MasterCard 2012 Annual Report Download - page 13

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•Cross-Border and Domestic Processing. The MasterCard Worldwide Network provides our customers
with a flexible structure that enables them to support processing across regions and for domestic
markets. The network processes transactions throughout the world on our products where the merchant
country and issuer country are different (cross-border transactions). We process transactions
denominated in more than 150 currencies through our global system, providing cardholders with the
ability to utilize, and merchants to accept, MasterCard cards and other payment devices across multiple
country borders. For example, we may process a transaction in a merchant’s local currency; however,
the charge for the transaction would appear on the cardholder’s statement in the cardholder’s home
currency. We also provide domestic (or intra-country) transaction processing services to customers in
every region of the world, which allow customers to facilitate payment transactions between cardholders
and merchants within a particular country. We process most of the cross-border transactions using
MasterCard, Maestro and Cirrus-branded cards and process the majority of MasterCard-branded
domestic transactions in the United States, United Kingdom, Canada, Brazil and a select number of
other countries. Outside of these countries, most intra-country (as opposed to cross-border) transaction
activity conducted with our payment products is authorized, cleared and/or settled by our customers or
other processors without the involvement of the MasterCard Worldwide Network. We continue to invest
in our network and build relationships to expand opportunities for domestic transaction processing. In
particular, the Single European Payment Area (“SEPA”) initiative creates an open and competitive
market in many European countries that were previously mandated to process domestic debit
transactions with domestic processors. As a result, in addition to cross-border transactions, we now
process some domestic debit transactions in virtually every SEPA country.
•Extended Processing Capabilities. In addition to transaction switching, we continually evaluate and
invest in ways to strategically extend our processing capabilities in the payments value chain by seeking
to provide our customers with an expanded suite of payment processing solutions that meet the unique
processing needs of their markets. Examples include:
OMasterCard Integrated Processing Solutions®.MasterCard Integrated Processing Solutions
(“IPS”) is a debit and prepaid issuer processing platform designed to provide medium to large global
issuing customers with a complete processing solution to help create differentiated products and
services and allow quick deployment of payments portfolios across banking channels. Through a
single processing platform, IPS can, among other things, authorize debit and prepaid transactions,
assist issuers in managing risk using fraud detection tools, manage an issuer’s card base, and
manage and monitor an issuer’s ATMs. The proprietary MasterCard Total Portfolio View™ tool
provides a user-friendly customer interface to IPS, delivering aggregate cardholder intelligence
across accounts and product lines to provide our customers with a view of information that can help
them customize their products and programs. We continue to develop opportunities to further
enhance our IPS offerings and global presence.
OInternet Payment Gateways. We provide e-commerce processing solutions through internet
payment gateways, which are interfaces between merchants and acquirers that help move a
transaction through the payments network. Our gateways include DataCash®and MasterCard
Internet Gateway Service (MiGS), which offer payment service provider solutions across the globe.
These gateways offer a single interface to provide e-commerce merchants with the ability to process
secure payments and offer value-added solutions, including outsourced electronic payments, fraud
prevention and alternative payment options.
OStrategic Investments. We have invested strategically in various regions around the globe to
pursue opportunities in issuer, prepaid, acquirer and third-party processing. These investments
support and/or provide, among other things, prepaid processing, acquirer processing, third-party
processing services and software (as well as switching solutions) and complete processing solutions
for mobile payments.
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