investment community meeting yg...2.5 billion adults worldwide are unbanked2 prepaid3 will grow to...

September 15, 2010

Investment Community Meeting

MasterCard Incorporatedy g

Agenda

8:30 a.m. Welcome Barbara Gasper8:35 a m Opening Remarks Bob Selander

Agenda

8:35 a.m. Opening Remarks Bob Selander8:45 a.m. Strategic Discussion Ajay Banga9:05 a.m. Product & Solutions Overview Gary Flood9:20 a.m. Core Products Tim Murphy9:40 a.m. Emerging Payments Ed McLaughlin

10:00 a.m. Break

10:20 a.m. U.S. Markets Chris McWilton10:40 a.m. International Markets Walt Macnee11:00 a.m. European Opportunities Javier Perez11:20 a.m. Financial Perspective Martina Hund-Mejean11:40 a m Q&A Session Management11:40 a.m. Q&A Session Management12:25 p.m. MA Labs & Product Demo Intro Garry Lyons12:35 p.m. Closing Remarks Ajay Banga

12:45 p.m. Lunch, Mingle & Product Demos Management & Staffp , g g

3:00 p.m. Event Adjourns

Investment Community MeetingSeptember 15, 2010

Forward-Looking Statements

Today’s presentation may contain, in addition to historical information forward looking statements within the meaning of

Forward Looking Statements

information, forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are based on our current These forward looking statements are based on our current assumptions, expectations and projections about future events which reflect the best judgment of management and involve a number of risks and uncertainties that could cause actual results to diff i ll f h d b ddiffer materially from those suggested by our comments today. You should review and consider the information contained in our filings with the SEC regarding these risks and uncertainties.

MasterCard disclaims any obligation to publicly update or revise any forward-looking statements or information provided during today’s presentations.y p


Bob Selander

September 15, 2010Executive Vice Chairman


Change through Innovationy g

MasterCard’s TransformationOver the Last DecadeOver the Last Decade

We faced challenges

...and responded withinnovative & competitive solutionschallenges... innovative & competitive solutions

• Strengthened brands and marketing• Launched PricelessWeak Brands

• Rewrote core systems• Developed Competitively Advantaged Offerings

DatedTechnology

• Created customer teams• Introduced value-added services & MasterCard Advisors

AssociationMentality

• Merged with EuropayDisparate • Merged with Europay• Created single global entity

DisparateStructure

• Changed ownership and governance structureLack of Capital

September 15, 2010

• Increased level of commercial rigorand Flexibility


Learning by InnovatingLearning by Innovating

We made mistakesWe learned lessonsthat made us

along the way

• Mondex

more successful

• Listen to customers

• Debit in the U.S. • A global, top-down approach doesn’t always work

I t f l i f • Importance of planning for different scenarios

September 15, 2010 Investment Community Meeting

Evolving Industry and Environment

Trends present both

Evolving Industry and Environment

pchallenges & opportunities

• Transformation of payments

• New customers

• Nationalism/regulation

• Demographic trends• New customers

• New competition

• Demographic trends

• Secular trends

We continue to deliver innovative solutions

• Mobile phone initiatives

• MoneySend

• inControl

September 15, 2010

• inControl


SummarySummary

Our innovative approach...

whether in the strategic business decisionswhether in the strategic business decisionswe’ve made over the last decade or thecompetitive solutions we’ve introducedpin recent months

...will continue todrive momentum across our business.


Ajay Bangaj y gPresident and Chief Executive OfficerSeptember 15, 2010


Looking to the Futurey g

MasterCard TodayMasterCard Today

Unified, global presence

I i l diff i d Increasingly differentiated assets

Challenging environmentChallenging environment

Strong financial performance

Significant growth potential


Key Trends Creating Opportunitiesin the “War on Cash”in the War on Cash

C ti d b i ti

Ongoing increase in acceptance

Continued urbanization

Ongoing increase in acceptance

Financial inclusion 8-10%Market Growth

Growing affluent and middle class

Market Growth

Growing importance of youth


Other Trends PresentingOpportunities and ChallengesOpportunities and Challenges

Increasing Role • Promoting electronification

• Regulatory challenges

Increasing Roleof Governments

• Merchants, telcos and governments as customers

New Entrantsinto Payments governments as customers

• Increasing competition

y

• Product innovationNewTechnologies


MasterCard Strategy:Looking to the FutureLooking to the Future

BUILDNew BusinessesBUILDNew Businesses

DIVERSIFYGeographies & CustomersDIVERSIFYGeographies & Customers

GROWCore BusinessGROWCore Business

+8-10%M k t

3-5%G th f

Low toLong-TermN t R

G h ill h h b h

+ =MarketGrowth

Growth fromStrategic Investments Mid-TeensNet Revenue

Growth

Growth will come through bothdisplacement of cash and checks

and increased market share.


Strategy Enables Future GrowthStrategy Enables Future Growth

GROWGROW

Credit Debit

Core BusinessCore Business

Credit Debit• Segmented offerings and

product enhancements• Reinforce strong

position outside U.S.

