MasterCard and Visa Earnings

Posted by Ray on February 4, 2010 under Main | Be the First to Comment

Visa had fantastic earnings with a pretty nice increase in cards issued with its brand and blew away expectations, but MasterCard had the exact opposite results. Both business models are probably the best business to be in, They are simply a credit card processing service, such as North American BanCard and PayPal, as it has no risk and is all profit., as it has no risk and is all profit. Regardless, both firms have been rivals for decades, but it looks like Visa is gaining the upper hand.

Earnings per share for MasterCard came to $2.24, compared with the consensus estimate of $2.46. The disappointing figure comes after rival Visa issued results Wednesday that comfortably beat The Street with earnings per share of $1.02, 11 cents better than expected. What is interesting about the massive profits, of both firms, is that the consumer, for the most part, has no idea that every time they swipe their credit or debit card Visa and MasterCard makes a profit. The merchant automatically pays the fee, but consumers don’t realize that the fees do get passed on to them through higher prices. In a cashless society, though, it probably would concern most people anyhow as it is convenient to just charge it instead of using cash.