MasterCard

MasterCard is an American technology company operating in the global payment industry. MasterCard products and solutions allow you to solve everyday tasks: shopping, traveling, doing business and managing finances.

Performance indicators

2022: Tether payment network beats Visa and Mastercard in transaction volume for the first time

Stablecoin USDT (Tether) at the end of 2022 for the first time bypassed Visa and Mastercard in terms of transactions. The stablecoin payment network processed payments of $18.2 trillion for the year. This is more than Mastercard, which processed $14.1 trillion and Visa with an annual volume of $7.7 trillion.

2019: Transaction growth of 20% in 9 months

On November 1, 2019, it became known that in the first nine months of 2019, Mastercard increased the number of transactions by 20%.

The growth of transactions was one of the factors that supported Mastercard's revenue figure, which grew by 12% in annual terms - to $12.469 billion. Net profit of MasterCard in the first 9 months of 2019 increased by 21% in annual terms and amounted to $6.018 billion. Diluted earnings per share were $5.87 versus $4.73 a year earlier.

According to the results of the third quarter, the net profit indicator increased by 11% compared to the level of 2018 and amounted to $2.108 billion. Diluted earnings per share were $2.07 versus $1.82 a year earlier, adjusted at $2.15 with a forecast of $2.01. Revenue for the three reporting months rose by 15% - to $4.467 billion, the forecast was $4.4 billion.

As of September 30, 2019, the company has issued 2.6 billion Mastercard and Maestro cards. In the third quarter, the company also bought back about 6.4 million of its shares in the amount of about $1.8 billion and paid dividends in the amount of $335 million.^[1]

2018: Mastercard profits rise by one and a half times

Net Mastercard  income in 2018 reached dollars US 5.859 billion , the company said in its financial statements.  Diluted earnings per share were $5.6 versus $3.65 dollar in 2017. Mastercard's annual revenue rose  19.6% to $14.95 billion.

At the end   of the fourth quarter, net profit almost quadrupled to $899 million. Diluted earnings per share were $0.87 versus $0.21 a year earlier. Also in the fourth quarter, the organization increased revenue volumes - by 14.9%, to $3.807 billion. Experts expected revenue at $3.79 billion.

• The number of transactions carried out through this payment system exceeds 22 billion per year.
• As of December 31, the company had issued 2.5 billion Mastercard and Maestro cards.

Business in Russia

Main article: Mastercard in Russia

History

2023: Visa and MasterCard wind down crypto projects after FTX collapse and other industry scandals

At the end of February 2023, payment systems Visa Mastercard decided to suspend projects based on - blockchain technology due to the fall in the cryptocurrency market and the outflow of capital from the industry. More here.

2022

Visa and Mastercard become unnecessary

On November 21, 2022, an article on the transformation of the global payment market appeared on the pages of the Financial Times business newspaper. Experts say Visa and Mastercard are under increasing pressure from new digital services. Read more here.

$43 million fine for cartel conspiracy

On January 18, 2022, the UK payment systems regulator fined Mastercard and four other companies for a total amount of over $45 million. Companies provided payment services in the country in violation of competition law, and a cartel conspiracy was also recorded. This is stated in a widespread message from the regulator of payment systems in the United Kingdom.

British regulator fines Mastercard $43 million for cartel conspiracy

The largest fine of $43 million will be paid by Mastercard, and the remaining amount will have to be paid by Prepaid Financial Services, Allpay, APS, Sulion. All five companies violated competition law by agreeing not to compete and lure customers away from each other in the UK prepaid card market, the regulator said. These cards were used by state authorities to pay social benefits to the most vulnerable members of society, such as the homeless, victims of domestic violence of poor citizens and other socially vulnerable groups of the state.

Cartel collusion is a serious violation of antitrust laws to recognize the agreement between business entities as illegal. The parties must be competitors, that is, sell their products or purchase goods in the same market.

According to the head of the department, Chris Hemsley, the fines imposed clearly indicate that the regulator does not accept cartel collusion, which strikes at competition in the UK payment markets. Mastercard management, in turn, apologized for the actions of two former employees, which led to the fact that in this case the standards expected from the company were not met. The company noted that it took the issue very seriously and implemented additional controls and training to ensure that it did not happen again.^[2]

Partnership with Coinbase to simplify the purchase of NFT

On January 18, 2022, the largest cryptocurrency exchange USA Coinbase announced a partnership with, the Mastercard goal of which is to simplify the purchase process. NFT

Through the partnership, Mastercard classifies the NFT as "digital goods," allowing cardholders to make NFT purchases with both credit and debit cards, a change in the status quo in the U.S., where many cryptocurrency purchases are supported only with debit cards.

2021

CipherTrace Cryptocurrency Transaction Tracking Technology Developer Purchase

In early September 2021, Mastercard announced the purchase of CipherTrace at a price that the companies did not disclose. Mastercard argues that by combining this data with its own cybersecurity technology, the company will be able to provide businesses with greater transparency of the cryptocurrency space, helping them understand the risks and manage their obligations to regulate digital assets and comply with all regulatory requirements. Read more here.