Processing

• New geographiesand customers

• Increase U.S. marketshare profitably

Prepaid Processing• Public sector, corporate

and consumer reloadable• Domestic processing

• Expand processing

Prepaid

September 15, 2010

• Grow market shareg

capabilities


Strategy Enables Future GrowthStrategy Enables Future Growth

DIVERSIFYDIVERSIFYGeographies & CustomersGeographies & Customers

Geographies Customers• Invest disproportionately in

high growth markets

• Grow acceptance, channels,

Relationships with:• Merchants• Telcos• Governments

processingGovernments

• Transit Operators


Strategy Enables Future Growth

BUILDBUILD

Strategy Enables Future Growth

New BusinessesNew Businesses

MasterCard Labs• Ideate, incubate and test

new ideas

e-Commerce & Mobile• Drive faster than market

growth

Information Services

new ideasgrowth

• Partner and build payments infrastructure in emerging markets Information Services

• Monetize information through diversified channels

markets

• Differentiate the consumer experience in developed markets

September 15, 2010

• Enhance merchant servicesmarkets


Acquisitions Play a Role in the StrategyAcquisitions Play a Role in the Strategy

DataCash fits our acquisition criteria well

• Drive e-Commerce growth in tandem with acquiring relationships

• Expand DataCash and MiGS gateway

StrategicRationale

Expand DataCash and MiGS gateway products beyond Europe and Asia/Pacific

• Enhance fraud management expertise

• Deliver new products with minimal merchant integration challenges

• Clear fit with e-Commerce strategy

• Complements and enhances existing assets

• Attractive returns

DealCriteria

September 15, 2010

• Attractive returns


Striking the rightglobal / local balance

Driving StrategyE ti global / local balance

Sharpening our

Execution

p gcompetitive edge through:

• Innovation

• Thoughtful risk taking

• Speed to market


Gary FloodGary FloodPresident, Global Products & SolutionsSeptember 15, 2010


Global Products & Solutionsy g

Optimizing Solutions for GrowthOptimizing Solutions for Growth

Integrated Core ProductsCore ProductsIntegratedSolutions

Ad i S iAd i S i

Core ProductsCore Products

Emerging PaymentsEmerging Payments

Advisory ServicesAdvisory Services

ProcessingProcessing

MarketingMarketing

MasterCard LabsMasterCard Labs


Global Opportunity toDisplace Cash and ChecksDisplace Cash and Checks

85% of the orld’s transactions Global cons mer Check1 ol me85% of the world’s transactionsare still done in Cash1

Global consumer Check1 volumeequals $9 trillion

2.5 billion adults worldwideare unbanked2

Prepaid3 will grow to$850 billion by 2017

Over $1.7 trillion Commercial4

opportunity globally by 2015More than $1 trillion ine-Commerce5 sales globally by 2011

4.6 billion Mobile Phones6 globally, with just 10% smart phone penetration

Opportunity to displace cash inTransit7 space is $29 billion globally

September 15, 2010

Sources: 1. MasterCard Advisors; 2. McKinsey; 3. BCG; 4. Packaged Facts; 5. Glenbrook Partners; 6. GSMA; 7. Datamonitor


Strategic PillarsStrategic Pillars

BUILDBUILDDIVERSIFYDIVERSIFYGROWGROWNew Businesses

Build for the futureBuild for the future

New Businesses

Build for the future

Income StreamContribution through expanded servicesContribution through expanded services

Income StreamContribution through expanded services

Core BusinessRevenues and market share in core businessRevenues and market share in core business

Core BusinessRevenues and market share in core business

• MasterCard Labs• e-Commerce• Mobile Payments

i


i


i

• Advisory Services• Network Products• inControl



• Credit• Debit• Prepaid

i l


i l


i l • Remittances• Information Services• Transit

• Remittances• Information Services• Transit

• Remittances• Information Services• Transit

• New Customers• New Markets• New Customers• New Markets• New Customers• New Markets

• Commercial• Processing • Commercial• Processing • Commercial• Processing

+ =8-10%Market

3-5%Strategic

Low tod

Long-TermNet Revenue

September 15, 2010

+ =MarketGrowth

StrategicInvestments Mid-TeensNet Revenue

Growth


Sustainable DifferentiationRequires Continuous InnovationRequires Continuous Innovation

T d N T L TToday

Differentiated assets provide leverage

Near-Term

Innovation supported bykey strategic investments

Longer-Term

Fully-integrated continuous innovation

• Integrated Solutions

• Unified Global Entity

N t k R

• Prepaid

• Information Services

C

• Drive value for:

– Customers

M h t • Network Responseand Flexibility

• inControl

• Advisory Services

• e-Commerce

• Mobile / P2P

• MasterCard Labs

– Merchants

– End Consumers

Advisory Services

• Data Analytics

• Smart Data

• Open API

• Consumer Segmentation

• New Customers


Processing Creates ValueProcessing Creates Value

Extended Capabilities New Channelsp• Integrated Processing Solutions• Strategic Payment Services• MiGS and DataCash

• e-Commerce• Mobile• Transit

MasterCard Worldwide

Global • 210 Countries

23 000 Fi i l

Local• Domestic Processing

CWorldwide Network

• 23,000 FinancialInstitutions

• Currency• Rules

Unique• Central & Distributed Network• 99.999% Global Availability• Fastest Global Network

