"The integration of MasterCard and Europay unites two of the strongest players in the payments business so that we can now deploy a truly globally integrated, regionally sensitive strategic model," said Robert Selander, MasterCard’s president and chief executive officer. "By integrating with Europay, we’re enhancing our ability to deliver high-quality, reliable payment solutions to our members globally, while maintaining regional flexibility that is responsible to local market requirements and conditions."
Selander said that by joining Europay’s strength in m-commerce, smart cards, and debit cards with MasterCard’s leadership in customer relationship management, award-winning branch marketing, and leading-edge processing technology, the financial institutions will receive superior support and delivery whether they operate in one country, on one continent, or in diverse markets around the world."
Europay, MasterCard’s long-standing strategic ally in Europe, is being integrated into the global organization as MasterCard’s Europe Region. The Europe Region will continue to be based in Waterloo, Belgium. Dr. Peter Hoch, Europay’s chief executive, will continue his leadership as president of MasterCard’s Europe Region, reporting to Selander.
"Europay has just marked another critical milestone, with over 300 million cards now issued in our region. It’s a proud moment at which to enter into this merger," said Hoch. "Our members have always benefited from our strategic alliance with MasterCard but the benefits of working as a truly integrated global company will now be all the greater."
With a unified governance and management structure, MasterCard will increase strategic flexibility, strengthen customer responsiveness and shorten time-to-market for innovative, products and services, Selander said.
At the same time, MasterCard’s regions – Europe, Asia/Pacific, Latin America/Caribbean, South Asia/Middle East/Africa and North America – will maintain their regional boards and the ability to decide how best to implement MasterCard’s global strategy on a regional level, and establish rules and policies that reflect local practices.
To facilitate the merger transaction with Europay, MasterCard created a private share corporation by issuing stock in a newly developed holding company, MasterCard Incorporated, to its principal members.
MasterCard International, the membership corporation, will continue as MasterCard Incorporated’s principal operating subsidiary.
"As a private share corporation, we provide a tangible benefit to our principal members, who are now our shareholders," Selander added. "They own stock in our company and have a vested interest in enhancing the value of that stock by moving more volume, revenue, and share of MasterCard."
Selander pointed out that as part of the process of becoming a private share company, MasterCard publicly disclosed detailed information about its business, and will file quarterly and annual financial reports with the US Securities and Exchange Commission.
"This increased level of financial transparency and precision is an important advantage in today’s business environment, and a key differentiator from our competition," he said.
The integration of MasterCard and Europay provides an opportunity to create substantial benefits for customers in terms of improved economies of scale, elimination of duplication, and faster decision making. This means MasterCard can be faster to market, delivering timely technology and marketing solutions to customers. Many of these benefits are already being realized.
Full globalization of MasterCard’s processing functions, for example, will provide a single set of applications and infrastructure for core processing, with significant economies of scale.
The integration provides the opportunity for the Europe region to further benefit from MasterCard’s global expertise in brand building, customer-centered service, marketing consulting, and corporate payments expertise.
For example, MasterCard’s award-winning Priceless advertising campaign, now seen in 45 languages and in 90 countries, including key European markets, will be expanded throughout the region, further enhancing the global reach and scope of MasterCard’s brand. European customers will also benefit from the delivery of enhanced customized relationship management and consulting services.