Mastercard (MA) 10-K risk factor changes: FY2023 vs FY2022

Despite various mitigation efforts that we undertake, there can be no assurance that we will [removed: be immune to these risks and] not suffer material breaches and resulting losses in the [removed: future, or that our insurance coverage would be sufficient to cover all losses.][added: future.]

As a result, information security and the continued development and enhancement of our controls, processes and practices designed to protect our [added: computer] systems, [removed: computers,] software, data and networks from attack, damage or unauthorized access remain a priority for us.

In addition to information security risks for our [removed: systems,] [added: systems and networks,] we also routinely encounter account data compromise events involving merchants and third-party payment processors that process, store or transmit payment transaction data, which affect millions of Mastercard, Visa, Discover, American Express and other types of account holders.

Damage to our reputation or that of our brands resulting from an account data breach of either our systems [added: and networks] or the systems [added: and networks] of our customers, merchants and other third parties could decrease the use and acceptance of our [removed: integrated] products and services.

Our transaction switching systems and other offerings have experienced in limited instances and may continue to experience interruptions as a result of technology malfunctions, [added: supply-chain attacks,] fire, [added: floods, earthquakes,] weather events, power outages, telecommunications disruptions, terrorism, workplace violence, accidents or other catastrophic events (including those related to climate change).

Our visibility in the global payments industry may also put us at greater risk of attack by terrorists, activists, or hackers who intend to disrupt our [removed: facilities] [added: facilities, networks] and/or systems.

While we work directly with many stakeholders in the payments [removed: system, including] [added: system (including] merchants, governments, fintechs and large digital companies and other technology [removed: companies,] [added: companies),] we are, and will continue to be, significantly dependent on our relationships with our issuers and acquirers and their respective relationships with account holders and merchants to support our programs and services.

See [removed: our risk factor in] “Risk Factors - Settlement and Third-Party Obligations” in this Part I, Item 1A with respect to how we guarantee certain third-party [removed: obligations for further discussion.][added: obligations.]

With the exception of the [removed: United States] [added: U.S.] and a select number of other jurisdictions, most in-country (as opposed to cross-border) transactions conducted using [removed: Mastercard, Maestro and Cirrus] cards [added: with our brands] are [removed: authorized, cleared and settled] [added: switched] by our customers or other processors.

Because we do not provide domestic switching services in these countries [removed: and do not, as described above,] [added: or] have direct relationships with account holders, we depend on our close working relationships with our customers to effectively manage our brands, and the perception of our payments system, among consumers in these countries.

We rely on both our relationships with them, as well as their relationships with our issuer and acquirer customers, to continue to expand the acceptance of our [removed: integrated] products and services.

In the retail industry, [removed: there is] [added: we believe] a set of larger merchants with increasingly global scope and influence [removed: that we believe] are having a significant impact on all participants in the global payments industry, including Mastercard.

See [removed: our risk factor in] “Risk Factors – [removed: Other] [added: Payments Industry] Regulation” in this Part I, Item [removed: 1A with respect to payments industry regulation, including interchange fees.][added: 1A.]

The continued focus of merchants on the costs of accepting various forms of [removed: payment, including in connection with the growth of digital payments,] [added: payment (including digital)] may lead to additional litigation and regulatory proceedings.

Additionally, if the rate of merchant acceptance growth [removed: slows] [added: slows,] our business could suffer.

- Our work with governments [removed: subjects] [added: is heavily regulated, subjecting] us to [added: additional potential exposure under] U.S. and international anti-corruption [removed: laws, including] [added: laws (including] the U.S. Foreign Corrupt Practices Act and the U.K. Bribery [removed: Act.][added: Act), as well as compliance with various procurement and other laws, regulations, standards and contract terms.]

[removed: A] [added: Any] violation and subsequent judgment or settlement [removed: under these laws] [added: related to the above] could subject us to substantial monetary penalties and damages and have a significant reputational impact.

[removed: These include COVID-19, as well as] [added: -] the [removed: threat] [added: global COVID-19 pandemic (and the potential] of [removed: terrorism] [added: any post-pandemic global economic impact)] and [added: potential] separate outbreaks of flu, viruses and other diseases (any of which could result in future epidemics or [removed: pandemics), as well as major environmental and extreme weather events, including those related to climate change.][added: pandemics)]

[removed: Moreover,] [added: *Russia’s invasion of Ukraine.* In addition to the cross-border impacts described above,] our compliance with sanctions and our decision to suspend [added: our] business operations [added: in Russia] has led, and could further lead, to other legal ramifications and operational challenges, including fines, the nationalization of our subsidiary and any resulting impacts, and/or lawsuits.

[removed: Any] [added: Factors such as those discussed above have adversely impacted our business, results] of [added: operations and financial condition, and any of] these developments [added: potentially] could have a material adverse impact on our overall business and results of operations.

[added: During 2023, approximately 70% of our revenue was generated from activities outside the U.S.] This revenue (and the related expense) could be transacted in a non-functional currency or valued based on a currency other than the functional currency of the entity generating the revenues.

In addition, some of the revenue we generate outside the [removed: United States] [added: U.S.] is subject to unpredictable currency fluctuations including devaluation of currencies where the values of other currencies change relative to the U.S. dollar.

Furthermore, we may become subject to exchange control regulations that might restrict or prohibit the conversion [added: into U.S. dollars] of our other revenue currencies [removed: into U.S. dollars, such as what we have experienced in Venezuela.][added: and financial assets.]

Moreover, adverse developments with respect to our industry or the industries of our customers or other companies and organizations that use our products and services (including certain legally permissible but [removed: high- risk] [added: high-risk] merchant categories, such as adult content, firearms, alcohol and tobacco) may also, by association, impair our reputation, or result in greater public, regulatory or legislative scrutiny, [removed: as well as potential litigation.]

[added: - We are headquartered in the U.S.] As such, a negative perception of the [removed: United States] [added: U.S.] could impact the perception of our company, which could adversely affect our business.

Our brand and reputation are associated with our public commitments to various ESG initiatives, including our goals relating to climate [removed: (e.g.,] [added: (such as] our commitment to achieve net-zero emissions by 2040), financial inclusion, and [removed: diversity, equity and inclusion.][added: DEI.]

[removed: Consumers, investors, employees and other stakeholders are increasingly focused on ESG practices, and to] [added: To] the extent any of our ESG disclosures, public statements and metrics are subsequently viewed as inaccurate, or we are unable to execute on our [removed: sustainability] [added: ESG] initiatives, we may be viewed negatively by stakeholders concerned about these matters.

[removed: These stakeholders] [added: Stakeholders (including those in support of or in opposition to ESG principles)] may also have a negative view of us to the extent we [removed: have been or in the future] are perceived to have not responded appropriately to [removed: growing concerns with respect to] [added: their] ESG [removed: matters or take] [added: concerns] or [removed: do not] take positions that are [removed: unpopular with them.][added: contrary to their views or expectations.]

In addition, various jurisdictions are increasingly adopting or considering laws and regulations that have or would impact us pertaining to ESG governance, strategy, risk management and [removed: metrics/targets.][added: metrics/targets/results.]

[removed: Regulations already adopted or being considered] [added: These] include required corporate reporting and disclosures on specific topics (such as climate and human rights) as well as broader matters (such as other environmental matters, treatment of employees and diversity of workforce).

These requirements [removed: would] [added: have, and are] likely [added: to continue to,] result in increased compliance costs for our business and supply chain, which may increase our operating costs.

Our performance largely depends on the [removed: talents] [added: skills, capabilities] and [removed: efforts] [added: motivation] of our employees (including our people leaders), as well as the environment we create for them to enable them to perform their jobs effectively.

[removed: The] [added: While attrition and pace of hiring has slowed due to economic uncertainty, the] market for specialized skill-sets [removed: is] [added: remains] highly competitive, particularly in technology and other areas that are important to the growth of our business.

[removed: Moreover,] changes in and enforcement of immigration and work permit laws and visa regulations have made it difficult for employees to work in, or transfer among, jurisdictions where we operate, potentially impairing our ability to attract and retain talent.

[removed: This approach] [added: Our flexibility policies and programs (in particular, those related to work arrangements)] may impact the [removed: nature] [added: well-being and productivity] of [removed: relationships among] our workforce, which in turn could have a negative impact on the quality of our corporate culture and our ability to innovate.

To the extent [removed: the arrangements we provide] [added: these policies (including our team-based agreements)] do not meet candidate or employee expectations for flexibility, this could also impact our ability to attract and retain talent.

Our efforts to enter into acquisitions, strategic investments or [removed: entry into] new businesses could be impacted or prevented by regulatory scrutiny and could otherwise result in issues that could disrupt our business and harm our results of operations or reputation.

We continue to evaluate our strategic acquisitions [removed: of] [added: of, and investments in,] complementary businesses, products or [removed: technologies, as well as acquiring interests in related joint ventures or other entities.][added: technologies.]

[removed: In addition, such] [added: Such] an integration [added: also] may divert management’s time and resources from our core business and disrupt our operations.

[removed: To] [added: Additionally, to] the extent we pay the purchase price of any acquisition in cash, it would reduce our cash reserves available to us for other uses, and to the extent the purchase price is paid with our stock, it could be dilutive to our stockholders.

While we offer cyber and intelligence products that are designed to prevent, detect and respond to fraud and cyber-attacks, there can be no assurance that such security solutions will perform as expected or address all possible security threats.

Real or perceived defects, failures, errors or vulnerabilities in our security solutions, such as our cyber and intelligence products, could adversely impact our reputation, customer confidence in our solutions and our business and may subject us to litigation, governmental audits and investigation or other liabilities.

In addition, fraudulent activity and increasing cyber-attacks have encouraged legislative and regulatory intervention, and could damage our reputation and reduce the use and acceptance of our products and services or increase our compliance costs.

Criminals are using increasingly sophisticated methods to capture consumer personal information to engage in illegal activities such as counterfeiting or other fraud and may see their effectiveness enhanced by the use of AI.

As outsourcing and specialization become common in the payments industry, there are more third parties involved in processing transactions using our payment products.

While we are continuing to take measures to make card and digital payments more secure, increased fraud levels involving our products and services, or misconduct or negligence by third parties switching or otherwise servicing our products and services, could lead to legislative or regulatory intervention, such as enhanced security requirements and liabilities, as well as damage to our reputation.

See “Risk Factors - Privacy, Data Protection, AI and Information Security Compliance” in this Part I, Item 1A for more detail concerning related legal risks and obligations.

While we maintain insurance coverage, such coverage may not be adequate to protect us from such losses as well as any liabilities or damages with respect to claims alleging compromises of our confidential, proprietary, sensitive or personal information or our technologies, systems or networks.

In addition, we cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or at all, or that our insurers will not deny coverage as to any future claim.

Our risk and exposure to these matters remain heightened due to, among other things, the evolving nature of these threats, our prominent role in the global payments ecosystem, our continued implementation of our strategic priorities, our extensive use of third-party vendors and potential vulnerabilities from previous and future acquisitions, strategic investments or related opportunities.

Potential future consolidation could occur as a result of bank failures, similar to those that occurred in the U.S. during 2023.

Moreover, as a government contractor, we are subject to a government’s right to conduct audits and investigations into both our contract performance and our compliance with applicable laws, regulations and contract terms.

Any adverse finding could subject us to civil or criminal penalties, sanctions, or suspension or disbarment.

- Debt limit and budgetary discussions in the U.S. has affected, and could further affect, the U.S. credit rating, impacting consumer confidence and spending

These include or have included:

- current and potential future geopolitical conflicts, as well as expansion into regional or global conflicts, and the resulting impacts to our business (this includes Russia’s invasion of Ukraine and the actions taken by the U.S., the EU, other governments and Mastercard in response)

- the threat of terrorism and major environmental and extreme weather events (including those related to climate change)

as well as potential litigation.

Consumers, investors, employees and other stakeholders are increasingly focused on ESG practices.

To the extent we are unable to differentiate our value proposition in the market, effectively develop leaders and build robust succession pipelines, it could impact our ability to deliver for our customers.

To the extent we cannot design our processes and practices to support equitable outcomes, our ability to attract talent may be significantly impacted and we may experience talent attrition.

In addition, escalations in global conflict and a rise in mental health needs are also impacting the well-being of our people.

To the extent we are unable to communicate effectively on these issues and provide support to our employees, we could experience a significant impact on our business, reputation and culture.

Further,

Acquisitions and Strategic Investments

Moreover, we have spent, and may continue to spend, time and money on acquisitions or projects that do not sufficiently meet our expectations (either strategically or financially), which has resulted (and may in the future result) in divesting from or otherwise exiting these investments or businesses.

These targets also have resulted in, and may in the future lead to, information security vulnerabilities for us.

