Michael Miebach
Chief Executive Officer at Mastercard
Thank you, Warren. Good morning, everyone from New York. I'm starting off with the key highlights for the quarter. We delivered strong revenue and earnings growth as we saw further improvement in our underlying operating metrics. Quarter 4 net revenues were up 28% and EPS up 46% versus a year ago on a non-GAAP currency-neutral basis. On the same basis, Quarter 4 net revenues are 19% above pre-COVID levels in 2019.
So with that let's take a look at the macroeconomic front. The outlook remains positive despite the recent supply chain constraints, geopolitical uncertainties and inflationary pressures. Although there has been a recent surge in COVID cases, there are signs that these may be peaking. By each of these areas merit monitoring, underlying spending trends remains strong, as consumers, businesses and governments have become more adaptable to a changing environment. In the U.S., economic growth remains solid with low unemployment and healthy consumer confidence.
According to our Quarter 4 SpendingPulse report, which is always based on all payment types, including cash and check, U.S. retail sales ex auto, ex gas were up 6.4% versus a year ago and up 10.9% versus 2019. In Europe, GDP growth has been strong, although recently impacted by mobility restrictions. As the impact of the Omicron variant reduces, we expect the economic growth to pick up in the coming quarters, in large part, thanks to considerable pent-up demand from the past year.
Spending costs shows that overall European retail sales in Quarter 4 were up 3.3% versus a year ago and up 1.3% versus 2019. In Asia-Pacific, vaccination rates continue to improve and we expect the economic recovery to pick up pace as both governments and businesses ramp up investment. The travel recovery in Asia-Pacific has lagged that of the rest of the world and has significant growth potential. The growth in Latin America is expected to moderate a bit following the rebound in 2021.
As it relates to COVID specifically, there are early signs that the Omicron surge will be relatively short-lived. The reality is that the tools we have to deal with the pandemic are more advanced than ever. 60% of the world's population is now at least partially vaccinated, effective therapeutics are becoming available, and governments are using more targeted measures to limit the spread. More malls have opened and have stayed open despite the recent variant. Although we've always said the path forward will not be linear, there are signs we are moving towards the endemic phase of the disease.
Looking at Mastercard spending trends. Switched volume growth continued to improve quarter-over-quarter. Both consumer credit and debit continued to grow well. Turning to cross-border. The recovery has continued with overall Quarter 4 cross-border levels now higher than those in 2019. Cross-border travel continued to show improvement relative to Quarter 3 levels, aided by border openings in the U.S., UK and Canada. While Omicron has had some recent impact on cross-border travel, we continue to believe that the cross-border travel will return to 2019 levels by the end of this year. Cross-border card-not-present spending ex travel, continue to hold up well in the quarter. So overall, the spending trends are moving in the right direction with some near-term travel related headwinds as a result of the variant.
Now turning to our business highlights. As outlined in our Investment Community Meeting in November, we remain focused on our grow, diversify, build strategy and our three strategic priorities, which are expanding in payments, extending our services, and embracing new networks. Here's an update on how we're progressing against each of those priorities. First, we're expanding in payments by growing in-person to merchant payments, scaling across other payment flows and leaning into innovation and new payment technologies. In aggregate, these targeted flows represent $115 trillion in opportunity. First off, we're driving growth in-person to merchant payments through new wins across the globe. In the U.S., I'm excited to announce that we're partnering with Chase and Instacart, a leading online grocery platform in North America on a new Instacart Mastercard co-brand program. This partnership marks an additional co-brand win with Chase quickly following the recent launch of the Chase Aeroplan World Elite Mastercard.
In addition, with First Interstate Bank's planned acquisition of Great Western Bank, we will flip Great Western's consumer debit, credit and commercial portfolios to Mastercard. And I'm happy to note that the consumer credit portfolio of Merit's Bank over 3 million customers will transition to Mastercard beginning in the second quarter. Merit Bank plans to leverage several Mastercard solutions, including our fraud prevention, consulting, open banking and loyalty services. Over in the Netherlands, we renewed our partnership with Rabobank, which includes the migration of 8 million Maestro cards to Debit Mastercard. We signed an exclusive deal with Westpac in Australia for the new banking-as-a-service platform. This platform will allow new players to leverage Westpac's banking capabilities. Afterpay, the first partner on the platform will connect Debit Mastercards through their money by Afterpay app.
And in the UK, the NatWest debit migration is progressing to plan as in the early stages of consumer roll-out. We're also expanding in payments by capturing new payment flows, including commercial, B2B accounts payable, Bill Pay, and cross-border remittances. For example, in the commercial space, we've expanded our relationship with Bank of America, where we'll be the lead brand for new commercial card issuance. We've also renewed and expanded our relationship with WEX, including the -- chosen as their strategic partner and adding open loop functionality to their millions of closed-loop fleet cards.
