Mastercard is a global technology company that connects consumers, financial institutions, merchants, governments and businesses worldwide, enabling them to use safe, simple and smart payment solutions. Mastercard operates one of the world’s fastest payments processing networks, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories.
What does Mastercard do?
Mastercard provides a wide range of products and services that enable payments and data-driven services. Here are some of the key things Mastercard does:
- Operates a global payments processing network that enables fast, secure payments transactions worldwide.
- Provides credit, debit and prepaid payment cards that are accepted at millions of locations worldwide.
- Enables digital payments through Mastercard’s network for online shopping, mobile payments and more.
- Offers payment processing services, support and technology for merchants and financial institutions.
- Provides data insights, analytics and advisory services to help businesses understand consumer trends and behavior.
- Develops payment security technologies like chip cards and tokenization to protect transactions.
- Partners with governments on national ID, benefit disbursement and other programs.
- Invests in emerging payment technologies like contactless and biometrics.
In summary, Mastercard aims to provide the infrastructure, services and technologies to connect stakeholders across the payments ecosystem while ensuring transactions are fast, safe and reliable. The company’s global network, data insights and cybersecurity solutions underpin its capabilities in moving money worldwide.
What types of data and services does Mastercard offer?
Mastercard offers many types of payment data and value-added services leveraging its vast global payments network. Here are some of the key data assets and services provided by Mastercard:
Payments Processing Data
- Switching Services – Processing of payment transactions on Mastercard’s network between issuers and acquirers.
- Settlement Services – Settlement of funds between issuing and acquiring financial institutions.
- Cross-Border Services – Processing of cross-border and multi-currency transactions.
- Terminal Management – Services to deploy and manage card acceptance devices.
- Fraud Products – Services to monitor transactions for fraudulent activity.
- Loyalty Solutions – Processing and analytics of loyalty and rewards programs.
Business Insights
- Analytics & Reports – Payment transaction data analysis on spending patterns, market share, etc.
- Benchmarking – Compare business performance vs industry KPIs.
- Customer Segmentation – Sophisticated segmentation to understand customers.
- Advisory Services – Expert consulting services for growth, pricing, new markets.
Consulting & Information Services
- Market Research – Industry reports, surveys, forecasts across sectors.
- Product Development – Services for product design, innovation and optimization.
- Payment System Design – Expertise on payment infrastructure, policy and oversight.
- Testing & Certification – Services to test and certify payments software and devices.
Managed Services
- Program Management – End-to-end program management services.
- Processing Services – Card processing, clearing, settlement outsourcing.
- Fraud Management – Outsourced fraud detection and prevention tools.
- Customer Service – Technical support and contact center services.
- Loyalty Services – Full service loyalty program design and management.
Cyber & Intelligence Solutions
- Security Solutions – Tools and capabilities to manage cyber risk.
- Identity Verification – Solutions for verifying digital identities.
- Intelligence Services – Expert cyber threat intelligence and analysis.
In summary, Mastercard provides a diverse mix of payment transaction data, business insights, consulting expertise, managed services and cybersecurity solutions to support stakeholders across the payments ecosystem. The depth and breadth of its data assets, along with value-added services, help differentiate Mastercard’s offerings.
What types of industries does Mastercard serve?
Mastercard serves a wide range of industries globally that are part of the broader payments ecosystem. Here are some of the major industry verticals that use Mastercard services:
Financial Services
Banks, credit unions, processors, acquirers, issuers, payment networks, switches. Mastercard provides them services including transaction processing, insights, fraud prevention, testing and more.
Merchants & Retailers
Physical and online merchants across categories like grocery, apparel, restaurants, digital services. Mastercard helps them accept payments, understand consumers, run loyalty programs.
Technology & Fintech
Payments technology firms, mobile wallets, gateways, POS device makers. Mastercard partners on enabling digital payment solutions.
Governments
Federal, state and local governments. Mastercard collaborates on payment infrastructure like transit, tolling, taxes, social benefit disbursement.
Consumers
While not a direct customer, consumers benefit from Mastercard’s work across areas like payment security, financial inclusion, experiences.
Travel & Hospitality
Airlines, hotels, car rentals, travel agents, tour operators. Mastercard provides payment acceptance, data insights on travel spending patterns.
