What changed in this filing

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Item 1A. Risk Factors

2026-02-11 compared with 2025-02-12 · 44 added, 40 removed, 219 unchanged (28% of the section changed)

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.

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 (including AI), 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.

The widespread use of AI, and its increasing capabilities, is enhancing the frequency and effectiveness of threat actors.

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.

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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.

In addition, the current or future listing of Recorded Future as an “undesirable” or “unreliable” entity by certain jurisdictions could further increase our risks in this area.

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

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Such events could have a material adverse impact on our transaction volumes, results of operations and prospects for future growth, or increase our costs by leading to additional regulatory burdens being imposed on us.

In addition, companies have generally experienced in recent years an increase in fraudulent activity and cyber-attacks.

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In addition, companies have generally experienced in recent years an increase in fraudulent activity and cyber-attacks, which has been further exacerbated by the increased use of AI.

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.

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Further, such occurrences have resulted in and could further result in legislative or regulatory intervention, which could lead to enhanced security requirements and liabilities.

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.

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

Despite various mitigation efforts that we undertake, there can be no assurance that we, or third parties with which we work, will not suffer material breaches and resulting losses in the future.

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

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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.

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.

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Service disruptions that cause us to be unable to process transactions or service our customers could reduce our operational resilience and materially affect our overall business and results of operations.

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

Our transaction switching systems and other offerings may experience interruptions as a result of technology malfunctions, network degradation, updates and migrations to new technology and platforms, supply-chain attacks, fire, floods, earthquakes, weather events, power outages, telecommunications disruptions, terrorism, workplace violence, accidents or other catastrophic events (including those related to climate change).

We have experienced in limited instances, and may continue to experience, some types of these interruptions.

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Additionally, we rely on third-party service providers for the timely transmission of information across our global data network.

If one of our service providers fails to provide the communications capacity or services we require, as a result of natural disaster, operational disruptions, terrorism, hacking or any other reason, the failure could interrupt our services.

If one of our service providers fails to provide the communications capacity or services we require, as a result of natural disasters, operational disruptions, cybersecurity-related disruptions or failures, terrorism, hacking or any other reason, the failure could interrupt our services.

Although we maintain an enterprise resiliency program to analyze risk, assess potential impacts, and develop effective response strategies, we cannot ensure that our business would be immune to these risks.

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Loss of business from any of our large customers could have a material adverse impact on our overall business and results of operations.

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Exclusive/near exclusive relationships certain customers have with our competitors may have a material adverse impact on our business.

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These consolidations have included customers with a substantial Mastercard portfolio being acquired by institutions with a strong relationship with a competitor.

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

in recent years.

Potential future consolidation could occur as a result of bank failures, similar to those that occurred in recent years.

If significant consolidation among customers were to continue, it could result in the substantial loss of business for us, which could have a material adverse impact on our business and prospects.

In addition, one or more of our customers could seek to merge with, or acquire, one of our competitors, and any such transaction could also have a material adverse impact on our overall business.

Consolidation could also produce a smaller number of large customers, which could increase their

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bargaining power and lead to lower prices and/or more favorable terms for our customers.

Consolidation could also produce a smaller number of large customers, which could increase their bargaining power and lead to lower prices and/or more favorable terms for our customers.

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

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See “Risk Factors - Settlement and Third-Party Obligations” in this Part I, Item 1A with respect to how we guarantee certain third-party obligations.

With the exception of the U.S.

and a select number of other jurisdictions, most in-country (as opposed to cross-border) transactions conducted using cards with our brands are switched by our customers or other processors.

We switch a high percentage of domestic (or in-country) transactions conducted using cards with our brands.

However, there are several jurisdictions in which domestic transactions are switched by our customers or other processors.

Because we do not provide domestic switching services in these countries 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.

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The continued focus of merchants on the costs of accepting various forms of payment (including digital) may lead to additional litigation and regulatory proceedings.

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Certain larger merchants are also able to negotiate incentives from us and pricing concessions from our issuer and acquirer customers as a condition of accepting our products.

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Our work with governments exposes us to risks that could have a material impact on our business and results of operations.

As we increase our work with national, state and local governments, both indirectly through financial institutions and with them directly as our customers, we may face various risks inherent in associating or contracting directly with governments.