Purchase of the developer of the open banking platform Aiia

In early September 2021, Mastercard entered into an agreement to acquire Aiia. Its participants did not disclose the cost of the transaction. Read more here.

Mastercard banned in India

In July 2021, due to the ban on the issuance of new debit, credit and prepaid Mastercard cards for the company's customers in the South Asian market, imposed by the Reserve Bank of India due to the company's non-compliance with local data storage rules.

Although a large amount of time has elapsed and sufficient opportunities have been provided to address the inconsistencies with the established rules, it has been determined that the company does not comply with the instructions for storing payment system data, the Reserve Bank of India said in an official statement.

India banned from issuing Mastercard payment cards

At the same time, it does not stipulate how long the specified restrictions will last. This measure requires all payment service providers to store data on users and transactions from India exclusively on servers within the country. Since the adoption of the order in 2018, payment services have been given six months to implement it.

A Reserve Bank of India spokesman said Mastercard should instruct all issuing banks to comply with the new rules. This step will not affect those customers of the company who already have its cards on hand.

In response to a question from CNN Business, Mastercard declined to report the number of users in the country. But a spokesman noted that this would not affect the company's current operations in India, and stated that the company is ready to ensure that all legal and regulatory obligations are fulfilled in the markets in which the company operates.

Mastercard also said that over the past three years, the company has worked closely with the central bank in an effort to meet the requirements established by it.

Although we are disappointed with the position taken by the (regulator), we will continue to work with it and provide any necessary information necessary to solve the problem, Mastercard said.

Acquisition of Ekata Identity Verification Systems Manufacturer

On April 19, 2021, it became known that Mastercard Corporation acquired Ekata, which develops identity confirmation systems. Read more here.

2020

Buying fintech company Finicity

At the end of June 2020, Mastercard signed an agreement to buy Finicity for $825 million. Finicity shareholders will be able to earn an additional $160 million if the company can achieve its stated targets. Read more here.

Bill Gates and Mastercard launch accelerator to fight coronavirus

In mid-March 2020, the Bill & Melinda Gates Foundation, Wellcome and Mastercard decided to accelerate the development of technologies designed to identify, evaluate, develop and scale treatments for the COVID-19 epidemic. An accelerator was created for this. Read more here.

MasterCard users are attacked around the world

In March 2020, it became known about a new hacker attack that hit users of the MasterCard payment system around the world. The criminal scheme was reported in the antivirus company Eset.

According to experts, scammers send a message to the victim's email with an update notification, and warn of the introduction of a new security system, as a result of which account disconnections are possible.

It became known about a new hacker attack that hit users of the MasterCard payment system around the world

The letter asks you to follow the link and fill out several forms, providing personal data, login, password and other important information. After that, the attackers have all the necessary data in order to withdraw funds from the victim's bank account.

Fraudsters have very carefully approached the development of a new cyber attack scheme. To create the illusion of authenticity of all actions, they simulate the process of verifying a person, and also send a verification code.

In addition, the attackers designed the fake site in the style of MasterCard pages and used an SSL certificate, due to which the browser considers open pages safe. Experts note that all sites working with financial information should use certificates, but this does not guarantee the security and legitimacy of the resource.

Attackers designed a fake site in the style of MasterCard pages and used an SSL certificate, due to which the browser considers open pages safe

Cybersecurity experts emphasize that the site, which translates users who have entered into communication with scammers, has nothing to do with Mastercard. Criminals are given an email address that does not match any of the company's official addresses.

To protect against this phishing attack and others like it, Eset recommends that users use comprehensive antivirus solutions with Anti-Phishing to get protection against scammers.^[3]

2019

Buying a service that evaluates the cybersecurity level of RiskRecon's business

At the end of December 2019, Mastercard announced the acquisition of RiskRecon and its service to identify indirect cybersecurity threats in the business ecosystem of companies. Mastercard will connect banks to this service. Read more here.

Data loss of tens of thousands of customers

On August 23, 2019, Mastercard reported a massive data breach to regulators in Germany and Belgium. The payment system did not specify the number of affected customers and only noted that we are talking about "a large number." The leak was discovered on August 19.

According to Chip Online, attackers could gain access to almost 90 thousand customers. In particular, the file contained information with the names of customers, their email addresses, as well as credit card data and in some cases even phone numbers. It is noted that the file with the table was published on one of the forums, but then deleted.

Mastercard lost the data of tens of thousands of customers

Mastercard reported that there was a failure in the loyalty platform, which was managed by a third-party company. After detecting problems, the system was disabled. At the same time, it is argued that what happened is not related to the payment system itself.

According to Belgian authorities, the leak affected a large number of people, mainly from Germany. Belgium said it has asked Mastercard for more information and is monitoring the situation with German authorities.

