Mastercard Inc business model

Mastercard Inc is international financial service provider with headquarter in New York, established 1966. IPO started in May 2006 priced 39 dollars per share traded in New York Stock Exchange under code “MA”. In 2014 stock split 1:10. Outstanding shares 1,020,931,000 with market cap 205 billion dollars and 192 dollars price per share (Jan 2019).

Mastercard Inc managing payment networks with banks by partnerships. Company doesn’t issue cards, cards issued by banks. Main stream of income is small percentage from each transaction. Each transaction contains 4 components:

  1. Sum paid to retailer
  2. Retailers bank commission
  3. Customers bank commission
  4. Mastercard’s commission.

More transactions leads to more revenue for company. Mastercard doesn’t provide credit, credit is provided by bank. This prevents Mastercard from credit defaults.

Company provides range of services to match need of every customer: credit, debit and prepaid. To insure customers loyalty , it created Loyalty & Rewards program.

Masterpass technology provide access to digital wallet for customers’ seamless experience. Recently introduced Fitbit Pay for active lifestyle lovers. Garmin Pay targeting people who always on the move.

To meet business needs, different charges applied on small business & corporations. Which depends on transaction volume. Data analysis provide understanding of unique customers behavior and preferences for future product improvement.

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