MasterCard 2008 Annual Report Download - page 21

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The pricing terms and duration of the agreements with our customers vary significantly. Most of our
customer relationships are not exclusive and may be terminated in a variety of circumstances. See “Risk
Factors—Business Risks—We face increasingly intense competitive pressure on the prices we charge our
customers, which may materially and adversely affect our revenue and profitability” and “—Our revenue would
decline significantly if we lose one or more of our most significant customers, which could have a material
adverse impact on our business” in Item 1A of this Report. In addition to our customer agreements, we have
standard licensing arrangements with all of our customers that permit them to use our trademarks and subject
them to the rules governing our payment programs. Those customers with which we do not have customized
agreements are generally subject to our standard pricing arrangements.
In addition, our MasterCard Advisors group serves to help differentiate us from our competitors by
providing our customers and other clients with a wide range of consulting and information services designed to
help them improve the performance of their payments businesses. Services include strategic consulting and
strategy development, information and analytics, marketing management, and risk and operations management
advice. In 2008, MasterCard Advisors continued its series of research reports covering topics such as cardholder
satisfaction and loyalty based on analysis of surveys of 50,000 U.S. consumers known as Comparative
Cardholder Dynamics. MasterCard Advisors charges our customers and other clients fees for its professional
services or may offer these services as an incentive under business agreements with certain customers.
MasterCard Programs
MasterCard offers a wide range of payment solutions to enable our customers to design, package and
implement programs targeted to the specific needs of their customers, the cardholders. Our principal payment
programs, which are facilitated through our brands, include consumer credit and debit programs, commercial
payment solutions, prepaid programs, contactless payment solutions and emerging technologies. Our issuer
customers determine the competitive features for the cards issued under our programs, including interest rates
and fees. We determine other aspects of our card programs—such as required services and marketing strategy—
in order to ensure consistency in connection with these programs.
Consumer Programs—Credit and Charge
Overview. MasterCard offers a number of consumer credit and charge (“pay later”) programs that are
designed to meet the needs of our customers. For the year ended December 31, 2008, our consumer credit and
charge programs generated approximately $1.6 trillion in GDV globally, representing 62% of our total GDV for
the year ended December 31, 2008. As of December 31, 2008, the MasterCard brand mark appeared on
approximately 726 million consumer credit and charge cards worldwide, representing 3.6% growth from
December 31, 2007.
United States. We offer customized programs to customers to address specific consumer segments. Our
consumer credit programs include Standard, Gold, Platinum, World and World Elite MasterCard®cards.
Standard MasterCard cards are general purpose credit cards targeted to consumers with basic needs for a credit
card. Gold MasterCard®cards are targeted to consumers typically requiring a higher line of credit or spending
limit and one or more card enhancement services associated with a card. Platinum MasterCard®cards provide
still higher credit lines or spending limits and also provide a full range of card enhancement services, such as
loyalty reward programs. World MasterCard®cards are offered to affluent consumers and are required to have no
preset spending limit and the option to revolve a designated portion of the charges made. In 2008, MasterCard
continued to focus on the World Elite MasterCard card, a card platform for high-income, high net worth
consumers that offers a mix of travel benefits, rewards and global acceptance, including personalized travel
agency benefits.
International. In addition to programs offered in the United States, MasterCard makes available to
customers outside of the United States a variety of consumer card programs in selected markets throughout the
world. For example, MasterCard Electronic cards offer additional control and risk management features by
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