Shadowing Practice: How Visa and MasterCard make their money - Learn English Speaking with Video
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How do Visa and MasterCard make their money?
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Millions of people today own plastic cards and use them to purchase almost everything from household appliances to plane tickets.
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Most Americans today have at least one credit and debit card.
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A majority own a lot of them, hoping to take advantage of all the rewards, cashback opportunities, and promotional benefits that issuers have to offer.
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Issuing of cards can be done by banks or a financial service company.
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However, the card transactions have to be processed through a particular system.
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A payment system is basically a process that is intended to settle financial transactions through both transfers and monetary values.
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In simpler terms, it's an operational network that links payment providers with bank accounts.
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Four major companies influence the electronic payment industry.
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These are Visa, MasterCard, American Express, and Discover, which are responsible for taking care of the majority of the world's card payments.
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Visa and Mastercard are said to be the largest
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and most popular payment systems globally
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and lately I've been wondering how they make their money so I decided to do some research.
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Mastercard is an American multinational financial services corporation with its headquarters in New York.
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Before its initial public offering, Mastercard Worldwide was a cooperative owned by the more than 25 ,000 financial institutions that issue its branded cards.
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MasterCard was created as an association of several regional bank card
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associations in response to the Bank AmeriCard issued by Bank of America which later became the Visa Credit issued by Visa Inc.
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These companies do their best to connect and power an inclusive digital economy that benefits everyone everywhere by making transactions safe,
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simple, smart, and accessible.
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Their innovations and solutions enable individuals,
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financial institutions, governments and businesses to realize their greatest potential through secure data and networks, partnership and passion.
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There's barely any difference between Visa and MasterCard when it comes to where you can use them.
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Both Visa and MasterCard can be used almost anywhere around the world that accepts card payments either in stores or online.
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It's hard to find a retailer that would accept one
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but not the other so it isn't really a case of visa versus mastercard
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when it comes to where they're accepted either would be fine however this isn't the same for american express
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it is also a payment network but it costs more for the retailer to process your payment
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that means some vendors don't accept american express because it costs them more
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so let's take a look at how these companies operate they both have huge
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if not enormous payment networks and also act as mediators.
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As much as they are financial service corporations, it doesn't mean they send or receive funds from their own accounts or resources.
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The companies are neither involved with extending credit nor issuing cards, meaning that all Visa and MasterCard transactions are issued through some form of co -branded relationships.
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They partner up with financial institutions like banks and credit unions, which issue card payments for individuals and businesses,
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either directly or through collaboration with hotels, airlines, or retail brands.
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They offer a wide array of products which is inclusive of credit, debit and prepaid card options.
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These banks and other financial institutions who issue these cards set the payment cards terms and conditions, inclusive of fees, rewards and other features.
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The issuing bank is in charge of underwriting, interest rate structuring and the full development of reward programs
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and this is for credit cards card issuers also offer other perks
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and benefits such as car rental insurance fraud and identity theft protection
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or even business purchase discounts although the variation in interest rates credit limits
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and reward programs are overseen by the issuing financial institution MasterCard
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and Visa compete for the co -branded association
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and also participate in the drafting of the card terms
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and conditions MasterCard and Visa receive about 0 .1 % of any individual transaction passed through their brands.
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You can refer to this as some sort of exchange, charged to the merchant, or just a transaction fee.
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You might think that this is quite little, but if you analyze this further, you'll find that it's not as little.
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These companies conduct thousands of transactions on a daily basis, which brings them hundreds of billions of dollars annually.
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Experts say that such a company can bag up to $1 trillion a year.
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If you're not yet impressed, then think of it this way.
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The UK GDP for 2017 was $2 ,622 trillion.
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So, if you do the math, 1 trillion is approximately 4 % of the UK's GDP.
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There's a huge difference between Visa and MasterCard and American Express and Discover.
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Visa and MasterCard's main sources of revenue are the transaction fees which was established earlier.
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They also cover the cost of maintaining their networks, customer service, troubleshooting, covering AML and any fraudulent transaction costs and so on.
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The cost of transactions may differ based on the type of business, the type of card and of course the network brand.
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Usually Visa and MasterCard have lower fees as compared to their competitors.
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Visa and MasterCard are the only network payment processors that are involved in all the areas of the payment market.
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Working solely as network operators, these companies have a unique advantage but work differently.
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Taking a look at MasterCard's financials, we see that the company generated total revenue of $16 .9 billion in 2019, with a payment volume of $6 .5 billion.
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Some of its card products include consumer credit, consumer debit, prepaid cards, and commercial product business.
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MasterCard has a reportable business segment called Payment Solutions, which is divided according to geographics across the states and other countries.
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The company earns a chunk of its revenue from service and data processing fees, just like Visa.
