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MasterCard International Reports Strong Growth in 2003 As Gross Dollar Volume Reaches US$1.27 Trillion

Gross dollar volume (GDV) up 14.7% in Canada

Purchase, NY, March 2, 2004 – MasterCard International today announced strong performance results for the fourth quarter and full-year 2003, demonstrating continued growth across almost all regions and in key measures of success in the payments industry. Worldwide, cardholders used over 632.4 million MasterCard branded cards for almost 15 billion transactions in 2003, generating gross dollar volume (GDV) of $1.27 trillion, an increase of 5.9% on a local currency basis, and 10.4% on a U.S. dollar basis, over 2002.

In Canada, GDV rose 14.7% for the full year, and 15.4% for the fourth quarter of 2003. MasterCard-branded transactions in Canada remained strong in 2003, up 13.5% over the same period in 2002. At the end of the year, Canadian banks had increased the number of MasterCard cards issued by 9.7%.

"MasterCard's 2003 performance clearly shows the significant momentum we've generated with Canadian consumers and businesses," said MasterCard Canada President Walt Macnee. "MasterCard Canada is committed to driving volume, market share and revenue growth by working closely with our issuers and acquirers to deliver the Canadian payments industry flexible and innovative programs and products."

Robert W. Selander, MasterCard President and CEO, said "MasterCard generated solid growth in 2003 and moved forward with some significant initiatives that strategically position us for future growth. This was despite global events that had a significant impact on the payments industry as continued economic weakness, the outbreak of SARS and instability in many regions of the world impacted consumer spending across most categories."

"We believe that what truly differentiates MasterCard is the value we place in our customer relationships. Our goal is to provide our customers with new opportunities for growth and improved profitability," he said.

In 2003, MasterCard expanded MasterCard Advisors, the first consulting, outsourcing and information services group devoted entirely to the payments space. Advisors helps optimize payment programs with expert advice and tailored solutions.

"Advisors, along with our Debit, Chip, Mobile/Wireless and e-commerce Centers of Excellence, is aimed at anticipating the needs of our customers and enabling us to deliver more value," Selander said. "The brand power generated by our award-winning Priceless campaign, now seen in 96 countries and 47 languages, also drives revenue for our customers."

Performance highlights for 2003 include:

  • Cardholders across the globe used MasterCard-branded cards (excluding Maestro® and Cirrus®) for almost 15 billion transactions, generating gross dollar volume (GDV) of $1.27 trillion, an increase of 5.9% over 2002. GDV includes both purchase and cash volume;
  • At year-end, MasterCard’s almost 25,000 customer financial institutions around the world had issued more than 632.4 million MasterCard-branded cards, a 7.0% increase over 2002;
  • Maestro, MasterCard’s online, PIN-based global debit brand, continued to grow in 2003, with the Maestro brand mark now appearing on more than 520 million cards worldwide, a 13.8% increase over year-end 2002. Maestro is accepted for purchases at more than 10 million merchant terminals in 93 countries and territories, and at over 900,000 MasterCard, Maestro, and Cirrus ATMs around the world;
  • We are an industry leader with more than 150 million MasterCard, Maestro, and Mondex®-branded smart cards issued worldwide by year-end 2003, more than half of them carry value-added applications like loyalty, digital ID, e-ticketing, e-coupons or personal data storage. A fast growing percentage of these cards are EMV compliant, demonstrating the increasing momentum for EMV compliance. At the end of 2003, MasterCard was working with its customers on more than 400 individual chip implementations around the world, more than double the number of projects active at the end of 2002;
  • In the United States, MasterCard’s share of mailed card solicitations, a leading indicator of card growth, averaged 57% through November 2003, according to Synovate Mail Monitor data. This is ahead of MasterCard’s 2002 average of 54%, and marks the fifth year in which MasterCard’s mail share has topped 50%.

MasterCard’s strong growth in 2003 was fueled by growth in both credit and debit programs. GDV for worldwide credit and charge programs grew 5.1% to $1.0 trillion, and GDV for offline debit programs rose 9.3% to $236.9 billion during 2003.

For the fourth quarter of 2003, global GDV rose 5.4% to $345.3 billion. Fourth quarter transactions increased by 8.8% in 2003 to 4.1 billion, compared to the same quarter in 2002.

As of December 31, 2003, cardholders could use their MasterCard cards at more than 22 million locations around the world. Acceptance locations include merchant locations, ATMs and other locations where cash may be obtained.

