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Mastercard

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MasterCard Worldwide
Company typePublic (NYSE: MA)
ISINUS57636Q1040 Edit this on Wikidata
IndustryFinancial services
Founded1966
HeadquartersMasterCard International Global Headquarters, Harrison, New York, United States
Area served
Worldwide
Key people
Richard N. Haythornthwaite
(Chairman)
Ajay Banga
(CEO)
Vicky Bindra
(President APMEA region)
Stephanie Voquer
(Chief Human Resources Officer)
ProductsPayment systems, Credit cards
RevenueIncrease US$5.10 Billion (FY 2009)[1]
Increase US$2.26 Billion (FY 2009)[1]
Increase US$1.46 Billion (FY 2009)[1]
Total assetsIncrease US$7.47 Billion (FY 2009)[2]
Total equityIncrease US$3.50 Billion (FY 2009)[2]
Number of employees
5,000 (2008)
WebsiteMasterCard.com

MasterCard Worldwide (NYSE: MA) is an American multinational corporation with its headquarters in the MasterCard International Global Headquarters in Harrison, New York, United States.[3][4] Throughout the world, its principal business is to process payments between the banks of merchants and the card issuing banks or credit unions of the purchasers who use the "MasterCard" brand debit and credit cards to make purchases. MasterCard Worldwide has been a publicly traded company since 2006. Prior to its initial public offering, MasterCard Worldwide was a membership organization owned by the 25,000+ financial institutions that issue its card.

MasterCard, originally known as MasterCharge, was created by several California banks as a competitor to the BankAmericard issued by Bank of America, which later became the Visa credit card issued by Visa Inc. The original banks behind MasterCharge were United California Bank (later First Interstate Bank and subsequently merged into Wells Fargo Bank), Wells Fargo, Crocker National Bank (also subsequently merged into Wells Fargo), and the Bank of California (subsequently merged into the Union Bank of California).

On December 7, 2010 MasterCard suspended the acceptance of its credit cards on the WikiLeaks website following Julian Assange's arrest in London.[5].

History

The 1970s Master Charge card.
The 1970s Master Charge card.
First MasterCard logo used from 1979-90.
First MasterCard logo used from 1979-90.
MasterCard logo used on cards 1990 to present.
MasterCard logo used on cards 1990 to present.

In 1966 the aforementioned group of California banks formed the Interbank Card Association (ICA). With the help of New York's Marine Midland Bank, now HSBC Bank USA, these banks joined with the ICA to create "Master Charge: The Interbank Card". The card was given a significant boost in 1969, when First National City Bank joined, merging its proprietary Everything Card with Master Charge.

In 1979, "Master Charge: The Interbank Card" was renamed simply "MasterCard". In the early 1990s MasterCard bought the British Access card and the Access name was dropped. In 2002, MasterCard International merged with Europay International SA, another large credit-card issuer association, which for many years issued cards under the name Eurocard.

In 2006, MasterCard International underwent another name change to MasterCard Worldwide. This was done in order to suggest a more global scale of operations. In addition, the company introduced a new corporate logo adding a third circle to the two that had been used in the past (the familiar card logo, resembling a Venn diagram, remains unchanged). A new corporate tagline was introduced at the same time: "The Heart of Commerce".[6]

IPO

The company, which had been organized as a cooperative of banks, had an initial public offering on May 25, 2006 at $39.00 USD. The stock is traded on the NYSE under the symbol MA.

Litigation

Both MasterCard and Visa have paid approximately $3 billion in damages resulting from a class-action lawsuit filed by Hagens Berman in January 1996.[7] The litigation cites several retail giants as plaintiffs, including Wal-Mart, Sears Roebuck & Company, and Safeway.[8]

In October 2010, Visa and MasterCard reached a settlement with the U.S. Justice Department in another antitrust case. The companies agreed to allow merchants displaying their logos to decline certain types of cards (because interchange fees differ), or to offer consumers discounts for using cheaper cards.[9]

Criticism

In December 2010, MasterCard blocked all payments to Wikileaks due to claims that they engage in illegal activity. [10] As a result, the MasterCard website experienced a Denial of service attack.

Advertising

MasterCard's current advertising campaign tagline is "Priceless". The slogan associated with the campaign is "There are some things money can't buy. For everything else, there's MasterCard." The Priceless campaign in more recent iterations has been applicable to both MasterCard's credit card and debit card products. They also use the 'Priceless' description to promote products such as their "priceless travel" site which features deals and offers for MasterCard holders.[11]

The first of these Priceless ads was run during the World Series in 1997 and there are numerous different TV, radio and print ads.[12] It was idealized by Stewart Emery.[13] MasterCard registered Priceless as a trademark.[14] Actor Billy Crudup has been the voice in the US market; in the UK, actor Jack Davenport is the voice.