Value-Add• inControl• Real-time Risk Scoring• Rewards

September 15, 2010

• Fastest Global Network • Rewards


Advisory ServicesAdvisory Services

S l i N d & L iSolving Needs &Driving Growth

Leveraging:• Data• Insightsg• Payments Expertise• Problem-Solving Skills

Three lines of business:• Consulting• InformationInformation• Managed Services


Marketing StrategyCorresponds to Market Evolution

EmergingEmergingEmergingEmerging DevelopingDevelopingDevelopingDeveloping MatureMatureMatureMatureEmergingEmerging DevelopingDeveloping MatureMature

Corresponds to Market Evolution

g gg gMarketsMarkets


p gp gMarketsMarkets

p gp gMarketsMarkets MarketsMarketsMarketsMarkets


p gp gMarketsMarkets MarketsMarkets

Brand PreferenceBrand PreferenceBrand AwarenessBrand Awareness

• Consumer & merchant education and awareness

• Fully integrated marketing• Product innovation

• Acceptance development

• Issuance support

• Infrastructure/business model

• Consumer benefit driven from functionality

• Issuer & merchant strategic marketing alignment

September 15, 2010

• Infrastructure/business model• Activation


Australia: Targeting Gen Y to Drive Debit Australia: Targeting Gen Y to Drive Debit

Australian debit volume increased 89%1

Top of wallet behavior more than doubled2

among the target demographic


Note: 1. YOY results as of Q1 2010; 2. Q1 2010 vs. Q1 2008

Australia: Targeting Gen Y to Drive Debit Australia: Targeting Gen Y to Drive Debit

Pl Vid<Play Video>


Global Products & SolutionsGlobal Products & Solutions

Powering

Tremendousopportunities exist

Powering MasterCard’s

GrowthInnovation and d ff lGrowth differentiation are critical

A global strategy with market-A global strategy with market-level insight, alignment and flawless execution drive success


Tim MurphyTim MurphyChief Product Officer, Core ProductsSeptember 15, 2010

Driving Growth at the Core:


Driving Growth at the Core:Credit, Debit, Prepaid

y g

Credit:Core to Our GrowthCore to Our Growth

2Q10 YOY Growth

Volumes stabilizing in the US; growth in ROW

US: -1.5%

ROW: 9.8%

Leading innovation in product and card design

hi / f h ffl

Focused on:

Partnerships / assets for the Affluent

Consumer-centric value propositions

C i l t


Commercial payments

Credit: Differentiation for the Affluent

The Right

Differentiation for the Affluent

The RightPartnerships

TurkishAirlines

Aeroflot(Russia)

RelevantProducts

BBVABlack

ItauBlackProducts Black Black

InnovativeDesign

Chase ContinentalOnePass


Credit: Substantial Opportunity in CommercialSubstantial Opportunity in Commercial

2Q10 YOY GrowthFastest growing US: 4.3%

ROW: 14.1%

Fastest growing segment in credit

Gaining share in Europe, pursuing greenfieldopportunities in APMEA and LAC

Leveraging differentiated product assets

CommercialLufthansa Miles & More


Miles & More

Recent US Financial Regulation:Impact on DebitImpact on Debit

• Debit economics

Impacts Opportunities• Brand sales in light ofeb t eco o cs

• Network exclusivity

• Discounts at POS

a d sa es g t onetwork exclusivity

• Prepaid for financial inclusion

• Credit min / max

Prepaid for financial inclusion


Debit:Driving Growth in Local MarketsDriving Growth in Local Markets

2Q10 YOY GrowthSignificant and

US*: 0.8% / 21.0%

ROW: 28.7%

Significant and sustained growth around the world

Leveraging country-level strategies, well positioned in many markets

i i fi bl d l i k k

Focused on:

well positioned in many markets

Winning profitable deals in key markets

Winning domestic switching

A l ti h i


Accelerating cash conversion* Includes/excludes US deconversions

Debit:Being Local is Key to Winning BusinessBeing Local is Key to Winning Business

IndiaState Bankof India

Created customized offering to largest bank in Indiabank in India

EuropeTEB (Turkish Next generation Economy Bank) Display Card

debit card


Prepaid:Capturing the Global OpportunityCapturing the Global Opportunity

Large & quickly growing global opportunityLarge & quickly growing global opportunity

IPS provides a robust prepaid issuer IPS provides a robust prepaid issuer processing solution across all categories

bli S

Focused on three verticals:

Public Sector

Corporate

C R l d bl


Consumer Reloadable

Prepaid:Leveraging ValueLeveraging Value

Public SectorPublic SectorDirect Express®

Debit MasterCard®

Gives recipientsfaster access to their funds and saves taxpayer dollarstaxpayer dollars

ConsumerTravelex and

k f ChiWorld’s largest distributor of Bank of China distributor of foreign currency prepaid cards


SummarySummary

Growth at thecore continues... Credit in focus and

generating momentum g g

Debit growth continues in Debit growth continues in US and around the world

Prepaid is the next generation opportunity


generation opportunity

Ed McLaughlin

September 15, 2010

Ed McLaughlinChief Emerging Payments Officer


Growth through Innovationy g

Past Present & Future StatePast, Present & Future State

A strong global network and brandwith robust assets / applications

Whowe are

Building infrastructures and enhancing i d h ld

What we areki consumer experiences around the worldworking on

Wh Facilitating commerce by drivinggrowth in new markets and segments

Where weare going


Accelerating e-CommerceAccelerating e Commerce

Rapid adoption of the Internet Global Online Sales

(in USD Billions)p p

continues to bolster online sales

Brand loyalty, security and

643768

8063%

18%

45% Brand loyalty, security and convenience drive growth

2007 2008 2009

32%

• Infrastructure:

