Mastercard
Mastercard Inc. (stylized as MasterCard from 1979 to 2016, mastercard from 2016 to 2019) is an American multinational payment card services corporation headquartered in Purchase, New York. It offers a range of payment transaction processing and other related-payment services (such as travel-related payments and bookings). Its headquarters are in Purchase, New York.[3] 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, credit and prepaid cards to make purchases. Mastercard has been publicly traded since 2006.
Company type
US57636Q1040 
1966
Worldwide
- Merit Janow (Chair)
- Michael Miebach (CEO)
- Sachin Mehra (CFO)
US$25.10 billion (2023)
US$14.01 billion (2023)
US$11.19 billion (2023)
US$42.45 billion (2023)
US$6.93 billion (2023)
33,400 (2023)
Mastercard (originally Interbank, then Master Charge)[4] was created by an alliance of several banks and regional bankcard associations in response to the BankAmericard issued by Bank of America, which later became Visa and is still its biggest competitor. Prior to its initial public offering, Mastercard Worldwide was a cooperative owned by the more than 25,000 financial institutions that issue its branded cards.
Other issues[edit]
United States internet gambling transactions[edit]
Mastercard, Visa, and other credit cards have been used to fund accounts since online gambling began in the mid-1990s.[53]
On March 20, 2000, the United States District Court for the Eastern District of Louisiana, reviewed motions in Re: MasterCard International Inc. regarding multi-district litigation alleging Mastercard illegally interacted with a number of internet casinos. The plaintiffs alleged, among other claims, that Mastercard had violated the Federal Wire Act. They sought financial relief for losses suffered at online gambling sites outside the United States.[54]
The District Court's ruling on February 23, 2001, later upheld by the United States Court of Appeals for the Fifth Circuit, sided with Mastercard. The Fifth Circuit also clarified the application of the Wire Act to illegal online gambling. The Court determined that the wire act only applied to gambling activities related to a "sporting event or contest". Therefore, the court could not conclude that Mastercard had violated the Wire Act.[55]
When PASPA was overturned May 14, 2018, Mastercard had to provide new guidance to its member banks. It clarified that state location restrictions apply to the individual placing the wager, not the member bank processing the transaction. According to various state gaming laws, sports betting providers must use Internet geolocation to determine a customer's physical location prior to accepting a wager.[56] The Independent Community Bankers of America specifically requested information about a new online gambling merchant category code.[57] Mastercard has dedicated MCC 7801 to online gambling. This code is distinct from 7800 for government owned lotteries and 7802 for government licensed horse and dog tracks.[58]
Blocking payments to WikiLeaks[edit]
In December 2010, Mastercard blocked all payments to whistleblowing platform WikiLeaks due to claims that they engage in illegal activity.[59] In response, a group of online activists Anonymous organized a denial-of-service attack; as a result, the Mastercard website experienced downtime on December 8–9, 2010.[60] On December 9, 2010, the servers of Mastercard underwent a massive attack[61] as part of an Operation Avenge Assange for closing down payments to WikiLeaks. The security of thousands of credit cards was compromised during that attack due to a phishing-site set up by the attackers.[62] However, Mastercard denied this, stating that account data had "not been placed at risk".[63] WikiLeaks' spokesman said, "We neither condemn nor applaud these attacks."[64] U.N. High Commissioner for Human Rights Navi Pillay said that closing down credit lines for donations to WikiLeaks "could be interpreted as an attempt to censor the publication of information, thus potentially violating WikiLeaks' right to freedom of expression".[65]
In July 2011, Iceland-based IT firm DataCell, the company that enabled WikiLeaks to accept credit and debit card donations, said it would take legal action against Visa Europe and Mastercard,[66] and that it would move immediately to try to force the two companies to resume allowing payments to the website.[67] Earlier on December 8, 2010, DataCell's CEO Andreas Fink had stated that "suspension of payments towards WikiLeaks is a violation of the agreements with their customers."[68][69] On July 14, 2011, DataCell announced they had filed a complaint with the European Commission claiming the closure by Visa and Mastercard of Datacell's access to the payment card networks violated the competition rules of the European Community.[70]
On July 12, 2012, a Reykjavík court ruled that Valitor, Visa and Mastercard's partner in Iceland, had to start processing donations within fourteen days[71] or pay daily fines to the amount of ISK 800,000 (some $6000) for each day after that time, to open the payment gateway. Valitor also had to pay DataCell's litigation costs of ISK 1,500,000.[72][73]
Corporate branding of all Nigerian identity cards[edit]
In 2014, pursuant to an agreement between Mastercard and the Nigerian Government, acting through the National Identity Management Commission, the new Nigerian ID cards bear the Mastercard logo, contain personal database data and double as payment cards, irrevocably linking such payments to the individuals,[74] sparking criticism by the Civil Rights Congress alleging that it "represents a stamped ownership of a Nigerian by an American company ... reminiscent of the logo pasted on the bodies of African slaves transported across the Atlantic."[75]
Selling of credit card data[edit]
In 2018, Bloomberg News reported that Google had paid millions of dollars to Mastercard for its users' credit card data for advertising purposes. The deal had not been publicly announced.[76][77]
Regulatory ban In India[edit]
On July 14, 2021, the Reserve Bank of India (RBI) indefinitely barred Mastercard from issuing new debit or credit cards to domestic Indian customers starting July 22, 2021, for violating data localization and storage rules as set by RBI on April 6, 2018, under Payment and Settlement Systems Act, 2007 (PSS Act). This ban does not affect cards already issued and working in India. Mastercard is the third major payment systems provider to be restricted in India after American Express and Diners Club International.[78] On June 16, 2022, the business restrictions imposed were lifted by RBI with immediate effect.[79][80]
Regulatory ban In Vietnam[edit]
In 2018, the State Bank of Vietnam (SBV) requested that banks temporarily halt the issuance of new Mastercard cards due to violations of international payment regulations. Specifically, Mastercard did not comply with the regulation of conducting payments through the National Payment Corporation of Vietnam (NAPAS). In 2020, the ban was lifted after Mastercard committed to complying with Vietnamese regulations.[81][82][83] Despite its widespread acceptance, using Mastercard in Vietnam still comes with certain limitations: Some Vietnamese websites and applications do not accept Mastercard as a payment method.[84][85][86] Not all ATMs in Vietnam allow cash withdrawals using Mastercard.[87] Some Mastercard users in Vietnam have reported experiencing inadequate customer service.[88][89]
Adult content restrictions[edit]
In December 2020, Mastercard barred the use of its credit cards on Pornhub, an online pornography site.[90][91] In April 2023, The Hill (newspaper) reported on an update to Mastercard's policy for adult content that would require sellers to have age and identity verifications and content review prior to posting in place.[92][93] The new policies took effect in October 2021.[93] On August 30, 2023, the American Civil Liberties Union, in combination with a coalition of other organizations, filed a complaint with the Federal Trade Commission requesting an investigation into the policy as an unfair business practice under Section 5 of the FTC Act.[94][95]
World Beyond Cash[edit]
In 2017, CEO Ajay Banga reinforced the company's goal of extending financial services to those outside the current system by bringing digital payment systems to the unbanked around the world. The company invested $500M in India with offices in Pune and Vadodara to help Mastercard bring cashless transactions to the largest population in the world. The company also is scheduled to invest an additional $750M in cashless apps and technology, especially focused on India between 2017 and 2020.[131]
Banknet[edit]
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 differs significantly 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.[132]