Significant Milestones Achieved

MasterCard has also achieved a wide range of significant business milestones:

  • In the U.S., we recently completed two trials of MasterCard PayPass, an innovative new "contactless" card payment program that provides consumers with a simpler way to pay in Orlando, Florida and Dallas, Texas. With MasterCard PayPass, consumers simply tap or wave their payment card near a specially equipped merchant terminal that transmits payment details wirelessly, eliminating the need to swipe the card through a reader. MasterCard will be making this service available to a wider audience later this year;
  • In the U.S. and South Africa, we launched MasterCard rePower, for use with prepaid mobile phone accounts. rePower offers our customers new business opportunities in the rapidly expanding prepaid arena by allowing cardholders to reload prepaid or stored-value accounts using their MasterCard debit or credit cards;
  • In 2003, MasterCard’s network delivered a nearly 100% availability rate. Credit and debit authorizations were up 10.3% to 9.6 billion, while Banknet network response time for authorizations improved 15% over response time for 2002;
  • In the United Kingdom, the successful migration of Switch® processing to the MasterCard platform was completed in November and all Switch members in the U.K. have begun the migration of the 24 million Switch branded cards to the Maestro brand, exclusively, as their debit brand. By the end of 2003, Maestro/Switch increased the number of transactions processed in Europe by one third. Europe also celebrated a Switch/Maestro landmark in 2003 with 10 million cards now branded with Maestro on the front-of-card;
  • This year marked the 10th anniversary of the MasterIndex of Consumer Confidence. Pioneered by MasterCard’s Asia/Pacific Region, the MasterIndex is the most comprehensive, longest running and most closely watched survey of consumer sentiment in the region;
  • We launched MasterCard e-P3, an electronic platform that helps financial institutions and their enterprise customers simplify business-to-business purchasing, presentment, and payment. Completely paperless, e-P3 makes the entire financial supply chain more efficient, lowering costs, speeding approvals, improving cash management and increasing control over spending and procurement;
  • We continued our leadership in co-branding in 2003 by working with British retailer Marks & Spencer to create a card that delivers increased value to the store’s customers. Some 2.6 million customers chose to receive co-branded cards with expanded benefits that include global acceptance and loyalty rewards.

Strong Regional Results

Strong GDV growth was reported for most of MasterCard’s regions in 2003: the U.S. rose 5.8%; Canada, 14.7%; Europe, 13.5%; Latin America, 31.2%; and South Asia, Middle East/Africa, 17.5%. Global growth was generated by strong purchase volume, up 10.0%, although cash volume was down 3.6%. The majority of Asia/Pacific markets experienced double-digit GDV growth, with the exception of Korea where the payments industry continues to be plagued by credit card delinquencies and write-offs.

At the end of 2003, the number of MasterCard credit cards issued in the U.S. was up 1.9% to almost 272.6 million, and outstanding balances reached $293.2 billion, a 3.4% increase over the same period in 2002. The number of debit MasterCard cards issued in the U.S. rose 10.6% to 53.4 million.

In the U.S., which accounts for more than half of total MasterCard GDV, MasterCard-branded cards were used for more than 7.4 billion transactions in 2003, generating $636.8 billion in GDV, a 5.8% increase over 2002. Purchase volume grew 9.6% while cash volume was down 5.1%.

"An increase in purchase volume of nearly 10% in the U.S. indicates continued solid MasterCard momentum, especially considering that the U.S. economy last year was unpredictable at best," said Ruth Ann Marshall, President of the Americas, MasterCard International. "In addition, we saw impressive gains on most metrics in Canada, highlighted by an increase in gross dollar volume of almost 15%."

U.S. GDV growth for the fourth quarter was 4.1% with a fourth quarter 2003 purchase volume growth rate of 8.2% versus the same period in 2002.

In Europe, MasterCard GDV rose 13.5% in 2003 to US$316.1 billion. MasterCard issuance increased throughout Europe in 2003 by 15.5%. GDV growth in Europe increased by 14.0% in the fourth quarter of 2003 compared with the same period the previous year. Both the Switch migration and the M&S MasterCard introduction, helped play a key part in the U.K.’s total card growth rate, including both MasterCard and Maestro cards, up 30.8% in 2003.

The Asia/Pacific region reported GDV of $213.1 billion in 2003, and the number of cards issued in the region rose 8.8% to 122.0 million, compared to 2002. Fourth quarter GDV in Asia/Pacific was $55.2 billion in 2003, down 9.1% compared to the same quarter in 2002.

Latin America reported a substantial increase in GDV of 31.2% for 2003, as the number of cards issued in the region increased 7.4%. This was due to strong cash volume growth of 41.9%. Driven by strong fourth quarter GDV performance in Mexico and Brazil, Latin America experienced a GDV increase of 28.7% over the same quarter in 2002.

In South Asia, Middle East/Africa, MasterCard GDV grew 17.5% during 2003, and 18.7% for fourth quarter of 2003, in each case compared to the same period in 2002. Strong purchase volume growth of 17.6% and a strong cash volume growth rate of 21.4% fueled the region’s growth in the fourth quarter of 2003 compared to fourth quarter 2002.

Maestro Online Debit Activity

Online debit activity, which includes MasterCard’s online debit program Maestro and MasterCard’s ATM-only brand Cirrus, continued to grow in 2003. The Maestro brand mark appeared on more than 520 million cards worldwide as of December 31, 2003, a 13.8 % increase over 2002. There were over 900,000 MasterCard, Maestro and Cirrus ATMs around the world at the end of 2003.