Focused on:102%

YTD June 2010 Y/Y Growth

North America Europe Asia Pacific LAC + Other

Gateways, payment options, fraud tools

• Consumer Engagement:Maestro online, MasterCard MarketPlace,social media

9%28%

66%


social media

Source: MasterCard Analysis and ComScore data

NA EU AP LAC

Transitioning to MobilityTransitioning to Mobility

Global Mobile Payments Volume Mobile phones…

250

300

y ob e p o esUbiquitous part of consumers’ daily lives

150

200

ion

s Overall CAGR68%

Innovation platform througha partnership approach

• Infrastructure: Contactless, Mobile

Focused on:100

150

Bill

Payments Gateway

• Consumer Application:PayPass, MoneySend, inControl alerts,API d A2008 2009 2010e 2011e 2012e

0

50

API and Apps


Source: Arthur D. Little, 2009

Mobile MomentumMobile Momentum

MasterCard introduces Mobile Payments Gateway, an m-wallet

First Commercial bil NFC

Partnership will pursue mobile Gateway, an m wallet

platform linking MasterCard cards

First Market Trial of Personalized

Custom technology trial of

Pioneer mobile phone debit

First large scale deployment of

mobile NFC Deployment

commerce opportunities

of PersonalizedNFC-Enabled Mobile Phones

200 phones payment pilot in

technology trial of Near Field Communication and MTA

phone debit payments in the UK, using Maestro PayPass

Turkey’s first mobile phones, enabled

deployment of PayPass in a mobile phone (60K Customer)

First Mobile Pilot in India (Bangalore)

First Mobile PayPass Tagpilot in Canada

payment pilot in partnership with ViVOtech

Fully-integrated on demand

First trial of PayPass-enabled mobile

Enable customers to make contactless

phones, enabled with MasterCard PayPass

First trial in Taiwan to make

India (Bangalore) using Mobile PayPass

on-demand person-to-person mobile payment service

enabled mobile phones for secure EMV payments

make contactless payments via phones with MasterCard PayPass

Partnering in the development of a

Taiwan to make use of NFC smart posters andm-coupons



Mobile Payments proposition that focuses specifically on consumer convenience


Enabling Transit PaymentsEnabling Transit Payments

High volume, faster than cash but current systems are cumbersome and inconvenient

Transit is an anchor for everyday spend

Paris

Taipei

New York CitySalt Lake City

Liverpool

IstanbulNewarkCleveland

Miami

Norfolk

Warsaw

Las Vegas • Infrastructure: Transit gateway

Focused on:

Rio de Janeiro

Kaohsiung Transit gateway,open loop network

• Consumer Experience: PayPass, prepaid,


PayPass, prepaid,mobile integration

SummarySummary

Driving growth in emerging Enhancing consumer g g g gmarkets, devices and segments

L i d di

Enhancing consumer experience through mobility, access and

Leveraging and expanding our infrastructure

personalization


Chris McWiltonChris McWiltonPresident, US MarketsSeptember 15, 2010

US MarketsInvestment Community Meetingy g

US MarketsUS Markets

Winning deals in the fast-growing Debit spacehas created excellent momentum for US Debithas created excellent momentum for US Debit

Well positioned for the impact of the financialf l lreform legislation

Engaging with non-traditional customers:Engaging with non-traditional customers:governments, merchants, telcos, others to grow revenue


Significant Momentum – “Game On!”Significant Momentum Game On!


Strategy to Address Recent US LegislationUS Legislation

Ensure Fed has a well-informed view

Leverage advantages of MasterCard signature and PIN debit offerings

Provide financial institutions withnew solutions

Merchant focused innovation


Non-Traditional CustomersNon Traditional Customers

Engaging with merchants, governments, telcos and other players

New U.S. BusinessDevelopment function devotedto non-traditional players


Current Customer PrioritiesCurrent Customer Priorities

Complying with regulationand managing uncertainty

Seeking to replace orh tenhance revenue streams

O ti i iOptimizingportfolio economics


US Strategic Priorities

Opportunity

US Strategic Priorities

Checks EFT

2009 PCE $10T

• More than half of themarket is still using paper

• Economic downturn causinghif bi

Debit

Checks26%

Cash26%

Cards32%

EFT16%

consumer shift to Debit

• Regulation driving changein competitive landscape

Strategic Imperatives

• Leverage strong momentume e age st o g o e tu

• Drive product innovation anddemonstrate differentiated value

• Maximize processing• Maximize processing


Source: Euromonitor

US Strategic PrioritiesUS Strategic Priorities

Opportunity

• Will represent a $442B market by 2017E

• Regulation driving the unbanked to Prepaid

• Adjunct to our Debit business

Prepaid• Adjunct to our Debit business


• Build already strong presence in corporate Build already strong presence in corporate, public sector and consumer reloadable verticals


Source: Boston Consulting Group


Opportunity

• Favorably positioned with secular trends

• Credit cards accounted for one-fifthof PCE in 2009

Credit

• Regulation will drive product innovation


• Protect and grow core Creditotect a d g o co e C ed t• Leverage consumer insights to drive

product innovation• Capitalize on commercial growth as

l b d


corporate travel reboundsSource: Economic Intelligence Unit


Opportunity

• Double-digit growth in online salesdespite tepid overall retail sales growth

• US accounts for more than 30% of all e-Commerce

global e-Commerce volume


• Grow share of online card spend aheadG o s a e o o e ca d spe d a eadof the market

