What is Mastercard? - Products and History

Mastercard is the second-largest payments network, ranked behind Visa, in the global payments industry12. Other major payments networks include American Express and Discover1. Mastercard partners with member financial institutions all over the world to offer Mastercard-branded network payment cards1.

Mastercard uses its proprietary global payments network, referred to as its core network, to facilitate payment transactions, which usually involve the Mastercard account holder and a merchant, along with their respective financial institutions1. Payments can be made via credit, debit, or prepaid cards1.

Mastercard is a payment network processor1. It partners with financial institutions that issue Mastercard payment cards processed exclusively on the Mastercard network1. Mastercard’s primary source of revenue comes from the fees that it charges issuers based on each card’s gross dollar volume1.

Mastercard itself is a financial services business that primarily generates revenue from gross dollar volume fees1. Mastercard cards are issued by member banks with the Mastercard logo and are characterized as open loop1. This means that the card can be used anywhere that the Mastercard brand is accepted1.

In 2020, Mastercard reported $6.3 trillion worth of gross dollar volume, which shows the amount of money comprehensively transacted on all of its card offerings1. The company partners with a variety of institutions to offer several types of cards1. Comprehensively, its card offerings include credit, debit, and prepaid cards1.

Mastercard does not have a banking division1. It partners with member financial institutions that, in turn, issue Mastercard-branded cards to consumers, students, and small businesses1. Member financial institutions often partner with organizations in co-branded relationships to issue Mastercard-branded rewards cards to their customer bases1.

Mastercard Inc. (stylized as MasterCard from 1979 to 2016, mastercard from 2016 to 2019) is headquartered in Purchase, New York2. It offers a range of payment transaction processing and other related-payment services (such as travel-related payments and bookings)2. 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, credit and prepaid cards to make purchases2. Mastercard has been publicly traded since 20062.

 

Mastercard: Products

Mastercard offers a wide range of products and services. Here are some of them:

1. Credit, Debit, and Prepaid Cards: Mastercard provides various types of cards including credit, debit, prepaid, and gift cards1.
2. Mastercard Data & Services: This includes offerings beyond the transaction. They provide customers across industries and geographies with a tailored portfolio of solutions to address their business pain points2.
3. Acquiring Optimizer: This empowers acquiring banks to grow and strengthen merchant relationships2.
4. Cardholder Services: These are designed to fit consumer needs and drive brand affection and card preference2.
5. Contactless Optimization: This helps launch, manage, and optimize contactless payments across your portfolio2.
6. Cyber Front and Cyber Quant: These identify and defend against your business’s most relevant threats through simulating breaches and cyber attacks2.
7. Digital Labs: This accelerates innovation using Mastercard’s proven innovation tools, processes, and methodologies2.
8. Global Treasury Intelligence: This analyzes complex payments data to deliver quantified, actionable insights for procurement, treasury, and finance2.
9. Mastercard Pay with Rewards™: This offers your cardholders access to their rewards for anything, any time, at millions of eligible Mastercard locations worldwide2.

Please note that the availability of these products may vary by country/territory1. For more detailed information, you may want to visit the official Mastercard website21.

 

 

Mastercard: History

Mastercard, originally known as Interbank and later Master Charge, was created in 196612. It was formed by an alliance of several banks and regional bankcard associations in response to the success of BankAmericard, which was issued by Bank of America and later became Visa12.

In 1969, Interbank developed a new national brand, “Master Charge: The Interbank Card” by combining the two overlapping yellow and orange circles of the Western States Bankcard Association with the “Master Charge” name coined by the First National Bank of Louisville, Kentucky3.

In 1974, Mastercard made the magnetic strip an international standard on all its cards to hasten authorization and reduce fraud3. In 1975, a system called INET was introduced to provide an electronic exchange of transactions among its members, thus reducing the necessity of actually mailing charge slips by automating the entire transaction process3.

Mastercard has been publicly traded since 20061. Prior to its initial public offering, Mastercard Worldwide was a cooperative owned by the more than 25,000 financial institutions that issue its branded cards1.

Today, Mastercard is the second-largest payment-processing corporation worldwide, offering a range of payment transaction processing and other related-payment services1. 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, credit, and prepaid cards to make purchases1.

 

 

Mastercard: Competitors

• Mastercard’s main competitors in the financial services sector include:

  1. PayPal: A technology company that provides online payment solutions1.
  2. Capital One: A provider of commercial and retail banking services1.
  3. Visa: A digital payment company that facilitates global commerce and money movement among consumers, merchants, financial institutions, and government entities1.
  4. American Express: A company that provides integrated payment solutions1.
  5. Discover: A digital banking and payment services company1.

  In addition to these, some other competitors of Mastercard include Accenture, S&P Global, Fiserv, Fidelity National Information Services, Global Payments, Broadridge Financial Solutions, WEX, ExlService, Western Union, and Grab2.

 

 

Mastercard: CEO

The Chief Executive Officer (CEO) of Mastercard is Michael Miebach1234. He replaced Ajay Banga in 20213.

 

 

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