Chillin' out till it needs to be funded
Mastercard’s 44% rise made it the #4 best performing stock in the US in 2011 despite not being allowed in the $2.3 tln payments industry in China and running behind leader Visa all through except that 64% of its transactions are global instead of 47% from Visa, if it does. Coming up by next Sunday 8 am ET in the final version of the report
Mastercard earnings come out early next month followed by Visa a week later. Mastercard’s recent growth pace has apparently increased its probability iinterval for catching up with Visa in the foreseeable future Meanwhile Amex results yesterday show an average 9.x% recovery of interest on card loans(managed)
The Nilson report expects US card payments to grow from 48% to 59% in 4 years till 2015, while the cards only make 15% of global retail payments. mastercard ofcourse wants to brand the remaining 85% cash market with card payments!!
Master card is #1 on the Bloomberg Business Week 50 , Visa having reported $774 mln for September 2011 at $1.06 per share earnings and Mastercard $717 mln for $5.63 per share up 42% from 2010 period new growth in debit cards and pre paid cards ( incl one from Suzie Orman) has outstripped growth in the 1.7 mln Credit card holder statistics even as payments in the US for Mastercard alone equalled slightly below a $1 tln and more for Visa. International transaction volumes for Master card in September were $665 bln. Visa’s september figures in the US were $1.15 tln three times that of Master’s 23% share of transactions currently.
American Express which grew faster in the US payments after a bad 2009 and recovered its share of transactions , also managed to run $717 bln on its own compared to $1 tln between the Top 5 banks for Mastercard and Visa. In 2010, its share of US transactions was greater than Mastercard at 25%
Its latest Q4 call on Thursday shows its Travel business at $5.9 bln for Q4 and $24 bln for 2011 a significant fraction of its total cardmember (97mln) loans of $62.6 bln Amex cards business was $5.2 bln, $3.9 bln from the US and net charge off rates of 1.3% and 3% 30+ past due bringing in profits of $727 mln in US Cards and $150 mln in Intl cards
Notably, card spending on Amex at just less than $4000 rose 12% for the year. Consumer spending rose exponentially in November with $6 bln of the $20 bln in revolver spending. Latest Australian retail reports show retail POs down 10% only for online spending to rise 20% in December for a sudden clamoring to spend on cards after years of Austerity.
Visa, based in San Francisco, in 2010 handled 39 percent of U.S. credit-card purchases by volume, while MasterCard had 23 percent, Nilson estimates.
MasterCard’s lag is even bigger in debit-card transactions. While Visa says it processed $1.14 trillion in such purchases in the U.S. during the fiscal year ended Sept. 30, more than triple MasterCard’s $376 billion, Banga sees that as a chance to gain market share.
New regulations bar debit-card processors from demanding exclusive agreements with merchants, which Banga says will let him sign up more retailers.