As we increase our work with national, state and local governments (both indirectly through financial institutions, system integrators and other third party partners and with them directly as our customers), we may face various risks inherent in associating or contracting directly with governments.

These risks include, but are not limited to, the following:

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Any violation and subsequent judgment or settlement related to the above could subject us to substantial monetary penalties and damages and have a significant reputational impact.

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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.

• Working or contracting with governments, either directly or via our financial institution customers, can subject us to heightened reputational risks, including extensive scrutiny and publicity, as well as a potential association with the policies of those governments.

• Working or contracting with governments (either directly or via our financial institution customers, system integrators or other third party partners) can subject us to heightened reputational risks, including extensive scrutiny and publicity, as well as a potential association with the policies of those governments.

Any negative publicity or negative association with a government entity, regardless of its accuracy, may adversely affect our reputation.

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credit rating, impacting consumer confidence and spending

• Uncertain global trade policies and related government actions (including those related to tariffs), which could have an adverse impact on our business (including with respect to consumer and business spending) and relationships with stakeholders

• Government intervention (including the effect of laws, regulations and/or government investments on or in our financial institution customers), as well as uncertainty due to changing political regimes in executive, legislative and/or judicial branches of government, that may have potential negative effects on our business and our relationships with customers or otherwise alter their strategic direction away from our products

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These include or have included:

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• Global pandemics (and related post-pandemic global economic impacts) and potential separate outbreaks of flu, viruses and other diseases (any of which could result in future epidemics or pandemics)

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Any of these developments potentially could have a material adverse impact on our overall business and results of operations.

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Adverse currency fluctuations and foreign exchange controls could negatively impact our results of operations.

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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 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, as well as potential litigation.

Additionally, we or our customers could take (or be perceived to take) actions related to these industries, which could be viewed negatively and result in threats or other retaliatory actions.

We may also face similar scrutiny to the extent that we are unable to detect and/or prevent illegal activities using our payment products or otherwise occurring over our network.

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Any of the above issues could have a material and adverse effect on our overall business.

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Lack of visibility of our brand in our products and services, or in the products and services of our partners who use our technology, may materially and adversely affect our business.

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Our brand and reputation are associated with the ways in which we impact environmental, social and governance matters.

These matters include initiatives to reduce greenhouse gas emissions, help everyone participate equitably in the digital economy and create a workplace that provides equal opportunities for all of our employees.

These matters include initiatives to reduce greenhouse gas emissions, help everyone participate in the digital economy and create a workplace where everyone has the opportunity to succeed.

Consumers, investors, employees and other stakeholders are increasingly focused on these impacts.

To the extent any of our disclosures, public statements and metrics about these matters are subsequently viewed as inaccurate, or we are unable to execute on these initiatives, we may be viewed negatively by stakeholders concerned about these matters.

To the extent any of our disclosures, public statements and metrics about these matters are subsequently viewed as inaccurate or unlawful, or we are unable to execute on these initiatives, we may be viewed negatively by stakeholders concerned about these matters.

Moreover, in recent years, we have received negative feedback from stakeholders on the adequacy of our environmental, social and governance initiatives.

We have also increasingly been receiving negative feedback from anti-environmental, social and governance stakeholders in opposition to such initiatives.

Stakeholders from both

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sides of this issue may continue to view us negatively and take public action against us to the extent that we do not satisfy their conflicting views or expectations.

Stakeholders from both sides of this issue may continue to view us negatively and take public action against us to the extent that we do not satisfy their conflicting views or expectations.

In addition, various jurisdictions are increasingly adopting or considering laws, regulations and oversight expectations that have or would impact us pertaining to environmental, social and governance matters, including required corporate reporting and disclosures.

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Our performance largely depends on the skills, capabilities and 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.

The market for specialized skill-sets remains highly competitive, particularly in technology and other areas that are important to the growth of our business.

The market for specialized skill-sets remains highly competitive, particularly in emerging technologies.

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.

Failure to attract, hire, develop, motivate and retain highly qualified employee talent could leave us vulnerable to not anticipating or identifying emerging customer or market opportunities.

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

Failure to attract, hire, develop, motivate and retain highly qualified talent could leave us vulnerable to not identifying and/or acting on emerging customer or market opportunities.

