Thank you for joining us for Mastercard's Q1 2020 Earnings Conference Call. I would now like to turn the call over to Warren Kneeshaw, Executive Vice President of Investor Relations. Please proceed.

Thank you, James. Good morning, everyone, and thank you for joining us for our first quarter 2020 earnings call. We hope you and your families and coworkers are all safe. With me today are Ajay Banga, our Chief Executive Officer; Michael Miebach, our President; and Sachin Mehra, our Chief Financial Officer. Following comments from Ajay, Michael and Sachin, the operator will announce your opportunity to get into the queue for the Q&A session. It is only then that the queue will open for questions. Due to the length of our prepared comments today, we plan to allow for an additional 15 minutes for questions, if necessary. You can access our earnings release, supplemental performance data and the slide deck that accompany this call in the Investor Relations section of our website, mastercard.com. Additionally, the release was furnished with the SEC earlier this morning. Our comments today regarding our financial results will be on a non-GAAP currency-neutral basis, unless otherwise noted. Both the release and the slide deck include reconciliations of non-GAAP measures to GAAP reported amounts. Finally, as set forth in more detail in our earnings release, I'd like to remind everyone that today's call will include forward-looking statements regarding Mastercard's future performance. Actual performance could differ materially from these forward-looking statements. Information about the factors that could affect future performance are summarized at the end of our earnings release and in our recent SEC filings. A replay of this call will be posted on our website for 30 days. With that, I will now turn the call over to our Chief Executive Officer, Ajay Banga.

