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Mastering Massive Databases At Mastercard International: A Case Study

Background and Challenges

Many organizations are working hard to address the opportunities and storage challenges associated with “big data.” Industry experts estimate that the total volume of data is doubling every 18 months and the vast majority of new data being generated is in business domains. MasterCard International  is no stranger to wrestling with the issues associated with massive databases. MasterCard has amassed a data warehouse that is more than 100-terabytes in size and company insiders expect that it will growth to more than 1.8 petabytes.

The growth of MasterCard’s data warehouse is fueled by a client/server network that, on average, handles 140 million credit card transactions per hour on behalf of more than 25,000 financial institutions [WALL08]. In 2007, MasterCard's worldwide network processed 18.7 billion transactions totaling approximately $2.3 trillion. MasterCard’s computer facility authorizes, clears, and settles each credit card transaction in real time as a cardholder's credit card is swiped. MasterCard’s bank and business clients expect the system to be fast and accessible.

To meet these expectations, MasterCard expects its network to have a response time of 140 milliseconds per transaction (or less). It also has implemented sufficient redundancy and failover systems to be able to C3-2 promise its customers 99.999 percent network availability. Needless to say, MasterCard customers also expect the transaction processing and data storage systems to be secure. For continued success, it is important for MasterCard to grow its volume of credit card transactions. To do this, the company works to expand its base of bank clients and business partners by offering them an attractive mix of products and services.

Part of their efforts is directed toward helping its clients increase the number of customers who hold a MasterCard and use them to make purchases. To remain competitive against other credit card issuers such as American Express, Discover, and Visa, MasterCard must also continue to grow its volume of credit card transactions and it has learned that one of the best ways to do this is by being a good business partner for its clients. In addition to credit cards, MasterCard offers debit cards, prepaid cards, smart cards with embedded chips, and contactless cards.

It also has business card programs for commercial and public sector organizations of all sizes. MasterCard partners with its customers to create customized loyalty programs and reward solutions to provide incentives for cardholders to use MasterCard to make purchases. By helping its customers identify the benefits that services that are most appealing to their cardholders, MasterCard is able to help its partners increase customer satisfaction. MasterCard’s global processing system enables customers to extend their loyalty programs worldwide. Hence, it is not surprising that MasterCard has been successful in partnering with airlines and hotel chains on loyalty programs. MasterCard’s Data Warehouse Strategy MasterCard’s data warehouse has emerged to play an important role in the company’s competitive strategy.

This global data repository has become a C3-3 business intelligence (BI) engine that helps the credit card giant and its clients make more effective business decisions. Planning for the data warehouse began in the mid-1990s. Interestingly, MasterCard’s executive team immediately grasped the data warehouse concept recommended by the IT division as a potential game changer. MasterCard executives typically required a detailed business case justifying IT investment recommendations, but in this case, the executives instantly recognized the proposed data warehouse as a strategic move to give MasterCard a competitive edge. Specifically, MasterCard wanted to improve market share.

At the time, MasterCard accounted for only about 25% of charges for goods sold worldwide using credit cards, with Visa accounting for 50%. Since the creation of the data warehouse, MasterCard’s market share increased to 31%. Although Visa continues to be the industry leader, MasterCard’s role as a global leader in credit card processing has strengthened [BASE11]. Financial institutions that use MasterCard rely on the history.

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