In addition, broader trends such as escalations in global conflict and a rise in mental health needs are 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.

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We also face increasing regulation with respect to new pay and benefits transparency requirements, which could subject us to liability or reputational harm if we do not adhere to these requirements in a timely manner.

As our workforce composition continues to change, our employees may have different expectations with respect to flexibility and well-being support, and may have different career motivations (such as pursuing project-based work or other gig opportunities, as opposed to linear career paths).

As our workforce composition continues to change, our employees may have different expectations with respect to flexibility and well-being support.

Additionally, employees may require different levels of support as to re-skilling and upskilling in order to adapt to advancements in our industry and changes in technology.

Further, certain current and prospective employees may have expectations as to positions we take on environmental, social and governance matters.

To the extent we are unable to effectively meet and/or balance these different expectations, motivations and needs, we could experience a negative impact to the quality of our corporate culture, the productivity of our workforce, our ability to innovate and our ability to attract and retain talent.

To the extent we are unable to effectively meet and/or balance these different expectations and needs, we could experience a negative impact to the quality of our corporate culture, the productivity of our workforce and our ability to attract and retain talent.

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We rely on our people leaders to display integrity and decency, as role models for the Mastercard Way.

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Such an integration also may divert management’s time and resources from our core business and disrupt our operations.

Moreover, we have spent, and may continue to spend, time and money on acquisitions or projects that do

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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.

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.

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.

Furthermore, we have inherited and may in the future inherit litigation risk which has or may increase our post-acquisition costs of operations and/or impact our ability to successfully finance that business.

Furthermore, we have inherited and may in the future inherit litigation risk which has or may increase our post-acquisition costs of operations.

Any acquisition, investment or entry into a new business could subject us to new regulations or legal requirements, both directly as a result of the new business as well as in the other existing parts of our business, with which we would need to comply.

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We may incur significant losses in connection with transaction settlements if a customer fails to fund its daily settlement obligations due to technical problems, liquidity shortfalls, insolvency or other reasons.

The occurrence of bank failures, such as those seen in recent years in the U.S., could increase the potential for such losses.

The occurrence of bank failures, such as those seen in recent years, could increase the potential for such losses.

Concurrent settlement failures of more than one of our larger customers or of several smaller customers either on a given day or over a condensed period of time may exceed our available resources.

In addition, as we are subject to increased regulation across the globe, jurisdictions could require us to extend our guarantee to additional obligations, which could have an impact on our cost of operations.

In addition, Brazil recently enacted regulation requiring PSOs in Brazil (including Mastercard and Visa) to extend their responsibility for the financial and settlement integrity of payments to merchants.

As we continue to be subject to increased regulation across the globe, more jurisdictions may enact similar approaches from time to time.

Any such changes could increase complexity and may impact our cost of operations and financial condition.

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.

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Any of the above issues or events could have a material or adverse impact to our overall business and/or results of operations.

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Class A Common Stock and Governance Structure

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Mastercard Foundation’s substantial stock ownership, and restrictions on its sales, may impact corporate actions or acquisition proposals favorable to, or favored by, the other public stockholders.

As of December 31, 2024, Mastercard Foundation owned shares of Class A common stock representing approximately 9.4% of our general voting power.

Mastercard Foundation owns shares of our Class A common stock representing greater than 5% of our general voting power.

Historically, Mastercard Foundation had been restricted from selling or otherwise transferring its shares of Class A common stock prior to May 1, 2027, except to the extent necessary to satisfy its charitable disbursement requirements, for which purpose earlier sales were permitted and had occurred.

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As a result, Mastercard Foundation is now permitted to sell all or part of its remaining shares, subject to certain conditions.

In March 2024, Mastercard Foundation began selling shares pursuant to an orderly and structured plan to diversify its Mastercard shares over a seven-year

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period, while committing to remain a long-term Mastercard stockholder and retaining a significant holding of Mastercard shares in its portfolio.

In March 2024, Mastercard Foundation began selling shares pursuant to an orderly and structured plan to diversify its Mastercard shares over a seven-year period, while committing to remain a long-term Mastercard stockholder and retaining a significant holding of Mastercard shares in its portfolio.

The directors of Mastercard Foundation are required to be independent of us and our customers.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors