What Is Mastercard?

A woman holds a credit card.

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Mastercard is one of four major U.S. processing networks, providing technology to facilitate electronic payments between consumers, businesses, and organizations.

Key Takeaways

  • Mastercard is one of four major credit card processing networks in the United States.
  • Financial institutions can offer Mastercard's payment products, like credit and debit cards, and benefits to consumers.
  • Mastercard primarily makes money by charging a fee on payments processed through its network.
  • Many of the credit cards in the Mastercard network offer a wide range of perks and benefits.

Definition and Examples of Mastercard

Mastercard is a global payment technology company that provides a platform for consumers, businesses, and organizations to make electronic payments.  Its payment processing network offers credit, debit, commercial, and prepaid cards, too. Mastercard works with more than 150 currencies and in more than 210 countries and territories.

Mastercard's business partly depends on consumer spending and consumers choosing electronic payments over cash and check transactions. One of its main revenue streams comes from processing fees charged to businesses that accept transactions made with Mastercard cards, which includes Maestro and Cirrus. 

Mastercard authorizes, clears, and settles payment transactions made with a variety of credit cards, including the Citi Double Cash, Chase Freedom Flex, and Capital One Walmart Rewards Card. You can easily identify Mastercard credit and debit cards by the Mastercard logo on the front or back of a card. 


The 16-digit card number on the front of Mastercard credit cards begins with a 5 or 2.

How Mastercard Works

Mastercard offers several types of payment products to financial institutions like banks and credit card issuers. The financial institution does the work of qualifying and approving account holders, collecting deposits or payments, and deciding on pricing. Once approved, consumers can use these products to make purchases with businesses that are authorized to accept electronic payments. 

Transaction Processing

Mastercard's core network routes payment transactions and facilitates the information exchange needed to complete a payment transaction. Most transactions involve four key players: the account holder, card issuer, merchant, and acquirer (the merchant's bank). 

  1. The consumer makes a purchase from a business.
  2. The card issuer authorizes the transaction, pays the acquirer the value of the transaction minus an interchange fee, and posts the transaction to the cardholder's account.
  3. The acquirer pays the merchant the amount of the purchase minus the discount rate.


“Interchange” is a fee charged to merchants to cover the cost of processing. The discount rate is the fee paid to the acquirer to cover its costs for processing transactions and providing services to merchants.

Merchant Rules

Merchants that accept Mastercard payment cards have to accept all Mastercards. They can request but can't require customers to provide identification unless it's needed to complete the transaction—for example, to verify a shipping address. Merchants can't impose minimum and maximum transaction amounts either.

Types of Mastercard Products

Mastercard offers several products that banks can, in turn, offer to consumers.

Consumer Credit

With Mastercard's consumer credit products, credit card issuers can allow consumers to make purchases and defer payment. With Mastercard's benefit offers, card issuers can customize credit card products to different segments of consumers. Major credit card issuers that offer Mastercard credit cards include Capital One, Chase, and Citi.

Consumer Debit

Mastercard's consumer debit products allow consumers to access funds in their bank accounts. Some programs also allow consumers to make purchases and get cash back from a bank branch, ATM, or point of sale.

Prepaid Cards

With prepaid cards, consumers can pay in advance for purchases without a bank account or credit history. Mastercard's prepaid program allows businesses and organizations to offer cards for a variety of use cases: pay bills, send peer-to-peer payments, receive payroll, access health savings accounts, or even receive unemployment benefits or Social Security payments.


Consumer debit and prepaid programs account for the highest amount of Mastercard's gross dollar volume, at $4.2 trillion in fiscal year 2021.

Commercial Credit and Debit

Mastercard's commercial credit and debit products are designed for businesses of all sizes and government agencies to streamline payments, manage information and expenses, and reduce administrative costs.

Loyalty and Rewards

Card issuers can use Mastercard's rewards platform to provide benefits and services to cardholders. Perks can include access to global airline lounges, concierge services, insurance services, emergency card replacement, and emergency cash advances.

Mastercard Benefit Tiers

Within its loyalty and rewards program, Mastercard offers three levels of benefits: Standard, World, and World Elite. Each level offers benefits that build on the previous level.

  Standard World World Elite
ID theft protection x x x
Zero liability for fraudulent purchases x x x
Mastercard Global Service x x x
Cellphone protection x
$1,000 yearly coverage, $600 max per claim, two claims per year
$1,000 yearly coverage, $800 max per claim, two claims per year
Professional travel services x x
Hotel stay guarantee x x
Lowest hotel rate guarantee x x
Free hotel nights, car rental status upgrade, and savings on air travel x x
Airport concierge x x
Exclusive offers for rideshare, meal delivery, and shipping x x
Premium experiences x x
Mastercard World of Benefits app x
World Elite concierge x


Offers and experiences differ between World and World Elite Mastercards.

Other benefits may include baggage delay reimbursement, extended warranty, lost/damaged luggage reimbursements, and protections that include rental cars cellphones, trip cancellations, and trip delays. In the last years, Mastercard has actively worked to launch several products aiming to help digitize business-to-business payments (B2B) around the world and created many strategic partnerships with other platforms to enable faster growth of digital B2B payments.

While Mastercard may offer these benefits for card issuers to include in their programs, not all card issuers offer all benefits. If you're shopping for a credit card, choose your card based on the card issuer and the credit card's rewards, benefits, and pricing rather than the card network.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. U.S. Securities and Exchange Commission. "Mastercard Incorporated: Form 10-K," Page 8.

  2. Mastercard. "Mastercard 2-Series BIN Implementation for Merchants," Page 1.

  3. Mastercard Incorporated - Investor Relations. "4Q21 Mastercard Supplemental Operational Performance Data," Page 1.

  4. World Mastercard Credit Card. "Travel & Lifestyle Benefits."

  5. PYMNTS.com. "39 percent of Firms Use Virtual Cards for B2B Payments."

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