For B2B accounts payable, we continue to scale Mastercard Track, as WEX, BMO, BOK Financial, Melio and Deluxe will connect to the platform. We also launched the launch -- we also announced the launch of Mastercard Track Instant Pay, which uses machine learning to analyze and initiate automatic virtual card payments, streamlining processes for buyers and improving cash flow for suppliers. And we're driving new B2B Acceptance through a global partnership with Boost Payment Solutions with an initial focus on expanding the use of commercial card in seven key markets. We're addressing new payment flows and consumer bill payments as well. We recently announced the acquisition of Arcus to help deliver Bill Pay solutions and other real-time payment applications in Latin America. Arcus enables digital payments for the majority of household bills in Mexico and its connections with banks, fintechs and digital wallet providers across the region.
And finally, we continue to capture new flows in cross-border remittances. This quarter, we established a partnership with Travelex in Brazil, who will use Mastercard's cross-border services, send P2P transfers to the U.S. and Europe. For domestic disbursements in the U.S., we partnered with fintech processor, TabaPay to make Mastercard Send easily available to fintechs and merchants across multiple use cases.
Now shifting gear, we're also expanding in payments by leaning into payment innovation in areas like installments, contactless acceptance, and cryptocurrencies. Here are a few examples. Our open-loop Mastercard Installments program that we announced last quarter has been very well received, the U.S. launch is on schedule for quarter one. We're actively bringing new partners into the program as we announced the Middle East Africa earlier this week, watch this space. Now we're making great progress in expanding contactless acceptance by turning the world's billions of active smartphones into potential acceptance devices, enabling people to buy and sell whenever wherever they want. We now have 100 deployments of Tap on Phone in over 50 markets with leading partners globally.
Contactless penetration increased to 1 [Phonetic] and 2 [Phonetic] of our in-person switched transactions globally this quarter. This is up from approximately 1 [Phonetic] and 3 [Phonetic] prior to the pandemic. And with that, the potential for accelerated acceptance growth, financial inclusion, and consumer convenience is substantial. We're also bringing capabilities, experience and reach to help enable the crypto ecosystem. Our new collaboration with Coinbase will allow consumers to use their Mastercards to purchase NFTs, try that myself.
Our work with consensus will make it easier for software developers to increase the scale, efficiency and speed of transactions on Ethereum and permissioned blockchains. And our CBDC Sandbox test platform, which we launched in 2020 continues to gain traction. We're helping central banks, financial institutions and fintechs simulate the issuance and distribution of CBDC along with the integration of CBDDs [Phonetic] with our card network, our real-time payment modules, and native blockchain wallets.
Now shifting to services. Our services support can differentiate our core products and have played a critical role in having many of the ones [Phonetic] I just mentioned. We grew services revenue at 25% in 2021 on a currency-neutral basis. We will continue to extend our service capabilities to enhance the value of payments. We even further accelerating our growth by expanding into new areas and new use cases, particularly through our data and services and safe cyber intelligence propositions, again a few examples for you. In December, we announced an agreement to acquire Dynamic Yield from McDonald's. Dynamic Yield uses enhanced AI to deliver customized product recommendations, offers and content to consumers. Their customer set includes over 400 global brands ranging from financial services companies like Synchrony to retailers like Lands' End.
When combined with SessionM's loyalty platform in our Test & Learn experimentation software, we will be able to offer a unified consumer engagement and loyalty hub to our customers. McDonald's is a great example of a company who is using all three of these platforms today with plans to further scale and integrate Dynamic Yield's capabilities globally. In addition, our Ethoca platform continues to experience strong traction and preventing unnecessary chargebacks are a real pain point. We added new consumer -- customers in every region in 2021 for Ethoca. Recently we launched Ethoca Consumer Clarity, which gives consumers detailed information about purchases on their mobile banking app.
Submission is live with issuers across the U.S., UK and several European markets, including OTP Bank, Central Cooperative Bank, and Paybox Bank. Now beyond expanding in payments and extending in services, our third strategic priority area is embracing new networks. Specifically, we are leveraging our expertise in payments to build out new networks, with the current focus on open banking and digital identity. On the open banking front, we have closed the acquisition of Aiia in November, which brings strong API connectivity to over 2,700 banks across Europe.
And combined with Finicity's North American connection, which cover more than 95% of deposit accounts in the U.S. market, Mastercard has an unparalleled footprint in the key open banking regions. Upon which we are building solutions to solve for a wide range of use cases. One example is in the mortgage verification space, where Finicity has signed deals with several new partners, including Loan Depot. And in the digital identity space, we're helping our customers with fast, frictionless identity verification services. Ekata has performed strongly over the last quarter, expanding through strategic partnerships with companies such as ZIP and Equifax, as well as growing its global footprint with leading frac [Phonetic] providers Tongon [Phonetic] and Air Click [Phonetic] in Asia-Pacific.
Combined, open banking and digital identity extend our value before and after the payment transaction, is a large attractive and growing opportunities that we are uniquely positioned to be a leader in both. So in summary, we delivered strong revenue and earnings growth this quarter. The macroeconomic outlook remains positive with a few areas that we're monitoring. And we're executing against our three strategic priorities, expanding in payments, extending our services, and embracing new networks, and all that with substantial progress on the product and deal front this quarter.
Now, Sachin, over to you and the numbers.