Telecom & Media
Mobile carriers, cable companies, digital media services. Mastercard helps process customers payments and subscriptions.
Other Sectors
Including healthcare, education, restaurants, aviation, insurance, real estate. Mastercard serves vast array of commercial entities worldwide.
So in summary, Mastercard provides specialized services across banking, merchants, technology firms, governments, travel, telecom, and many other global industry sectors. The company’s payments expertise, data and cyber solutions cater to stakeholders across the broad payments ecosystem.
What are some of Mastercard’s major products and solutions?
Mastercard has developed a diverse portfolio of payment products, services, insights and technologies. Here is an overview of some of Mastercard’s major offerings:
Payment Cards
Includes Mastercard branded consumer credit, debit, prepaid and commercial cards issued by customer financial institutions. Mastercard does not directly issue cards to consumers.
Popular card types:
- Mastercard Credit Cards
- Maestro Debit Cards
- Mastercard Prepaid Cards
- Mastercard Small Business Cards
- Mastercard Corporate Cards
- Mastercard Gift Cards
Key benefits like worldwide acceptance, integrated chips, tap-to-pay, rewards programs, travel perks, insurance, security features.
Digital Payments
Enabling secure digital payments across channels like online, in-apps, mobile wallets.
Solutions include:
- Mastercard Digital Enablement Service
- Mastercard Payment Gateway Services
- Mastercard Digital Wallet Services
- Mastercard Cloud Based Payments
Provides tools for tokenized payments, biometrics, click-to-pay, QR code payments, P2P transfers.
Business Solutions
Technology and services that help businesses optimize operations, gain insights on customers and manage expenses.
Offerings include:
- Mastercard Business Analytics & Insights
- Mastercard Branded B2B Accounts
- Mastercard Procurement Solutions
- Mastercard Spend Management Services
- Mastercard Data & Services
Helps businesses understand spending patterns, improve procurement, manage employee expenses efficiently.
Security Solutions
Tools leveraging AI, encryption, tokenization, biometrics and more to ensure safe, seamless transactions and combat fraud.
Capabilities include:
- Mastercard Identity Solutions
- Mastercard Fraud Management
- Mastercard Safety & Security Services
- Mastercard Cyber & Intelligence
- Mastercard Distributed Ledger Technology
Provides multilayered monitoring and intelligence to ensure payments integrity.
Data & Services
Valuable insights, market research and services that help organizations in planning, product development, customer engagement and more.
Offerings include:
- Mastercard Advisors – Research, insights, economics practice
- Mastercard Consulting Services
- Mastercard Innovation & Design
- Mastercard Testing Platform
- Mastercard Loyalty Solutions
Expertise that enables organizations to stay ahead of evolving consumer trends.
So in summary, Mastercard provides a multifaceted suite of payment, data-driven, and value-added products and services that underpin its role as a leader in global payments technology. The company leverages these capabilities to power commerce and provide mission-critical support to organizations worldwide.
What are some interesting facts about Mastercard’s global presence?
Here are some fascinating facts and figures about Mastercard’s size and global reach:
- Processes over 65,000 transactions per minute on average
- Present in over 210 countries and territories
- 2.5 billion Mastercard and Maestro branded cards in circulation
- Card accepted at over 36 million merchant locations worldwide
- Supports over 150 currencies for cross border payments
- 87% of global GDP flows through the Mastercard network
- 338 million Mastercard Digital Enablement Service (MDES) tokens in 2022
- 1 billion+ Mastercard, Maestro and Cirrus cards are chip-enabled
- Operates 14,000 kilometers of fiber optic network
This demonstrates the immense scale and geographic span of Mastercard’s global network and capabilities. The company has built key payment infrastructure supporting commerce in both mature and emerging markets worldwide.
Mastercard is also well positioned for further growth opportunities:
- 95% of worldwide transactions still use cash
- 1.7 billion adults globally remain unbanked
- eCommerce still only accounts for 15% of retail sales
Mastercard aims to further broaden financial inclusion and expand the transition to electronic forms of payment globally.
What is Mastercard’s revenue model?
