Mastercard $MA is a U.S.-based payments technology company that operates a global network for processing electronic transactions made with credit, debit, and prepaid cards. Headquartered in Purchase, New York, the company functions primarily as a network intermediary — it does not issue cards or extend credit directly to consumers. Instead, it licenses its brand and network to financial institutions, which issue Mastercard-branded cards to their customers and set the terms of those accounts.
When a cardholder makes a purchase, Mastercard's network handles the authorization, clearing, and settlement of the transaction between the merchant's bank and the cardholder's bank. The company earns revenue through fees charged on that transaction flow — including assessment fees paid by banks and network service fees — rather than from interest on consumer debt, which distinguishes it from banks that issue cards under its brand.
Mastercard was founded in 1966 as the Interbank Card Association, a consortium of U.S. banks formed to compete with Bank of America $BAC's BankAmericard program, which later became Visa $V. The network was rebranded Mastercard in 1979. For most of its history the company operated as a bank-owned cooperative, but it converted to a public, for-profit corporation and listed on the New York Stock Exchange in 2006 under the ticker MA. That initial public offering was one of the largest in U.S. history at the time.
Mastercard and Visa together form a duopoly in global card payment networks, with American Express $AXP