The recent increased speed of bank failures as recently seen in the U.S. could increase the potential for such losses.

Additionally, certain non-guaranteed transactions as well as chargebacks to acquirers in the event of acquirer default could result in elevated brand risk and the potential for financial loss.

These impacts could materially and adversely affect our results of operations.

In July 2023, pursuant to an application in consultation with Mastercard, Mastercard Foundation received court approval to advance that date to January 1, 2024.

Mastercard Foundation would do so pursuant to an orderly and structured plan to diversify its Mastercard shares over a seven-year period, while remaining a long-term Mastercard stockholder and retaining a significant holding of Mastercard shares in its portfolio.

Our failure to effectively design and deliver these multi-rail solutions and integrated products and services could make our other offerings less desirable to these customers, or put us at a competitive disadvantage.

In addition, if there is a delay in the implementation of our products or services (which could include compliance obligations, such as AML and CFT, and licensing requirements for our products and services that operate under regulatory licenses), if our products or services do not perform as anticipated, or we are unable to otherwise adequately anticipate risks related to new types of customers, we could face additional regulatory scrutiny, fines, sanctions or other penalties, which could materially and adversely affect our overall business and results of operations, as well as negatively impact our brand and reputation.

Information Security and Operational Resilience

Information security incidents or account data compromise events could disrupt our business, damage our reputation, increase our costs and cause losses.

Information security risks for payments and technology companies such as ours have significantly increased in recent years in part because of the proliferation of new technologies, the use of the Internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties.

These threats may derive from fraud or malice on the part of our employees or third parties, or may result from human error or accidental technological failure.

These threats include cyber-attacks such as computer viruses, malicious code (including ransomware), phishing attacks or information security breaches and could lead to the misappropriation of consumer account and other information and identity theft.

These types of threats have risen significantly due to a significant portion of our workforce working in a remote or hybrid environment.

Our operations rely on the secure processing, transmission and storage of confidential, proprietary and other information and technology in our computer systems and networks, as well as the systems of our third-party providers.

Our customers and other parties in the payments value chain, as well as account holders, rely on our digital technologies, computer systems, software and networks to conduct their operations.

In addition, to access our integrated products and services, our customers and account holders increasingly use personal smartphones, tablet PCs and other mobile devices that may be beyond our control.

We, like other financial technology organizations, routinely are subject to cyber-threats and our technologies, systems and networks, as well as the systems of our third-party providers, have been subject to attempted cyber-attacks.

Because of our position in the payments value chain, we believe that we are likely to continue to be a target of such threats and attacks.

In response to U.S. and European sanctions against Russia earlier this year, we saw increased information security threats from state sponsored actors.

Other geopolitical events and resulting government activity could also lead to information security threats and attacks by affected or sympathizing jurisdictions or other actors, which could put our information and assets at risk, as well as result in network disruption.

To date, we have not experienced any material impact relating to cyber-attacks or other information security breaches.

However, future attacks or breaches could lead to security breaches of the networks, systems (including third-party provider systems) or devices that our customers use to access our integrated products and services, which in turn could result in the unauthorized disclosure, release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary and other information (including account data information) or data security compromises.

Such attacks or breaches could also cause service interruptions, malfunctions or other failures in the physical infrastructure or operations systems that support our businesses and customers (such as the lack of availability of our value-added services), as well as the operations of our customers or other third parties.

In addition, they could lead to damage to our reputation with our customers, other stakeholders and the broader payments ecosystem, additional costs to us (such as repairing systems, adding new personnel or protection technologies or compliance costs), regulatory penalties, financial losses to both us and our customers and partners and the loss of customers and business opportunities.

These consequences could be further pronounced in jurisdictions in which we are deemed critical national infrastructure.

If such attacks are not detected immediately, their effect could be compounded.

Our risk and exposure to these matters remain heightened because of, among other things, the evolving nature of these threats, our prominent size and scale and our role in the global payments and technology industries, our plans to continue to implement our digital and mobile channel strategies and develop additional remote connectivity solutions to serve our customers and account holders when and how they want to be served, our global presence, our extensive use of third-party vendors and future joint venture and merger and acquisition opportunities.

PART I

ITEM 1A.

RISK FACTORS

*Russia’s invasion of Ukraine.* In response to the Russian invasion of Ukraine, the United States, the European Union and other governments imposed sanctions and other restrictive measures on certain Russian-related entities and individuals and we suspended our business operations in Russia.

We have experienced loss of revenue in this fast-growing market as a result of both the implementation of sanctions and the suspension of our business operations, as well as related impacts in Ukraine and throughout the region.

Future developments (including the expansion or extension of the war, future sanctions and/or actions taken by others globally, and other macroeconomic factors) could result in further negative impacts on our business and financial results.

As customers, merchants and other business partners are impacted by the invasion, it can further negatively affect the environment in which we operate.

The global COVID-19 pandemic and measures taken in response have adversely impacted our business, results of operations and financial condition, and may continue to do so depending on future developments, which are uncertain.

While conditions related to the global COVID-19 pandemic generally improved in 2022, the pandemic continues to have negative effects on the global economy and has affected business activity, in particular, in areas such as travel and supply chains.

These impacts have continued to adversely impact consumers, our customers, suppliers and business partners, as well as our workforce.

Governments, businesses and consumers continue to react to changing conditions, including the emergence of variants of the virus, the severity of infections on a regional basis and the global administration of vaccines and boosters.

Such reactions have included tightening or loosening safety measures and border restrictions or voluntarily making personal safety decisions, as applicable, based on the current environment of their location.

The COVID-19 pandemic has adversely impacted our business, results of operations and financial condition.

There are no comparable recent events which may provide guidance as to the future effects of a global pandemic such as COVID-19, and, as a result, the ultimate impact of this pandemic or a similar health epidemic in the future is uncertain and subject to change.

The full extent to which the COVID-19 pandemic, and measures taken in response, further impacts our business, results of operations and financial condition will depend on future developments, which are uncertain, including, but not limited to, the duration of the pandemic and its impact on the global economy, including the extent to which we can continue to progress toward and maintain more consistent economic and operating conditions.

Even after the COVID-19 pandemic has subsided, we may continue to experience materially adverse impacts to our business and our results of operations as a result of its global economic impact, including any recession that has occurred or may occur in the future.

During 2022, approximately 67% of our revenue was generated from activities outside the United States.

- We are headquartered in the United States.

Net revenue from our payment network increased [removed: 21%, or 20%] [added: 10%,] on [removed: a currency-neutral] [added: both an as reported and currency neutral] basis, in [removed: 2021] [added: 2023] versus [removed: 2020.][added: 2022.]

Net revenue from our payment network [removed: include $10,476] [added: includes $15,182] million of rebates and incentives provided to customers, which increased [removed: 31%, or 30%] [added: 22%] on [removed: a] [added: both an as reported and] currency-neutral basis, in [removed: 2021] [added: 2023] versus [removed: 2020,] [added: 2022,] primarily due to an increase in our key drivers as well as new and renewed deals.

Net revenue from our value-added services and solutions increased [removed: 28%,] [added: 18%,] or [removed: 27%] [added: 17%] on a currency-neutral basis, in [removed: 2021] [added: 2023] versus [removed: 2020, which includes a 6 percentage point increase from acquisitions.][added: 2022.]

| | | | | | | Operational | | | | | | | | | | | | Acquisitions | | | | | | | | | | | | Currency Impact [removed: 3] [added: 1,2] | | | | | | | | | | | | | | | | | | Special Items [removed: 4] [added: 2] | | | | | | | | | | | | Total | | | | | | | | | | | | | | |

| | | | | | | [removed: 2022 | | | | | | 2021 | | | | | | 2022 | | | | | | 2021] [added: 2023] | | | | | | 2022 | | | | | | 2021 | | | | | | [removed: | | | | | | | | | | | | 2022 | | | | | | 2021] [added: 2023] | | | | | | 2022 | | | [removed: | | | 2021 | | |]

| Payment network | | | | | | [removed: 26%] [added: 11%] | | | [removed: 1] | | | [removed: 20%] [added: 26%] | | | [removed: 1] | | | —% | | | | | | —% | | | | | | [removed: (6)%] [added: —%] | | | | | | [removed: 1%] [added: (6)%] | | | | | | | | | | | | | | | | | | —% | | | | | | —% | | | | | | [removed: 20] [added: 10] | | % | | | | [removed: 21] [added: 20] | | % |

| Value-added services and solutions | | | | | | [removed: 15%] [added: 16%] | | | [removed: 2] | | | [removed: 21%] [added: 15%] | | | [removed: 2] | | | [removed: 4%] [added: —%] | | | | | | [removed: 6%] [added: 4%] | | | | | | [removed: (4)%] [added: 1%] | | | | | | [removed: 1%] [added: (4)%] | | | | | | | | | | | | | | | | | | | | | | | | [removed: —%] | | | | | | [removed: 14] [added: 18] | | % | | | | [removed: 28] [added: 14] | | % |

| Net revenue | | | | | | [removed: 22%] [added: 13%] | | | | | | [removed: 20%] [added: 22%] | | | | | | [removed: 1%] [added: —%] | | | | | | [removed: 2%] [added: 1%] | | | | | | [removed: (5)%] [added: —%] | | | | | | [removed: 1%] [added: (5)%] | | | | | | | | | | | | | | | | | | —% | | | | | | —% | | | | | | [removed: 18] [added: 13] | | % | | | | [removed: 23] [added: 18] | | % |

[removed: 3] [added: 1] Includes the translational and transactional impact of currency and the related impact of our foreign exchange derivative contracts designated as cash flow hedging instruments.

[removed: 4] [added: 2] See “Non-GAAP Financial Information” for further information on our non-GAAP adjustments and the reconciliation to GAAP reported amounts.

In [removed: 2022,] [added: 2023,] the net revenue from these customers was approximately [removed: $4.7] [added: $5.6] billion, or [removed: 21%,] [added: 22%,] of total net revenue.

Operating expenses increased [removed: 13%] [added: 11%] in [removed: 2022] [added: 2023] versus the prior year.

Adjusted operating expenses increased [removed: 11%,] [added: 10%,] or [removed: 14%] [added: 11%] on a currency-neutral basis, versus the prior year, which includes a [removed: 4] [added: 1] percentage point increase from acquisitions.

| | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| General and administrative | | | | | | $ | [removed: 8,078] [added: 8,927] | | | | | $ | [removed: 7,087] [added: 8,078] | | | | | $ | [removed: 5,910] [added: 7,087] | | | | | [removed: 14] [added: 11] | | % | | | | [removed: 20] [added: 14] | | % |

| Advertising and marketing | | | | | | [removed: 789] [added: 825] | | | | | | [removed: 895] [added: 789] | | | | | | [removed: 657] [added: 895] | | | | | | [removed: (12)] [added: 5] | | % | | | | [removed: 36] [added: (12)] | | % |

| Depreciation and amortization | | | | | | [removed: 750] [added: 799] | | | | | | [removed: 726] [added: 750] | | | | | | [removed: 580] [added: 726] | | | | | | [removed: 3] [added: 7] | | % | | | | [removed: 25] [added: 3] | | % |

| Provision for litigation | | | | | | [removed: 356] [added: 539] | | | | | | [removed: 94] [added: 356] | | | | | | [removed: 73] [added: 94] | | | | | | | | | | | | | | |

| Total operating expenses | | | | | | [removed: 9,973] [added: 11,090] | | | | | | [removed: 8,802] [added: 9,973] | | | | | | [removed: 7,220] [added: 8,802] | | | | | | [removed: 13] [added: 11] | | % | | | | [removed: 22] [added: 13] | | % |

| Special Items 1 | | | | | | [removed: (423)] [added: (539)] | | | | | | [removed: (176)] [added: (423)] | | | | | | [removed: (73)] [added: (176)] | | | | | | | | | | | | | | |

| Adjusted [added: total] operating expenses [removed: (excluding Special Items 1)] | | | | | | $ | [removed: 9,549] [added: 10,551] | | | | | $ | [removed: 8,627] [added: 9,549] | | | | | $ | [removed: 7,147] [added: 8,627] | | | | | [removed: 11] [added: 10] | | % | | | | [removed: 21] [added: 11] | | % |

| | | | | | | Operational | | | | | | | | | | | | Acquisitions | | | | | | | | | | | | Currency Impact [removed: 1] [added: 1,2] | | | | | | | | | | | | Special Items [removed: 2] [added: 2,3] | | | | | | | | | | | | Total | | | | | | | | |

| | | | | | | [removed: 2022 | | | | | | 2021 | | | | | | 2022 | | | | | | 2021] [added: 2023] | | | | | | 2022 | | | | | | 2021 | | | | | | [removed: 2022 | | | | | | 2021] [added: 2023] | | | | | | 2022 | | | [removed: | | | 2021 | | |]