Thank you, Warren, and good morning, everybody. Our first quarter started off strong and continued to build off the solid trends and performance that we had in 2019. But as you all know, as the pandemic developed and spread, it impacted our first quarter performance. However, the strength in our services-related revenues shows that the strategy we have pursued over the last decade to diversify our revenue streams is paying off. Now, this virus has created a truly extraordinary challenge that we need to address together. Like everyone else, we're trying to do our part. Post the execution of our grow, diversify and build strategy, we've built on the solid foundation of our technology, data, brand and our wonderful people. That's put us in the fortunate position of being able to support our clients and partners throughout this difficult period. At its core, this is a health crisis, and therefore, the public health response is the most important policy response in the near term. It is the critical first step to getting the world's economies back on track. Coordinated efforts, such as the sustained implementation of social distancing and the scaling of our healthcare capacity to address increasing needs, are having a positive effect. The company's future performance will depend on the implementation of successful testing processes and the development of effective prophylactics, therapeutics and vaccines. We are contributing through our investment in the Therapeutics Accelerator together with The Gates Foundation and Wellcome Trust. In the meantime, fiscal stimulus packages are being introduced across many markets, which will be critical to provide relief during the downturn for individuals, small businesses and others who are particularly hard-hit. We're also seeing strong monetary policy efforts across a number of countries, which will be particularly supportive as the recovery takes hold. The shape and speed of the recovery will ultimately be determined by the effectiveness of these policy initiatives. In the meantime, we are helping out. We've joined forces with Onward U.S., a coalition of tech partners and foundations that are addressing displaced workers across the United States. We're providing necessary resources to support the unique needs of small businesses, with a commitment of $250 million in technology, product and insight assets, as well as philanthropic support. Now, let me shift gears for a moment to tell you how we are looking at this on the ground. We have spent some time together as a team on developing a framework that helps the entire company. Think about the progression through four distinct phases: containment, stabilization, normalization and growth. Containment includes mitigation initiatives like travel restrictions and social distancing that are implemented by public authorities in an effort to bend the curve and contain the growth in new COVID cases. From a payment volume perspective, this phase is characterized by rapid contraction in spending levels. Portfolios of stabilization occur where these mitigation initiatives are largely complete and spending stabilizes around a new lower level due to mobility limitations, with a focus on buying necessities, aided by e-commerce. We believe we are currently in the stabilization phase in most markets. The next phase is normalization, where governments gradually relax mitigation practices and the environment becomes safer for citizens, enabled by broader availability of testing, tracing and improved therapeutics even before the rollout of an effective vaccine. We anticipate spending will begin to rebound during this phase, but not necessarily evenly. Some sectors, particularly where there is pent-up demand, like home improvement, clothing, healthcare, or domestic and intra-regional travel, will likely normalize earlier. Other areas, like mass entertainment and long-haul travel, will take longer to recover. We expect early signs of normalization in some sectors and geographies throughout the rest of this year. The final phase is growth, where spending levels gradually trend higher than pre-COVID levels. We believe a widely available vaccine and proven therapeutics will help bring this change to fruition. This four-phase framework is how we are running this business. You will hear us talk about progress in these terms as we move forward. Our metrics are being impacted, as you have seen, but our business drivers are rooted in more than just PCE trends. The secular shift from cash and check to electronic forms of payment is important, and we expect it to accelerate coming out of this crisis. We have worked hard to grow a balanced portfolio across credit, debit, prepaid and commercial payments, with a focus on strengthening share in debit and prepaid, which tend to be more resilient in times like this. We've diversified our business in terms of our customer base and geographies, as demonstrated with our presence around the globe. Our services lines, a significant portion of which are not linked to transaction levels, help us further diversify our revenue stream and are in demand. All of this is built on a strong balance sheet and liquidity, which allows us to execute our strategy to capture new payment flows and build new capabilities for the long term, both organically and inorganically. The near-term will no doubt look different than we expected just three months ago, but we're well positioned to make the most of the significant opportunities coming our way. Let me turn to what we are doing to address the situation today. We are focusing on the things we can control both inside our company and externally with our customers, governments and society. The health and well-being of our employees is the most important issue. Our offices remain open wherever allowed, but the vast majority of our employees are working from home. Many people are dealing with new circumstances and unexpected challenges. We are helping our employees in every way we can. We're providing them with additional health benefits and time off for those in need to care for themselves or their loved ones. We have assured our employees that there will be no COVID-19-related layoffs this year. Our network and systems remain fully operational based on the resilient core infrastructure we've built and regularly tested. We are helping customers mitigate risk by engaging them in scenario planning and leveraging AI tools to fortify their business continuity plans as they navigate the downturn. We're also reaching out beyond our four walls to support governments, many of whom we’ve worked with in the past, with an increased focus on their specific needs in light of the pandemic crisis. We are uniquely positioned to help them provide emergency payments to both people and businesses through our multi-rail solutions. We are facilitating specific COVID-related social disbursement programs around the world, reaching millions of some of the hardest-hit individuals, including in the United States through the Direct Express prepaid program, which enables about 90% of payroll and supports almost all state benefit payments in the U.K. and is now being leveraged to support payments to displaced workers and financial assistance to businesses in that market. We are involved in similar work in markets as diverse as Israel and Chile. There's a lot going on, but we're always thinking about what more we can do. So before we move on, let me just say, we will get through this. I have tremendous confidence in the ability of mankind to find innovative solutions in the face of difficult circumstances. And when confidence returns, it will. We expect the fundamental growth trends that have driven the company to return in force. We have a resilient business model that benefits from diversification, the ability to optimize existing products and solutions, and our capacity to introduce new value propositions, all of which contribute to our long-term growth. I'm going to turn this call over to Michael, who has all the operating teams reporting to him. I feel fortunate to have him working side by side with me as we navigate this unique time together.

