MasterCard 2010 Annual Report Download - page 40

New regulations in one jurisdiction or of one product may lead to new regulations in other jurisdictions
or of other products.
Regulators around the world increasingly look at each other’s approaches to the regulation of the payments
and other industries. Consequently, a development in any one country, state or region may influence regulatory
approaches in other countries, states or regions. This includes the interpretation of the recent Wall Street Reform
and Consumer Protection Act and other regulatory and legislative activity relating to interchange. Similarly, new
laws and regulations in a country, state or region involving one product may cause lawmakers there to extend the
regulations to another product. For example, regulations like those affecting debit payments could lead to
regulations affecting credit and general use prepaid cards. See “Risk Factors—Legal and Regulatory Risks—
Government actions may prevent us from competing effectively against providers of domestic payments services
in certain countries which could adversely affect our ability to maintain or increase our revenues” in this Part I,
Item 1A.
As a result, the risks created by any one new law or regulation are magnified by the potential they have to be
replicated, affecting our business in another place or involving another product. These include matters like
interchange rates, network standards and network exclusivity and routing agreements. Conversely, if widely
varying regulations come into existence worldwide, we may have difficulty adjusting our products, services, fees
and other important aspects of our business, with the same effect. Either of these eventualities could materially
and adversely affect our business, financial condition and results of operations.
Government actions may prevent us from competing effectively against providers of domestic payments
services in certain countries, which could adversely affect our ability to maintain or increase our revenues.
Governments in certain countries, such as Russia, Ukraine and India, have acted, or could act, to provide
resources or protection to selected national payment card and processing providers. These governments may take
this action to support these providers. They may also take this action to displace us from, prevent us from
entering into, or substantially restrict us from participating in, particular geographies. As an example,
governments in certain countries are considering, or may consider, regulatory requirements that mandate
processing of domestic payments either entirely in that country or by only domestic companies. Such a
development would prevent us from utilizing our global processing capabilities for customers. Our efforts to
effect change in these countries may not succeed. This could adversely affect our ability to maintain or increase
our revenues and extend our global brand.
The payments industry is the subject of increasing global regulatory focus, which may result in the
imposition of costly new compliance burdens on us and our customers and may lead to increased costs and
decreased transaction volumes and revenues.
We are subject to regulations that affect the payment industry in the many countries in which our cards are
used. In particular, many of our customers are subject to regulations applicable to banks and other financial
institutions in the United States and abroad, and, consequently, MasterCard is at times affected by such
regulations. Regulation of the payments industry, including regulations applicable to us and our customers, has
increased significantly in the last several years. See “Business—Government Regulation” in Part I, Item 1 for a
detailed description of such regulation and related legislation. In addition to the Wall Street Reform and
Consumer Protection Act, examples include:
• Anti-money laundering regulation, such as Section 352(a) of the USA PATRIOT Act in the United
States and an anti-money laundering law enacted in India (which imposes requirements on payment
systems, such as MasterCard’s, and their customers).
• Payment systems regulation, such as the Indian Payments and Settlement Systems Act 2007, under
which payment system operators, such as MasterCard, operate under the authority and broad oversight
of the Reserve Bank of India. Increased regulatory focus in this area could result in additional
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