perspective from three-year, five-year plans.

Is your system different because of the speed of the feedback you get?

MIEBACH:  It’s not. Five years ago, we re-architected MasterCard’s network. We’re in more and more countries around the world. We’re facilitating more and more types of payments that might have been from an account-to-account are now happening on card rails or stablecoins or you name it. So we had to re-architect. From that perspective, that is not really changing our plans.

What is changing our plans is if consumer behaviors and consumer choices are changing in more fundamental ways. Younger consumers like to buy now, pay later. So well, we got to have that built into our system. Those are the kind of changes there, not short-term changes. This is, ups and downs from the economy. We capture that, the system can handle that. But where are the payment trends going? Where do we invest to really understand where consumer or business payments are going? The payments need to be smarter, they need to be faster, they need to be safer. All those kinds of things, that’s where we’re investing. But that’s not from week on week. We look out two, three years, and then we make those technologies available for our customers, which are generally banks or large merchants or airlines. Those are our customers.

Copy Link“Buy now, pay later” & evolving payment methods

SAFIAN: You mentioned buy now, pay later, a business like Klarna that went public last year. Is the credit card “buy now, pay later?”  What’s the distinction? Why do people get so excited about it?

MIEBACH: It’s yet another payment choice out there. So payments have not been more competitive than they are today. So you can pay in stablecoins, you can have a push payment, you can have a prepaid payment. You can have a buy now, pay later. This goes straight to essentially a personal loan kind of equivalent. So those are choices. And those are the choices that if we see them amongst consumers or the customers of our customers, then we make them available.

If you are a buy now, pay now – a pure play company – you’re going to find large merchants, large brands that are going to have these offers on their websites and in their stores if they have physical stores. The way that we did it, we built it just as an offer into our network. So wherever MasterCard is available, one of our acquiring partners can offer at the checkout terminal in an in-store and someone can buy now, pay later. So JP Morgan or Galileo are partners like that of us, they make that pay available.

So the initial craze of buy now, pay later has died down a bit. I think it’s a very credible choice. We offer it. And a lot of young people think this is a good idea because it gives you more planability of your interest payments and all that. We also think loans on cards where you say, let’s say you pay $500 on a card and you turn that into three payments and many banks just offer that and it’s not going into a buy now or pay later route, but it’s the same outcome. So in the end, people want more control over their finances and more flexibility to buy bigger things that they maybe cannot afford in the moment. And different solutions to that. We’re all about consumer choice and we make all of that available.

Copy LinkHow MasterCard CEO thinks about branding

SAFIAN: You’re also a brand.

MIEBACH: Right.

SAFIAN: I mean, and I’m curious how you think about distinguishing that brand going forward. This term like, “What’s in your wallet?” has become ubiquitous, but that’s Capital One. In some ways, your customers become your competitors. Or how do you think about distinguishing yourself in that kind of a noisy, evolving market?

MIEBACH: So branding in our business, it’s about trust. So you’re fulfilling a payment transaction. It’s about somebody’s money, that it’s hard-earned money. So what’s going to happen if something goes wrong? So if you see the two interlocking circles of our brand, you know it’s going to work. It’s always on. And if something goes wrong, I can complain. And if I didn’t do that transaction and I prove it, we will get your money back. So that is what happens when you deal with MasterCard.

So “What’s in your wallet?” is great, but what I personally prefer is “Priceless.” That’s one of the most iconic advertising campaigns. We have invested in that a lot. A bank is generally a rather local institute. Capital One is mostly in the United States, but they have customers that travel around the world. So what do we bring? We bring access to, let’s say, Fast Track in airports. How do you get into the leading restaurant in the city of your choice during your Christmas holiday? Or how do you get into that Live Nation concert while the tickets have been sold out? Those are all sponsorship partners of ours. So they’re all part of our investment into our brand.

SAFIAN:  I’ll sometimes ask a version of this question to an auto company CEO about what they drive.

MIEBACH:  Right.