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But the difference between the two is that MasterCard characterizes the fees differently.
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Its service fees are negotiated and calculated as a percentage of the worldwide dollar value.
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Date processing fees are called switching fees, which is a small fixed cost per transaction that's charged to the issuer.
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MasterCard is known for offering three card levels, and these are Base, World, and World Elite.
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MasterCard carries out transactions in more than 150 currencies across more than 210 countries and territories.
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Even though the company does not have a monopoly on the payment industry, majorly due to similar operators like Visa and also the emergence of new payment service providers,
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it is still largely successful globally.
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A majority of its success being owed to the company brand and the cache it holds.
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Mastercard sees having the upper hand over the up -and -coming payment systems with its ability to be a multi -rail network, covering domestic, cross -trader and card -based in account -to -account transactions.
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The company vows to continue to develop and strengthen each of these channels in the future.
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As for the traditional debit, credit, prepaid and commercial product, the company will continue to offer users and financial institutions a broader variety of options,
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both in references to the products themselves as well as in payment plans and systems.
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Although Mastercard is a major player in the global payment industry, it also experiences some crucial challenges.
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Among the greatest is government regulation.
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The company has gone through a number of antitrust suits over the years, and regulation frequently changes in a majority of the regions in which the company conducts business.
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It has to remain flexible and alert to ensure its business excels.
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Considering MasterCard's international and cross -border business, this is a significant component of its continued success.
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When it comes to Visa, it also reports a single segment, which is payment services
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but it occasionally divides its revenue into four smaller segments which generate the majority of the company's revenue.
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These sub -segments are service revenue, data processing revenue, international transaction revenue, and other revenue.
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Service revenue is attached to something called payment volume meaning
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that the more a product costs the more MasterCard or Visa earn although in small amounts.
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Data processing revenue refers to the fees collected based on the number of transactions made, rather than the value of each transaction.
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International transaction revenues are generated whenever a cardholder purchases goods in a country different from the card issuer's country of origin.
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Visa illustrates these sub -segments as components of net revenue, but they are reported gross of client incentives.
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The total revenue summed up from each segment is equivalent to
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a gross revenue close to $6 .4 billion for quarter three fiscal year.
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2020. Visa's net revenue of $4 .8 billion for the quarter is the figure obtained
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when client incentives are deducted from the gross revenue.
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Recently, Visa announced it will extend its global partnership with PayPal.
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The extension of this partnership will pave the way to the expansion of real -time access to funds for consumers
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and small businesses that are either sending or receiving cash using PayPal, Zoom, or Venmo.
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It will be able to expand PayPal's instant transfer services
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which leverages visa direct for real -time payments one strategy
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that a company can adapt to create growth is to improve its existing technology by extending product features
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and visa and mastercard have a long history of doing just
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so when they saw mobile which is now part of exxon introduce speedpass visa
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and mastercard started working with third party merchants on a host of smart chip technologies for contactless payment touch
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and go and pay with wave transactions.
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When they saw the addition of personal passwords, Visa and MasterCard both revealed a card with an embedded fingerprint scanner,
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a small square sitting at the top right hand corner that acts like a makeshift biometric reader.
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All these innovations were meant to better the performance of their existing offerings. In conclusion,
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both Visa and MasterCard seem to continuously revolutionize the electronic payment industry and don't appear to be slowing down anytime soon.
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I hope you enjoyed the video.
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Give it a thumbs up if you did and consider subscribing if you're new to the channel.
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With that said, have a great day you guys and I'll see you all in the next one.
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Vocabulario y notas de pronunciación para esta lección
Esta lección de conversación de nivel B2 se basa en el vídeo “How Visa and MasterCard make their money”. Las palabras que más se repiten: mastercard, visa, payment, card, transaction. Este vídeo tiene 108 frases y 1680 palabras para practicar shadowing. La parte hablada dura 10:17. El hablante habla a un ritmo natural de unas 163 palabras por minuto, cercano a una conversación cotidiana. Solo el 79 % de las palabras está entre las 3.000 más comunes del inglés, por lo que el vocabulario es exigente.
