MasterCard sees increased profits through increasing card usage
The credit card payment processing giant, MasterCard on Tuesday announced that it has recorded an impressive 15% third quarter profit, following the increased use of credit and debit cards overseas. The payment processing company recorded a total income of 518 million US dollars which translated into earnings per share of 3.94 dollars for the three months that ended September 30th. This marks a decent increase over the 452 million dollar income figure the same quarter last year representing earnings per share of 3.45 dollars. The revenue of the company rose from 1.36 billion dollars around the same time last year to 1.43 billion dollars. The profit is also higher than the 3.54 dollar per share earnings, the average predicted by all analysts quizzed by Thomson Reuters. They had predicted revenue of 1.41 billion dollars.
The expenditure on charge and credit cards in the country has declined by 0.7% to touch 132 billion dollars. The debit card purchases in the domestic market have dropped to 108 billion dollars, representing a 5 per cent drop. The reduction in credit card spending in the country has been offset largely by spending abroad on both types of cards across the world. The purchases on credit and charge cards rose by 9% across the world to touch 317 billion dollars. The use of debit cards shot up by a whopping 29 per cent to touch 128 billion dollars. There has been an 8% rise on the spending on MasterCard to reach a grand total of 685 billion dollars.
Meanwhile the low spending of the customers in the US is because the anxiety most people are feeling about their jobs right now. This is in spite of the fact that MasterCard has made pacts with many banks boosting the number of cards that are using the logo of the payment processor to an impressive 1.6 billion. Some of the deals involving Chevy Chase Bank and Sovereign Bank, recently bought over by Capital One represent the efforts of MasterCard to push itself into the debit card group. However, the company still lies behind the main rival Visa. MasterCard, which is based in Purchase, NY said that the new deals will also help to offset gains from increase in the processing transactions and increases in charges. The shares of MasterCard in premarket trading have leaped by 9 dollars to touch 247.99 dollars representing a decent 3.8 percent.