SAFIAN:  Like, “What cards do you carry around? Do you sometimes use a Visa or American Express to test them out?” They’re like, “No, I’m never going to touch anything but having a MasterCard in my wallet.”

MIEBACH:  Bob, if I had a wallet, so generally it all lives on my phone. That’s the first thing. The key word you just use is test out. So I test out a lot of our own cards. So try this new program, try that new program. And how would I ever know how it feels as a consumer if I don’t use competitor products? You just have to be careful when I pay with what so people don’t misinterpret me paying with another brand and saying, “You have an issue with that?” No, it’s really, I got to know how it feels.

And I used to be our chief product officer, so I call our chief product officers and say, “Hey, I think there’s something that we could do better or differently.” And I encourage my team to do the same thing. We got to know what’s going on.

Copy LinkThe shift to contactless payments

SAFIAN:  You don’t carry a wallet in the same way. And obviously we’ve had this drastic evolution from physical cards and checks and even cash to contactless tap and digital wallets.

MIEBACH:  Right.

SAFIAN:  Is this new standard going to stay or do you think things will keep moving to things like biometrics or face scanning? I mean, I know you’ve talked about more personalized payments. Is that what you mean?

MIEBACH:  That’s not quite what I mean. But when you think payments, it’s a constant evolution, so it’s not going to stay where it is. It took 10 years for contactless to get what it is today. So you tap with your phone, you tap with your card. It’s about two-thirds of global transactions on our network are now contactless.

What is now a big driver for the next kind of experience is where checkout really becomes a non-issue. It just going to disappear. So we put a lot of focus on making checkout a non-event, and an enabling technology for that is tokenization. So you take your card data and you turn it into a one-time code that can only be used for the transaction that’s securely shot between the different participants and the payment ecosystem, very safe. Now you can do the same thing with your biometric identity, be your fingerprint or your facial, and that comes along with that transaction token and anybody on the other side can see that is the transaction and it should go through. So it increases security dramatically.

So we invented tokenization in the payment side many years back, and it’s now scaling. So we made a commitment starting with Europe that by 2030, every transaction will be tokenized. Really the checkout moment is just going to really recede to the background.

SAFIAN:  More choice, more opportunities, easier and safer transactions. Michael paints a fairly rosy picture for the future, but he’s also quite aware of the double-edged nature of progress that AI and global markets and disruption require new perspectives and new vigilance. We’ll talk about that and more after the break. Stay with us.

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Before the break, MasterCard’s Michael Miebach shared insights about the 2025 holiday shopping season and what it’ll take to differentiate a brand in 2026. Now we dig into AI’s impact on the security of financial transactions, what he’s doing to unlock new opportunities for MasterCard, and the lessons that people most miss about global markets. Let’s jump back in.

Copy LinkAI, cybersecurity, and the future of fraud prevention

With AI, I worry sometimes that by doing a show like this, someone can take my image and can deepfake me. And if my face is my access to my financial life, how do we protect against that?

MIEBACH:  First of all, I’m real, so that’s good. This conversation is actually real. We recognize there’s an arms race going on, and AI is fueling the arms race. So there’s those of us that defend the digital economy and then there’s the hackers and the fraudsters.

So tokenization is only one aspect of the arsenal of tools that we need to deploy. For example, the speed with which you type on your device, your device can tell if this is a left hand or right hand. And let’s say the fraudster types with a different speed, a different pressure, and is recognized, “Well, that’s not… Cannot be the same person.” Then there’s location data. Well, you’re actually in another place because you just did a transaction over here somewhere, these transactions come from somewhere else. Or it’s completely out of your buying pattern, and that would also be different. So there’s multi-layered security.

Where the journey is really going is to leverage generative AI for cybersecurity and fraud prevention is where you start to predict what is the most likely next fraudulent card number or the next card number that will be frauded. Let’s say your card details, for whatever reason, you’ve stored them with some merchant a few years back, you’ve even forgotten that and that merchant is hacked. Those kinds of scenarios happen all the time. So what we do through a company that we’ve acquired in December 2024, Recorded Future, we scan the world out there and all the corners of the internet and dark web to see where there is fraudulent card data that’s out there. And then we flag that to your bank. So both sides are arming up.

