Summary
This Form 8-K filing by Mastercard Incorporated, dated January 3, 2007, reports a material amendment to a definitive agreement with Bank of America, National Association. The amendment, executed on December 27, 2006, revises pricing arrangements for Bank of America's use of Mastercard's core authorization, clearing, and settlement services, as well as supplemental user-pay services. These revised terms are in consideration for transaction volumes associated with Bank of America's issuance of Mastercard-branded debit cards. This agreement update is significant for investors as it reflects a strategic partnership and potential growth driver related to debit card issuance. The inclusion of Bank of America's transaction volumes, particularly in the debit card space, could positively impact Mastercard's revenue and market share in this segment. The disclosure also notes Bank of America's substantial voting power in Mastercard, highlighting the importance of this relationship.
Key Highlights
- 1Mastercard amended and restated its agreement with Bank of America, National Association on December 27, 2006.
- 2The amendment revises pricing arrangements for Bank of America's use of Mastercard's authorization, clearing, and settlement services.
- 3New pricing is tied to transaction volumes from Bank of America's issuance of Mastercard-branded debit cards.
- 4This agreement impacts services in the United States and other specified countries.
- 5Bank of America, with its affiliates, holds approximately 5.49% of the total voting power of Mastercard's Class M common stock.
- 6The filing indicates a material definitive agreement was entered into, signaling a significant business relationship update.