• Partner with targeted online players

• Leverage MasterCard Marketplace


• Leverage MasterCard Marketplace


Opportunity

• Significant competitive differentiator

• Regulation driving changes in Issuerbusiness models

AdvisoryServices

• Economy driving changes in consumer trends


• Improve profitability of Issuer portfoliosp o e p o tab ty o ssue po t o os

• Demonstrate predictive capabilities and insights


Leveraging significantLeveraging significantdeal activity and momentum

Exercising prudence ine c s g p ude cefinancial negotiations

Investing in innovatived t d l ti

US Poised for

Growth products and solutions

Focusing on both traditionaland non-traditional customers

Growth

and non traditional customers

Building, Growing andDiversifying revenue streams


Walt MacneeWalt MacneePresident, International MarketsSeptember 15, 2010


International Marketsy g

International Markets: Large and Growing

Our Objective...Sustained double digit revenue growth

International Markets: Large and Growing

Sustained double digit revenue growththrough Global resources embedded in local execution.

MasterCard Net Revenue

55%US International

210 Countries with

$5.1B

$

45%

48%

210 Countries with$2.8B Net Revenue$3.3B

CAGR21%

52%45%

CAGR10%


2006 2009

Strategic Framework for Capturing Opportunities and Addressing ChallengesOpportunities and Addressing Challenges

Prioritization of marketsPrioritization of marketsbased on size of opportunity andpotential returns for MasterCard

f kSegmentation of marketsto identify common themes and approach

Country-level strategies

GROWGROW BUILDBUILDDIVERSIFYDIVERSIFY

Country level strategiesaround MasterCard strategic pillars of:

GROWCore Business

Dial Up the Core BusinessDial Up the Core Business

GROWCore Business

Dial Up the Core Business

BUILDNew Businesses

Build for the FutureBuild for the Future

BUILDNew Businesses

Build for the Future

DIVERSIFYIncome StreamIdentify New Customersand GeographiesIdentify New Customersand Geographies

DIVERSIFYIncome StreamIdentify New Customersand Geographies


Global Drivers Translate intoMarket-level Opportunities and ChallengesMarket level Opportunities and Challenges

Secular Trends

Demographic TrendsOpportunities& Challenges

Transformationof Payments

& Challenges

Evolving Roleof Governments


Secular Trends:Growth of Cross-Border Travel

Brazil22%

Growth of Cross Border Travel

India

Brazil

VenezuelaUAE

16%

18%

20%

of

pen

dit

ure

China

Si

Peru

Nigeria

UAE

10%

12%

14%

-2009 C

AG

Rer

Tou

rist

Exp

Singapore

S K

AustraliaPoland

MexicoCanada USA

ItalySpain4%

6%

8%

2004

Cro

ss-B

ord

e

S. KoreaCanada

France GermanyItaly

Netherlands0%

2%

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000

2009 Cross Border Tourist Expenditure (in USD Millions)

$216,262

2009 Cross-Border Tourist Expenditure (in USD Millions)

Source: Euromonitor International


Capturing Growth in Cross-BorderCapturing Growth in Cross Border

GermanyLeveraging domestic position

China Won all 9 recent co-brands to

i to capture outbound travel

capture growing cross-border in China


Demographic Trends: Reaching the Un/Under-bankedReaching the Un/Under banked

140%

100%

120%2009 Penetration 2004 Penetration

Developed Countries

Developed Countries

Emerging Countries

60%

80%Emerging Countries

Developed Countries

20%

40% Emerging Countries

0%

20%

Banked Population(as % of 15+ Population)

Broadband Penetration(Subscribers per Household)

Mobile Penetration(Subscribers per Capita)


Source: Euromonitor International

Mobile Payments:Reaching the Banked and Un/Under-bankedReaching the Banked and Un/Under banked

MasterCard introduces Mobile Payments Gateway, an m-wallet

First Commercial bil NFC

Partnership will pursue mobile Gateway, an m wallet

platform linking MasterCard cards

First Market Trial of Personalized

Custom technology trial of

Pioneer mobile phone debit

First large scale deployment of

mobile NFC Deployment

commerce opportunities

of PersonalizedNFC-Enabled Mobile Phones

200 phones payment pilot in

technology trial of Near Field Communication and MTA

phone debit payments in the UK, using Maestro PayPass


deployment of PayPass in a mobile phone (60K Customer)

First Mobile Pilot in India (Bangalore)

First Mobile PayPass Tagpilot in Canada

payment pilot in partnership with ViVOtech

Fully-integrated on demand

First trial of PayPass-enabled mobile

Enable customers to make contactless


First trial in Taiwan to make

India (Bangalore) using Mobile PayPass

on-demand person-to-person mobile payment service

enabled mobile phones for secure EMV payments

make contactless payments via phones with MasterCard PayPass

Partnering in the development of a

Taiwan to make use of NFC smart posters andm-coupons



Mobile Payments proposition that focuses specifically on consumer convenience


Transformation of Payments TrendTransformation of Payments Trend

The changing payments landscape provides g g p y p pnew opportunities with non-traditional customers and innovative products but also introduces new challenges

