MasterCard reports strong growth in its payment programs for first three months of 2003

Despite ongoing uncertainty in economies across the globe, MasterCard's customers and their cardholders increasingly turned to MasterCard as their payment brand choice.

"We experienced solid growth in our business during the first quarter of 2003 despite global uncertainties on several fronts, including the conflict in Iraq, SARS, and generally faltering economic conditions in many parts of the world," said Robert W. Selander, MasterCard president and CEO. "Our continued growth in an extremely challenging environment is evidence that the initiatives we put in place over the past few years to focus on customers, strengthen our core services, and differentiate ourselves through customized services and solutions are not only working, but are also resilient."

Performance highlights for first quarter 2003 include:

• Cardholders across the globe used MasterCard-branded cards (excluding Maestro and Cirrus®) for about 3.4 billion transactions, generating gross dollar volume (GDV) of US$285.7 billion, an increase of 7.3% over the same period in 2002;

• In the first three months of 2003, MasterCard's 25,000 member financial institutions around the world had issued more than 595.4 million MasterCard-branded cards, an 11.3% increase over the same period in 2002;

• MasterCard cardholders were also able to use their cards at 32 million acceptance locations and terminals around the globe as of March 31, 2003, up 17.5% over the like 2002 period;

• Maestro, MasterCard's online, PIN-based global debit brand, continued to grow in the first quarter of 2003, with the Maestro brand mark now appearing on 466 million cards worldwide, a 10% increase over the same period in 2002. Maestro is accepted for purchases at more than 7.8 million merchant terminals in 93 countries and territories, and at 892,800 MasterCard/Maestro/Cirrus ATMs around the world;

MasterCard's strong growth in the first quarter of 2003 was fueled by growth in both credit and debit programs. GDV for worldwide credit and charge programs grew 6.6% to US$235 billion, and GDV for offline debit programs rose 10.6% to US$50.7 billion.

Strong Regional Results
Strong double-digit GDV growth was reported for most of MasterCard's regions in the first quarter of 2003: Canada, 17%, Europe, 10.6%; Latin America, 29.4%; South Asia, Middle East/Africa, 16.3%; and the U.S. rose 10.3%. Due to spiraling credit card delinquencies and write-offs in Korea, and the conversion to the domestic payments brand in China, Asia/Pacific reported a 6.8% drop in GDV despite solid performance throughout the rest of the region. Global growth was generated by strong purchase volume, up 11.3% from the same period in 2002.

In the United States, which accounts for more than half of total MasterCard GDV, MasterCard-branded cards were used for nearly 1.7 billion transactions in the first quarter of 2003, generating US$146.7 billion in GDV. Strong purchase volume growth of 13.6% drove this result.

The number of MasterCard credit cards issued in the United States was up 10.6% to 264.7 million, and outstanding balances reached US$278 billion, a 13.2% increase over the same period in 2002. The number of debit MasterCard cards issued rose 15% to 50.5 million.

In Canada, GDV rose 17% to US$8.3 billion for the first three months of 2003. MasterCard-branded transactions in Canada remained strong, up 17.1% over the same period in 2002 and MasterCard cards issued up by 18.4%.

In Europe, MasterCard GDV rose to 10.6% as of March 31, 2003, to US$66 billion. Card issuance increased by 11.3% to 88.2 million cards over the same period in 2002. Europe continues to be the largest cardholder base for Maestro, with 226.4 million Maestro cards, an almost 7% increase over the same period in 2002. There was a 41.7% increase in the number of merchant terminals accepting Maestro in the first quarter of 2003.

The Asia/Pacific region reported GDV of US$54.2 billion in the first quarter of 2003 and the number of cards issued in the region rose 8.5% to 114.3 million. With over 144.1 million Maestro cards, Asia/Pacific was the second largest Maestro region as of March 31, 2003. The number of Maestro cards in the region rose 14.4% over first quarter 2002.

Latin America reported a strong 29.4% increase in GDV for the first quarter of 2003 to US$8.1 billion, as the number of cards issued in the region increased 14% over the same period in 2002. With 34.1 million Maestro cards in circulation, the growth for first quarter of 2003 was close to 21% over the same period in 2002, and the number of merchant terminals in the region increased close to 22%.

In South Asia, Middle East/Africa, GDV grew 16.3% to US$2.3 billion during the first three months of 2003, with solid transaction growth of 12.6%. Maestro acceptance in the region has been growing significantly with an increase of 40.3% in merchant terminals accepting Maestro as of March 31, 2003, compared to the same period in 2002. There were close to 16.1 million Maestro cards in circulation in the first three months of 2003.