Thank you, Ajay. Likewise. These are clearly difficult times, which is why we're leaning in with our customers to be the best partner we can be, especially now as we work through the containment and stabilization phases together and prepare for normalization and ultimately growth. We're staying closely connected and anticipating the needs of banks, merchants, governments, fintechs as well as end consumers, while executing on our strategic priorities, driving a secular shift to electronic payments, building new revenue streams, and capturing new payment flows, diversifying our customer base and geographic reach. All these have been critical parts of our strategy and they will continue to be key enablers driving our success coming out of this crisis. While remaining agile on how we manage expenses to ensure long-term growth, let me take each of these three areas in turn to give you an idea of how we are doing this. First off, the secular shift. With trillions of dollars of payments still being made by cash and check despite our best efforts, there's clearly an opportunity to drive new transactions to our products, both online and in-store. We've seen a dramatic increase in e-commerce during this time of low mobility, and we expect some of these behaviors to persist going forward. When we look at our switched volumes in April, card-not-present accounts for over 50% of volume, which is up from 40% last year. Our drive to offer customers expanded digital capabilities online and in apps is increasingly important, and we are doubling down on these efforts. For instance, by leveraging our Payments Gateway services, merchants can accept digital payments securely and easily, and our Simplify Commerce platform makes it easy for small and medium-sized businesses to set up e-commerce options within just a few days, which, of course, matters more now than ever. Underlying these digital transactions, our tokenization capabilities, which enable safe and secure purchases across every digital channel and bring benefits like improved approval rates, are incredibly important today. We have new commitments with FC in the U.S. and large e-commerce retailers such as JD.com in China to tokenize the cards on file. In-store, contactless is now seen by the WHO as the fastest, easiest, and healthiest way to pay, and is a key driver in the conversion of cash to electronic payments, especially now with consumers looking for a quick way to get in and out of stores without exchanging cash or touching terminals. We've seen 40% growth in contactless transactions worldwide in the first quarter. Our recent consumer insights indicate that habits created today will last beyond the current situation; more than half of new contactless users are saying they will continue to use contactless once this pandemic is over. We're enabling this by increasing contactless limits around the globe, and in our conversations with banks, we see a renewed commitment to accelerate the issuance of new contactless cards. Moving on to the growth pillar, we continue to win important credit, debit, prepaid, and commercial deals globally. Here are a few recent examples, including our expanded partnership with Sberbank in Russia, an expanded global commercial agreement with Brex, and extended long-term relationships with Banco Inter in Brazil. Afterpay has agreed to make Mastercard its preferred commercial prepaid and issuer processing partner. In the U.S., Dow is moving its commercial card business over to us, including T&E and purchasing cards as well as the new virtual card program. I'm really pleased to announce that we've won credit and debit programs with Live Oak Bank, a significant provider of small business loans in the U.S., which is particularly important in these times. I'd like to highlight the debit trend that Ajay mentioned. We've increased our consumer debit share globally over time and are leaders in several markets such as Brazil, India and multiple markets in Continental Europe. We believe that this, along with our global leadership in prepaid, will serve us well in the current environment and beyond. Additionally, we have products like digital debit, which allow issuers to offer their customers credentials that can be used online, even when their current cards don't have these capabilities. We have several examples this quarter, notably with cooperative banks in Germany working exclusively with Mastercard to enable more than 20 million customers with access to digital debit cards. Now let's shift the focus to our diversification strategy. We are making good progress in expanding our customer base, particularly with fintechs, where we've developed a leadership position. Recent wins include a new prepaid co-brand program with Credit Sesame in the U.S. and expanded relationships with N26 in around 80 markets globally. On the topic of diversifying geographies, we have looked forward to switching domestic transactions in China and are pleased to have received preliminary approval for our license application, which will allow us to set up our joint venture with local partners in UCC. We expect this process to unfold over the next year. Regarding the build pillar of our strategy, we have made efforts to invest through a combination of organic and inorganic means to build new revenue streams. This has not only accelerated our growth but also diversified our revenue, which is particularly valuable in these times. Our services lines are holding up well, despite the downturn, as a significant portion is not linked to transaction levels. For example, our customers are using our differentiated insights and analytics to help them assess, react and plan during the current crisis. We have implemented our unique test and learn capabilities acquired through our APT acquisition to address industry-specific needs. We're also working to address fraud, which is increasingly important as more transactions move online. The capabilities we have acquired through companies like NuData, Brighterion, Ethoca, and most recently RiskRecon, help us bring significant value to the ecosystem. With RiskRecon, we are providing cyber vulnerability assessments for small businesses and healthcare organizations, while Ethoca aids issuers and merchants in preventing fraud before it occurs. This breadth of our cyber intelligence services allows us to assist beyond payments by creating a digital identity framework. I'd like to update you on our progress in new payment flows, particularly real-time payments. Our real-time payments implementations are progressing as planned in the Philippines, Saudi Arabia and in the Nordics with P27. Our account-to-account rails are resilient in times like these, given the breadth of use cases to address and the recurring nature of these payments. In the U.K., we process more than 2 billion real-time transactions annually, which are growing at double-digits. Social distancing measures are pushing more day-to-day activities like person-to-person payments and home delivery services to digital platforms, which use Mastercard Send. We continue to see strong volume growth here, even with the slowdown in parts of the economy like ride-sharing. Additionally, we've observed strong growth across our cross-border assets, including Transfast. There's momentum in both P2P flows and B2C flows of disbursement use cases, including with First Abu Dhabi Bank, which has gone live with cross-border account-to-account remittances. On the open banking front, we are expanding a set of comprehensive solutions and services that we believe work for all players in the ecosystem. We are very excited to expand our longstanding relationship with Tesco in open banking, which is significant given the U.K. is a leading market in this space. We see the ability to facilitate the exchange of real-time information while protecting data privacy as a substantial opportunity as the landscape evolves. With all of this as a backdrop, we are actively managing our expenses. As the situation developed, we quickly advanced our expense framework with a focus on how to best support our customers and drive the long-term interests of the company. We are looking at each expense line and making adjustments based on market readiness and customer demand. While preserving our ability to invest in strategic areas, such as digital, services, geographic expansion, and the enormous opportunities we see in real-time payments, we can adapt quickly and adjust as circumstances warrant.