| General and administrative | | | | | | [removed: 13%] [added: 11%] | | | | | | [removed: 11] [added: 13] | | % | | | | [removed: 4] [added: 1] | | % | | | | [removed: 6] [added: 4] | | % | | | | [removed: (3)] [added: —] | | % | | | | [removed: 2] [added: (3)] | | % | | | | [removed: —] [added: (1)] | | % | | | | [removed: 1] [added: —] | | % | | | | [removed: 14] [added: 11] | | % | | | | [removed: 20] [added: 14] | | % |

| Advertising and marketing | | | | | | [removed: (9)%] [added: 4%] | | | | | | [removed: 35] [added: (9)] | | % | | | | [removed: 1] [added: —] | | % | | | | 1 | | % | | | | [removed: (4)] [added: —] | | % | | | | [removed: 1] [added: (4)] | | % | | | | | | | | | | | | | | | | [removed: (12)] [added: 5] | | % | | | | [removed: 36] [added: (12)] | | % |

| Depreciation and amortization | | | | | | [removed: (1)%] [added: 5%] | | | | | | [removed: 3] [added: (1)] | | % | | | | [removed: 8] [added: 1] | | % | | | | [removed: 20] [added: 8] | | % | | | | [removed: (4)] [added: —] | | % | | | | [removed: 2] [added: (4)] | | % | | | | | | | | | | | | | | | | [removed: 3] [added: 7] | | % | | | | [removed: 25] [added: 3] | | % |

| Total operating expenses | | | | | | 10% | | | | | | [removed: 12] [added: 10] | | % | | | | [removed: 4] [added: 1] | | % | | | | [removed: 7] [added: 4] | | % | | | | [removed: (3)] [added: —] | | % | | | | [removed: 2] [added: (3)] | | % | | | | [removed: 3] [added: 1] | | % | | | | [removed: 1] [added: 3] | | % | | | | [removed: 13] [added: 11] | | % | | | | [removed: 22] [added: 13] | | % |

General and administrative expenses increased [removed: 14%, or 17%] [added: 11%] on [removed: a] [added: an as reported and] currency-neutral basis, in [removed: 2022] [added: 2023] versus the prior year.

Current year results include growth of [removed: 4] [added: 1] percentage [removed: points] [added: point] from acquisitions.

| | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Personnel 1 | | | | | | $ | [removed: 5,263] [added: 6,022] | | | | | $ | [removed: 4,489] [added: 5,263] | | | | | $ | [removed: 3,787] [added: 4,489] | | | | | [removed: 17%] [added: 14%] | | | | | | [removed: 19%] [added: 17%] | | |

| Professional fees | | | | | | [removed: 480] [added: 495] | | | | | | [removed: 433] [added: 480] | | | | | | [removed: 384] [added: 433] | | | | | | [removed: 11%] [added: 3%] | | | | | | [removed: 13%] [added: 11%] | | |

| Data processing and telecommunications | | | | | | [removed: 926] [added: 1,008] | | | | | | [removed: 898] [added: 926] | | | | | | [removed: 756] [added: 898] | | | | | | [removed: 3%] [added: 9%] | | | | | | [removed: 19%] [added: 3%] | | |

| Foreign exchange activity 2 | | | | | | [removed: 102] [added: 83] | | | | | | [removed: 51] [added: 102] | | | | | | [removed: 9] [added: 51] | | | | | | [added: (19)%] | | | | | | | | |

| Other 1, 3 | | | | | | [removed: 1,307] [added: 1,319] | | | | | | [removed: 1,216] [added: 1,307] | | | | | | [removed: 974] [added: 1,216] | | | | | | [removed: 7%] [added: 1%] | | | | | | [removed: 25%] [added: 7%] | | |

| Total general and administrative expenses | | | | | | $ | [removed: 8,078] [added: 8,927] | | | | | $ | [removed: 7,087] [added: 8,078] | | | | | $ | [removed: 5,910] [added: 7,087] | | | | | [removed: 14%] [added: 11%] | | | | | | [removed: 20%] [added: 14%] | | |

3 [removed: Includes] [added: The year ended December 31, 2021 includes] a Special Item related to a foreign indirect tax matter of $82 [removed: million for the year ended December 31, 2021.][added: million.]

Advertising and marketing expenses [removed: decreased 12%,] [added: increased 5%,] or [removed: 8%] [added: 4%] on a currency-neutral basis, in [removed: 2022] [added: 2023] versus the prior year, primarily due to [removed: lower] [added: an increase in] spending on [removed: marketing campaigns.][added: sponsorships, partially offset by a decrease in media spending.]

Depreciation and amortization expenses increased [removed: 3%,] [added: 7%,] or [removed: 7%] [added: 6%] on a currency-neutral basis, in [removed: 2022] [added: 2023] versus the prior year, [added: primarily] due to [added: increased software capitalization to support] the [removed: amortization] [added: continued growth] of [removed: acquired intangible assets from acquisitions.][added: our business.]

In [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] we recorded [removed: $356] [added: $539] million, [removed: $94] [added: $356] million and [removed: $73] [added: $94] million, respectively, related to various legal proceedings.

See Note 7 (Investments) and Note 21 (Legal and Regulatory Proceedings) to the consolidated financial statements included in Part II, Item 8 of this Report for further discussion related to certain of our non-GAAP financial measures.

Currency-neutral Growth Rates

Currency-neutral growth rates are calculated by remeasuring the prior period’s results using the current period’s exchange rates for both the translational and transactional impacts on operating results and are non-GAAP financial measures.

The impact of currency translation represents the effect of translating operating results where the functional currency is different than our U.S. dollar reporting currency.

The impact of the transactional currency represents the effect of converting revenue and expenses occurring in a currency other than the functional currency of the entity.

The impact of the related realized gains and losses resulting from our foreign exchange derivative contracts designated as cash flow hedging instruments is recognized in the respective financial statement line item on the statement of operations when the underlying forecasted transactions impact earnings.

We believe the presentation of currency-neutral growth rates provides relevant information to facilitate an understanding of our operating results.

The translational and transactional impact of currency and the related impact of our foreign exchange derivative contracts designated as cash flow hedging instruments (“Currency impact”) has been excluded from our currency-neutral growth rates and has been identified in the non-GAAP information below and our “Drivers of Change” tables.

See “Foreign Currency - Currency Impact” for further information on our currency impacts and “Financial Results - Net Revenue” and “Financial Results - Operating Expenses” for our “Drivers of Change” tables.

The following tables reconcile our reported financial measures calculated in accordance with GAAP to the respective adjusted non-GAAP financial measures:

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | Year ended December 31, 2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | Net revenue | | | | | | Operating expenses | | | | | | Operating margin | | | | | | Other income (expense) | | | | | | Effective income tax rate | | | | | | Net income | | | | | | Diluted earnings per share | | |

| | | | | | | ($ in millions, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Reported - GAAP | | | | | | $ | 25,098 | | | | | $ | 11,090 | | | | | 55.8 | | % | | | | $ | (369) | | | | | 17.9 | | % | | | | $ | 11,195 | | | | | $ | 11.83 | |

| (Gains) losses on equity investments | | | | | | | | | | | | | | | | | | | | | | | | 61 | | | | | | 0.1 | | % | | | | 36 | | | | | | 0.04 | | |

| Litigation provisions | | | | | | | | | | | | (539) | | | | | | 2.1 | | % | | | | | | | | | | 0.5 | | % | | | | 376 | | | | | | 0.40 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Adjusted - Non-GAAP | | | | | | $ | 25,098 | | | | | $ | 10,551 | | | | | 58.0 | | % | | | | $ | (308) | | | | | 18.5 | | % | | | | $ | 11,607 | | | | | $ | 12.26 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | Year ended December 31, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | Net revenue | | | | | | Operating expenses | | | | | | Operating margin | | | | | | Other income (expense) | | | | | | Effective income tax rate | | | | | | Net income | | | | | | Diluted earnings per share | | |

| | | | | | | ($ in millions, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Reported - GAAP | | | | | | $ | 22,237 | | | | | $ | 9,973 | | | | | 55.2 | | % | | | | $ | (532) | | | | | 15.4 | | % | | | | $ | 9,930 | | | | | $ | 10.22 | |

| (Gains) losses on equity investments | | | | | | | | | | | | | | | | | | | | | | | | 145 | | | | | | — | | % | | | | 126 | | | | | | 0.13 | | |

| Litigation provisions | | | | | | | | | | | | (356) | | | | | | 1.6 | | % | | | | | | | | | | 0.3 | | % | | | | 263 | | | | | | 0.27 | | |

| Russia-related impacts | | | | | | (37) | | | | | | (67) | | | | | | 0.2 | | % | | | | | | | | | | — | | % | | | | 24 | | | | | | 0.02 | | |

| Adjusted - Non-GAAP | | | | | | $ | 22,200 | | | | | $ | 9,549 | | | | | 57.0 | | % | | | | $ | (387) | | | | | 15.7 | | % | | | | $ | 10,342 | | | | | $ | 10.65 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | Year ended December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | Net revenue | | | | | | Operating expenses | | | | | | Operating margin | | | | | | Other income (expense) | | | | | | Effective income tax rate | | | | | | Net income | | | | | | Diluted earnings per share | | |

| | | | | | | ($ in millions, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Reported - GAAP | | | | | | $ | 18,884 | | | | | $ | 8,802 | | | | | 53.4 | | % | | | | $ | 225 | | | | | 15.7 | | % | | | | $ | 8,687 | | | | | 8.76 | | |

| (Gains) losses on equity investments | | | | | | | | | | | | | | | | | | | | | | | | (645) | | | | | | (0.5) | | % | | | | (497) | | | | | | (0.50) | | |

| Litigation provisions | | | | | | | | | | | | (94) | | | | | | 0.5 | | % | | | | | | | | | | 0.1 | | % | | | | 74 | | | | | | 0.07 | | |

| Indirect tax matter | | | | | | | | | | | | (82) | | | | | | 0.4 | | % | | | | 6 | | | | | | 0.1 | | % | | | | 69 | | | | | | 0.07 | | |

| Adjusted - Non-GAAP | | | | | | $ | 18,884 | | | | | $ | 8,627 | | | | | 54.3 | | % | | | | $ | (413) | | | | | 15.4 | | % | | | | $ | 8,333 | | | | | $ | 8.40 | |

The remaining increase was primarily driven by our cyber and intelligence and data and services solutions.

1Includes impacts from our key drivers and metrics, offset by rebates and incentives.

2 Includes impacts from cyber and intelligence, data and services, processing and gateway, ACH batch and real-time account-based domestic and cross-border payments and solutions, opening banking and digital identity, offset by rebates and incentives.

The remaining increase was primarily due to higher personnel costs, travel and meeting costs and unfavorable foreign exchange activity.

The remaining increase was primarily due to higher personnel costs to support our continued investment in our strategic initiatives across payments, services and new networks, increased travel and meeting costs and balance sheet remeasurement losses due to unfavorable foreign exchange activity.

Other income (expense) was unfavorable $757 million in 2022 versus the prior year, primarily due to net losses in the current year versus net gains in the prior year related to unrealized fair market value adjustments on marketable and nonmarketable equity securities and realized gains on sales of marketable equity securities in 2021.

The effective income tax rate was lower in 2022 primarily due to a discrete tax benefit in the first quarter of 2022 related to final U.S. tax regulations published in the current year.

These regulations resulted in a valuation allowance release of $333 million associated with the U.S. foreign tax credit carryforward deferred tax asset.

The regulations limit Mastercard’s ability to generate foreign tax credits starting in 2022 for certain foreign taxes paid, resulting in additional U.S. tax expense.

Additionally, a more favorable geographic mix of earnings in 2022 contributed to the lower effective tax rate.

The lower effective income tax rate was partially offset by:

- the recognition of U.S. tax benefits in 2021 (the majority of which were discrete) resulting from a higher foreign derived intangible income deduction and greater utilization of foreign tax credits in the U.S.

- a discrete tax benefit in 2021 related to the remeasurement of the our net deferred tax asset in the U.K. due to an enacted tax rate change in 2021

- a discrete tax expense related to an unfavorable court ruling in 2022

The adjusted effective income tax rate was higher in 2022 primarily due to:

- the recognition of U.S. tax benefits in 2021 (the majority of which were discrete) resulting from a higher foreign derived intangible income deduction and greater utilization of foreign tax credits in the U.S.

- a discrete tax benefit in 2021 related to the remeasurement of the our net deferred tax asset in the U.K. due to an enacted tax rate change in 2021

- a discrete tax expense related to an unfavorable court ruling in 2022

All of the above impacts were partially offset by a discrete tax benefit in the first quarter of 2022 related to final U.S. tax regulations published in the current year.