New Types of

also introduces new challenges

New Types of Customers

New Technologiesand Products


Expanding Our Customer BaseExpanding Our Customer Base

Strategic Global Prepaid Alliance with Travelex

Co-Brand Partnership Spanning Co Brand Partnership Spanning 11 Countries in Latin America


Evolving Role of Governments TrendEvolving Role of Governments Trend

Working with regulatory bodies to drive positive change

MasterCard is actively partnering Supporting financial inclusion

in emerging marketswith governments

in emerging markets

Driving electronic payments i f d linfrastructure development


RussiaSupporting Government’s Payments AgendaSupporting Government s Payments Agenda

MasterCard partners with Sberbank Russia’s MasterCard partners with Sberbank, Russia s

largest retail bank, to offer customers

Maestro Debit Cards instead of

traditional savings passbooks.


International Markets

F i

International Markets

Focusingon market trendsThe

Growth Tailoringcountry-level strategies

Growth Enginefor MasterCard

Leveragingglobal resources

for MasterCard

Adapting innovationfor local execution


Javier PerezJavier PerezPresident, MasterCard EuropeSeptember 15, 2010

Europe:


Europe:Opportunities for Growth

y g

Europe: Largest PCE in the World Europe: Largest PCE in the World

2009 Global PCEUS$ 34T

Europe

LAC9%

Canada 3%

US$ 34T

Europe32%

US29%

APMEA


27%

Source: Economist Intelligence Unit (EIU)

Europe’s Card Payments Business isFar from Being Mature and Saturated

United

Far from Being Mature and Saturated

2009 Continental Europe PCE

d

UnitedStates

2009 Continental Europe PCE$10T

Spendon Cards 31%23%

MasterCardMarket Share 27%

Continental Europe

50%

MasterCardSwitching Ratio 90%

Continental Europe has substantial potential to grow

19%


Sources: PCE – EIU, Spend on Cards – Euromonitor, Market Share – Nilson, RBR, Processing data- Internal data

MasterCard is Well Positionedto Capture the Opportunityto Capture the Opportunity

A starting position of strength

Building for the future with products and partnerships

An active force inshaping the industry

Giulio Tremonti, Italy's Minister of Welfare, presents the new Maestro social card to the press.

Global and independent


Leveraging the Single Euro Payments AreaLeveraging the Single Euro Payments Area

SEPA opens competition for 97% of domestic transactions

2006 2009

Domestic Debit SwitchingIcelandIceland IcelandIcelandg

No Domestic Debit Switching

DKDK

l dl d

EstoniaEstonia

LatviaLatvia

LithuaniaLithuania

FinlandFinland

NorwayNorway

SwedenSweden

IrelandIreland

DKDK

l dl d

EstoniaEstonia

LatviaLatvia

LithuaniaLithuania

IrelandIreland

SwedenSweden

NorwayNorway

FinlandFinland

PolandPolandGermanyGermany

NLDNLD

SpainSpainPortugalPortugal

ItalyItaly

FranceFranceSwitzerlandSwitzerland

SloveniaSlovenia

GreeceGreece

BulgariaBulgaria

RomaniaRomaniaHungaryHungary

Czech Rep.Czech Rep.SlovakiaSlovakia

Lux.Lux.BelgiumBelgium

AustriaAustria

PolandPolandGermanyGermany

NLDNLD

SpainSpainPortugalPortugal

ItalyItaly

FranceFranceSwitzerlandSwitzerland

SloveniaSlovenia

GreeceGreece

BulgariaBulgaria

RomaniaRomaniaHungaryHungary

Czech Rep.Czech Rep.SlovakiaSlovakia

Lux.Lux.BelgiumBelgium

AustriaAustria

Percent of MasterCard Domestic Debit Transactions Switched3.4% 6.9%

CyprusCyprusMaltaMalta

CyprusCyprusMaltaMalta


We are now switching domestic debit in every SEPA country

Unlocking Opportunity in The Netherlands

Th

Unlocking Opportunity in The Netherlands

Enhancing the consumer experience

Then Domestic scheme:100% of Debit cards and domestic volume

Challenges • Nationalist sentiment

• Cost of migrating merchants to EMV

D li iti i

Now • 90% of Dutch Debit cards converted to EMV Maestro

• Additional security and features for consumers

• Deliver a positive consumer experience

Additional security and features for consumers

• MasterCard begins processing Dutch domestic Debit transactions

Processing all Dutch domestic transactions would increaseProcessing all Dutch domestic transactions would increaseMasterCard Europe’s processed transactions by 40%


Unlocking Opportunity in France

Th

Unlocking Opportunity in France

Sparking innovation and choice

Then • Strong domestic schemes controlled by banks

• Difficult for non-traditional playersto enter market

Challenges • “Breaking the market”

• Legacy of co-branding restrictions

Now • Carrefour:First major MasterCard-only Issuer in France

• Auchan and others follow; unique card propositions emerge

• 2.5 million PayPass cards within 18 months

• MasterCard begins processing French domestic Debit transactions


Well Positioned to Seize the Opportunity

2006 2009 2015 E

Well Positioned to Seize the Opportunity

2006 2009 2015 E

$8T $10T $12TContinentalEurope PCE

Spendon Cards

20% 23% +

MasterCardMarket Share

46% 50% +

MasterCardSwitching Ratio

15% 19% +


Sources: PCE – EIU, Spend on Cards – Euromonitor, Market share – RBR, Processing data – Internal data

