MasterCard 2010 Annual Report Download - page 41

obligations or restrictions with respect to the types of products that we may offer to consumers, the
countries in which our cards may be used and the types of cardholders and merchants who can obtain or
accept our cards.
• Regulations imposed by OFAC, which impose restrictions on financial transactions with certain
countries and with persons and entities included on the SDN List. It is possible that transactions
involving persons or entities on the SDN List may be processed through our payment system, and that
our reputation may suffer due to some of our financial institutions’ association with these countries or
the existence of any such transactions, which in turn could have a material adverse effect on the value of
our stock.
• Legislation, such as that enacted by certain U.S. states, regarding investments by pension funds and
other retirement systems in companies that have business activities or contacts with countries that have
been identified as terrorist-sponsoring states. As a result of such legislation, pension funds and other
retirement systems may be subject to reporting requirements with respect to investments in companies
such as ours or may be subject to limits or prohibitions with respect to those investments that may
materially and adversely affect our stock price.
• Issuer practices legislation and regulation, including the Credit CARD Act (which is being implemented
through regulations issued by the Board of Governors of the United States Federal Reserve System),
which are having a significant impact on the disclosures made by our customers and on our customers’
account terms and business practices by, among other things, making it more difficult for credit card
issuers to price credit cards for future credit risk and significantly affecting the pricing, credit allocation,
and business models of most major credit card issuers. Additional regulations include regulations by the
Board of Governors regulating overdraft fees imposed in connection with ATM and debit card
transactions.
• Regulation of Internet transactions, including legislation enacted by the U.S. Congress (and applicable
to payment system participants, including MasterCard and our customers in the United States) requiring
the coding and blocking of payments for certain types of Internet gambling transactions, as well as
various additional legislative and regulatory activities with respect to Internet transactions which are
being considered in the United States.
Increased regulatory focus on us, such as in connection with the matters discussed above, may result in
costly compliance burdens and/or may otherwise increase our costs, which could materially and adversely impact
our financial performance. Similarly, increased regulatory focus on our customers may cause such customers to
reduce the volume of transactions processed through our systems, which could reduce our revenues materially
and adversely impact our financial performance. Finally, failure to comply with the laws and regulations
discussed above to which we are subject could result in fines, sanctions or other penalties, which could materially
and adversely affect our results of operations and overall business, as well as have an impact on our reputation.
Regulation in the areas of consumer privacy, data use and/or security could decrease the number of
payment cards issued and could increase our costs.
We and our customers are also subject to regulations related to privacy and data protection and information
security in the jurisdictions in which we do business, and we and our customers could be negatively impacted by
these regulations. Recently, these topics have received heightened legislative and regulatory focus in the United
States (at both the federal and state level), in Europe and in other jurisdictions around the world. Regulation of
privacy and data protection and information security in these and other jurisdictions may increase the costs of our
customers to issue payment cards, which may, in turn, decrease the number of our cards that they issue. Any
additional regulations in these areas may also increase our costs to comply with such regulations, which could
materially and adversely affect our profitability. Finally, failure to comply with the privacy and data protection
and security laws and regulations to which we are subject could result in fines, sanctions or other penalties,
which could materially and adversely affect our results of operations and overall business, as well as have an
impact on our reputation.
31