MasterCard International Reports Continued Growth in Second Quarter, First Six Months of 2005

PURCHASE, NY – MasterCard International today announced excellent operating results for the second quarter and first six months of 2005, as double-digit growth in both gross dollar volume (GDV) and purchase volume was fueled by increased cardholder spending around the world and the continued implementation of the company’s successful customer-centric strategy.

Cardholders worldwide used MasterCard-branded cards (excluding Maestro® and Cirrus®) for 4.8 billion transactions during the second quarter. This generated GDV of $408.4 billion, an increase of 12.3% over the same period in 2004. Total purchases on MasterCard-branded credit and debit cards increased 14.5% during the quarter, while the number of MasterCard cards issued worldwide rose to 716.3 million, an increase of 12.1% over the same period in 2004.

“MasterCard’s customer-centric approach enables us to bring value to our key stakeholders as a thoughtful and innovative partner focused on helping them build, manage and enhance the profitability of their payments businesses,” said Alan Heuer, chief operating officer, MasterCard International. “MasterCard’s results for the first half of this year are a testament to the global strength of the MasterCard brand and our ability to work with our member financial institutions to deliver the best payment solutions in the industry.”

Performance highlights for the second quarter and first half of 2005 include:

• MasterCard GDV totaled $408.4 billion in the second quarter, up 12.3% over the same period last year. For the first six months of the year, GDV has grown by 11.6% to $790.5 billion. GDV includes both purchase and cash volume;
• MasterCard’s nearly 25,000 customer financial institutions around the world issued 716.3 million MasterCard-branded cards, a 12.1% increase over the same period in 2004;
• The value of purchases on MasterCard-branded cards, a significant measure of success, increased 14.5% to $290.1 billion in the second quarter. Purchase volume increased 13.5% during the first six months of the year, reaching $556.0 billion.

MasterCard’s growth has spanned both credit and debit. GDV for worldwide credit and charge programs increased by 8.3% to $321.8 billion in the second quarter, while GDV for debit programs surged 30.0% to $86.6 billion. For the first six months of the year, GDV for credit and charge programs is up 7.8%, while GDV for debit programs is up 28.9%.

Core Areas of Focus
In the second quarter of 2005, MasterCard continued its focus on broadening customized services to financial institution customers, enhancing relationships with merchants that accept MasterCard cards, and developing innovative payment solutions and services. This was demonstrated in the second quarter by several significant business milestones including:

Broadening Customized Services for Financial Institution Customers

• A new execution of MasterCard’s award winning Priceless® national advertising campaign was launched, featuring the enhanced World MasterCard, a card program offering mass affluent consumers an innovative mix of customized incentives and rewards. The campaign supports the broader strategy of MasterCard to further increase its leadership position in the affluent market and communicate the unmatched customization qualities of World MasterCard.
• MasterCard announced that it will launch the “Debt Know How” program, a multi-year, consumer education program designed to give consumers access to free, easy-to-understand tools to help them manage their personal debt.
• Cetelem, the France-based consumer credit provider, was licensed to use the MasterCard, Maestro and Cirrus brands on a worldwide basis. With this arrangement Cetelem, a subsidiary of BNP Paribas, will be established in 20 countries worldwide, working alongside MasterCard International to further grow its global credit card business.
• Banka Koper, a universal bank headquartered in Slovenia, and MasterCard Europe announced the launch of a pilot program to deploy two added value chip-based business programs in Slovenia: OneSMART Authentication and OneSMART Web. This is the first project to be announced by MasterCard’s Central and Eastern European (CEE) OneSMART Club, established in August last year. Other club members are expected to announce similar projects soon.

Enhancing Relationships with Merchants that Accept MasterCard Cards

• MasterCard published its rules directly to Member Service Providers, the latest step in the company’s ongoing effort to provide increased levels of transparency and customer service. The new Member Service Provider Rules Manual is available for free download on the MasterCard merchant website (www.mastercardmerchant.com).
• Sheetz, Inc. announced that technology allowing customers to use a contactless payment option, such as MasterCard® PayPass™, is now “live” in all 309 Sheetz stores. During the second quarter, Sheetz became the first retail merchant to launch its own cobranded contactless credit card.
• 7-Eleven, Inc. announced that it will accept MasterCard® PayPass. The convenience retailer expects to roll out the program in its 5,300 U.S. locations by early 2006 and has installed radio frequency readers in 170 test-market 7-Eleven® stores.
• Regal Entertainment Group, the largest movie theatre operator in the world, announced that it will be the first movie theatre circuit to accept MasterCard® PayPass at Regal Cinemas, United Artist Theatres and Edwards Theatres throughout the United States.
• Ritz Camera announced the expansion of MasterCard® PayPass acceptance to each of its more than 1,100 Ritz Camera Centers and 114 Boater’s World Marine Centers.
• MasterCard announced that it has shut down more than 1,900 phishing or spoof sites globally over the past 13 months as part of its aggressive Operation Stop IT (Identity Theft) campaign. MasterCard also successfully uncovered and took offline more than 800 carding and e-commerce websites brokering illegally obtained payments card numbers during that time.

Developing Innovative Payment Solutions and Services

• MasterCard Advisors, LLC, the global professional services arm of MasterCard International, launched the first fully integrated end-to-end rewards solution in Europe. The MasterCard Rewards Services solution is designed to enable payment card issuers to integrate their global rewards offerings into one system, thereby streamlining operations and reducing administrative costs and complexity. The innovative integrated platform supports issuers’ business goals and creates new opportunities to expand their loyalty and reward offerings regionally or around the world.
• Bank of the Philippine Islands (BPI) and MasterCard collaborated to launch the BPI Express Credit Gold MasterCard, the Philippines’ first chip-based card payment program.
• MasterCard’s leading contactless payments solution – MasterCard OneSMART™ PayPass™ – was recognized as the most innovative payments product launched in 2004 by the European Payments Consulting Association and European Card Review Innovation Awards.
• MasterCard Europe joined forces with International Currency Exchange (ICE) to launch Cash2Go, a PIN secured, pre-paid Maestro debit card, which is designed to replace existing paper-based travellers cheques. The card is currently being piloted at ICE exchange bureaus in the UK, including those at Heathrow Airport, and at selected branches of Travelcare, a UK travel agent. Full rollout is scheduled to take place in
• the UK over the next three months. SkyCard, the first MasterCard credit card to be fully integrated with interactive television was launched in the UK by Barclaycard and BSkyB. The card was launched on April 15, 2005 with a comprehensive marketing campaign involving a 3.5 million piece direct mail program, magazine advertising, and television advertising that included Sky’s Active and Text channels. Details of a unique rewards plan called SkyPoints, designed for SkyCard customers, were also unveiled.
• Belgian consumers can now benefit from more flexibility and choice following Deutsche Bank’s launch of the Titanium card, together with MasterCard. The revolutionary card combines the advantages of a debit card and a credit card. Cardholders have access to the money in their current account, plus a “financial reserve” that can be tailored by the bank to the client’s needs.
• Tatra, part of Raiffeisen bank group, launched in Slovakia the first MasterCard Unembossed card issued in Europe. The chip-enabled cards combines all the traditional advantages of the MasterCard brand with the enhanced security associated with online payment authorization.
• MasterCard International partnered with Brazilian bank Banco Ibi for an exclusive four year agreement to issue MasterCard cards through the innovative concept of ‘instant issuing’ in C&A department stores. C&A customers can now apply for a MasterCard card and receive it instantly upon approval, in approximately 10 minutes time. Banco Ibi and MasterCard’s instant card program is available in over 80 C&A stores throughout Brazil.