Martina Hund MejeanMartina Hund-MejeanChief Financial OfficerSeptember 15, 2010


Financial Perspectivey g

Topics for TodayTopics for Today

2010 Outlook

R b t & I tiRebates & Incentives

Capital Structure Considerations

Long-Term Growth Opportunity

fUpdated Long-Term Performance Targets


WorldwideGross Dollar Volume (GDV) GrowthGross Dollar Volume (GDV) Growth

Reported Processed

10.811.9

15%

%

As Reported

Impact of Deconversions

p

2.53.4

5.2

10.89.8

10%

al G

row

th %

5 6

8.38.5

4 6

0.35.9

5%

Loca

5 6

0.6

5.6 4.60.6

Q3'09 Q4'09 Q1'10 Q2'10 Jul/Aug

0%

5.6 Processed


Q3 09 Q4 09 Q1 10 Q2 10 Jul/Aug

US CreditGross Dollar Volume GrowthGross Dollar Volume Growth

0.00%Reported 1.2 Processed

-1.5

0.0

-5%

0%

%

p 1.2 Processed

-8.0-10%

5%

al G

row

th %

-13.0-15%

Loca

-17.9

Q3'09 Q4'09 Q1'10 Q2'10 Jul/Aug

-20%


Q3 09 Q4 09 Q1 10 Q2 10 Jul/Aug

US DebitGross Dollar Volume GrowthGross Dollar Volume Growth

Reported Processed

22.321.0 20.8

20%

30%

%

As Reported


p

2.3

15.3

20.2 25.85 6

12.8

10%

20%

al G

row

th %

5.210.5

7.00.8

-5 0

0.45.6

0%

Loca

0 7 Processed 5.0

Q3'09 Q4'09 Q1'10 Q2'10 Jul/Aug

-10%

0.7 Processed


Q3 09 Q4 09 Q1 10 Q2 10 Jul/Aug

Rest of WorldGross Dollar Volume GrowthGross Dollar Volume Growth

Reported Processed

11.6

14.8 14.5

14.012%

16%

%

p

12.5 Processed

7.48%

12%

al G

row

th %

4%

Loca

Q3'09 Q4'09 Q1'10 Q2'10 Jul/Aug

0%


Q3 09 Q4 09 Q1 10 Q2 10 Jul/Aug

WorldwideProcessed TransactionsProcessed Transactions

12.1

15%

%

As Reported


7.61.6 4.8 9.8 12.0

8.2

9.4 9.910%

al G

row

th %

6.6

5%

Loca

4.6

0.1 0.1

Q3'09 Q4'09 Q1'10 Q2'10 Jul/Aug

0%


Q3 09 Q4 09 Q1 10 Q2 10 Jul/Aug

WorldwideCross-Border Volume GrowthCross Border Volume Growth

15.2 15.0

14%

18%

%

10.9

10%

al G

row

th %

3.5

2%

6%

Loca

-0.5

Q3'09 Q4'09 Q1'10 Q2'10 Jul/Aug

-2%


Q3 09 Q4 09 Q1 10 Q2 10 Jul/Aug

Acquirer Cross-Border Rebates

R i d A i C B d A F i

Acquirer Cross Border Rebates

• Raised Acquirer Cross-Border Assessment Fee in Q4 2009, with corresponding rebates

• Will simplify structure starting Q4 2010• Will simplify structure starting Q4 2010

– All rebates will be collapsed into gross revenue with no impact on net revenuep

• As-reported Acquirer Cross-Border Rebates were:

– Q1 2010 = $65 million

– Q2 2010 = $62 million


2010 Financial Outlook: Constant Currency 2010 Financial Outlook: Constant Currency

• 1 2 ppt headwind from Euro/Real FX• 1-2 ppt headwind from Euro/Real FX• Debit Portfolio losses• Rebates & Incentives trajectory

NetRevenue

Operating • Modest decline• 1-2 ppt tailwind from Euro/Real FX

Expenses • Reinvestment in the business in Q3 / Q4• A&M spend higher in second half of year

Net Income Growth

• Achieve at least 20%


Rebates & Incentives Mix*Rebates & Incentives Mix

% of Rebates& Incentives

Volume / 70 %Volume /Transaction Based

~ 70 %

New / Renewed Deals d 30 %and

Customer Marketing~ 30 %


* Excludes Acquirer Cross-Border Rebates

Capital Structure ConsiderationsGuiding Principles Guiding Principles

• Preserve strong balance sheet, liquidity and credit ratingsStrong• $3.5 billion net cash with remaining litigation payable of

$0.6 billion as of June 30, 2010

• Available debt capacity, though to be used sparinglyuntil clarity around outstanding litigation

Balance Sheet

until clarity around outstanding litigation

• Investments in organic opportunities and M&A transactions

Long-TermBusiness Growth

• Bias towards share repurchase over dividend increases

• Primary focus in technology, processing, prepaid, e-Commerce and mobile

Business Growth

Return • Bias towards share repurchase over dividend increases

• Will target regular cadence depending on use of cash in the business

• $1 0 billion share repurchase program recently authorized

ReturnExcess Cash


• $1.0 billion share repurchase program recently authorized by the Board of Directors

