Ajay Banga Takes Cash-Bashing Career on New Path to World Bank

Jenny Surane
·4 min read
1
  • Oops!
    Something went wrong.
    Please try again later.

(Bloomberg) -- President Joe Biden’s proposed World Bank president has long had one major enemy: cash.

Most Read from Bloomberg

The former chief executive officer of Mastercard Inc., Ajay Banga has spent years decrying the ways that consumers reliant on paper currency are left out of formal economies. With his new role, Banga would be atop a lender that is meant to fight global poverty and that Biden hopes will also expand its financial power to contend with climate change and improve public health.

“His efforts have helped bring 500 million unbanked people into the digital economy,” US Treasury Secretary Janet Yellen said in a statement. “This experience will help him achieve the World Bank’s objectives of eliminating extreme poverty.”

The son of an officer in the Indian army, Banga spent his childhood moving around the South Asian country. He ultimately graduated from Delhi University with a bachelor’s degree in economics.

Banga, 63, is known for his love of fine wines and once told the Financial Times he owns “practically every Elvis Presley album that you could think of.” He’s also a fan of composer and record producer Quincy Jones, pop musician Lady Gaga and the New York Mets baseball team.

Banga began his career at Nestle SA, where he spent more than a decade in sales, marketing and management roles before moving to PepsiCo Inc., where he helped launch the company’s fast-food franchises in India. In 1996, he joined Citigroup Inc.

He rose through the ranks quickly at Citigroup, which, at that time, was the largest financial institution in the world. In just four years, he was named business head of CitiFinancial and the US consumer-assets division, and, in 2005, was promoted to lead all of the bank’s international consumer operations.

In 2008, Citigroup named Banga head of its Asia-Pacific region, a role that gave him oversight of every single business line — from credit cards to institutional banking — in a geography spanning from Japan to India. Inside the bank, he was considered a candidate to ultimately take over as CEO one day.

Surprising Move

So it came as a shock in 2009 when Banga announced he was moving to Mastercard to become the payment network’s president and chief operating officer. Less than a year later, the Purchase, New York-based company promoted him to CEO.

Banga led Mastercard through a period of explosive growth, with purchase volume on the firm’s network more than doubling during his 10 years atop the company. Revenue and earnings nearly tripled during that time.

But he also squared off with regulators and lawmakers alike over the Durbin Amendment, a controversial law that limited the amount Mastercard and its rival Visa Inc. could charge merchants each time a consumer swiped a debit card at checkout. While banks collect most of that fee, it’s the payment networks that set the price.

The move was designed to help merchants, who have continued to complain that rising card fees force them to pass along higher prices to consumers — even those who don’t use cards.

After his departure as Mastercard’s CEO, Banga took over as executive chairman in January 2021 and spent much of the ensuing year helping then-new CEO Michael Miebach assume responsibility for key relationships with customers and regulators. Banga joined US investment firm General Atlantic as vice chairman at the end of 2021.

Unbanked Focus

All along, Banga was vocal about his disdain for paper currency. Even with the rise of smartphones and tap-to-pay credit and debit cards, use of cash has actually gone up in recent years — even in developed countries. The Federal Reserve said in May that cash transactions now account for 20% of all payments, up from 19% a year earlier.

In 2015, Banga took the stage with Jim Yong Kim, then president of the World Bank, and told a tale of a successful move toward card-based payments. Mastercard had been working with the World Food Programme to supply Syrian refugees in Lebanon and Jordan with prepaid cards to purchase food for their families from local supermarkets. The system allowed them to abandon the paper vouchers and food-rationing system the humanitarian agency had long used.

“Typically, you bought grain somewhere in the United States and you moved it by ship and truck all the way there,” he said. “You had leakage, which is a polite term for people getting their grubby fingers onto it, and you finally got to the end with 30% less than you thought you would get. We’ve changed all that.”

At that time, Banga said his company had already helped bring 150 million people across 50 countries into the formal financial ecosystem. He vowed that Mastercard would help bring 350 million more in the ensuing five years.

“Now I don’t mean only opening an account, whether a card or a phone,” Banga said. “It’s the usage of the account that truly determines whether you have become financially included or not.”

Most Read from Bloomberg Businessweek

©2023 Bloomberg L.P.