Sachin Mehra: Yes. David, it’s Sachin. I’ll just emphasize what Michael just said, right? He has mentioned on a couple of occasions today that payments drives value-add service and solutions and value-added service and solutions drive payments. It’s no different in Europe, right? For all the share wins we’ve had in Europe, for all the growth we’re seeing on the payment side, it creates new opportunities for us on the services side. And then vice versa, as you actually do deliver on those services, you get the benefit of additional data. When you get the benefit of additional data, you are able to help optimize existing portfolios, which again drives payment volume growth. And that’s not unique to Europe. It’s actually true for the way we run the business globally. But the fact that we are actually increasingly becoming more prominent in the payment flow enables that cycle to work quite effectively.
Operator: Our next question comes from Ken Suchoski with Autonomous Research.
Ken Suchoski: I just wanted to ask about the yields on the domestic assessment revenue line. That yield has declined year-over-year for some time now, and they came in a little bit lighter than some were expecting this quarter. I think you highlighted mix impacting the yields or the spread between revenue and volume growth. So could you just provide some more detail around the specific changes that you’re seeing in terms of mix? And could we get to a place where domestic yields are actually expanding year-over-year?
Sachin Mehra: Look, I mean, I’ll comment on the yield piece, because what you’re seeing effectively in the fourth quarter of 2023, when you look at payment network net revenue divided by GDV is what you see every year in terms of the sequential decline in yields. And that’s primarily being driven by the fact that, remember, in the third quarter of all years, we tend to have our strongest cross-border performance. And our cross-border tends to come with our best yields. And so what you’ve got is when you’re getting more bang for the buck for $1 of GDV on the cross-border side than you are on the domestic volume side. So that’s what’s causing for that sequential decline. You’ll see that as a pattern, which has existed in prior years as well.
Broadly speaking, I would tell you that, otherwise, there’s nothing unusual to call out on the payment network net revenue yield. The one reminder I’ll give you is that, we run the business not only to optimize payment network, net revenue yield, but overall net revenue yield for our company. Because again, it goes back to the question David asked right before you, Ken, which is at the end of the day, we’ve got to be in the payment flow. We’ve got to allow ourselves to have the opportunity to deliver services on those payments to generate additional revenue, which causes for overall net accretion in our overall net revenue yield. So I know your question is specific to payment network net revenue, but I just wanted to make sure you know that from our mindset standpoint, we’re looking at payment network net revenue yield as well as overall net revenue growth to the company.
Michael Miebach: I should say, earlier when I was talking about the payment algorithm, I said that we are putting great focus on our financial discipline. And we do it with revenues in mind and with services revenue in mind. So yes, it needs to add up to the overall net revenue yield, as Sachin just said. But I’m telling you, we don’t want to win every deal. We want to win the deals we want to win, and we’re pretty disciplined about it.
Operator: Your next question comes from Andrew Jeffrey with Truist Securities.
Andrew Jeffrey: I wanted to dig in, Michael, if I’m at a little bit more on your pay by bank initiatives. Can this be, especially as we see the emergence of networks like tax in Brazil, for example, can this be sort of a stand-alone growth driver in its own right? Or is it sort of folded into your overall comments on open banking? I just wanted to see if there’s an important distinction to draw as we think about go-forward growth opportunities.
Michael Miebach: Right. So I think both questions, your question and the previous question hit on an important point there. There is a particular point of interest for us at the intersection of open banking and payments. It enables — the open banking connectivity enables us to go after use cases that we otherwise wouldn’t be able to go after. So here’s additional data that is available that you can then combine in combination with an underlying RTP rail to make a profitable proposition for a customer, which is exactly what Chase Pay-by-Bank is. Basically, you debit your customer when there’s a balance, and that is what the open banking connectivity tells you. So that’s a good solution. If we look broadly around the world, Pix, UPI in India, FedNow, there’s a bunch of real-time payment systems.
And those are the kind of rails where we have experience. We have connectivity. In some, we operate them ourselves. So that is exactly what we’re looking at as one of the assets and the propositions that we will bring together for our customers. Now, more broadly speaking, when you look at Pix, when you look at UPI, one other thing to keep in mind is, here’s public sector doing a good job in pulling in more participants in the overall digital economy so we can come in with our solutions, our real-time payment solutions, our card-based solutions, but they’re basically extending the digital economy to create a tide that kind of lifts everybody’s boats, financial inclusion being the headline. So that’s something to consider. Somewhere in between, there are points that we will manage very carefully as in when these systems grow and they provide alternatives to our solutions that we compete and provide the best solution to consumers and to our customers.