These regulations resulted in a valuation allowance release of $333 million associated with the U.S. foreign tax credit carryforward deferred tax asset.

The regulations limit Mastercard’s ability to generate foreign tax credits starting in 2022 for certain foreign taxes paid, resulting in additional U.S. tax expense.

In August 2022, the U.S. enacted the Inflation Reduction Act (the “IRA”).

The IRA includes a corporate alternative minimum tax of 15% on the adjusted financial statement income of corporations for years beginning after December 31, 2022, and an excise tax of 1% on the fair market value of annual net stock repurchases made after December 31, 2022.

We continue to analyze the impacts of the IRA, however, it is not expected to have a material impact on our financial statements.

| | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

In February 2022, we issued €750 million ($800 million as of December 31, 2022) principal amount of notes due February 2029 (the “2022 EUR Notes”).

During 2022, €700 million ($724 million as of the maturity date) of principal related to the 2015 Euro Notes matured and was paid.

On January 27, 2023, we increased our Commercial Paper Program from $6 billion to $8 billion.

| | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

| Shares repurchased in 2022 | | | | | | 25.7 | | |

or to the extent we are unable to realize a deferred tax asset, we would adjust the valuation allowance in the period in which such a determination is made, with a corresponding increase or decrease to earnings.

[removed: We] [added: To manage this risk, we] enter into [added: short duration] foreign exchange derivative contracts [removed: to manage currency exposure associated with] [added: based upon] anticipated receipts and disbursements [removed: occurring in a currency other than] [added: for] the [removed: functional] [added: respective] currency [removed: of the entity.][added: position.]

[removed: The] [added: As of December 31, 2022, the] effect of a hypothetical 10% adverse change in the value of the [removed: functional currencies] [added: U.S. dollar] could result in a fair value loss of approximately [removed: $94 million and $70] [added: $203] million on our foreign exchange derivative contracts [removed: outstanding at December 31, 2022 and 2021, respectively,] [added: designated as a net investment hedge] before considering the offsetting effect of the underlying hedged activity.

[removed: The effect of a] [added: A] hypothetical 10% adverse change in the value of the functional currencies would not have a material impact to the fair value of our short duration foreign exchange derivative contracts outstanding at December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively.

The effect of a hypothetical [removed: 10%] [added: 100 basis point] adverse change in [removed: the value of the U.S. dollar could result in] [added: interest rates would not have] a [added: material impact to the] fair value [removed: loss] of [removed: approximately $203 million and $165 million on] our [removed: foreign exchange] [added: interest rate] derivative contracts designated as a [removed: net investment] [added: fair value] hedge [added: of our fixed-rate debt] at December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively, before considering the offsetting effect of the underlying hedged activity.

A hypothetical 100 basis point adverse change in interest rates would not have a material impact to the fair value of our investments at December 31, [removed: 2022] [added: 2023] and [removed: 2021.][added: 2022.]

| As of December 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] and for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] | | | | | | | | | | | |

| | | | [Management’s report on internal control over financial [removed: reporting](#ief7e67cb5fe84c30b59c87b2d0fbc770_82)] [added: reporting](#i723bd5ed79eb47ff8ce5352df17ef4e6_91)] | | | | | | [removed: [63](#ief7e67cb5fe84c30b59c87b2d0fbc770_82)] [added: [65](#i723bd5ed79eb47ff8ce5352df17ef4e6_91)] | | |

| | | | [Report of independent registered public accounting [removed: firm](#ief7e67cb5fe84c30b59c87b2d0fbc770_85)] [added: firm](#i723bd5ed79eb47ff8ce5352df17ef4e6_94)] (PCAOB ID 238) | | | | | | [removed: [64](#ief7e67cb5fe84c30b59c87b2d0fbc770_85)] [added: [66](#i723bd5ed79eb47ff8ce5352df17ef4e6_94)] | | |

| | | | [Consolidated Statement of [removed: Operations](#ief7e67cb5fe84c30b59c87b2d0fbc770_88)] [added: Operations](#i723bd5ed79eb47ff8ce5352df17ef4e6_97)] | | | | | | [removed: [66](#ief7e67cb5fe84c30b59c87b2d0fbc770_88)] [added: [68](#i723bd5ed79eb47ff8ce5352df17ef4e6_97)] | | |

| | | | [Consolidated Statement of Comprehensive [removed: Income](#ief7e67cb5fe84c30b59c87b2d0fbc770_91)] [added: Income](#i723bd5ed79eb47ff8ce5352df17ef4e6_100)] | | | | | | [removed: [67](#ief7e67cb5fe84c30b59c87b2d0fbc770_91)] [added: [69](#i723bd5ed79eb47ff8ce5352df17ef4e6_100)] | | |

| | | | [Consolidated Balance [removed: Sheet](#ief7e67cb5fe84c30b59c87b2d0fbc770_94)] [added: Sheet](#i723bd5ed79eb47ff8ce5352df17ef4e6_103)] | | | | | | [removed: [68](#ief7e67cb5fe84c30b59c87b2d0fbc770_94)] [added: [70](#i723bd5ed79eb47ff8ce5352df17ef4e6_103)] | | |

| | | | [Consolidated Statement of Changes in [removed: Equity](#ief7e67cb5fe84c30b59c87b2d0fbc770_97)] [added: Equity](#i723bd5ed79eb47ff8ce5352df17ef4e6_106)] | | | | | | [removed: [69](#ief7e67cb5fe84c30b59c87b2d0fbc770_97)] [added: [71](#i723bd5ed79eb47ff8ce5352df17ef4e6_106)] | | |

| | | | [Consolidated Statement of Cash [removed: Flows](#ief7e67cb5fe84c30b59c87b2d0fbc770_100)] [added: Flows](#i723bd5ed79eb47ff8ce5352df17ef4e6_109)] | | | | | | [removed: [71](#ief7e67cb5fe84c30b59c87b2d0fbc770_100)] [added: [73](#i723bd5ed79eb47ff8ce5352df17ef4e6_109)] | | |

| | | | [Notes to consolidated financial [removed: statements](#ief7e67cb5fe84c30b59c87b2d0fbc770_103)] [added: statements](#i723bd5ed79eb47ff8ce5352df17ef4e6_112)] | | | | | | [removed: [72](#ief7e67cb5fe84c30b59c87b2d0fbc770_103)] [added: [74](#i723bd5ed79eb47ff8ce5352df17ef4e6_112)] | | |

As required by Section 404 of the Sarbanes-Oxley Act of 2002, management has assessed the effectiveness of Mastercard’s internal control over financial reporting as of December 31, [removed: 2022.][added: 2023.]

Management has concluded that, based on its assessment, Mastercard’s internal control over financial reporting was effective as of December 31, [removed: 2022.][added: 2023.]

The effectiveness of Mastercard’s internal control over financial reporting as of December 31, [removed: 2022] [added: 2023] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears on the next page.

We have audited the accompanying consolidated balance sheet of Mastercard Incorporated and its subsidiaries (the “Company”) as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the related consolidated statements of operations, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022] [added: 2023] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

As described in Notes 1 and 3 to the consolidated financial statements, the Company provides certain customers with rebates and incentives which are a portion of total net revenue of [removed: $22.2] [added: $25.1] billion for the year ended December 31, [removed: 2022.][added: 2023.]

[removed: February 14, 2023][added: | | | | | | | 2023 | | |]

| | | | | | | 2022 | | | | | | 2021 | | | | | | [removed: 2020] [added: 2022] | | | [added: | | | 2021 | | |]

| Net Revenue | | | | | | $ | [removed: 22,237] [added: 25,098] | | | | | $ | [removed: 18,884] [added: 22,237] | | | | | $ | [removed: 15,301] [added: 18,884] | |

| General and administrative | | | | | | [removed: 8,078] [added: 8,927] | | | | | | [removed: 7,087] [added: 8,078] | | | | | | [removed: 5,910] [added: 7,087] | | |

| Advertising and marketing | | | | | | [removed: 789] [added: 825] | | | | | | [removed: 895] [added: 789] | | | | | | [removed: 657] [added: 895] | | |

| Depreciation and amortization | | | | | | [removed: 750] [added: 799] | | | | | | [removed: 726] [added: 750] | | | | | | [removed: 580] [added: 726] | | |

| Provision for litigation | | | | | | [removed: 356] [added: 539] | | | | | | [removed: 94] [added: 356] | | | | | | [removed: 73] [added: 94] | | |

| Total operating expenses | | | | | | [removed: 9,973] [added: 11,090] | | | | | | [removed: 8,802] [added: 9,973] | | | | | | [removed: 7,220] [added: 8,802] | | |

| Operating income | | | | | | [removed: 12,264] [added: 14,008] | | | | | | [removed: 10,082] [added: 12,264] | | | | | | [removed: 8,081] [added: 10,082] | | |

| Investment income | | | | | | [removed: 61] [added: 274] | | | | | | [removed: 11] [added: 61] | | | | | | [removed: 24] [added: 11] | | |

| Gains (losses) on equity investments, net | | | | | | [removed: (145)] [added: (61)] | | | | | | [removed: 645] [added: (145)] | | | | | | [removed: 30] [added: 645] | | |

| Interest expense | | | | | | [removed: (471)] [added: (575)] | | | | | | [removed: (431)] [added: (471)] | | | | | | [removed: (380)] [added: (431)] | | |

| Other income (expense), net | | | | | | [removed: 23] [added: (7)] | | | | | | [removed: —] [added: 23] | | | | | | [removed: 5] [added: —] | | |

| Total other income (expense) | | | | | | [removed: (532)] [added: (369)] | | | | | | [removed: 225] [added: (532)] | | | | | | [removed: (321)] [added: 225] | | |

| Income before income taxes | | | | | | [removed: 11,732] [added: 13,639] | | | | | | [removed: 10,307] [added: 11,732] | | | | | | [removed: 7,760] [added: 10,307] | | |

| Income tax expense | | | | | | [removed: 1,802] [added: 2,444] | | | | | | [removed: 1,620] [added: 1,802] | | | | | | [removed: 1,349] [added: 1,620] | | |

| Net Income | | | | | | $ | [removed: 9,930] [added: 11,195] | | | | | $ | [removed: 8,687] [added: 9,930] | | | | | $ | [removed: 6,411] [added: 8,687] | |

| Basic Earnings per Share | | | | | | $ | [removed: 10.26] [added: 11.86] | | | | | $ | [removed: 8.79] [added: 10.26] | | | | | $ | [removed: 6.40] [added: 8.79] | |

As of December 31, 2023, we did not have any foreign exchange derivative contracts designated as a net investment hedge.

February 13, 2024

| Balance at December 31, 2022 | | | | | | — | | | | | | — | | | | | | 5,298 | | | | | | (51,354) | | | | | | 53,607 | | | | | | (1,253) | | | | | | 6,298 | | | | | | 58 | | | | | | 6,356 | | |

| Dividends | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,231) | | | | | | — | | | | | | (2,231) | | | | | | — | | | | | | (2,231) | | |

| Balance at December 31, 2023 | | | | | | $ | — | | | | | $ | — | | | | | $ | 5,893 | | | | | $ | (60,429) | | | | | $ | 62,564 | | | | | $ | (1,099) | | | | | $ | 6,929 | | | | | $ | 46 | | | | | $ | 6,975 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

Each of the Company’s capabilities support and build upon each other and are fundamentally interdependent.

The Company employs a multi-layered approach to help protect the global payments ecosystem in which it operates.

Certain of the Company’s contracts may include options to receive additional value-added services and solutions.

The Company accounts for the option as a distinct performance obligation if the option provides a material right to the customer.

Material rights are incremental to the standard offerings, which a customer would not have received without entering into the contract.

If a material right exists in a contract, revenue allocated to the option is deferred and recognized as revenue when those future products or services are transferred or when the option expires.

The value of the option is based on observable prices in the contract or on a relative standalone selling price (“SSP”) basis.

The SSP is the price at which the Company would sell a promised product or service separately in similar circumstances to similar customers.

As the assumptions employed to measure these assets are based on

If the fair value of the indefinite-lived intangible asset is less than its carrying value, the asset is impaired and the excess of the asset’s carrying value over the fair value is recognized as an impairment charge.

The duration of the settlement exposure is short-term and generally limited to a few days.

Settlement is generally completed on a same-day basis.

The Company

During 2023, the Company fully reduced its Restricted cash for litigation settlement balance as the settlement became final in August 2023.

Refer to Note 21 (Legal and Regulatory Proceedings) for further details.

outstanding ownership interest.

commencement date in determining the present value of lease payments.

Accounting Pronouncements Not Yet Adopted

*Improvements to Reportable Segment Disclosures* - In November 2023, the Financial Accounting Standards Board (“FASB”) issued accounting guidance to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024.