Thanks, Michael. As Ajay and Michael mentioned, this truly is an unprecedented time for us all. Before I get into the numbers, I would like to take a moment to acknowledge the resiliency of the team here at Mastercard. We have maintained focus in supporting our business, our customers and partners, and each other during this challenging period. In light of current circumstances, I will focus most of my comments today on the trends we have seen recently, but I will start by walking you through our Q1 results. On a currency-neutral basis, excluding special items and the impact of gains and losses on the company's equity investments, net revenue grew 5%, with acquisitions contributing approximately 1 percentage point to this growth. Total operating expenses increased 8%, which includes a 6 percentage point increase related to acquisitions. Operating income grew by 2%, and net income was up 3%, both of which include a 3 percentage point reduction due to acquisitions. EPS grew 6% year-over-year to $1.83, which includes $0.05 of dilution related to our recent acquisitions, offset by a $0.04 contribution from share repurchases. During the quarter, we repurchased about $1.4 billion worth of stock. Turning to page four, you can see the operational metrics for the first quarter, each of which was impacted by the pandemic starting in February and March. Worldwide gross dollar volume or GDV growth was 8% on a local currency basis and was positively impacted by an additional processing day due to the leap year, partially offsetting the declines due to the pandemic. U.S. GDV grew 6%, down approximately 3 percentage points from last quarter, with credit and debit growth of 7% and 5%, respectively. Outside of the U.S., volume growth was 9%, down 5 percentage points from last quarter. Cross-border volume growth was approximately 15% through January, driven by double-digit growth in most regions, but began to decline progressively through February and March as travel restrictions were implemented globally. This resulted in overall cross-border volume decreasing by 1% for the quarter on a local currency basis. I will get into more detail on the trends we are seeing in a moment. Switched transaction growth was approximately 20% through February, reflecting a strong recent trend supported in part by the ongoing adoption of contactless. We then saw declines in March, as stay-at-home practices were implemented, leading to a growth of 13% globally for the quarter. Card growth was 5%. Globally, there are 2.6 billion Mastercard and Maestro-branded cards issued. Let's turn to page six for highlights on a few of the revenue line items, again described on a currency-neutral basis unless otherwise noted. The 5% net revenue increase was primarily driven by transaction and volume growth, as well as strong growth in our services offerings, partially offset by a decrease in cross-border volume and higher rebates and incentives. As previously mentioned, acquisitions contributed around 1 percentage point to this growth. Domestic assessments grew 8% in line with the 8% growth in worldwide GDV. Cross-border volume fees decreased 2%, while cross-border volume decreased by 1%. The 1 percentage point difference is mainly driven by mix. Transaction processing fees grew 16%, while switched transactions grew 13%, the 3 percentage point difference is primarily driven by the strength in services, partially offset by mix. Other revenues were up 28%, including a 6 percentage point contribution from acquisitions, while the remaining growth was primarily driven by our Cyber & Intelligence and Data & Services solutions, which held up reliably this quarter. Finally, rebates and incentives increased 26%, reflecting recent deal activity, as anticipated. If you look at rebates and incentives as a percentage of gross revenues, you will see that they increased sequentially to 35% this quarter reflecting recent deal activity and the impact of the amortization of fixed incentives over a smaller gross revenue base. Now moving on to page seven, on a currency-neutral non-GAAP basis, total operating expenses increased 8%. This includes a 6 percentage point increase related to acquisitions, partially offset by a 3 percentage point benefit related to the differential in hedging gains and losses versus the year-ago period. The remaining 5 percentage point growth relates to our continued investment in strategic initiatives, including digital enablement, safety and security, geographic expansion, and new payment flows. Turning to page eight, I thought it would be worthwhile to update you on our status from a capital allocation standpoint. Our capital allocation priorities are to maintain a strong balance sheet, invest for the long-term growth of our business, return excess capital to our shareholders, and migrate our capital structure towards a more normalized mix of debt and equity over time. Despite the impact of COVID-19, we have generated strong operating cash flows in Q1 through the strength of our business model and prudent expense discipline. This strong operating cash flow, the temporary suspension of our share repurchase program and the $4 billion of debt raised in Q1 further strengthened our liquidity position. At the end of the first quarter, we had $10.7 billion in cash, cash equivalents and investments. We believe maintaining a strong liquidity position is prudent given the current economic environment. It gives us tremendous flexibility to meet our obligations and capitalize on new organic and inorganic opportunities that may arise. We have deals in the pipeline that we are actively examining. Lastly, regarding the share buyback program, we will reevaluate this as macroeconomic visibility improves and will opportunistically execute the program as we have historically done. Turning to page nine, let's discuss what we've seen through March and the first three weeks of April from an operating metrics standpoint. We are providing additional detail here to help you better understand the recent trends. Essentially, what you see is that through March, we were in the containment phase, with cross-border volumes and domestic spending declining as travel restrictions were implemented, followed by social distancing measures across various jurisdictions. The rates of decline have stabilized as these restrictions have taken hold, indicating early signs of the stabilization phase. Social distancing measures have been implemented at different times and to various degrees around the globe, therefore, not every location is in the same phase. Part of Asia moved first, followed by much of the developed world in March, and the rest in the last few weeks. Looking closer at switched