2009 Bankcard Profitability Study: MasterCard Inc.

Costly payouts to settle two long-running antitrust cases dampen profits while the economic slowdown begins to affect purchase volume.

MasterCard Worldwide continued to crank out overall debit card payment-volume growth in 2008, but legal issues and the U.S. economic slowdown hurt its overall performance.

In its second full year as an independent company following its initial public offering in 2006, MasterCard finally resolved some long-simmering legal issues.

The company in June reached an agreement to pay American Express Co. up to $1.8 billion to settle an antitrust case dating back to 2004. AmEx's suit, filed in 2004, alleged that MasterCard's and Visa's exclusionary rules prohibiting U.S. financial intuitions from issuing cards on its network hurt its growth opportunities. MasterCard said it would pay the settlement amount in quarterly installments over the next three years.

MasterCard and Visa Inc. reached an agreement to settle Discover Financial Services' similar antitrust suit dating back to 2004 and to share settlement costs. MasterCard's share of the $2.75 billion settlement was $827.5 million, including $35 million Morgan Stanley, Discover's former parent, agreed to pay MasterCard as part of the deal.

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