MasterCard 2014 Annual Report Download - page 12

Download and view the complete annual report

Please find page 12 of the 2014 MasterCard annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 102

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102

10
Marketing
We manage and promote our brands through advertising, promotions and sponsorships, as well as digital, mobile and social media
initiatives, in order to increase consumer preference for our brands and usage of our products. We sponsor a variety of sporting,
entertainment and charity-related marketing properties to align with consumer segments important to us and our customers. Our
advertising plays an important role in building brand visibility, usage and overall preference among cardholders globally. Our
“Priceless®” advertising campaign, which has run in 53 languages in 112 countries worldwide, promotes MasterCard usage
benefits and acceptance, markets MasterCard payment products and solutions and provides MasterCard with a consistent,
recognizable message that supports our brand around the globe. We have extended the Priceless brand to focus on consumers’
spending preferences - Priceless Cities® provides cardholders in 35 cities across all of our regions with access to special experiences
and offers, Priceless Causes™ provides cardholders with opportunities to support philanthropic causes, and Priceless Surprises®
provides cardholders with unexpected unique experiences when they use their cards.
Our Revenue Sources
We generate revenues by assessing our customers primarily based on GDV on the cards and other devices that carry our brands
and from the fees we charge to our customers for providing transaction processing and other payment-related products and services.
Our net revenues are classified into the following five categories:
• Domestic assessments. Domestic assessments are fees charged to issuers and acquirers based primarily on the dollar
volume of activity on cards and other devices that carry our brands where the merchant country and the issuer country
are the same.
• Cross-border volume fees. Cross-border volume fees are charged to issuers and acquirers based on the dollar volume of
activity on cards and other devices that carry our brands where the merchant country and issuer country are different.
• Transaction processing fees. Transaction processing fees are charged for both domestic and cross-border transactions
and are primarily based on the number of transactions.
• Other revenues. Other revenues consist of other payment-related products and services and primarily include fees
associated with consulting and research, fraud products and services, loyalty and rewards solutions, program management
services and a variety of other payment-related products and services.
• Rebates and incentives (contra-revenue). Rebates and incentives are provided to certain MasterCard customers and are
recorded as contra-revenue.
Pricing varies among our regions, as do rebates and incentives, which are customer-specific agreements and which provide them
with financial incentives and other support benefits to issue, accept, route, prioritize and promote our branded products and other
payment programs. These financial incentives may be based on GDV or other performance-based criteria, such as issuance of
new payment products, increased acceptance of our products, launch of new programs or execution of marketing initiatives.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Revenues” in Part II, Item 7 for
more detail about our revenue, GDV and processed transactions.
Intellectual Property
We own a number of valuable trademarks that are essential to our business, including MasterCard®, Maestro® and Cirrus®,
through one or more affiliates. We also own numerous other trademarks covering various brands, programs and services offered
by MasterCard to support our payment programs. Trademark and service mark registrations are generally valid indefinitely as
long as they are used and/or properly maintained. Through license agreements with our customers, we authorize the use of our
trademarks in connection with our customers’ issuing and merchant acquiring businesses. In addition, we own a number of patents
and patent applications relating to payments solutions, transaction processing, smart cards, contactless, mobile, electronic
commerce, security systems and other matters, many of which are important to our business operations. Patents are of varying
duration depending on the jurisdiction and filing date.
Competition
We compete in the global payments industry against all forms of payment including:
• cash and checks;