volumes, you can see the impacts of social distancing measures on overall spending, starting progressively in March. The impacts have varied by category, with spending on essentials, such as groceries, pharmaceuticals, and utilities holding up well. Spending on discretionary items or those requiring mobility are down significantly, including categories like travel, restaurants, clothing, recreation, and gas. Not surprisingly, spending on healthcare services other than those related to COVID-19 has changed as well. The way people make purchases has shifted; card-not-present spending now accounts for over 50% of switched volume in April, up from about 40% in 2019, as e-commerce spending, excluding travel, has grown. Merchants have accelerated their omnichannel distribution efforts, most notably in restaurants and department stores to adapt to this shift. In total, switched volumes are down approximately 25% year-over-year in recent weeks, indicating early signs of the stabilization phase that Ajay mentioned. Early indicators have shown improvement across all regions, perhaps partially due to the early impact of fiscal stimulus, but it's still early days, and we are seeing stabilization continue. Moving forward, as social distancing measures are relaxed, we expect sectors hard-hit to begin to show signs of normalization, including spending on gas as people return to work. Some sectors where there is pent-up demand, such as clothing, home improvement, and domestic and intra-regional travel, will likely normalize earlier, while other areas will take longer to respond, such as long-haul travel spending and mass entertainment. Trends in switched transactions mirror those in switched volumes, being impacted by the same factors. We are noticing an increase in the use of contactless and card-present transactions, supported by increased spending limits we have facilitated worldwide. We expect this trend to continue. On page 10, I'd like to provide a bit more color on the cross-border trends we've seen recently. Total cross-border volume appears to be leveling off, down approximately 50% year-over-year, indicating early signs of the stabilization phase. To better understand these numbers, it’s best to split cross-border spend into card-present and card-not-present categories. Each accounted for about half of our cross-border spend last year. As expected, card-present spend plummeted significantly as travel restrictions and social distancing measures were implemented, and has since bottomed at a minimal level. Thus, there is little room for further deterioration. Conversely, card-not-present spend, which is the yellow line in our charts, has been more resilient, down approximately 25% in April. Notably, this includes significant declines in online travel-related spend. Yet, if you exclude online travel, card-not-present spending is up approximately 20% in April, demonstrating the resilience of this aspect of cross-border activity. In summary, the normalization of cross-border spend relies on the relaxation of travel restrictions, while returning to the growth phase depends on improvements in consumer confidence, which is tied to the availability of effective therapeutics and, ultimately, vaccines. Turning to our outlook going forward, we will not be providing a forward view for either the second quarter or the year given current uncertainties. However, we intend to provide periodic updates to our operating metrics throughout the quarter to help you understand the trends we see. Consistent with this approach, we are also withdrawing our 2019 to 2021 performance objectives at this time, which we will reconsider as we gain better visibility. A few additional comments to assist with your modeling: First, regarding cross-border, inter-regional travel has been more significantly impacted than intra-regional travel in Europe. Thus, an increased percentage of cross-border volume consists of intra-Europe transactions, which yield less than inter-regional transactions. While some of our services revenue is tied to transaction levels, a significant portion we generate from services is not. This helps our service lines diversify our company's revenues, something we expect will continue to positively impact us over the long term. We've seen strong demand for our data analytics and cyber solutions, and in the second quarter, we expect services growth to continue to outperform our core products. You should, however, expect growth rates to decline sequentially in the second quarter but remain positive overall. This decline is due to the dependence of some of our Cyber & Intelligence services on switched transactions, which we expect to drop in Q2, as well as social distancing measures affecting our ability to execute projects at customer sites, impacting both transaction processing and other revenue lines. We anticipate services-related revenues to accelerate as switched transactions normalize and mobility restrictions ease. Separately, we expect rebates and incentives as a percentage of gross revenues to continue increasing sequentially, reflecting deal activity and the amortization of fixed incentives over a smaller gross revenue base. Lastly, in terms of operating expenses, as Michael mentioned, we are carefully managing expenses to ensure we can invest in strategically important initiatives. We have ramped up efforts here and now expect operating expenses, on a currency-neutral basis, excluding acquisitions, to decline at a low single-digit rate in Q2 versus a year ago. Other factors to consider: Foreign exchange is expected to pose a 1 percentage point headwind to revenue for the quarter and the year, while being a tailwind to operating expenses to a similar magnitude. Acquisitions will contribute about 1 percentage point to revenue and 6 to 8 percentage points to operating expenses for both Q2 and the year, assuming the transaction with Nets closes in the third quarter. In terms of the other income and expense line, we will now be at a quarterly expense run rate of approximately $100 million, given our recent debt issuance and prevailing interest rates. This does not include gains and losses on our equity investments, which are excluded from our non-GAAP metrics. Regarding tax, you should assume a tax rate of approximately 17% to 18% for the year, assuming the geographic mix of the business doesn't change significantly. Ultimately, as Ajay said, we will get through this. We are seeing early signs of stabilization and the impacts of fiscal stimulus. We are well positioned to navigate this period of uncertainty and emerge ready to tackle the significant opportunities ahead. With that, I will turn the call back over to Warren.