Mastercard operates a multi-sided revenue model, earning fees and revenue from different stakeholders that participate in transactions across its network. Here are some of the key ways Mastercard generates revenue:
Interchange Fees
A small percentage fee charged to the merchant’s bank (acquirer) on each purchase transaction. Ranges from 1% to 3% of transaction value.
Network Transaction Fees
Fees charged to issuers and acquirers for processing transactions on Mastercard’s network for authorization, clearing and settlement.
Assessments & Licensing
Fees like membership fees charged annually to issuers and acquirers for issuing cards and acquiring merchants on the network.
Digital Services
Fees for providing issuers and merchants value-added technology services like digital wallet enablement, security solutions, analytics tools.
Consulting & Research
Fees for customized consulting projects, advisory services, market research reports and other insights services provided.
Data Services
Monetizing Mastercard’s payment data assets by providing aggregated insights, benchmarking reports, customer segmentation and other data analytics services.
So in summary, Mastercard leverages a multi-sided revenue model by collecting small fees from different players across the payment ecosystem for providing specialized infrastructure, technology, insights and services that facilitate transactions. This results in a highly scalable and diversified revenue stream.
How does Mastercard make money?
Mastercard generates the majority of its revenue from transaction processing and data services provided across its global payments network. Here is a breakdown of Mastercard’s major revenue sources:
Domestic Assessments
38% of net revenue
Fees charged to issuers and acquirers primarily based on purchase volume on cards and transactions processed in the same country.
Cross-Border Volume Fees
28% of net revenue
Fees from processing international payments and foreign exchange conversion.
Transaction Processing
24% of net revenue
Switch fees for processing transactions between issuers and acquirers domestically and cross-border.
Other Revenues
10% of net revenue
Includes services like consulting, managed services, fraud services, loyalty solutions plus other payment-related products.
In 2021, Mastercard generated $18.9 billion in total net revenue. The majority came from domestic assessments (38%), cross-border volume fees (28%) and transaction processing (24%).
Other key points:
- 83% of revenue from payment services, 17% from data services
- 69% of revenue from fees directly tied to purchase volume
- 44% revenue from outside the United States
So in summary, Mastercard primarily makes money by facilitating payment transactions worldwide and collecting small fees in the process from issuers, acquirers, merchants and other players in the ecosystem. The company also provides value-added services that augment its transaction-related revenues.
What are Mastercard’s main operating expenses?
Mastercard incurs a range of expenses in operating its global payments network and services business. Here is an overview of some of the major costs:
General and Administrative
Day-to-day corporate operating expenses including:
- Personnel – Salaries, benefits, incentives for all employees
- Equipment – Data centers, servers, devices, communications infrastructure
- Facilities – Offices, utilities, rent and occupancy costs
- Professional Services – Legal, audit, consulting and outsourced services
- Travel & Entertainment – Business travel, conferences, events
- Other overhead costs – supplies, insurance, taxes, depreciation
Advertising and Marketing
Promoting the Mastercard brand through:
- Advertising – TV, print, digital and other media buys
- Sponsorships – Sporting events, venue naming rights, endorsements
- Partner campaigns – Co-marketing with banks, merchants, fintechs
- Conferences and trade shows
- Agency and creative services
Processing Fees
Third party expenses for:
- Card production – Card manufacturers, card embossing
- Payments processing – Access fees, network costs, postage
- Transaction research – Billing disputes and revenue recovery initiatives
Professional fees
Including legal counsel, audit, tax advisory and consulting services.
In 2021, Mastercard’s total operating expenses were $10.9 billion. So in summary, key costs relate to personnel, infrastructure, advertising, third-party services, as well as typical overhead expenses involved in running a large global payments network and technology company.
Conclusion
In summary, Mastercard operates a vast global payments infrastructure and technology ecosystem that connects consumers, merchants, banks, businesses and governments worldwide. The company facilitates secure payment transactions between stakeholders and provides an array of data-driven services, insights and innovations across the payments value chain. Mastercard generates revenues primarily from processing payments and assessing fees on transactions flowing through its network. With continued growth in electronic payments globally across channels like cards, online, mobile and beyond, Mastercard is well positioned at the core of flows of commerce worldwide.