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MasterCard® Company Profile |
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New York-based Mastercard is a global finance company most well-known for its credit card services. Mastercard employs more than 5,000 employees in 37 worldwide locations, including the Far East and the Middle East. The company processes as many as 32 million credit card transactions daily.
Since 1997, Mastercard has been headed by Robert W. Selander. Selander worked for three years as head of Mastercard International before becoming CEO. Previously, he had spent 20 years working at Citicorp/Citibank.
Early Company History
In 1966, a group of California-based banks, including Bank of California and Wells Fargo, decided to create a credit card that would compete with the successful BankAmericard (known today as Visa) which had been launched eight years earlier by another group of California banks. Interbank Card Association (ICA) was formed.
Only two years after ICA formed, the company began stretching its focus beyond the United States by extending their services to Europe, Japan, and Mexico.
By 1974, Master Charge had included magstripes on all of their credit cards. Magstripes are the black magnetic banks on the back of almost all modern credit and debit cards which contain information. When the strip makes physical contact with another device, such as by swiping it through a card reader, the information can easily be read.
In 1979, ICA decided to change the name of its credit card from Master Charge to Mastercard. Although the change was small, the company wanted the new name to be a reflection of its global presence.
The Next Two Decades
The 1980's were a time of growth and innovation for Mastercard. Mastercards, for example, were the first in the credit card industry to include security holograms – a standard feature on almost all modern credit cards.
Mastercard also purchased an interested in Eurocard (which later became Europay International) in 1985 and became the first credit card ever issued in China just two years later.
Before the end of the decade, Mastercard would also purchase the Cirrus ATM network which made it possible for card holders to access their cash at any time from 900,000 ATMs in more than 200 countries.
Shortly after the next decade began, Mastercard and Europay International jointly launched the first point-of-sale debit online network known as Maestro. Maestro is now used worldwide in countries such as Argentina and Belgium.
Mastercard in the 21st Century
In 2002, Mastercard and Europay International again worked together. This time they created MasterCard International. This single company focuses on all of Mastercard's international activities.
Later that same year, Mastercard launched a new service called PayPass. The program involves a card that does not require contact. Instead, the card is tapped or waved in front of a special reader. Mastercard conducted a nine month trial of the card including 60 retailers and more than 16,000 cardholders. Plans to include PayPass features in some cell phones are also in the works.
Three years after conducting the first PayPass trial, Mastercard won two awards from Card Technology Magazine for the program.
In 2006, Mastercard changed its corporate name to Mastercard Worldwide in order to demonstrate its commitment to providing global services.
Today, Mastercard serves over 25,000 customers in 210 countries. Since its beginnings in the 1960's, more than 1 billion Mastercards have been issued, and the company has partnered with over 25,000 financial institutions around the world. In 2005, the company earned more than $300 million in income.
Mastercard Advertising
In 1997, Mastercard launched its “Priceless” advertising campaign. The ads, narrated by actor Billy Crudup (Russell Hammond in Almost Famous), became part of American pop culture. The company has even trademarked the word “priceless” and has threatened legal action against organizations which create spoofs of their advertisements.
In 2000, Mastercard did file a suit against Green party presidential candidate Ralph Nader because of a political ad he ran which imitated the “Priceless” ads. Their lawsuit claimed Nader's ad infringed on their trademark and copyright, plus represented “unfair competition.” Four years later, a court sided with Ralph Nader.
The ads have been translated into 48 languages and can be viewed in 106 countries.
Mastercard Lawsuits
In 2003, both Mastercard and Visa were sued for failing to disclose a transaction fee for converting currency for transactions. The lawsuit covered the time between 1996 and 2003 and involved over $800 million in fees. The judge ordered that those fees be returned to the consumers.
Also in 2003, Mastercard agreed to pay a settlement of $1 billion in a class action law suit brought against it by retailers who claimed they were being charged too much for their customers' debit transactions. Visa was a co-defendant in the case.
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