The agency won the business, worth in excess of £10 million in the early stages, following a three-way pitch. McCann-Erickson previously handled much of MasterCard's below-the-line work in the UK and is thought to have pitched for the account.
The agency will initially launch a campaign for MasterCard called "priceless memories which will build on the above-the-line work from McCann-Erickson.
Claydon Heeley will develop print, direct mail, promotional and internet activity.
Claydon Heeley's role is to oversee creative and communication of MasterCard's activity through more than 50 banks that are members of MasterCard. Initially it will work across ten European countries including the UK.
Previously MasterCard has used several below-the-line agencies across Europe but wanted to appoint an agency to provide consistency across the relationships and across creative work produced by the individual banks.
Craig Browne, the MasterCard brand manager, said: "I'm excited about working with Claydon Heeley and am confident in its ability to deliver strategic, integrated campaigns across Europe. I see it as a long-term relationship."
Anne Yeoman-Nagy, the business director at Claydon Heeley, said: "MasterCard is a fantastic brand and 'priceless' is a wonderful property to work with."
MasterCard spent £4 million last year on its above-the-line advertising but increased activity around the football World Cup to back its official sponsor status. Its advertising linked the "priceless memories theme to a World Cup ticket competition.
The "priceless campaign was introduced to the UK in 1999, adapted from McCann-Erickson work in the US. Media for MasterCard is handled by Universal McCann.