Thanks, Sachin. James, we're now ready for the question-and-answer session.

And our first question comes from Craig Maurer with Autonomous. Go ahead, please. Your line is open.

Yes, thanks for taking the questions and especially for the additional detail, hope everyone is well. So wanted to focus on two things. One, if you could talk about the exit rate at April 21st? You know that saw a nice improvement. How much do you think is related to recent stimulus efforts and how sustainable do you think that is or dependent on continued stimulus efforts? And second, when we think about cross-border, I was hoping you could help us understand how much of that, the card not present, non-T&E cross-border spend is related to B2B versus consumer activity. Thanks.

Great, thanks. The first part regarding fiscal stimulus - while it's tough to pinpoint exact impact, it only started rolling out relatively recently. Remember, that's a substantial amount of money in the United States, but 60%-plus of our revenue comes from outside of the United States, and the trends Sachin mentioned show that in the third week of April, and the continuing trend for the first few days of the next week are global and across every region, so I can't provide a definitive answer. I wouldn’t assume that the improvement is solely due to fiscal stimulus.

Yeah. As Ajay mentioned earlier, even beyond the week ending April 21, we've observed the same trends continue in the following days. Globally, various countries are starting to relax some social distancing measures, and cross-border restrictions are also beginning to ease, which is contributing to stabilization in markets like Italy, Germany, and Austria. However, it's important to note that the shift to omnichannel is increasing among various merchants due to this crisis. As they transition to online channels, they are starting to see a positive impact reflected in spending on clothing, general retail, subscription services, and marketplace activities.

I'm a bit surprised there isn't more variation in the rebates and incentives line given the lower volumes. I understand there are both variable and fixed components, but with the contracts structured as they are, I'm curious why there isn't. Is it possible that there are many fixed components? Additionally, can you share your thoughts on how cross-border rates and yields might affect margins?

