NEW YORK, Nov 1 — Mastercard Inc yesterday posted a record profit and trounced Wall Street expectations, as it battled for consumers and global market share over other payment channels including its bigger rival Visa Inc.
More people used credit, debit and commercial prepaid cards across Mastercard's global network — pushing the value of transactions processed — known as “gross dollar volume,” up 11 per cent to US$1.35 trillion (RM5.7 trillion).
“In the US, we continue to see steady economic growth, low unemployment and inflation,” said Ajay Banga, chief executive officer of Mastercard, on a post-earnings call.
“Consumer sentiment is favourable.”
Last month, consumer spending in the United States had its largest increase in eight years, aiding payment processors such as Mastercard and Visa, which generate revenue by facilitating credit- and debit-card transactions.
Visa also beat market expectations last week, posting an 11 per cent rise in quarterly profit on healthy consumer spending.
Mastercard shares hit a record earlier but lost ground and were down 1.3 per cent at US$147.02 mid-day. The drop was attributed to profit taking after a 20 percent rise from the previous quarter, according to Thomas McCrohan, managing director of Americas Research at Mizuho.
Mastercard has risen nearly 44 per cent this year, as of Monday's close, outpacing Visa, which was up 41 per cent over the same period.
Mastercard's net income rose 21 per cent to US$1.43 billion or US$1.34 per share in the third quarter ended Sept 30. Analysts on average were looking for US$1.23, according to Thomson Reuters I/B/E/S.
Cowen analyst George Mihalos called the results “very strong” and said the company has “exceeded our expectations every quarter this year.”
Mastercard is taking measures to bolster security on its network and said safety remains a key priority. Many American companies are investing heavily in securing their systems against hackers.
“Our investments in technologies like biometrics, tokens, encryption and artificial intelligence are redefining the way both consumers and transactions are protected,” Banga said.
Mastercard has already started the process when it announced this month it would forgo signatures after purchases.
Total operating expenses rose 20.4 per cent to US$1.46 billion in the quarter, partly from costs related to buying digital payments company Vocalink.
Net revenue rose 18 per cent to US$3.40 billion and topped estimates of US$3.28 billion. — Reuters