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Tag: mastercard
How Does Mastercard Actually Make Money?
MasterCard doesn’t make money directly from consumers using their cards. Instead, they generate revenue through several key channels:
1. Assessments: This is the main source of income, accounting for roughly 28% of Mastercard’s revenue. Assessment fees are charged to financial institutions that issue Mastercard-branded cards based on the gross dollar volume (GDV) of transactions made using those cards. The higher the GDV, the higher the fee.
2. Transaction fees: This accounts for about 34% of their revenue. These are small fees charged to merchants every time a Mastercard is used for a purchase. This fee is typically a percentage of the transaction amount and a fixed fee.
3. Cross-border fees: When a Mastercard is used in a different country than the one where it was issued, additional fees are charged, contributing around 23% of Mastercard’s revenue. These fees cover currency conversion and other costs associated with cross-border transactions.
4. Other revenue: This includes smaller sources of income like data analytics services, consulting fees, and licensing fees for Mastercard technology.
Apple Will Allow iPhones to Accept Contactless Payments by NFC
Apple is reportedly going to allow iPhones to start accepting contactless payments. This is huge news!
It will dramatically affect any card company and how they collect their fees – as well as companies like Square and other POS services.
Apple has reporting been working on this service since 2020, when it purchased a Canadian startup called Mobeewave. Mobeewave’s technology only needs an app and the phone’s NFC to work.
I expect that Apple will roll out such a service as part of Apple Pay.
Game changer!