And we’ve invested, I think over the last six years, like $11 billion into our safety and security. So this is a big topic to stay ahead of the game. There’s predictions that when you look up to 2030, that it’s about $15 trillion of fraud out there by 2030. If it were a country, internet fraud, that would be the third-largest country in the world. So there’s a lot going on. It’s a big part of our business and there’s a big part of us saying that we’re promoting trust and payments across all types of payments because we’re investing into that.

SAFIAN:  Yeah, no, AI is a great tool for identifying potential fraud, and it’s also a great tool for perpetrating fraud.

MIEBACH:  Exactly.

SAFIAN:  And it’s an ongoing battle. We’re not really sure where that’s going to net out.

MIEBACH:  Somebody comes up with the latest cool technology, but it’s just cool and not safe. That is what standards are designed to do. So we’re partnering with Google and others to do exactly that.

In the world of agents doing payments on behalf of people in an AI world, you’ve got the next kind of open flank if you don’t put in standards early. So collaboration is really important amongst the industry, but also then with the regulator. So that safety and security is recognized by regulators in a way that doesn’t stifle innovation. And that’s where we spend a lot of time with regulators and governments around the world on the same thing.

Copy LinkHow MasterCard is prioritizing agentic AI

SAFIAN:  You’ve been working with OpenAI and Google and Cloudflare on agentic commerce standards. Is this vision of AI agents doing buying for us? Is this a near term reality, or do we still have a long way to go before that can come to fruition in any substantial way?

MIEBACH:  It’s a great question. I don’t know the answer to that, but I can tell you a lot of people are going for it right now. The question is, will this be a zero-sum game? This is now the only thing I’m going to do, most likely not, because we’ve not seen these complete changes with new technology emerging. I think it’s more of a choice. I think we see gradual change. But we will not see gradual change. If you deal with an agent and that agent is not an accredited agent that is known and understood in the payment network as in that is actually the agent that it claims. And that’s problem number one that we solve, which we have solved, is MasterCard agent paying.

And the other problem that we solved is what happens if something goes wrong? How do you say, “Well, actually I never asked the agent to buy this”? How do you prove that? So there’s an audit trail there. There’s a lot of technology behind it to do the same thing that happens in payments today where you could just say, “Well, I never did that. ” So we’re just doing that.

And I think with where we are on that, it is now following the same standards. So this is kind of live now. Then we have a real opportunity here that might be a significant change. I think agentic commerce and agent-driven purchases on behalf of a consumer can also level the playing field in terms of competition on the merchant side. So our small business can now compete in a very different way because the agent looks at everything that’s out there. Joe’s travel shop somewhere, they can compete. And because they’re recognized, participate in the ecosystem, they will be on this level playing field.

So I find that an exciting thought, more choice for consumers, more competition, a chance for small business. I think that has a lot going for it. So maybe we see some shifts, but I don’t think it’s a dramatic change.

Copy LinkInside MasterCard’s approach to AI

SAFIAN:  As you look at how AI will impact your business, how much do you think about what you build yourselves versus what you would acquire or partner to use?

MIEBACH:  So what sets us apart in a world of AI or what sets anybody apart in the world of AI is your data set models. So all those kinds of things are going to commoditize over time, but the data that you have is absolutely central. And that’s how we started our conversation talking about our data. It’s non-personalized data, but it’s global data, it’s high frequency data, high quality data. We have like 19 million rules that we apply to sanitize our data and then start to extract insights from that. Now, that puts us in a really good position in the world of AI.

So when it comes to building agents, do I see ourselves in the business of building agents? No, that’s really anyway not our business as a network. We’re an AI company because we have a lot of data, and we use that data to drive better insights and drive more value.

SAFIAN: I do hear from some folks that there’s a push to sort of integrate this, but they don’t necessarily see the value from it yet, commensurate with what they have to invest in it.

