MasterCard Inc. recently reported a 12% increase in gross dollar volume, a 15% increase in cross-border volume, and a 10% increase in processed transactions.
This is not the first time MasterCard has been in the news recently. According to an earlier report from the Inquisitr, MasterCard is now giving merchants permission to pass on swipe fees to customers.
“We are pleased with the announcement and see it as a good step in the right direction,” MasterCard Chief Executive Ajay Banga said on a post-earnings conference call regarding its most recent earnings report. MasterCard’s shares were up 7 percent at $81.25 by midday. The net income rose to $1.02 billion, or 87 cents per share. Net revenue rose 12.8 percent to $2.5 billion. Nearly 60% of this revenue is generated from international business.
“We delivered strong results for the quarter, reporting double-digit revenue and net income growth, despite a mixed economic environment,” said MasterCard President and CEO Ajay Banga in a statement this morning. “We also continue to invest and partner to make payments safer, easier and faster. Within the past two months alone, we opened our new technology hub in New York City, delivered our technology and security protocols as part of the launch of Apple Pay and partnered with the Transport for London to deliver contactless payments system-wide.”
The success of MasterCard has lured many investors. “We rate MasterCard Inc(MA) a buy. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company’s strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself,” said The Street‘s Ratings Team.
“People are using their credit cards a little bit more. That’s actually healthy. Consumers have been extremely debt averse — too much so,” said James Friedman, an analyst who covers MasterCard at Susquehanna Financial group. “China is a hugely important geography that previously these companies really could not penetrate.”
A contributor to MasterCard’s profit could be its new integration with Apple Pay. This allows its users to pay with the new NFC-enabled iPhone 6. The new contactless payment system could generate even more revenue for the company.
[Image via AP Images]