What Does Mastercard Spend More On: Data Processing Or Employee Salaries?

Mastercard (NYSE: MA) is one of the largest global electronic payment solutions company in the world and provides its clients authorizing, clearing and settling of transactions, and other support services. Considering the fact that the company processes nearly $5 trillion in payments a year globally, one would expect it to spend a bulk of its cash on data processing activities. However, as we detail in our interactive dashboard for Mastercard’s Expenses, Data Processing Expenses represented just 4% of its net revenues in 2018. On the other hand, Personnel Expenses accounted for nearly 21% of net revenues – dwarfing Data Processing Expenses by a significant margin.

General and Administrative Expenses account for more than half of Mastercard’s Expenses

• In 2018, General & Administrative expenses accounted for nearly 60% of the company’s total expenses.
• Mastercard’s General & Administrative (G&A) Expenses include Personnel Expenses, Professional Fees, Data Processing and Telecommunication Charges, and Foreign Exchange Costs among others.
• Personnel expenses, the largest subcategory under G&A Expenses, account for nearly 21% of the net revenues.
• Moreover, data processing expenses are just 4% of the net revenues.
• G&A Expenses as a percentage of net revenues have remained fairly stable at 34-35% over the last few years and Trefis expects it to continue growing at roughly the same rate as revenues as the company expands its offerings and operational capacity across geographies.

Advertising and Amortization are other key expense categories

• In 2018, advertising and amortization expenses accounted for nearly 10% and 5% of the company’s total expenses, respectively.
• As a percentage of net revenues, the advertising and amortization expenses have remained fairly stable at 6% and 3%, respectively.
• These expense categories are majorly impacted by marketing campaigns and acquisitions.
• In 2017, Mastercard incurred additional income taxes of $873 million but going forward, the low statutory tax rate of 21% has lowered its bottom line by nearly 5-percentage points.

Additional data around how much cost Mastercard has incurred across categories over recent years is available in our interactive dashboard.

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