The Company will adopt this guidance in its Form 10-K for the year ended December 31, 2024.

This guidance is expected to impact the disclosures only with no impact to the results of operations, financial position or cash flows.

*Improvements to Income Tax Disclosures* - In December 2023, the FASB issued accounting guidance to enhance the transparency and decision usefulness of income tax disclosures.

The guidance includes improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid.

This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is in the process of evaluating when it will adopt this guidance and the potential effects this guidance will have on its disclosures.

In 2023, the Company did not complete any material business acquisitions.

| | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

1North American Markets includes the United States and Canada, excluding the U.S. Territories.

Market risk is the potential for economic losses to be incurred on market risk sensitive instruments arising from adverse changes in factors such as interest rates and foreign currency exchange rates.

Our exposure to market risk from changes in interest rates and foreign exchange rates is limited.

Management monitors risk exposures on an ongoing basis and establishes and oversees the implementation of policies governing our funding, investments and use of derivative financial instruments to manage these risks.

Foreign currency and interest rate exposures are managed through our risk management activities, which are discussed further in Note 23 (Derivative and Hedging Instruments) to the consolidated financial statements included in Part II, Item 8.

Foreign Exchange Risk

We may also enter into foreign currency derivative contracts to offset possible changes in value of assets and liabilities due to foreign exchange fluctuations.

The objective of these activities is to reduce our exposure to transaction gains and losses resulting from fluctuations of foreign currencies against our functional currencies, principally the U.S. dollar and euro.

To manage this risk, we enter into short duration foreign exchange contracts based upon anticipated receipts and disbursements for the respective currency position.

PART II

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The effect of a hypothetical 100 basis point adverse change in interest rates could result in a fair value loss of approximately $36 million and $49 million on our interest rate derivative contracts designated as a fair value hedge of our fixed-rate debt at December 31, 2022 and 2021, respectively, before considering the offsetting effect of the underlying hedged activity.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Balance at December 31, 2019 | | | | | | $ | — | | | | | $ | — | | | | | $ | 4,787 | | | | | $ | (32,205) | | | | | $ | 33,984 | | | | | $ | (673) | | | | | $ | 5,893 | | | | | $ | 24 | | | | | $ | 5,917 | |

| Dividends | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,641) | | | | | | — | | | | | | (1,641) | | | | | | — | | | | | | (1,641) | | |

| Balance at December 31, 2021 | | | | | | — | | | | | | — | | | | | | 5,061 | | | | | | (42,588) | | | | | | 45,648 | | | | | | (809) | | | | | | 7,312 | | | | | | 71 | | | | | | 7,383 | | |

| Settlement of interest rate derivative contracts | | | | | | — | | | | | | — | | | | | | (175) | | |

The Company’s payment solutions are designed to ensure safety and security for the global payments ecosystem.

During 2022, the Company updated its disaggregated net revenue presentation by category and geography to reflect the nature of its payment services and to align such information with the way in which management will prospectively view its categories of net revenue.

The funds continue to be restricted for payments until the litigation matter is resolved.

guarantees, are not recorded on the consolidated balance sheet.

Any gains and losses deferred in accumulated other

Settlement is generally completed on a same-day basis, however, in some circumstances, funds may not settle until subsequent business days.

The useful lives of the Company’s assets are as follows:

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Asset Category | | | | | | Estimated Useful Life | | |

| Buildings | | | | | | 30 years | | |

| Building equipment | | | | | | 10 - 15 years | | |

Anti-Money Laundering, [removed: Counter] [added: Countering the] Financing of Terrorism, Economic Sanctions and Anti-Corruption. We are subject to anti-money laundering (“AML”) and [removed: counter-financing] [added: countering the financing] of terrorism (“CFT”) laws and regulations globally, including the U.S. Bank Secrecy Act and the USA PATRIOT Act, as well as the various economic sanctions programs, including those imposed and administered by the U.S. Office of Foreign Assets Control (“OFAC”).

[removed: As part of this program, we obligate issuers and acquirers to comply with their local sanctions obligations and] [added: In] the [removed: U.S. sanctions programs, including] [added: U.S., these obligations include] requiring the screening of account holders and merchants, respectively, against OFAC sanctions lists (including the SDN List).

Regulation of Internet, Digital Transactions and High-Risk Merchant Categories. Various jurisdictions have enacted or have proposed regulation related to internet [removed: transactions.][added: transactions which applies to payments system participants, including us and our customers.]

Privacy, Data [added: Protection, AI] and Information Security. Aspects of our operations or business are subject to increasingly complex [removed: privacy] and [added: fragmented privacy,] data [removed: protection] [added: and information security] laws [added: and regulations] in the [removed: United States,] [added: U.S.,] the [removed: European Union] [added: EU] and elsewhere around the world.

For example, in the [removed: United States,] [added: U.S.,] we and our customers are respectively subject [removed: to] [added: to, among other laws and regulations,] Federal Trade Commission and federal banking agency information safeguarding requirements under the Gramm-Leach-Bliley Act [added: (“GLBA”)] that [removed: require] [added: require, among other things,] the maintenance of a written, comprehensive information security [removed: program.][added: program and, increasingly, a number of state data and privacy laws.]

In the [removed: European Union,] [added: EU,] we are subject to the General Data Protection Regulation (the [removed: “GDPR”),] [added: “GDPR”) and its equivalent in the U.K.,] which [removed: requires] [added: requires, among other things,] a comprehensive [removed: privacy and] [added: privacy,] data protection [added: and information security] program to protect the personal and sensitive data of EEA residents.

[removed: A number of] [added: Several] regulators and policymakers around the globe [removed: are using] [added: use] the GDPR as a reference to adopt new or updated [removed: privacy and] [added: privacy,] data protection [removed: laws.][added: and information security laws and regulations, although divergences have occurred.]

[removed: Due] [added: Laws and regulations in this area are constantly evolving due] to [added: several factors, including] increasing data collection and data flows, numerous data breaches and security [removed: incidents as well as the use of] [added: incidents, more sensitive data categories, and] emerging technologies such as [removed: artificial intelligence, regulations in this area are constantly evolving with regulatory and legislative authorities in numerous parts of the world adopting proposals to regulate data and protect information.][added: AI.]

In addition, the interpretation and application of these [removed: privacy and] [added: privacy,] data protection [added: and information security] laws [added: and regulations] are often uncertain and in a state of flux, thus requiring constant monitoring for compliance.

ESG. Various jurisdictions have adopted or are increasingly considering adopting laws and regulations impacting our reporting on ESG governance, strategy, risk [removed: management and] [added: management,] metrics and [removed: targets.][added: targets, and results.]

Specific topics include climate (such as the U.K. Streamlined Energy and Carbon Reporting, the [removed: European Union] [added: EU] Corporate Sustainability Reporting Directive, or “EU CSRD”, and the SEC proposed rules related to climate change) and human rights (such as the [removed: European Union] [added: EU] Corporate Sustainability Due Diligence Directive).

Broader ESG matters include other environmental matters, treatment of employees and diversity of workforce (such as [added: in] the EU CSRD).

Additional Regulatory Developments. Various regulatory agencies also continue to examine a wide variety of issues that could impact us, including evolving laws surrounding buy-now-pay-later, [added: open banking,] digital currencies, marijuana, prepaid payroll cards, identity theft, account management guidelines, disclosure [removed: rules, security] [added: rules] and [removed: marketing that would impact our customers directly.][added: marketing.]

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports are available for review, without charge, on the investor relations section of our corporate website as soon as reasonably practicable after they are filed with, or furnished to, the [removed: U.S. Securities and Exchange Commission (the “SEC”).][added: SEC.]

The information contained on our corporate website, including, but not limited to, our [removed: Corporate Sustainability Report, our Global Inclusion] [added: Environmental, Social and Governance] Report and our U.S. Consolidated EEO-1 Report, is not incorporated by reference into this Report.

| | | | Privacy, Data [added: Protection, AI] and [added: Information] Security | | | | | | | | | | | | Stakeholder Relationships | | | | | | Acquisitions [added: and Strategic Investments] | | | | | |

Global regulatory and legislative activity [removed: directly] related to the payments industry may have a material adverse impact on our overall business and results of operations.

[removed: These efforts established,] [added: Central banks] and [removed: potentially] [added: similar regulatory bodies have increasingly established or] further [removed: expand,] [added: expanded their authority over certain aspects of payments systems such as ours, including] obligations or restrictions with respect to the types of products and services that we may offer, the countries in which our [removed: integrated] products and services may be used, the way we structure and operate our business and the types of consumers and merchants who can obtain or accept our products or services.

[removed: New regulations] [added: This type of regulation] and oversight [removed: could also relate] [added: is related] to [removed: our] [added: switching activities (authorization,] clearing and [removed: settlement activities (including] [added: settlement), and includes] policies, procedures and requirements related to risk management, collateral, participant default, timely switching of financial transactions, and capital and financial [removed: resource).][added: resources.]

[removed: Several] [added: Moreover, several] jurisdictions [removed: have also inquired] [added: are demonstrating increased interest] about the network fees we charge to our customers (in some cases as part of broader market reviews of retail [removed: payments).][added: payments), which could in the future lead to regulation of our network fees.]

Parts of our business have also been deemed as a “specified service provider” [removed: and] [added: or] considered [removed: critical national infrastructure.][added: “critical infrastructure”.]

[removed: As a result, the risks] [added: The impact] to our business created by any [removed: one] new [removed: law or] [added: law,] regulation [removed: are] [added: or designation is] magnified by the potential it has to be replicated [removed: in] [added: in, or conflict with,] other [removed: jurisdictions] [added: jurisdictions,] or involve other products within any particular jurisdiction.

The expansion of our products and services as part of our multi-rail strategy [removed: have] [added: has] also created the need for us to obtain new types and increasing numbers of regulatory licenses, resulting in increased supervision and additional compliance burdens distinct from those imposed on our core payment network activities.

In addition, any regulation that is enacted related to the type and level of network fees [removed: we charge our customers could also materially and adversely impact our results of operations.]

If interchange rates are too low, issuers may stop promoting our [removed: integrated] products and services, eliminate or reduce loyalty rewards programs or other account holder benefits (e.g., free checking or low interest rates on balances), or charge fees to account holders (e.g., annual fees or late payment fees).

Governments and merchant groups in a number of countries have implemented or are seeking interchange rate reductions through legislation, [removed: competition law, central bank] regulation and litigation.

If issuers cannot collect or we are required to reduce interchange rates, issuers may be less willing to participate in our four-party payments [removed: system, or may reduce the benefits offered in connection with the use of our products, reducing the attractiveness of our products to consumers.][added: system.]

[removed: Issuers could] [added: Alternatively, they may] reduce the benefits associated with our [removed: products or] [added: products,] choose to charge higher fees to consumers to attempt to recoup a portion of the costs incurred for their [removed: services.][added: services, or seek a fee reduction from us to decrease the expense of their payment programs (particularly if regulation has a disproportionate impact on us as compared to our competitors in terms of the fees we can charge).]

[removed: This] [added: These and other impacts] could make our products less desirable to consumers, [removed: reduce the volume of transactions and our profitability, and] limit our ability to innovate or offer differentiated [removed: products.][added: products, and/or make proprietary three-party networks or other forms of payment more attractive, ultimately reducing the volume of transactions over our network and our profitability.]

We have historically implemented policies, referred to as no-surcharge rules, in certain jurisdictions, including the [removed: United States] [added: U.S.] and Canada, that prohibit merchants from charging higher prices to consumers who pay using our products instead of other means.

Additionally, [removed: we have modified] our no-surcharge rules [removed: to] [added: now] permit U.S. and Canadian merchants to surcharge credit [removed: cards, subject] [added: cards (subject] to certain [removed: limitations.][added: limitations), which over time could lead merchants in some or all merchant categories in these jurisdictions to choose to surcharge as permitted.]

- Some jurisdictions have implemented, or are considering, requirements to collect, [removed: process and/or] store [added: and/or process] data within their borders, as well as prohibitions on the transfer of data abroad, leading to technological and operational implications as well as increased compliance burdens and other costs.

- Geopolitical events (such as Russia’s invasion of Ukraine) and resulting OFAC sanctions, adverse trade policies, enforcement of U.S. laws related to [removed: counter] [added: countering the] financing of terrorism, economic sanctions and anti-corruption, or other types of government actions could lead affected or other jurisdictions to take actions in response that could adversely affect our business.

Moreover, given our decision to suspend business operations in Russia, other separate jurisdictions may decide to [added: begin to or] increase their focus on growing local payment networks and other solutions.

- Regional groups of countries are considering, or may consider, efforts to restrict our [removed: participation in the] switching of regional transactions.