The purpose of the campaign is to position MasterCard as a friendly credit card company with a sense of humor, as well as respond to the public's worry that everything is being commodified and that people are becoming too materialistic.[15]

Many parodies have been made using this same pattern, especially on Comedy Central, though MasterCard has threatened legal action,[16] contending that MasterCard views such parodies as a violation of its rights under the federal and state trademark and unfair competition laws, under the federal and state anti-dilution laws, and under the Copyright Act. Despite these claims, however, noted US consumer advocate and presidential candidate Ralph Nader emerged victorious (after a four-year battle) in the suit MasterCard brought against him after he produced his own "Priceless" political commercials.[17]

MasterCard MarketPlace

Through a new partnership with an Internet company that specializes in personalized shopping, MasterCard introduced a Web shopping mall on April 16, 2010 that it says can pinpoint with considerable accuracy what its cardholders are likely to purchase.[18]

The site, called MasterCard MarketPlace, relies on technology developed by Next Jump, a New York company that monitors customer behavior from thousands of retailers and uses the data it gathers to help merchants tailor their product offerings.

Sports sponsorships

MasterCard currently sponsors the New Zealand All Blacks, the country's rugby union team.[19] MasterCard also sponsors the UEFA Champions League. For many years, it also sponsored FIFA World Cup but withdrew its contract after a court settlement and its rival Visa took up the contract in 2007.[20] It is currently the sponsor of the Memorial Cup Tournament of the Canadian Hockey League. MasterCard has just announced new sponsorship deal with Australian Cricket team and is also the founding sponsor of IPL cricket team Mumbai Indians.[21] It was the official credit card of UEFA Euro 2008.

In 1997, MasterCard was the main sponsor of the aborted MasterCard Lola Formula One team.

On October 12, 2007 MasterCard offered $160,000 to the municipal government of Toronto so that the city could keep its ice rinks open, as the city was facing a budget shortfall.[22]

Management and Board of Directors

Key executives include:[23]

As of December 2004, the following banks are represented on MasterCard's board of directors:[citation needed]

MasterMoney

MasterMoney is the branding of a MasterCard debit card distributed in North America. Like many debit cards, the brand has capabilities of being used as an ATM card as well as a credit card, providing sufficient funds are in one's bank account (usually a checking account) in order to complete a transaction.

PayPass

PayPass RFID chip from a MasterCard.
A Citizens Bank debit card with MasterCard PayPass before their late 2009 switch to Visa-branded cards.

MasterCard PayPass is an EMV compatible, "contactless" payment feature based on the ISO/IEC 14443 standard that provides cardholders with a simpler way to pay by tapping a payment card or other payment device, such as a phone or key fob, on a point-of-sale terminal reader rather than swiping or inserting a card.

In 2003, MasterCard concluded a nine-month PayPass market trial in Orlando, Florida, with JPMorgan Chase, Citibank, and MBNA. More than 16,000 cardholders and more than 60 retailer locations participated in the market trial. In addition, MasterCard worked with Nokia, AT&T Wireless, and JPMorgan Chase to incorporate MasterCard PayPass into mobile phones using Near Field Communication technology, in Dallas, Texas.

In 2005, MasterCard began to roll out PayPass in certain markets. As of September 2008, the following financial institutions have issued the MasterCard PayPass:

  1. Westpac Bank Australia
  2. Bank of America
  3. Banca Intesa Beograd (Serbia)
  4. Fifth Third Bank
  5. JPMorgan Chase (available through its "blink" contactless feature in the United States)
  6. Citibank (both MasterCard credit and debit cards)
  7. HSBC Bank USA (debit card only)
  8. Washington Mutual (WaMu Debit MasterCard with PayPass) "Gold & Platinum Debit Cards"
  9. Key Bank (debit card only)
  10. Citizens Bank and Charter One Bank (both MasterCard credit and debit cards, switching to Visa in fall 2009)
  11. Commonwealth Bank (Australia)
  12. Garanti Bank (Turkey, available through its Bonus Trink Card)
  13. Banco de Oro (Philippines, available through its BDO International ATM Card)
  14. Bank of Montreal (Canada, available on most Mosaik cards issued after November 1, 2007)[24]
  15. President's Choice Financial (Canada)
  16. CIMB Bank (Malaysia)
  17. Bank Zachodni WBK SA (Poland)
  18. Deutsche Kreditbank AG (Germany, issuer of Lufthansa Miles & More credit cards)
  19. Natwest (United Kingdom), on Maestro cards; limited use in the London Docklands and City of London)
  20. HSBC (United Kingdom), on credit cards; limited use in selected areas of London
  21. Canadian Tire Bank (Canada)[25]
  22. Capital One (Canada)[26]
  23. Barclaycard (UK)
  24. Shinhan Bank (South Korea)
  25. Alior Bank (Poland)
  26. Poste italiane (Italy)[27]
  27. Banka Koper (Slovenia)
  28. OTP Bank (Hungary, launched in September 2009)
  29. Lloyds TSB (UK)

