Banga, 50, will take charge in July. He replaces retiring CEO Robert Selander, the company said on Monday, and had been widely expected to take the reins at the company.
Banga oversaw Citigroup Inc's
MasterCard will work very hard to ... win in those markets, he said. The company's payment processing network is the second biggest in the world, after Visa Inc.
Emerging markets, where most consumers still use cash instead of plastic, offer a good chance for MasterCard to boost its business. Growth in developed markets will be more difficult, analysts said.
The biggest single impact (Banga) could have is an emphasis on high-growth international markets -- Brazil, India, China -- where the big opportunities are for the MasterCard brand, said former MasterCard executive Philip J. Philliou.
Those countries are still at the relatively nascent stage for electronic payments, and that's where the growth's going to come, said Philliou, who is now a partner in Philliou Selwanes Partners LLC, a consulting firm to banks and payments companies.
More than half of MasterCard's revenue comes from operations outside of the United States.
Banga said he also plans to increase MasterCard's focus on innovation in emerging technologies, including e-commerce and mobile payments.
Analysts cited Banga's Indian nationality and experience managing Citi's operations in the Asia-Pacific region as advantages.
Given his background, working at Nestle, Pepsi, and Citi, he's got the global view. That's what MasterCard is going after, that's really where the secular growth opportunity is, said Mayank Tandon, a senior industry analyst at the investment bank Signal Hill Capital.
Growth will be tougher for MasterCard in developed markets. For example, Visa dominates the credit and debit card processing market in North America, where more than half of U.S. consumer transactions are already made with plastic, according to industry newsletter The Nilson Report.
AN INTERNATIONAL FOCUS
Banga spent 13 years at Citigroup, including a stint as CEO of its international global consumer group, with responsibility for the company's brand and marketing work.
He led a major reorganization of Citigroup's Asian operations in 2008 that gave regional heads increased authority across the bank's sprawling product lines.
From 2005 to mid-2009, Banga also spearheaded Citi's strategy in the microfinance sector across the world.
Prior to joining Citi in 1996, he worked at Nestle
Banga, a practicing Sikh who graduated from Delhi University, is one of a growing group of South Asians to lead major U.S.-based companies, including Pepsi and Citigroup.
Banga's former boss at Citigroup, Vikram Pandit, was traveling and unavailable for comment, Citigroup spokeswoman Shannon Bell said. Banga was one of a series high-profile departures from Citigroup last year after Pandit was named CEO.
Banga received about $10 million in compensation in 2008 from Citigroup, making him one of the firm's highest paid executives that year.
When Banga joined MasterCard last summer, the terms of his contract included the right to leave the company with his upfront compensation intact, including a $4.2 million sign-on bonus, if he was not named CEO by June 30, 2010.
Selander, 59, joined MasterCard in 1994 after a 20-year career at what was then Citicorp. He became CEO in March 1997 and oversaw MasterCard's high-profile initial public offering in 2006. He will remain MasterCard's executive vice chairman and retain his seat on the board until he retires at the end of the year, the company said.
Banga has also joined the board, effective immediately.
Shares of MasterCard, which reports first-quarter earnings on May 4, closed up 0.3 percent at $259.57 on Monday. The stock has gained 1.1 percent since the start of the year, close to the roughly 1.8 percent increase in the sector as measured by the Standard & Poor's 1500 Data Processing & Outsourcing Services Sub-Industry Index <.15GSPTKDP> .
(Reporting by Maria Aspan; Editing by Lisa Von Ahn, Tim Dobbyn and Steve Orlofsky)