In addition, to the extent a jurisdiction determines us not to be in compliance with regulatory requirements (including those related to data localization), we [removed: have,] [added: have been,] and may [removed: continue to] [added: again in the future] be, subject to resource and time pressures in order to come back into compliance.

Privacy, Data [added: Protection, AI] and [added: Information] Security

Regulation [added: and enforcement] of privacy, data, [added: AI, information] security and the digital economy could increase our [removed: costs,] [added: costs and lead to legal claims and fines,] as well as negatively impact our [removed: growth.][added: growth and reputation.]

We are subject to increasingly [removed: complex] [added: complex, fragmented and divergent laws and] regulations related to [removed: privacy,] [added: privacy and] data [added: protection, data use] and [added: governance, AI and] information security in the jurisdictions in which we do business.

[removed: As] [added: Further, as] we [removed: continue to] [added: acquire new companies and] develop integrated and personalized products and services to meet the needs of a changing [removed: marketplace (as well as acquire new companies),] [added: marketplace,] we have expanded our [removed: information] [added: data] profile through [removed: the collection of] additional data [removed: from additional sources] [added: types] and [added: sources,] across multiple [removed: channels.][added: channels, and involving new partners.]

As part of this program, we obligate issuers and acquirers to comply with their local sanctions obligations and U.S. and EU sanctions programs.

With respect to information security, the U.S. Securities and Exchange Commission (the “SEC”) adopted new disclosure rules that require, among other things, disclosing material cybersecurity incidents in a Current Report on Form 8-K, generally within four business days of determining an incident is material.

Similarly, jurisdictions that regulate a particular product may consider extending their jurisdiction to other products.

For example, debit regulations could lead to regulation of credit products.

we charge our customers could also materially and adversely impact our results of operations.

- Governments have been increasingly creating and expanding local payments structures (such as the Brazilian Instant Payment System-PIX, FedNow in the U.S. and UPI in India), which are increasingly being considered as alternatives to traditional domestic payment solutions and schemes such as ours.

While policymakers around the globe look to the EU and the GDPR when adopting new or updated privacy and data protection laws, divergences have occurred and continue to occur.

As a result, new or updated privacy and data protection and information security laws and regulations have led, and may continue to lead, to similar, stricter or at times conflicting requirements, creating an uncertain regulatory environment.

In addition, laws and regulations on AI, data governance and credit decisioning may overlap or conflict with, or diverge from, general privacy rules.

Overall, these myriad laws and regulations may require us to modify our data processing practices and policies, incur substantial compliance-related costs and expenses, and otherwise suffer adverse impacts on our business.

As a user and deployer of AI technology, we are also subject to increasing and evolving laws and regulations related to AI governance and new applications of existing laws and regulations to AI.

How our use and deployment of AI will be regulated remains uncertain given the uncertainty that exists as to how AI technology will develop.

In addition, the use of AI creates or amplifies risks that are challenging to fully prevent or mitigate.

In particular, AI algorithms may generate inaccurate, unintended, unfair or discriminatory outcomes, which may not be easily detectable or explainable, and may inadvertently breach intellectual property, privacy or other rights, as well as confidential information.

Our implementation of robust AI governance and risk management frameworks aimed at complying with emerging laws and regulations may not be sufficient protection against these emerging risks.

As a result, we are required to constantly monitor our data practices and potentially change them when necessary or appropriate.

We also need to provide increased care in our data management, governance and quality practices, particularly as it relates to the use of data in products leveraging AI.

products or using information products, which may, in turn, decrease the number of our products that they offer.

Many of these competitors are also able to use existing payment networks without being subject to many of the associated costs.

Moreover, these competitors also occupy various roles in the payments ecosystem that enable them to influence payment choice of other participants.

Any of these factors could put us at a competitive disadvantage.

Roadmap for Enhancing Cross-border Payments)).

ITEM 1A.

RISK FACTORS

These differences may present new operational challenges, such as enhanced infrastructure and monitoring for less regulated customers.

Our failure to effectively design and deliver these multi-rail solutions and products and services could make our other offerings less desirable to these customers, or put us at a competitive disadvantage.

In addition, if there is a delay in the implementation of our products or services (which could include compliance obligations, such as AML and CFT, and licensing requirements for our products and services that operate under regulatory licenses), if our products or services do not perform as anticipated, or we are unable to otherwise adequately anticipate risks related to new types of customers, we could face additional regulatory scrutiny, fines, sanctions or other penalties, which could materially and adversely affect our overall business and results of operations, as well as negatively impact our brand and reputation.

Information Security and Operational Resilience

Information security incidents or account data compromise events could disrupt our business, damage our reputation, increase our costs and cause losses.

Information security risks for payments and technology companies such as ours have significantly increased in recent years in part because of the proliferation of new technologies, the use of the Internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, “hacktivists”, terrorists, nation-states, state-sponsored actors and other external parties.

These threats may derive from fraud or malice on the part of our employees or third parties, or may result from human error, software bugs, server malfunctions, software or hardware failure or other technological failure.

These threats include cyber-attacks such as computer viruses, denial-of-service attacks, malicious code (including ransomware), social-engineering attacks (including phishing attacks) or information security breaches and could lead to the misappropriation or loss of consumer account and other information and identity theft.

These types of threats have risen significantly due to a significant portion of our workforce working in a hybrid environment.

These threats also may be further enhanced in frequency or effectiveness through threat actors’ use of AI.

Our operations rely on the secure transmission, storage and other processing of confidential, proprietary, sensitive and personal information and technology in our computer systems and networks, as well as the systems of our third-party providers.

Our customers and other parties in the payments value chain, as well as account holders, rely on our digital technologies, computer systems, software and networks to conduct their operations.

In addition, to access our products and services, our customers and account holders increasingly use personal smartphones, tablet PCs and other mobile devices that may be beyond our control.

We, like other financial technology organizations, routinely are subject to cyber-threats and our technologies, systems and networks, as well as the systems of our third-party providers, have been subject to attempted cyber-attacks.

Because of our position in the payments value chain, we believe that we are likely to continue to be a target of such threats and attacks.

Geopolitical events and resulting government activity could also lead to information security threats and attacks by affected or sympathizing jurisdictions or other actors, which could put our information and assets at risk, as well as result in network disruption.

Various forms of data localization requirements or data transfer restrictions are also under consideration in other countries and jurisdictions, including the European Union.

Financial Sector Oversight. We are or may be subject to regulations related to our role in the financial industry and our relationship with our financial institution customers.

In addition, we are or may be subject to regulation by a number of agencies charged with oversight of, among other things, consumer protection, cybersecurity, financial and banking matters.

The regulators have supervisory and independent examination authority as well as enforcement authority that we may be subject to because of the services we provide to financial institutions that issue and acquire our products.

The legislation applies to payments system participants, including us and our customers, and is implemented through a federal regulation.

Jurisdictions increasingly have regulated or established and expanded authority over certain aspects of payments systems such as ours, or have sought to do so.

Several central banks or similar regulatory bodies around the world have also increased, or are seeking to increase, their formal oversight of the electronic payments industry.

These obligations, designations and restrictions result in heightened regulatory oversight and scrutiny.

They may further expand and could conflict with each other as more jurisdictions impose oversight of payments systems.

Moreover, these efforts may influence the approaches of other regulators around the world that are increasingly looking to replicate similar regulation of payments and other industries.

Similarly, jurisdictions that regulate a particular product may extend their regulation to similar products (for example, debit regulations could lead to regulation of credit products or network fees).

Such changes could lead to new or different criteria for participation in and access to our payments system by financial institutions or other customers.

These and other impacts could lower transaction volumes, and/or make proprietary three-party networks or other forms of payment more attractive.

In addition, issuers could seek a fee reduction from us to decrease the expense of their payment programs, particularly if regulation has a disproportionate impact on us as compared to our competitors in terms of the fees we can charge.

It is possible that over time merchants in some or all merchant categories in these jurisdictions may choose to surcharge as permitted by the rule change.

These regulations could result in negative impacts to our business.

This regulation requires monitoring of and changes to our data practices in regard to the collection, use, disclosure, storage, transfer and/or protection of personal and sensitive information, as well as increased care in our data management, governance and quality practices.

We are also subject to enhanced compliance and operational requirements in the European Union, and policymakers around the globe are or are considering adopting new or updated privacy laws that have resulted or could result in similar or stricter requirements in other jurisdictions.

Moreover, due to account data compromise events and privacy abuses by other companies, as well as the disclosure of monitoring activities by certain governmental agencies in combination with the use of artificial intelligence and new technologies, there has been heightened legislative and regulatory scrutiny around the world that could lead to further regulation and requirements and/or future enforcement.

Those developments have also raised public attention on companies’ data practices and have changed consumer and societal expectations for enhanced privacy and data protection.

In addition, fraudulent activity and increasing cyberattacks have encouraged legislative and regulatory intervention, and could damage our reputation and reduce the use and acceptance of our integrated products and services or increase our compliance costs.

Criminals are using increasingly sophisticated methods to capture consumer personal information to engage in illegal activities such as counterfeiting or other fraud.

As outsourcing and specialization become common in the payments industry, there are more third parties involved in processing transactions using our payment products.

While we are taking measures to make card and digital payments more secure, increased fraud levels involving our integrated products and services, or misconduct or negligence by third parties switching or otherwise servicing our integrated products and services, could lead to legislative or regulatory intervention, such as enhanced security requirements and liabilities, as well as damage to our reputation.

Moreover, the suspension of our business operations in Russia may provide the opportunity for competitors to grow their business and increase their market share and relative competitive position in other jurisdictions.

These companies may also develop products or

We continue to experience pricing pressure.

The demand from our customers for better pricing arrangements and greater rebates and incentives moderates our growth.

Additionally, we face pricing pressure related to real-time account-based payment schemes and cross-border payments.

- Various central banks are experimenting with digital currencies called Central Bank Digital Currencies (CBDCs).

These differences may present new operational challenges in the development and implementation of our new products or services.

These new customers are typically less regulated, and as a result, enhanced infrastructure and monitoring is required.

For the fiscal year ended December 31, [removed: 2022][added: 2023]

| | | | | | | [removed: ] [added: ] | | | | | | | | | | | | | | |

| If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. | | | | | | | | | | | | | | | | | | | | | [removed: ☐] [added: ☒] | | |

The aggregate market value of the registrant’s Class A common stock, par value $0.0001 per share, held by non-affiliates (using the New York Stock Exchange closing price as of June 30, [removed: 2022,] [added: 2023,] the last business day of the registrant’s most recently completed second fiscal quarter) was approximately [removed: $270.1] [added: $328.8] billion.

As of February 8, [removed: 2023,] [added: 2024,] there were [removed: 945,723,000] [added: 925,723,131] shares outstanding of the registrant’s Class A common stock, par value $0.0001 per share and [removed: 7,519,534] [added: 7,168,369] shares outstanding of the registrant’s Class B common stock, par value $0.0001 per share.

| Portions of the registrant’s definitive proxy statement for the [removed: 2023] [added: 2024] Annual Meeting of Stockholders are incorporated by reference into Part III hereof. | | |

[removed: ][added: ]