Vocabulario clave de este vídeo
Las 15 palabras más avanzadas del vídeo, con su pronunciación y significado:
| Palabra | Pronunciación | Significado |
|---|---|---|
| visa sustantivo | /ˈviːzə/ | visa, visado |
| debit sustantivo | /ˈdɛb.ɪt/ | débito |
| issuer sustantivo | emisor, expedidor | |
| inclusive adjetivo | /ɪnˈkluːsɪv/ | inclusivo |
| retailer sustantivo | /ˈɹiteɪlɚ/ | minorista, detal |
| globally adverbio | /ˈɡloʊbəli/ | globalmente |
| incentive sustantivo | /ɪnˈsɛntɪv/ | incentivo, aliciente |
| merchant sustantivo | /ˈmɝt͡ʃənt/ | comerciante, mercader |
| provider sustantivo | /pɹəˈvaɪ.də(ɹ)/ | suministrador, proveedor |
| divide verbo | /dɪˈvaɪd/ | desunir, dividir |
| antitrust adjetivo | /ˌæntiˈtɹʌst/ | antimonopolio, antimonopolista |
| appliance sustantivo | /əˈplaɪ.əns/ | implemento, instrumento |
| characterize verbo | /ˈkɛɹəktəɹaɪz/ | caracterizar |
| fingerprint sustantivo | /ˈfɪŋɡɚˌpɹɪnt/ | huella digital, huella dactilar |
| mediator sustantivo | /ˈmidieɪtɚ/ | mediador, tercero en discordia |
Phrasal verbs que vas a escuchar
| Palabra | Pronunciación | Significado |
|---|---|---|
| carry out verbo | /ˈkæ.ɹi aʊt/ | llevar a cabo, llevar al cabo |
| go through verbo | atravesar | |
| hand over verbo | devolver, entregar | |
| pass through verbo | atravesar | |
| slow down verbo | desacelerar, decelerar |
Gramática en este vídeo
Las estructuras que más usa el hablante, con las palabras exactas del vídeo:
| Estructura | En el vídeo |
|---|---|
| Voz pasiva be + participio pasado — importa lo que ocurre, no quién lo hace | can be done · be processed · is intended |
| Oraciones de relativo who / which + oración — información extra sobre una persona o cosa | Discover, which are · products which is · fees which was |
Pronunciación a tener en cuenta
El hablante usa 11 contracciones y formas reducidas, como don't, isn't, you're. Dilas en su forma corta, tal como las oyes.
- Los sonidos de “th”: thumb /ˈθʌm/, strengthen /ˈstɹɛŋ(k)θən/, theft /θɛft/, mathematics /mæθ(.ə)ˈmæt.ɪks/
- Los sonidos de “sh” y “zh”: makeshift /ˈmeɪkˌʃɪft/, revolutionize /ˌɹɛv.əˈl(j)u.ʃəˌnaɪz/, cache /kæʃ/, promotional /pɹəˈmoʊʃənəl/, negotiate /nəˈɡəʊ.ʃi.eɪt/
- Palabras largas — cuida el acento: biometric /ˌbaɪ.oʊˈmɛt.ɹɪk/, characterize /ˈkɛɹəktəɹaɪz/, revolutionize /ˌɹɛv.əˈl(j)u.ʃəˌnaɪz/, competitor /kəmˈpɛt.ɪ.tɚ/, monopoly /məˈnɑpəli/
Sonidos difíciles para hispanohablantes:
- s + consonante al inicio — sin añadir una “e” delante: scanner /ˈskænə/, strengthen /ˈstɹɛŋ(k)θən/
- /v/ — no es /b/: los dientes tocan el labio inferior: visa /ˈviːzə/, inclusive /ɪnˈkluːsɪv/, incentive /ɪnˈsɛntɪv/, provider /pɹəˈvaɪ.də(ɹ)/, divide /dɪˈvaɪd/
- /z/ — sonora, no /s/: visa /ˈviːzə/, characterize /ˈkɛɹəktəɹaɪz/, revolutionize /ˌɹɛv.əˈl(j)u.ʃəˌnaɪz/, analyze /ˈæn.əˌlaɪz/
Cómo practicar con este vídeo
- Escucha el vídeo entero una vez sin hablar y anota las palabras que no conoces.
- Empieza a velocidad 0,75×, haz shadowing frase por frase y vuelve a la velocidad normal cuando te resulte fácil.
- Grábate y compara con el original, prestando atención a palabras como visa, debit, issuer.
¿Qué es la Técnica de Shadowing?
Shadowing es una técnica de aprendizaje de idiomas respaldada por la ciencia, desarrollada originalmente para la formación de intérpretes profesionales y popularizada por el políglota Dr. Alexander Arguelles. El método es simple pero poderoso: escuchas audio en inglés nativo y lo repites en voz alta de inmediato, como una sombra que sigue al hablante con solo 1-2 segundos de retraso. A diferencia de la escucha pasiva o los ejercicios de gramática, el shadowing obliga a tu cerebro y músculos de la boca a procesar y reproducir simultáneamente patrones de habla reales. Las investigaciones muestran que mejora significativamente la precisión de la pronunciación, la entonación, el ritmo, el habla conectada, la comprensión auditiva y la fluidez al hablar, convirtiéndola en una de las metodologías más efectivas para la preparación del IELTS Speaking y la comunicación en inglés en el mundo real.