NEW YORK — Ajay Banga leads a company that is synonymous with plastic, yet he encourages his staff to focus on cash.
The chief executive of MasterCard sees the fact that 85 percent of all transactions around the world still take place in cash as an opportunity. He argues that targeting those purchases and payments provides far bigger growth prospects than competing for the comparatively small share of debit and credit transactions already handled through processing networks like the one he runs.
As he jets from continent to continent — Banga’s schedule keeps him away from the office for at least two weeks of each month — the former banking executive in some ways personifies the Purchase, N.Y.-based company that gets more than half its revenue from outside the U.S.
The India-born son of an army general has roots on three continents, having settled in Manhattan after living in London. Exerpts, edited for clarity, from a broad conversation with Banga:
Q: What do current consumer spending patterns say about the U.S. economy?
A: There is definitely, for the last six to nine months, something changing in terms of spending. Whether it will persist for another year or two will depend greatly on how employment behaves. And it will depend greatly on how housing prices actually behave. Housing prices are the one I’m most nervous about right now, because I don’t know where the bottom is. The reason spending is picking up is, I believe, is that the 90 percent of the people who are employed, compared to the 10 percent who are not, no longer believe their jobs are at risk.
Q: Has the recession created a lasting change in how consumers use credit?
A: My general sense is no, but there is some kind of temporary impact on how people think about credit. The recession created a change for the period of time that people were suffering really seriously from unemployment fears. Those who no longer feel this fear of unemployment are beginning to spend a little more.
Q: Are rising gas and food prices affecting behavior?
A: The fact that gas prices are going up means people are spending a little less on other things. But I’d be very careful to draw too many conclusions from a month or two. Everybody expects food prices to go up 4, 5, 6 percent this year. I suspect if food prices increase that much, a certain segment of society, which is relatively budget strapped, will cut back. But will that impact the majority of the spending in the United States? Many people spend only 5 to 10 percent of their income on food, so not really. When you look at the total, you may see a more neutral impact than if you looked at each segment of consumers.
Q: How would you describe your management style?
A: I’m very passionate, but I take time to work my passion. I mean I study something and I try to understand both sides of the debate because if you’ve been a banker and worked around the world long enough, you kind of have to understand both sides of the debate. But you have to have a point of view, and so I believe in having a point of view on an issue and not ducking the issue.
Q: Does that make for an intense workplace?
A: I kind of call a spade a spade, and I don’t have too much time for political niceties, although that sometimes gets me into trouble, in truth. It does. And I’m learning to be a little more careful, sometimes. . . . Sometimes, not always. That’s the truth. I am actually very easygoing, I encourage my colleagues to say things to me that they would never have had a chance to say to most bosses. That is because I spend too many hours in an office, and they spend too many hours in the office to be stressed out at each other.