MASTERCARD INCORPORATED FISCAL YEAR [removed: 2022] [added: 2023] FORM 10-K ANNUAL REPORT

| PART I | | | [removed: [6](#ief7e67cb5fe84c30b59c87b2d0fbc770_16)] [added: [6](#i723bd5ed79eb47ff8ce5352df17ef4e6_16)] | | | [Item [removed: 1.](#ief7e67cb5fe84c30b59c87b2d0fbc770_16)] [added: 1.](#i723bd5ed79eb47ff8ce5352df17ef4e6_16)] | | | [removed: [Business](#ief7e67cb5fe84c30b59c87b2d0fbc770_16)] [added: [Business](#i723bd5ed79eb47ff8ce5352df17ef4e6_16)] | | |

| [removed: [25](#ief7e67cb5fe84c30b59c87b2d0fbc770_19)] [added: [27](#i723bd5ed79eb47ff8ce5352df17ef4e6_19)] | | | [Item [removed: 1A.](#ief7e67cb5fe84c30b59c87b2d0fbc770_19)] [added: 1A.](#i723bd5ed79eb47ff8ce5352df17ef4e6_19)] | | | [Risk [removed: factors](#ief7e67cb5fe84c30b59c87b2d0fbc770_19)] [added: factors](#i723bd5ed79eb47ff8ce5352df17ef4e6_19)] | | | | | |

| [removed: [40](#ief7e67cb5fe84c30b59c87b2d0fbc770_22)] [added: [41](#i723bd5ed79eb47ff8ce5352df17ef4e6_22)] | | | [Item [removed: 1B.](#ief7e67cb5fe84c30b59c87b2d0fbc770_22)] [added: 1B.](#i723bd5ed79eb47ff8ce5352df17ef4e6_22)] | | | [Unresolved staff [removed: comments](#ief7e67cb5fe84c30b59c87b2d0fbc770_22)] [added: comments](#i723bd5ed79eb47ff8ce5352df17ef4e6_22)] | | | | | |

| [removed: [40](#ief7e67cb5fe84c30b59c87b2d0fbc770_25)] [added: [43](#i723bd5ed79eb47ff8ce5352df17ef4e6_25)] | | | [Item [removed: 2.](#ief7e67cb5fe84c30b59c87b2d0fbc770_25)] [added: 2.](#i723bd5ed79eb47ff8ce5352df17ef4e6_25)] | | | [removed: [Properties](#ief7e67cb5fe84c30b59c87b2d0fbc770_25)] [added: [Properties](#i723bd5ed79eb47ff8ce5352df17ef4e6_25)] | | | | | |

| [removed: [40](#ief7e67cb5fe84c30b59c87b2d0fbc770_28)] [added: [43](#i723bd5ed79eb47ff8ce5352df17ef4e6_28)] | | | [Item [removed: 3.](#ief7e67cb5fe84c30b59c87b2d0fbc770_28)] [added: 3.](#i723bd5ed79eb47ff8ce5352df17ef4e6_28)] | | | [Legal [removed: proceedings](#ief7e67cb5fe84c30b59c87b2d0fbc770_28)] [added: proceedings](#i723bd5ed79eb47ff8ce5352df17ef4e6_28)] | | | | | |

| [removed: [40](#ief7e67cb5fe84c30b59c87b2d0fbc770_31)] [added: [43](#i723bd5ed79eb47ff8ce5352df17ef4e6_31)] | | | [Item [removed: 4.](#ief7e67cb5fe84c30b59c87b2d0fbc770_31)] [added: 4.](#i723bd5ed79eb47ff8ce5352df17ef4e6_31)] | | | [Mine safety [removed: disclosures](#ief7e67cb5fe84c30b59c87b2d0fbc770_31)] [added: disclosures](#i723bd5ed79eb47ff8ce5352df17ef4e6_31)] | | | | | |

| | | | [removed: [41](#ief7e67cb5fe84c30b59c87b2d0fbc770_34)] [added: [44](#i723bd5ed79eb47ff8ce5352df17ef4e6_34)] | | | [removed: [\-](#ief7e67cb5fe84c30b59c87b2d0fbc770_34)] [added: [\-](#i723bd5ed79eb47ff8ce5352df17ef4e6_34)] | | | [Information about our executive [removed: officers](#ief7e67cb5fe84c30b59c87b2d0fbc770_34)] [added: officers](#i723bd5ed79eb47ff8ce5352df17ef4e6_34)] | | |

| PART II | | | [removed: [44](#ief7e67cb5fe84c30b59c87b2d0fbc770_40)] [added: [47](#i723bd5ed79eb47ff8ce5352df17ef4e6_40)] | | | [Item [removed: 5.](#ief7e67cb5fe84c30b59c87b2d0fbc770_40)] [added: 5.](#i723bd5ed79eb47ff8ce5352df17ef4e6_40)] | | | [Market for registrant’s common equity, related stockholder matters and issuer purchases of equity [removed: securities](#ief7e67cb5fe84c30b59c87b2d0fbc770_40)] [added: securities](#i723bd5ed79eb47ff8ce5352df17ef4e6_40)] | | |

| [removed: [44](#ief7e67cb5fe84c30b59c87b2d0fbc770_43)] [added: [47](#i723bd5ed79eb47ff8ce5352df17ef4e6_43)] | | | [Item [removed: 6.](#ief7e67cb5fe84c30b59c87b2d0fbc770_43)] [added: 6.](#i723bd5ed79eb47ff8ce5352df17ef4e6_43)] | | | Reserved | | | | | |

| [removed: [45](#ief7e67cb5fe84c30b59c87b2d0fbc770_46)] [added: [48](#i723bd5ed79eb47ff8ce5352df17ef4e6_46)] | | | [Item [removed: 7.](#ief7e67cb5fe84c30b59c87b2d0fbc770_46)] [added: 7.](#i723bd5ed79eb47ff8ce5352df17ef4e6_46)] | | | [Management’s discussion and analysis of financial condition and results of [removed: operations](#ief7e67cb5fe84c30b59c87b2d0fbc770_46)] [added: operations](#i723bd5ed79eb47ff8ce5352df17ef4e6_46)] | | | | | |

| [removed: [60](#ief7e67cb5fe84c30b59c87b2d0fbc770_76)] [added: [62](#i723bd5ed79eb47ff8ce5352df17ef4e6_85)] | | | [Item [removed: 7A.](#ief7e67cb5fe84c30b59c87b2d0fbc770_76)] [added: 7A.](#i723bd5ed79eb47ff8ce5352df17ef4e6_85)] | | | [Quantitative and qualitative disclosures about market [removed: risk](#ief7e67cb5fe84c30b59c87b2d0fbc770_76)] [added: risk](#i723bd5ed79eb47ff8ce5352df17ef4e6_85)] | | | | | |

| [removed: [62](#ief7e67cb5fe84c30b59c87b2d0fbc770_79)] [added: [64](#i723bd5ed79eb47ff8ce5352df17ef4e6_88)] | | | [Item [removed: 8.](#ief7e67cb5fe84c30b59c87b2d0fbc770_79)] [added: 8.](#i723bd5ed79eb47ff8ce5352df17ef4e6_88)] | | | [Financial statements and supplementary [removed: data](#ief7e67cb5fe84c30b59c87b2d0fbc770_79)] [added: data](#i723bd5ed79eb47ff8ce5352df17ef4e6_88)] | | | | | |

| [removed: [113](#ief7e67cb5fe84c30b59c87b2d0fbc770_187)] [added: [115](#i723bd5ed79eb47ff8ce5352df17ef4e6_196)] | | | [Item [removed: 9.](#ief7e67cb5fe84c30b59c87b2d0fbc770_187)] [added: 9.](#i723bd5ed79eb47ff8ce5352df17ef4e6_196)] | | | [Changes in and disagreements with accountants on accounting and financial [removed: disclosure](#ief7e67cb5fe84c30b59c87b2d0fbc770_187)] [added: disclosure](#i723bd5ed79eb47ff8ce5352df17ef4e6_196)] | | | | | |

| [removed: [113](#ief7e67cb5fe84c30b59c87b2d0fbc770_190)] [added: [115](#i723bd5ed79eb47ff8ce5352df17ef4e6_199)] | | | [Item [removed: 9A.](#ief7e67cb5fe84c30b59c87b2d0fbc770_190)] [added: 9A.](#i723bd5ed79eb47ff8ce5352df17ef4e6_199)] | | | [Controls and [removed: procedures](#ief7e67cb5fe84c30b59c87b2d0fbc770_190)] [added: procedures](#i723bd5ed79eb47ff8ce5352df17ef4e6_199)] | | | | | |

| PART III | | | [removed: [115](#ief7e67cb5fe84c30b59c87b2d0fbc770_199)] [added: [118](#i723bd5ed79eb47ff8ce5352df17ef4e6_208)] | | | [Item [removed: 10.](#ief7e67cb5fe84c30b59c87b2d0fbc770_199)] [added: 10.](#i723bd5ed79eb47ff8ce5352df17ef4e6_208)] | | | [Directors, executive officers and corporate [removed: governance](#ief7e67cb5fe84c30b59c87b2d0fbc770_199)] [added: governance](#i723bd5ed79eb47ff8ce5352df17ef4e6_208)] | | |

| [removed: [115](#ief7e67cb5fe84c30b59c87b2d0fbc770_202)] [added: [118](#i723bd5ed79eb47ff8ce5352df17ef4e6_211)] | | | [Item [removed: 11.](#ief7e67cb5fe84c30b59c87b2d0fbc770_202)] [added: 11.](#i723bd5ed79eb47ff8ce5352df17ef4e6_211)] | | | [Executive [removed: compensation](#ief7e67cb5fe84c30b59c87b2d0fbc770_202)] [added: compensation](#i723bd5ed79eb47ff8ce5352df17ef4e6_211)] | | | | | |

| [removed: [115](#ief7e67cb5fe84c30b59c87b2d0fbc770_205)] [added: [118](#i723bd5ed79eb47ff8ce5352df17ef4e6_214)] | | | [Item [removed: 12.](#ief7e67cb5fe84c30b59c87b2d0fbc770_205)] [added: 12.](#i723bd5ed79eb47ff8ce5352df17ef4e6_214)] | | | [Security ownership of certain beneficial owners and management and related stockholder [removed: matters](#ief7e67cb5fe84c30b59c87b2d0fbc770_205)] [added: matters](#i723bd5ed79eb47ff8ce5352df17ef4e6_214)] | | | | | |

| [removed: [115](#ief7e67cb5fe84c30b59c87b2d0fbc770_208)] [added: [118](#i723bd5ed79eb47ff8ce5352df17ef4e6_217)] | | | [Item [removed: 13.](#ief7e67cb5fe84c30b59c87b2d0fbc770_208)] [added: 13.](#i723bd5ed79eb47ff8ce5352df17ef4e6_217)] | | | [Certain relationships and related transactions, and director [removed: independence](#ief7e67cb5fe84c30b59c87b2d0fbc770_208)] [added: independence](#i723bd5ed79eb47ff8ce5352df17ef4e6_217)] | | | | | |

| [removed: [115](#ief7e67cb5fe84c30b59c87b2d0fbc770_211)] [added: [118](#i723bd5ed79eb47ff8ce5352df17ef4e6_220)] | | | [Item [removed: 14.](#ief7e67cb5fe84c30b59c87b2d0fbc770_211)] [added: 14.](#i723bd5ed79eb47ff8ce5352df17ef4e6_220)] | | | [Principal accountant fees and [removed: services](#ief7e67cb5fe84c30b59c87b2d0fbc770_211)] [added: services](#i723bd5ed79eb47ff8ce5352df17ef4e6_220)] | | | | | |

| PART IV | | | [removed: [117](#ief7e67cb5fe84c30b59c87b2d0fbc770_217)] [added: [120](#i723bd5ed79eb47ff8ce5352df17ef4e6_226)] | | | [Item [removed: 15.](#ief7e67cb5fe84c30b59c87b2d0fbc770_217)] [added: 15.](#i723bd5ed79eb47ff8ce5352df17ef4e6_226)] | | | [Exhibits and financial statement [removed: schedules](#ief7e67cb5fe84c30b59c87b2d0fbc770_217)] [added: schedules](#i723bd5ed79eb47ff8ce5352df17ef4e6_226)] | | |

| [removed: [117](#ief7e67cb5fe84c30b59c87b2d0fbc770_220)] [added: [120](#i723bd5ed79eb47ff8ce5352df17ef4e6_229)] | | | [Item [removed: 16.](#ief7e67cb5fe84c30b59c87b2d0fbc770_220)] [added: 16.](#i723bd5ed79eb47ff8ce5352df17ef4e6_229)] | | | [Form 10-K [removed: summary](#ief7e67cb5fe84c30b59c87b2d0fbc770_220)] [added: summary](#i723bd5ed79eb47ff8ce5352df17ef4e6_229)] | | | | | |

- regulation [removed: directly] related to the payments industry (including regulatory, legislative and litigation activity with respect to interchange rates and surcharging)

- regulation of privacy, data, [added: AI, information] security and the digital economy

- regulation that directly or indirectly applies to us based on our participation in the global payments industry (including anti-money laundering, [removed: counter] [added: countering the] financing of terrorism, economic sanctions and anti-corruption, account-based payments systems, and issuer and acquirer [removed: practice] [added: practices] regulation)

- the impact of global economic, political, financial and societal events and conditions, including adverse currency fluctuations and foreign exchange controls [removed: as well as events and resulting actions related to the Russian invasion of Ukraine]

