From Bathroom cleaner to Heading Mastercard - A success story.

Master who plays his cards right

In a meteoric rise through the business world, Ajay Banga has gone from cleaning bathrooms to heading MasterCard

By Suzzane Kapner and Peter Eichenbaum, Financial Times

Published: 00:00 September 19, 2010

Not many corporate chiefs would admit to having cleaned bathrooms as part of their training, but Ajay Banga, chief executive of MasterCard, is not your typical business leader. "Cleaning bathrooms," which he did in the 1990s while opening Kentucky Fried Chicken and Pizza Hut restaurants in India for PepsiCo, "made me very valuable to my wife", he says. "I'm called the bathroom fairy at home."

That willingness to poke fun at himself extends to his appearance. As a Sikh, Banga, 50, wears a turban and has a full beard, making for a striking contrast with Robert Selander, his predecessor and current vice-chairman. "Bob and I joke about it all the time," Banga says. "I know I look different from a lot of people around the world, but I don't view that as something that defines me."

His affability is disarming, but it also masks a competitive streak that propelled Banga from fast food to one of the top jobs at Citigroup, where he ran the global consumer bank, before joining MasterCard last year with a promise of quickly being promoted to chief executive.

Since then, he has set about shaking up MasterCard's sleepy culture. The company processes more than 22 billion transactions a year, at the speed of 140 milliseconds each, faster than the blink of an eye.

Its entire business depends on making sure each of those transactions clears without a hitch, a model that tends to reward reliability over risk-taking. "When somebody swipes a card in Guam and that card was issued in Bangalore, if it doesn't go through, that's the end of my so-called guarantee," he says.

To speed up decision-making, Banga has given lower-level employees more authority to negotiate contracts and has created a new division to better compete with electronic payment systems such as PayPal. The urgency Banga is trying to instil in employees also applies to him. Any request to which he does not respond within two weeks is automatically approved. "He operates on Ajay time, which is about 10 times faster than everyone else," says Josh Peirez, the head of MasterCard's business development unit.

An extrovert, who encourages staffers to drop by his office to discuss everything from the quality of the coffee in the cafeteria to world affairs, Banga can also be extremely blunt, a quality that has rubbed off on other executives. Selander says that Banga has taught him to be more direct in his feedback. "After two hours with Ajay, you know exactly what he thinks," he says.

At a leadership meeting in Dec-ember, Banga grew impatient when executives spouted too many platitudes. "I told them: ‘I'm not going to let this conversation end here. You're not being as forthright as you need to be.' " So he had the executives anonymously write down on index cards the five things that bothered them most. Their answers led him to slash the company's bureaucracy. "A lot of what we did came from these touchy, feely meetings," he says.

Nomadic childhood

Playing the role of corporate psychoanalyst is a world away from where Banga started. As the son of a lieutenant-general in the Indian army, who was transferred from post to post every two years, Banga had a nomadic childhood. "The moving around made me who I am," he says. "I make friends easily. I adjust easily to new situations. I was always the new kid on the block, so I had to learn to break into established groups."

He believes it also made him more open to divergent points of view. "When you come to the US and hear people talking about diversity, well, I grew up with it," he says.

In spite of his globetrotting, he has not abandoned his Indian heritage. On the 30-minute drive from his Manhattan home to MasterCard's I.M. Pei-designed headquarters in Purchase, New York, he tunes in to Sikh radio, which airs traditional hymns.

Yet, he is also thoroughly Americanised. He loves baseball (the Mets), listens to Quincy Jones and Lady Gaga and "owns practically every Elvis Presley album that you could think of".

Choosing chickens

After receiving a bachelor's degree in economics from Delhi University and an MBA from the India Institute of Management, he joined Nestlé in 1981 as a management trainee. Thirteen years later, Banga signed on as director of marketing for PepsiCo Restaurants in India. He was charged with doing everything from choosing the right-sized chickens — too big, and they do not fry properly — to working the register and, yes, cleaning those bathrooms.

When he learnt that PepsiCo was planning to spin off its restaurant division, Banga decided it was time for a career change.

He wanted to work for a large global enterprise and, as a standalone business, PepsiCo's restaurants would be a far smaller and less well-capitalised company. "I realised I was in the wrong place at the wrong time," he says. He accepted a job with Citigroup, where he briefly served as a debt collector before going on to become head of marketing for the consumer bank.