Sure. So, Bryan, regarding rebates and incentives, remember the variable component fluctuates based on volume levels, while the fixed component remains unchanged. So the variability lies in the former. In the first quarter, despite the pandemic, we still experienced volume growth, and you will see that under the rebate and incentive line. Also, keep in mind that new and renewed deals are impacting that line as well. Overall, the fixed component will remain steady, while the variable can fluctuate, depending on what volumes trend out for the rest of the year. Regarding cross-border, there's much transparency provided on volume trends. There are three cross-border categories: intra-Europe, which is lower yielding, and inter-regional travel that splits into long-haul and short-haul. In terms of margin, intra-Europe tends to be low yielding, but as inter-regional volume returns, it will boost yields. Therefore, when modeling, consider these yield differences.

One last point about margin: our company has various aspects to its margin mix. Our services business has increased in revenue contribution over the years, leading to improved margins overall. While cross-border may be down, we are focused on diversifying our business to drive growth.

Following up to Bryan's question regarding the incentives line—can we assume that deal activity may pause here or could accelerate as clients embrace contactless products? Also, regarding M&A, has your appetite changed due to pandemic impacts or valuations?

Look, we're running our business to grow market share, which includes ongoing interactions with customers to execute deals. Our visibility remains strong, and the pipeline reflects this active activity.

Regarding M&A, there are opportunities we've been pursuing pre-pandemic and those conversations continue to develop. Our focus is not solely on price; the value they bring as a partner is what matters. We see potential for others wanting to align their businesses with ours for broader access to distribution, capabilities, geography, and liquidity. On valuations, we remain focused on acquiring for the right reasons rather than just to capitalize on any dip.

The areas of focus on M&A have not fundamentally changed. We're staying true to our growth strategy in data analytics, cyber, new payment flows, and open banking, which are still top priorities.

Can you discuss the long-term recovery path for cross-border travel? What conditions need to be in place for governments and consumers to feel comfortable reopening borders?

It's difficult to predict the timeline precisely, but we're learning from China, which is in a normalization phase. Their domestic travel is beginning to ramp up, with public transport open and food services restarting. Cross-border travel will likely open in corridors first, such as smaller nations neighboring each other. The aviation sector will need time to reactivate, but we believe as restrictions ease, domestic travel will return before international travel does.

Evidence indicates that once businesses feel comfortable with the therapeutic and confidence increases, leisure travel may bounce back before corporate travel. Ultimately, how quickly this happens is uncertain since the pandemic has created an unprecedented situation. We're focused on maintaining liquidity and managing through recovery phases as best as we can.

Given the impacts of the pandemic, what are the structural changes you see that could benefit the payments industry? Similarly, could the challenges of reduced travel impact your long-term outlook?

Michael will take a lead on this. What we know is that consumer behaviors are stabilizing and going digital will remain more prominent. E-commerce and cash displacement will drive contactless adoption; more merchants will leverage online sales, and our B2B space will expand through digitization of the supply chain.

The push towards e-commerce and digital services will surely continue, and our digital capabilities will help in addressing the growing demand. The acceptance side is essential for us in order to increase our footprint as more establishments pivot online. The heightened emphasis on cybersecurity will drive investment in this space, and we're focusing on accomplishing more in digital identity, too.

Could you detail your cost containment strategies moving forward, especially should economic conditions worsen? Additionally, how will new relationships impact revenue? Will it be immediate or stretched across several years?

In terms of relationships, you should expect immediate revenue with existing customers, while new relationships might be staggered over longer periods, particularly with fresh portfolio launches. When it comes to expenses, we aim to preserve strategic investments while remaining nimble to adjust as the market fluctuates.

Our expense management follows two guiding principles. We will invest in long-term initiatives while also being mindful of market readiness and customer demand. There are many strategic investments we're willing to put on hold until the environment stabilizes.

I think we've reached the end of our allotted time. Ajay, any final thoughts?

Thank you for your questions. Though the COVID-19 crisis has created challenges, we are seeing early signs of stabilization. We believe our diversified business model will position us well to capitalize on opportunities as we normalize and ultimately return to growth. Our expense management allows us to focus on areas that differentiate us and foster market share, and we aim to deliver value through services, data analytics, and cybersecurity enhancements. I am confident in our path forward, and I appreciate your continued support of Mastercard. I look forward to the day we can reconnect in person. Thank you.

Thanks everyone.

Thank you. Bye-bye.

This concludes today's conference call. You may now disconnect.