Summary
Mastercard Inc. (MA) has filed an 8-K report on February 14, 2023, to disclose a change in its revenue presentation. The company is modifying how it disaggregates its net revenue from contracts with customers, moving from a source-based presentation to two new categories: 'payment network' and 'value-added services and solutions.' This change will be effective starting with the Annual Report on Form 10-K for the year ended December 31, 2022. The 'payment network' category will encompass revenues generated from transaction processing and gross dollar volume (GDV) across its global network, while 'value-added services and solutions' will include revenues from offerings like cyber and intelligence, data services, and open banking. Importantly, management emphasizes that this change in presentation will have no impact on Mastercard's total net revenue. The filing also introduces new key metrics related to the payment network, such as domestic assessments, cross-border assessments, and transaction processing assessments. These metrics are intended for internal management use to monitor operating performance and cardholder trends, and they do not represent net revenue. The company has provided historical data for these new categories and metrics, along with reconciliations, in Exhibit 99.1 for prior periods.
Key Highlights
- 1Mastercard is changing its revenue disaggregation method to 'payment network' and 'value-added services and solutions'.
- 2This presentation change is effective for the Form 10-K covering the year ended December 31, 2022.
- 3The 'payment network' revenue will primarily come from transaction fees and gross dollar volume (GDV).
- 4The 'value-added services and solutions' revenue will include a range of ancillary services like cyber, data, and open banking.
- 5The modification will not alter the company's reported total net revenue.
- 6New key metrics for the payment network (e.g., assessments) are being introduced for internal performance monitoring.
- 7Historical data and reconciliations for the new presentation are available in Exhibit 99.1.