Although banking was an entirely different industry, he saw similarities to the restaurant business. "One is share of throat, the other is share of wallet." By the time he left in 2009, he had been promoted to chief executive of the Asia-Pacific division.

With his 50th birthday looming, Banga started to think seriously about what he wanted to do with the rest of his career. He considered teaching but couldn't resist the urge to run a public company.

So when a headhunter called him at his Hong Kong home late one night to talk about becoming the chief operating officer of MasterCard, he was intrigued.

He flew to Connecticut in March 2009 and met Selander at his home. The two talked for five hours. Banga came away thinking that "this was a job that used all of my skills, yet wasn't something I had done before".

The clincher: when the board offered Banga the job, it promised to promote him to chief executive by June 30, when Selander, who had run the company for 13 years, planned to retire from day-to-day management. Just to be sure, Banga negotiated a $4.2 million (Dh15.4 million) signing bonus that would have been his if MasterCard failed to make good on its promise.

Banga's accomplishments have certainly been financially rewarding. At a time when compensation has come under scrutiny, his $13.5 million pay package means he is earning more than the heads of Goldman Sachs and Bank of America.

Although success runs in the family — Banga's older brother Vindi was a former Unilever executive who now works for the private equity firm Clayton, Dubilier & Rice — Banga does not take it lightly.

"To join Citi 14 years ago as a lower-level executive in India and end up as one of the top people at the company, that's pretty good," he says.

·                     Born: November 10, 1959, in Pune, India.

·                     Education: BA in Economics from St Stephen's College in Delhi and MBA from the Indian Institute of Management, Ahmedabad.

·                     Career: 1981: Joins Nestle as a management trainee. Spends 13 years at the company in roles ranging from marketing to general management. 1994: Director of marketing and business development at PepsiCo Restaurants in India; he helped launch Kentucky Fried Chicken and Pizza Hut in the country. 1996: Joins Citigroup, where he eventually became chairman and chief executive of Citi's global consumer bank and, later, chief executive of the Asia-Pacific division. 2009: Joins MasterCard as chief operating officer and becomes president and chief executive on July 1.

·                     Interests: Lives with his wife and two children in New York City. Loves music, golf and baseball. Cheers for the New York Mets. Works with the Clinton Global Initiative on poverty. Member of the Council on Foreign Relations and the Economic Club of New York. Sits on the boards of Kraft Foods, the Asia Society and National Urban League. 
Visa, MasterCard decline

New York Visa Inc. and MasterCard Inc., the world's biggest payments networks, tumbled on Tuesday by the most in almost two months after an analyst said federal caps on fees and pending litigation may limit their ability to raise prices.

Visa, the second-worst performer in the Standard & Poor's 500 Index dropped 3.8 per cent to $65.48 (Dh238) on Tuesday in New York Stock Exchange composite trading. MasterCard declined 2.6 per cent to $193.03. Both companies were downgraded to "market perform" from "outperform" by Sanford C. Bernstein & Co. analyst Rod Bourgeois.

"Investors will need to get used to substantially lessened pricing power," Bourgeois said in a research note. "We see a higher probability that Visa's and MasterCard's stocks will be ‘dead money.' "Visa and MasterCard both have plunged 25 per cent this year as US lawmakers approved caps on interchange, or "swipe" fees, charged to merchants on each debit-card transaction.

San Francisco-based Visa and Purchase, New York-based MasterCard are also defendants in a federal antitrust lawsuit that may lead to lower interchange for credit-card transactions.

"If credit interchange were to be reduced, this would be another blow to sentiment for Visa and MasterCard," Bourgeois said.

The Dodd-Frank Act directs the Federal Reserve to determine interchange rates that are "reasonable and proportional" to the cost of processing debit transactions. MasterCard and Visa, which now set the rates and pass the money to card-issuing banks, may face pressure from lenders seeking to renegotiate their contracts.

Bank of America Corp. has said the debit caps could trim annual revenue by as much as $2.3 billion.

Visa and MasterCard continue to benefit as consumers worldwide shift from cash and cheques to plastic.

Spending in the US on Visa-branded credit and debit cards climbed 14 per cent in July, compared with the same month last year, and 12 per cent in August, the company said.