LiquidityLiquidity

$62.0 3.0

$6

$5

3.5

1.0 $3

$4

Bill

ions

0.5

1.0 $1

$2

$

Cash Balance(as of 6/30/2010)

Revolver OperationalSettlementExposure

ShareRepurchase

DataCashAcquisition

ExcessLiquidity

$0


Exposure

PCE Growth and Secular TrendProvide for Tremendous OpportunityProvide for Tremendous Opportunity

Personal Consumption Expenditure (PCE)

2010 – 2015E (CAGR)36%

Cash & Check EFT Credit / Debit

$ illi

$48 Trillion

Global PCE 6%

Card Purchase Vol. 10%18%23%

29%

36%

$27 Trillion

$36 Trillion

Secular Growth 4%

65% 56% 46%

12%15%23%

2005 2010E 2015E


Source: EIU, Euromonitor and MasterCard internal estimates

Long-Term Revenue GrowthLong Term Revenue Growth

Estimated 2010-2015 CAGR

~10%

Low – MidTeens

9%Strategic

Investments

Secular Growth+4%6%

~9%

MA Mix(1%)

MasterCardLong-Term Revenue

Global PCE

IndustryPurchase Volume

Adjusted Industry Purchase Volume


Source: EIU, Euromonitor and MasterCard internal estimates

g

Updated Longer-Term2011 – 2013 Performance Objectives2011 2013 Performance Objectives

On a constant currency basis:

Net Revenue Growth Rate

12-14%CAGR

Operating minimum 50%

CAGR

Operating Margin

minimum 50%annually

Earnings Per ShareGrowth Rate

20% +CAGR


CAGR

APPENDIXCross-Border Pricing Change ($ in millions)Cross Border Pricing Change ($ in millions)

Simplified structure with no Net Revenue impact

As ReportedB/(W) B/(W)

Q1 2010 $ % growth $ % growth

Adjusted View 1

Gross Revenue 1,683 12.7 1,748 17.1

Rebates & Incentives (375) (11.3) (440) (30.7)

Net Revenue 1,308 13.1 1,308 13.1

Rebates & Incentives % of Gross Revenue 22.3% 25.2%

Q2 2010Gross Revenue 1,766 8.7 1,828 12.6

Rebates & Incentives (401) (16.6) (463) (34.7)

Net Revenue 1,365 6.6 1,365 6.7


Rebates & Incentives % of Gross Revenue 22.7% 25.3%

Note 1: Adjusted view of Q1 and Q2 2010 illustrates impact if cross-border acquiring rebate pricing change had occurred on 1/1/2010. Pricing change will not be retroactive.

Garry LyonsGarry LyonsGroup Executive, Research & DevelopmentSeptember 15, 2010


Innovation Experiencey g

MasterCard Drives Growththrough Innovationthrough Innovation

MasterCard has always “It is not the strongest MasterCard has alwaysbeen a payments innovator.And will continue to be a key contributor

It is not the strongest of species that survive, nor the most intelligent but the

Change is happening fast.Needs of merchants and cardholders

l i f h

intelligent but the one most responsive to change.”

– Charles Darwin

evolving faster than ever

We must leverage our preeminence in paymentspreeminence in payments.To stay ahead or react quickly as opportunities emerge


Breakthrough InnovationsBreakthrough Innovations

Make MasterCard better & faster at innovation, and facilitate the creation of facilitate the creation of disruptive breakthrough solutions for the next phasei M t C d’ thin MasterCard’s growth.

Preserving the strength ofour brand reputation

“The temptation of business is always to feed yesterday andto starve tomorrow.”

– Peter Drucker


our brand, reputationand quality of our network.

Guiding PrinciplesGuiding Principles

Good ideas can comeBe open and diverse

Good ideas can comefrom anywhere

Share everythingFail smart

Dare to dreamDefine success metrics early

Labs is a stepping stoneTimeliness trumps perfection


MasterCard Open API: The New Frontier

A t id ti

MasterCard Open API: The New Frontier

Access to new ideas, creating even better experiences

Companies revolutionized by opening up… proven impact

This is just the beginning…

Developer portal is on track


p pto launch later this year.

Product DemonstrationsProduct Demonstrations

inControl Smart DatainControlProviding personalized spendingcontrol and peace of mind.

Smart DataSpend management tohelp companies work smarter.

MasterCard MarketPlaceA smarter way to shop online

MoneySendGreater speed convenience and security A smarter way to shop online. Greater speed, convenience and security in person-to-person payments.

Prepaid SolutionsLeading the conversion from cashand checks to electronic payments.

Integrated Processing SolutionsThe globally integrated processing platform for debit and prepaid.


Ajay Bangaj y gPresident and Chief Executive OfficerSeptember 15, 2010


Closing Remarksy g

Looking to the FutureLooking to the Future

BUILDBUILDDIVERSIFYDIVERSIFYGROWGROW BUILDNew BusinessesBUILDNew Businesses

DIVERSIFYGeographies & CustomersDIVERSIFYGeographies & Customers

GROWCore BusinessGROWCore Business

Capturing opportunities while addressing challenges

Striking the right global / local balance

Investing in innovative products and solutions Investing in innovative products and solutions

Delivering strong financial performance


investment community meeting yg...2.5 billion adults worldwide are unbanked2 prepaid3 will grow to...

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