We take privacy and security very seriously, and we take every possible action to investigate and resolve the issue... This includes informing and helping cardholders affected by the data breach, Bloomberg quoted Mastercard as saying.

The data that got into the network was deleted, but it is possible that someone could make copies of it and use it for fraudulent purposes. It is not known how long confidential information was in the public domain on the Internet.

Mastercard notified Belgium of the leak as the company's main representative office is based in Waterloo. The notification of the German authorities is due to the fact that mainly users from Germany were affected.^[4]

Purchase of fintech company Nets Group for 2.85 billion euros

In early August 2019, Mastercard announced the acquisition of fintech company Nets for €2.85 billion. It's the largest deal in Mastercard's history and is expected to close entirely in the first half of 2020 after regulatory approval. Read more here.

Over 60 digital banks in Europe chose Mastercard as a partner

On June 4, 2019, it became known that Mastercard has more than doubled the number of agreements with digital banks throughout the European continent over the past two years. As of June 2019, over 60 digital companies rely on innovation, global infrastructure, Mastercard's worldwide network for financial institutions, and the payment system's ability to deliver digital solutions.

The majority of respondents (75%) are confident that Mastercard is a suitable partner for digital market players. They note the value of the company's safe, reliable and easy-to-use technologies (28%), its reliability as a participant in the transaction (23%), as well as innovative products (22%).

Fine of 570.6 million euros for overstating commissions

On 22 January 2019, the European Commission announced the imposition of a €570.6 million fine on MasterCard for overcharging fees. According to the regulator, the actions of the payment system prevented banks from competing for payment services and forced consumers to overpay when buying goods and services in the EU countries.

An investigation conducted by the European Commission showed that due to international MasterCard acquiring rules, retailers paid more for banking services.

Europe fines MasterCard €0.5 billion for inflating fees

This led to higher prices for retailers and consumers, limited cross-border competition and artificial segmentation of the single market, the EC said.

Preventing sellers from shopping for the best terms offered by banks in other member states, MasterCard's rules artificially increased the cost of card payments, hurting consumers and retailers in the EU, Competition Commissioner Margrethe Vestager said.

The authorities found MasterCard guilty of "limiting the ability to use alternative and more profitable cross-border payment services within the European Union." The company did this until the end of 2015. It is noted that thanks to the active cooperation of the company in the investigation, the amount of the fine was reduced by 10%.^[5]

Before the entry into force at the end of 2015 of European laws on limiting the maximum amount of fees for card payments in all EU countries, these fees varied greatly in the EU states. And the MasterCard rules introduce fees established in the banking sector of the EU country where the company is registered, which provides services or sells goods (shops, hotels, etc.) through the card. European consumers and businesses make more than half of cashless payments using cards.

Prohibition of automatic debiting of money after the end of trial subscriptions to paid services

On January 16, 2019, MasterCard officially announced the ban on automatic debiting of money after the end of trial subscriptions (free tria) to paid services. The new rules require sellers to warn the cardholder of a subscription renewal after the test period ends and send them payment details.

As reported on the MasterCard website, the company received many complaints from customers about automatic renewal of subscriptions after the completion of the trial mode, so a new rule was adopted. After the end of the test period, the client must agree to receive a subsequent subscription.

Mastercard to ban automatic debits after trial subscriptions end

The payment system obliged paid service providers to send users an email or SMS notification of the transaction date, payment amount and company name before each extension of the service.

Before the next payment, the seller will have to send a receipt in the same way with an instruction on canceling the service. In addition, the card statement will contain the URL of the seller's website or the phone number of the store where the purchase was made. MasterCard does not say how they will control the sending of instructions and data.

A free trial period is a great way to get to know the new product and test it before you buy it... Sometimes a free trial can unwittingly become a permanent subscription that is difficult to cancel. This situation can be unpleasant and costly for both consumers and their banks... The new rules will help increase transparency and provide a satisfactory experience for cardholders, MasterCard said in a statement.

At the time of publication of the material (January 17, 2019 17:45 Moscow time), MasterCard's Moscow office did not answer TAdviser's question whether the innovation would be valid in Russia.^[6]

2018: MasterCard and Visa agree to pay $6.2 billion for price collusion

On September 18, 2018, Visa and MasterCard agreed to pay a $6.2 billion fine to settle a class action lawsuit accusing the companies of price conspiracy. Read more here.

2016: Logo Update

In the summer of 2016, media reports, Pentagram design agency presented a redesign of the MasterCard payment system logo. According to the developers of the new logo, the previous one is somewhat outdated - in particular, the capital letter "C" in the name hinted to the user at the emphasis that the company makes on calculating using cards, while in recent years more and more operations have been carried out on the network.

According to company representatives, such a situation created problems regarding brand positioning, since the company is not a manufacturer of the cards themselves. This logo update was the first since 1996.