A U.S. issued HSBC Debit MasterCard with PayPass can be used in the U.K.

Banknet

MasterCard operates Banknet, a global telecommunications network linking all MasterCard card issuers, acquirers and data processing centers into a single financial network. The operations hub is located in St. Louis, Missouri. Banknet uses the ISO 8583 protocol.

MasterCard's network is significantly different from Visa's. Visa's is a star based system where all endpoints terminate at one of several main data centers, where all transactions are processed centrally. MasterCard's network is an edge based, peer-to-peer network where transactions travel a meshed network directly to other endpoints, without the need to travel to a single point. This allows MasterCard's network to be much more resilient, in that a single failure cannot isolate a large number of endpoints.[citation needed]

EPS-Net

MasterCard Europe operated a Network known as EPS-Net - this interfaced Banknet but it was decommissioned in January 2010. EPS-Net is used to link Issuers and Acquirers for Online POS/ATM Transaction Processing.

Publications

See also

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References

  1. ^ a b c Mastercard (MA) annual SEC income statement filing via Wikinvest
  2. ^ a b Mastercard (MA) annual SEC balance sheet filing via Wikinvest
  3. ^ "Harrison town, New York." U.S. Census Bureau. Retrieved on January 18, 2010.
  4. ^ "10577 5-Digit ZCTA, 105 3-Digit ZCTA." U.S. Census Bureau. Retrieved on June 8, 2010.
  5. ^ [1] Retrieved Devember 8, 2010.
  6. ^ Jay Loomis (2006-06-28). "MasterCard changing name". The Journal News.
  7. ^ Visa/MasterCard Litigation, January 1st 1996
  8. ^ Inrevisacheckmastermoneyantitrustlitigation.com
  9. ^ http://marketplace.publicradio.org/display/web/2010/10/04/pm-visa-mastercard-settlement-means-more-flexibility-for-retailers/
  10. ^ http://news.cnet.com/8301-31921_3-20024776-281.html
  11. ^ Priceless Travel
  12. ^ Priceless Film Festival
  13. ^ As a consultant, he asked questions that led MasterCard to its legendary “Priceless” campaign.Whartonsp.com
  14. ^ Priceless, Trademark Electronic Search System, Retreieved July 5, 2006
  15. ^ Priceless, Jim Farrell, New American Dream, Retrieved July 5, 2006
  16. ^ Threats of legal action: MasterCard International (April 9, 2001). "Re: MasterCard/Infringement by Netfunny.com web site". Retrieved 2006-07-30. {{cite web}}: Cite has empty unknown parameters: |month= and |coauthors= (help)
  17. ^ George B. Daniels, District Judge (March 9, 2004). "Decision of the US District Court in the case of MasterCard International Incorporated v. Ralph Nader" (PDF). US District Court, Southern District of New York. Retrieved 2006-07-30. {{cite web}}: Cite has empty unknown parameters: |month= and |coauthors= (help)
  18. ^ Martin, Andrew (April 8, 2010). "MasterCard Set to Open an Online Shopping Mall". The New York Times.
  19. ^ Promotion All Blacks
  20. ^ Visa signs $170m deal with Fifa Visa signs $170m deal with Fifa
  21. ^ "Mastercard is founding sponsor of Mumbai Indians". IndianTelevision.com. Retrieved 2008-04-27.
  22. ^ MasterCard Canada Wants to Keep Torontonians Skating – Offers City $160,000 to Open Rinks in December
  23. ^ MasterCard Investor Relations, accessed 6 March 2009
  24. ^ "BMO Adds 'Tap & Go' Convenience to Mosaik MasterCard". Retrieved 2007-12-08.
  25. ^ "Canadian Tire Financial Services - Options MasterCard - PayPass". Archived from the original on 2008-04-14. Retrieved 2008-05-07.
  26. ^ "Tap & Go with Capital One Canada". Retrieved 2008-05-07.
  27. ^ "Postepay PosteMobile" (in Italian). Retrieved 2009-12-14.
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