Summary
This Form 8-K filing by Mastercard Inc., dated May 11, 2006, reports on a material definitive agreement entered into by its principal operating subsidiary, MasterCard International Incorporated, with Bank of America, National Association. The agreement, effective January 1, 2006, establishes pricing arrangements for Bank of America's utilization of Mastercard's core authorization, clearing, and settlement services, along with supplemental user-pay services. This strategic arrangement includes pricing discounts and other incentives for Bank of America in exchange for committing certain transaction volumes on Mastercard-branded cards. This development is significant as Bank of America is a substantial shareholder, holding approximately 6.23% of Mastercard's outstanding common stock. The agreement underscores the symbiotic relationship between Mastercard and its major financial institution partners, aiming to drive transaction volume and solidify market presence. Investors should note that portions of the agreement have been filed confidentially, suggesting commercially sensitive details regarding pricing and incentives.
Key Highlights
- 1MasterCard International Incorporated entered into a material definitive agreement with Bank of America, National Association on May 9, 2006.
- 2The agreement governs pricing for Bank of America's use of Mastercard's authorization, clearing, and settlement services.
- 3It also includes terms for certain supplemental user-pay services in the US and other countries.
- 4The agreement provides for pricing discounts and incentives to Bank of America in exchange for transaction volume commitments.
- 5Bank of America Corporation is a significant shareholder, owning 6.23% of Mastercard Incorporated's common stock.
- 6The agreement is effective as of January 1, 2006.
- 7Certain portions of the Customer Business Agreement have been filed separately with the SEC under confidential treatment.