The number of Maestro cards issued in Asia/Pacific rose to 151.1 million at December 31, 2003, a 7.1% increase over the same period in 2002. GDV for online debit activity in the region for the fourth quarter of 2003 was $50.1 billion, with purchase volume at $6.3 billion. Transactions for fourth quarter 2003 totaled 478.6 million.

In the fourth quarter of 2003, Europe continued to be the largest cardholder base for Maestro with 239.8 million cards, a 6.1% increase over the same period in 2002. GDV for online debit activity in the region for the fourth quarter of 2003 was $295.6 billion, with purchase volume at $89.2 billion. Transactions for fourth quarter 2003 totaled 2.7 billion.

Maestro card numbers increased an extraordinary 109.6% to 62.7 million cards in Latin America as of December 31, 2003, compared to the same quarter in 2002, in large part due to the migration to Maestro from Redeshop, Brazil’s popular local debit brand. GDV for online debit activity in the region for the fourth quarter of 2003 was $12.0 billion, with purchase volume at $1.7 billion. Transactions for fourth quarter 2003 totaled 284.8 million.

The South Asia, Middle East and Africa regions also experienced exceptional card growth with a 31.8% increase to 20.4 million cards in the fourth quarter of 2003, compared to the same period in 2002. GDV for online debit activity in the region for the fourth quarter of 2003 was $14.3 billion, with purchase volume at $1.0 billion. Transactions for fourth quarter 2003 totaled 166.1 million.

Note to Editors
The data in this press release is provided by the member financial institutions of MasterCard International Incorporated and its affiliates ("MasterCard") and is subject to revision and amendment by such members subsequent to the date of its release. A portion of the information contained in this press release is estimated. In addition, a portion of the data relating to accounts and cards reflects the impact of routine portfolio changes among members and other practices that may lead to over counting of the underlying data in certain circumstances. Information with respect to gross dollar volumes ("GDV") includes the impact of balance transfers and convenience checks. The number of cards includes virtual cards, which are MasterCard, Maestro or Cirrus-branded payment accounts in connection with which functional cards are not generally issued.

Information denominated in U.S. dollars is calculated by applying an established U.S. dollar/local currency exchange rate for each local currency in which MasterCard, Maestro and/or Cirrus volumes are reported.

Period-over-period rates of change in volume-based information are provided on a local-currency basis. Accordingly, the period-over-period rates of change in this press release cannot be extrapolated directly by reference to the U.S. dollar volume information presented for the current and historical periods.

MasterCard-branded data regarding GDV, purchase volume, purchase transactions, cash volume and cash transactions is derived from information provided by MasterCard members that is subject to logical and statistical verification by MasterCard and partial cross-checking against information provided by MasterCard’s transaction processing systems. MasterCard-branded data concerning accounts and cards, and all Maestro- and Cirrus-branded data, is derived from information provided by MasterCard members that is subject to certain limited logical and statistical verification by MasterCard. Certain information with respect to ATM locations is provided by third parties and has not been independently verified by MasterCard.

The data in this press release includes information with respect to MasterCard, Maestro and Cirrus-branded transactions that are not processed by MasterCard and transactions for which MasterCard does not earn revenues. The substantial majority of Maestro and Cirrus-branded transactions reported in this press release are not processed by MasterCard. Accordingly, the data in this press release cannot be taken as an indication of the financial performance of MasterCard Incorporated.

Acceptance locations include merchant locations, ATMs and other locations where cash may be obtained. In certain countries, reporting of merchant locations includes all acceptance terminals deployed at individual merchants; terminals supported by multiple acquirers of the same merchant may be counted more than once in the compilation of the data. The number of acceptance locations stated above has been revised as compared to information previously released by MasterCard to reflect these and other industry practices, and to reduce the impact of regional variations in the reporting of such data. Despite this revision, when the change in methodology is applied historically, MasterCard continues to show a longer-term trend of substantial growth in MasterCard brand acceptance.

The data in this press release relating to Maestro- and Cirrus-branded activity principally reflects the performance of members and the bankcard industry as a whole in connection with card programs carrying these brands. In certain regions and countries, a substantial portion of such information is estimated and has not been verified by MasterCard.

A portion of GDV growth in Latin America for 2003 reflects subsequent revisions to 2002 volume data for offline debit which have been provided by a member from that region.

For further information on the performance results described in this press release, please review MasterCard Incorporated’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on February 4, 2004, including the narrative description therein of the sources of, and bases of presentation for, the performance results for MasterCard’s payment programs.

About MasterCard International
MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members' credit, deposit access, electronic cash, business-to-business and related payment programs. MasterCard International manages a family of well-known, widely accepted payment cards brands including MasterCard®, Maestro® and Cirrus® and serves financial institutions, consumers and businesses in over 210 countries and territories. The MasterCard award-winning Priceless® advertising campaign is now seen in 96 countries and in 47 languages, giving the MasterCard brand a truly global reach and scope. For more information go to