- exposure to loss or illiquidity due to our role as guarantor [removed: and] [added: as well as] other contractual obligations [added: and discretionary actions we may take]

| | | | | | | [Item 1. [removed: Business](#ief7e67cb5fe84c30b59c87b2d0fbc770_16)] [added: Business](#i723bd5ed79eb47ff8ce5352df17ef4e6_16)] | | | | | | | | | | | |

| | | | | | | [Item 1A. Risk [removed: factors](#ief7e67cb5fe84c30b59c87b2d0fbc770_19)] [added: factors](#i723bd5ed79eb47ff8ce5352df17ef4e6_19)] | | | | | | | | | | | |

| | | | | | | [Item 1B. Unresolved staff [removed: comments](#ief7e67cb5fe84c30b59c87b2d0fbc770_22)] [added: comments](#i723bd5ed79eb47ff8ce5352df17ef4e6_22)] | | | | | | | | | | | |

| | | | | | | [Item 2. [removed: Properties](#ief7e67cb5fe84c30b59c87b2d0fbc770_25)] [added: Properties](#i723bd5ed79eb47ff8ce5352df17ef4e6_25)] | | | | | | | | | | | |

| | | | | | | [Item 3. Legal [removed: proceedings](#ief7e67cb5fe84c30b59c87b2d0fbc770_28)] [added: proceedings](#i723bd5ed79eb47ff8ce5352df17ef4e6_28)] | | | | | | | | | | | |

| | | | | | | [Item 4. Mine safety [removed: disclosures](#ief7e67cb5fe84c30b59c87b2d0fbc770_31)] [added: disclosures](#i723bd5ed79eb47ff8ce5352df17ef4e6_31)] | | | | | | | | | | | |

| [41](#i723bd5ed79eb47ff8ce5352df17ef4e6_1099511629840) | | | [Item 1C.](#i723bd5ed79eb47ff8ce5352df17ef4e6_1099511629840) | | | [C](#i723bd5ed79eb47ff8ce5352df17ef4e6_1099511629840)[ybersecurity](#i723bd5ed79eb47ff8ce5352df17ef4e6_1099511629840) | | | | | |

| [116](#i723bd5ed79eb47ff8ce5352df17ef4e6_202) | | | [Item 9B.](#i723bd5ed79eb47ff8ce5352df17ef4e6_202) | | | [Other information](#i723bd5ed79eb47ff8ce5352df17ef4e6_202) | | | | | |

| | | | | | | [Item](#i723bd5ed79eb47ff8ce5352df17ef4e6_1099511629840) [1C](#i723bd5ed79eb47ff8ce5352df17ef4e6_1099511629840)[.](#i723bd5ed79eb47ff8ce5352df17ef4e6_1099511629840) [C](#i723bd5ed79eb47ff8ce5352df17ef4e6_1099511629840)ybersecurity | | | | | | | | | | | |

Each of our capabilities support and build upon each other and are fundamentally interdependent.

| $25.1B | | | | | | | | | | | | $11.2B | | | | | | | | | | | | $11.83 | | | | | |

| up 13% | | | | | | | | | | | | up 13% | | | | | | | | | | | | up 16% | | | | | |

| $25.1B | | | | | | | | | | | | $11.6B | | | | | | | | | | | | $12.26 | | | | | |

| up 13% | | | | | | | | | | | | up 12% | | | | | | | | | | | | up 15% | | | | | |

| $9.0T | | | | | | | | | | | | up 24% | | | | | | | | | | | | 143.2B | | | | | |

| Consumer Credit | | | | | | $ | 3,445 | | | | | 12 | | % | | | | 38 | | % | | | | 1,024 | | | | | | 4 | | % | | | |

Our winning culture is guided by the Mastercard Way, which outlines the behaviors we expect from employees to deliver for our customers and one another.

Our franchise model enables the scale of our network and provides a single governance structure for its operation.

This structure has the potential to be extended to new opportunities.

Doing Well by Doing Good. Sustainable impact is fundamental to our business strategy.

We leverage our employees, technology, resources, partnerships and expertise to address social, economic and environmental challenges, while at the same time creating markets for future growth and driving long-term value for stockholders.

Account-Based Payments Capabilities

Our Franchise. We manage an ecosystem of stakeholders that participate in our global payments network, setting standards and rules for all participants and aiming to ensure interoperability among them while balancing risk and value across all stakeholders.

We offer platforms, products and applications that apply our multi-rail payment capabilities to capture new payment flows, enabling us to serve the needs of a significant addressable market.

| | | | •In 2023, we launched Mastercard Receivables Manager, a solution aimed at streamlining how suppliers receive virtual card payments by automating the integration of reconciliation data into suppliers’ accounts receivables systems. •In 2023, our Disbursements and Remittances capabilities have the ability to reach more than 95% of the world’s banked population. | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

Leveraging our merchant acceptance network (which includes many billers), we offer consumers the choice of paying their bills in a convenient and secure manner using credit, debit or prepaid.

We also offer the choice of account-based payments methods.

As a result, these solutions provide an experience that offers flexibility and benefits consumers, financial institutions and billers.

| | | | •In 2023, we marked the tenth anniversary of Mastercard introducing token standards to the payments industry, and we reached the milestone of three billion tokens in one month. •In 2023, we launched our Multi Token Network, a set of foundational capabilities designed to make transactions within digital asset and blockchain ecosystems secure, scalable and interoperable. | | | | | | | | |

◦Our Tap on Phone acceptance technology enables businesses of all sizes to accept payments from any contactless card or mobile wallet directly from their NFC-enabled device, providing a turnkey and cost-effective solution without any additional hardware required

| | | | •In 2023, we launched our Consumer Fraud Risk solution, which leverages our AI capabilities and the unique network view of real-time payments to help banks predict and prevent payment scams. •In 2023, Mastercard SafetyNet prevented more than $20 billion in fraud globally. •In 2023, we acquired an AI-enabled, cloud-based solution designed to help stop cyber-attacks related to malware, ransomware and DDOS attacks. | | | | | | | | |

| | | | •In 2023, we built upon our acquisition of Dynamic Yield™ by launching Element. This solution is designed to combine insights from our data analytics with Dynamic Yield’s personalization experience to provide more insight-driven, customized product recommendations, offers and content to consumers. | | | | | | | | |

| | | | •In 2023, our open banking capabilities provided connectivity to over 95% of deposit accounts in the U.S. and approximately 3,000 banks across Europe (directly as well as through partners). | | | | | | | | |

- build on our DEI efforts to enable equal opportunities and empower people

We create a range of products and services for our customers (including the majority of our value-added services) that use our data assets, infrastructure, expertise and platforms.

P2M and P2P market share.

In particular, India has recently engaged in a series of efforts to expand the interoperability and cross-border reach of UPI globally.

Most recently, it announced an agreement in 2023 to partner with the United Arab Emirates (UAE) to enable Indian travelers within the UAE to pay with UPI.

| | | | | | | | | |

| | | | | | | | | |

ITEM 1.

BUSINESS

| | | | •In October 2023, the U.S. Federal Reserve issued a proposal that would lower the interchange rate cap for debit and prepaid transactions in the U.S. by approximately 28%-30% (based on an average ticket size of $50), with the cap automatically updating every two years. | | | | | | | | |

| | | | •In October 2023, the U.S. Consumer Financial Protection Bureau (CFPB) proposed a rule requiring data providers to make covered data available to consumers and authorized third parties, promoting industry standard-setting bodies recognized by the CFPB, and outlining obligations for third parties accessing data on behalf of consumers (including limitations on the collection, use and retention of covered data). | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| [113](#ief7e67cb5fe84c30b59c87b2d0fbc770_193) | | | [Item 9B.](#ief7e67cb5fe84c30b59c87b2d0fbc770_193) | | | [Other](#ief7e67cb5fe84c30b59c87b2d0fbc770_193) [i](#ief7e67cb5fe84c30b59c87b2d0fbc770_193)[nformation](#ief7e67cb5fe84c30b59c87b2d0fbc770_193) | | | | | |

- the impact of the global COVID-19 pandemic and measures taken in response

Our payment solutions are designed to ensure safety and security for the global payments ecosystem.

| $22.2B | | | | | | | | | | | | $9.9B | | | | | | | | | | | | $10.22 | | | | | |

| up 18% | | | | | | | | | | | | up 14% | | | | | | | | | | | | up 17% | | | | | |

| $22.2B | | | | | | | | | | | | $10.3B | | | | | | | | | | | | $10.65 | | | | | |

| up 23% | | | | | | | | | | | | up 32% | | | | | | | | | | | | up 34% | | | | | |

| $8.2T | | | | | | | | | | | | up 45% | | | | | | | | | | | | 125.7B | | | | | |

| Consumer Credit | | | | | | $ | 3,143 | | | | | 15 | | % | | | | 38 | | % | | | | 992 | | | | | | 3 | | % | | | |

The diversity and skill sets of our people underpin everything we do.

Our franchise enables the scale of our payments network and helps ensure our multiple payment capabilities operate under a single governance structure, which can be extended to new opportunities.

Doing Well by Doing Good. Sustainable impact is fundamental to our business strategy, and we leverage our employees, technology, resources, partnerships and expertise to address social, economic and environmental challenges.

Additional Payment Capabilities

We also use our real-time payments capabilities to enable new payment flows, such as consumer bill payments using our real-time bill pay solutions.

We apply these capabilities to help these stakeholders with various disbursements and remittances.

Our approach includes supporting small businesses by

Our Franchise. We manage an ecosystem of stakeholders that participate in our network and payments platforms.

| We offer platforms that apply our multi-rail payment capabilities to capture new payment flows, enabling us to serve the needs of a significant addressable market. Disbursements and Remittances. We offer applications that enable consumers, businesses, governments and merchants to send and receive money domestically and across borders with greater speed and ease. •Using Mastercard Send™, we partner with digital messaging and payment platforms to enable consumers in approximately 50 markets to send money directly within applications to other consumers in more than 100 markets. We | | | | | | | | | Key 2022 Developments | | | | | |

| | | | •In 2022, our Disbursements and Remittances capabilities achieved a payout reach of nearly 10 billion endpoints globally across multiple channels. | | | | | | | | | | | |

B2B Accounts Payable. We offer solutions that enable businesses or governments to make payments to businesses with whom they have a trusted relationship for goods and services.

Additionally, we offer a platform to optimize supplier payment enablement campaigns for financial institutions, as well as our treasury intelligence platform that provides corporations with recommendations to improve working capital performance and accelerate spend on cards.

Our bill pay solutions include the enablement of enhanced biller setup and expanded bill presentment that make it easier for consumers and small businesses to present, view, manage and pay their bills through their online or mobile banking apps.

These solutions facilitate payment choice using multiple payment rails (including real-time account-based payments) and deliver immediate payment confirmation, providing an experience that benefits consumers, financial institutions and billers.

| | | | •During 2022, we entered into pilot programs for our previously announced Mastercard Installments, an open loop solution to deliver buy-now-pay-later installments capabilities at scale. The solution connects lenders with merchants across our acceptance network to provide buy-now-pay-later options for consumers. | | | | | | | | |

| | | | •In 2022, we significantly extended the reach of our Consumer Clarity services, enhancing the value of payments by providing cardholders with merchant details and digital receipts to reduce disputes, lower chargeback costs and improve the consumer experience. | | | | | | | | |

| | | | •In 2022, we completed our acquisition of Dynamic Yield™, which uses enhanced AI to deliver customized product recommendations, offers and content to consumers. When combined with our loyalty and other offerings, this platform provides the opportunity to offer a unified consumer engagement and loyalty hub to our customers. | | | | | | | | |

| | | | •In 2022, we launched a suite of smart payment decisioning tools that add value to our enhanced ACH solution, helping our partners determine the optimal timing and payment rail for a successful payment transaction. | | | | | | | | |

- build on our DEI efforts to support our employees’ growth

- We remain committed to our “In Solidarity” initiative through alignment of our DEI plans globally to address local needs and opportunities, for example through the introduction of new training programs such as our neurodiversity hiring initiative and new partnerships with historically Black colleges and universities (HBCUs) in the U.S.

In 2022, we expanded this modifier to all employees, underscoring our commitment to ESG

2Data as of September 30, 2022.

Certain jurisdictions have also created domestic card schemes focused mostly on debit.

|  | | | Security | | | Enable all parties in the payments ecosystem to transact securely and with confidence through safety and security solutions offered on our network (including fraud prevention and authentication) | | |

|  | | | Services | | | Value-added services for all parties including analytics insights, consulting and marketing services and loyalty solutions | | |

| | | | •In 2022, the U.K. Payment Systems Regulator (“PSR”) opened a market review of network constraints in setting network fees and European Union/U.K. cross-border interchange to determine whether the market is functioning in terms of competition, innovation and promoting the interests of end users. The market review will be a multi-year effort during which the PSR may make recommendations for potential changes. | | | | | | | | |

| | | | •The U.S. Federal Reserve announced that, effective July 1, 2023, the requirement for issuing customers to enable two unaffiliated networks for routing debit card-present transactions will be extended to debit card-not-present transactions. | | | | | | | | |

| | | | •In December 2022, the U.S. Federal Trade Commission’s Bureau of Competition voted to issue an administrative complaint and accept a consent agreement with Mastercard related to our compliance with the debit routing provisions of the Durbin Amendment. Pursuant to this agreement, we agreed to provide primary account numbers (PANs) so merchants can route tokenized online debit transactions to alternative networks. | | | | | | | | |

In China, we are currently excluded from domestic switching and are seeking market access, which is uncertain and subject to a number of factors, including receiving regulatory approval.

We are in active discussions to explore different solutions.