MasterCard

Encyclopedia : M : MA : MAS : MasterCard

MasterCard Incorporated NYSE: [MA] is a membership organization owned by the 25,000+ financial institutions that issue its card. MasterCard is also the company's brand of credit cards. It was originally created by United California Bank, Wells Fargo, Crocker Bank, and the Bank of California as a competitor to the BankAmericard issued by Bank of America. BankAmericard is now the VISA credit card, issued by Visa International.

Contents

1 History
2 Shareholders
3 IPO
4 Litigation
5 Advertising
6 MasterCard board of directors
7 MasterMoney
8 PayPass
9 See also
10 External links
11 References

History

The name Master Charge was licensed by the above mentioned California banks from the First National Bank of Louisville, Kentucky in 1967. With the help of New York's Marine Midland Bank, now HSBC Bank USA, these banks joined with the Interbank Card Association (ICA) to create "Master Charge: The Interbank Card".

In 1979, "Master Charge: The Interbank Card" was renamed to simply "MasterCard". In 2002, MasterCard Worldwide absorbed Europay International SA, another large credit-card issuer association.

In 2006, MasterCard International underwent another name change to MasterCard Worldwide. This was done in order to suggest a more global scale of their operations. In addition, the company introduced a new corporate logo made up of an additional circle to the traditional two that had been used in the past. A new corporate tagline was introduced at the same time. The tagline is "The Heart of Commerce". [MasterCard changing name], Jay Loomis, The Journal News, June 28, 2006

Shareholders

Based on an SEC filing in early 2005, MasterCard's largest current shareholders are:

11.8% - JPMorgan Chase
6.2% - Citigroup
6.0% - Bank of America
5.2% - Euro Kartensysteme
5.0% - Europay France

IPO

The company, which had been organized as a cooperative of banks, offered an inital public offering IPO on May 25th 2006 and trades 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. [Visa/MasterCard Litigation], January 1st 1996 The litigation cites several retail giants as plaintiffs, including Wal-Mart, Sears Roebuck & Company, and Safeway. [VISA CHECK/MASTERMONEY ANTITRUST LITIGATION WEBSITE]

Advertising

MasterCard's ads always follow the same formula:

This series of ad started in 1998 and there are numerous different ads. [Pricess Film Festival] It was created by McCann-Erickson. MasterCard actually registered Priceless as a trademark. [Priceless], Trademark Electronic Search System, Retreieved July 5th 2006

This campaign attempts to position MasterCard as the credit card company with a sense of humor. They are designed to respond to the public's worry that everything is being commodified, and that people are becoming too materialistic. [Priceless], Jim Farrell, New American Dream, Retreieved July 5th 2006

There are many spoof ads based on this concept.

MasterCard board of directors

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

Europay España, S.A.
HSBC
Clarima Banca
Capital One
Banamex (Citigroup's Mexican division)
Citigroup
The Royal Bank Of Scotland
MBNA America, (now acquired by Bank of America)
Westpac Banking Corporation
Southern Bank Berhad
Bank of Montreal
Banque Fédérative du Crédit Mutuel
Deutscher Sparkassen-und Giroverband
Orient Corporation

In January, 2005, Washington Mutual Bank, the third largest issuer of debit cards in the United States, announced that it was changing its debit-card branding from VISA to MasterCard. The change will make Washington Mutual MasterCard's largest bank customer.

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

MasterCard PayPass is a new "contactless" payment feature based on the ISO 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 in Dallas, Texas.

In 2005, MasterCard began to roll out PayPass in certain markets. As of April 2006, the following financial institutions have issued the MasterCard PayPass:

Bank of America (available through its MBNA division)
JPMorgan Chase (available through its "blink" contactless feature)
Citibank (both MasterCard credit and debit cards)
HSBC Bank USA (debit card only)
Key Bank (debit card only)
Citizens Bank (debit card only)
Commonwealth Bank (Australia)

External links

References

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