MIEBACH:  I think most company leaders you would talk to, everybody’s trying to make their own operation more efficient on customer service and so forth. We do the same, and we see some good value there. I find it’s more interesting when you apply it on the product set and what are we selling and how are we driving value for others?

Let’s go back to the cybersecurity side of things. So we’re leveraging generative AI there to scan what is out there, predict the next fraud. This particular solution is called masked threat intelligence. In the first six months of market testing, we have taken down 9,500 fake merchant sites. We saved $150 million in fraud. Now that’s real value. That is not real value we would’ve been able to create with machine learning and additional rules-based artificial intelligence. So this is genAI at work for the next generation. So there is real value there, but it’s going to transform the world because we’re looking at AGI that’s not that. It’s very specific use cases that make a lot of sense and drive value right now, and that’s actually where our focus is.

Copy LinkLessons from global commerce

SAFIAN:  You mentioned the global nature of MasterCard’s business. You operate all over the world. You personally worked in Africa and the Middle East. I know business media tends to be quite US-centric. And I’m curious what you think is being overlooked. Are consumers the same or different in different places? What lessons have you learned about the global consumer or if there’s a global consumer?

MIEBACH:  There are things that are commonly true. People want safety, security, but then the circumstances are very different. If you go to an emerging market into a rural area, what means an easy payment if it’s on a feature phone versus a smartphone, that’s a whole different just engagement. There might not be a bank available. So you’re actually doing this through your phone company.

Circumstances, infrastructure, all that is very different. In Africa, most of the financial services are driven through phone companies, and those are our partners. There are no limitations through legacy technology in some of these markets. You just think of things in a very different way because you’re not held back by legacy. Technology built something brand new, which we then export and say, “This is actually great. So we’re going to take that to other parts of the world.” The leapfrogging idea out of emerging markets, I think that is overlooked to your question.

Back to the arms race, the fraudsters and hackers don’t care about borders. They don’t care about countries. So if we have a world of digital islands where different governments do their own thing and they don’t agree that cybersecurity is an issue that needs common tackling, then we’re going to have a problem. I think that is overlooked.

Copy LinkWhat’s at stake for MasterCard right now?

SAFIAN: Given all these different pieces that are moving around and what you’re managing and looking at, what’s at stake for MasterCard right now?

MIEBACH: If you look at the tectonic shifts in the world that provides, certainly when it comes to technology and payments, some interesting discontinuities. Agentic commerce, for example. Suddenly there’s this additional entity, the agent, which is run by some company potentially. It’s like the large LLM company. So that’s an opportunity for us to engage in a very different way and create a lot more value for our shareholders and for MasterCard by engaging upfront, being proactive, leaning in to stable coins and discontinuity.

So I think our mindset of we will always lean in, it’s always providing choice, is the right mindset. We just have to do it and have to be out there and have to be out there fast. When the GENIUS Act was signed last year, we were all there cheering and said, “This is a good thing. It’s a discontinuity.” And we’re looking for discontinuities to provide more value in a fast-changing world.

What we cannot do is look in a rearview mirror and say, “Hey, what we have works,” and it does, but I think there are many more choices coming. So constructive, competitive paranoia I think is the mindset we need to have. And then I think what is at stake is also an opportunity for us.

SAFIAN:  Well, Michael, this was great. Thanks so much for chatting with us.

MIEBACH:  Well, thanks, Bob. I appreciated the conversation.

SAFIAN:  I want to double click on the phrase Michael uses at the end of our discussion, “constructive, competitive paranoia.” It’s a compelling concept, especially for a world facing so much transition. To turn discontinuity into opportunity, we need a mindset that keeps us on our toes and also open to new ideas. That openness is the constructive piece, which is so critical.

I also have to tip my hat to Michael for acknowledging that he uses competing products to test them out. The fact that he’s wary about being seen doing so reflects the unforgiving nature of our media ecosystem. But in this arena, as in so many business activities, a little bravery is worth the risk. I’m Bob Safian. Thanks for listening.