Profits soar 38% at MasterCard

MastercardMasterCard's third-quarter profits have soared 38% after a huge spike in card use around the world.
The most pronounced growth was in debit cards, and in the US use of MasterCard-branded debit cards rose 23% compared with just 7% for credit cards.

By comparison, rival Visa, which has a far bigger share of the domestic debit market, said last week that debit purchase volume rose about 8%.
The debit card side of the card industry is experiencing a shake-up in the US. New regulations which came in on October 1 limit the fees banks and payment processors like MasterCard and Visa can charge retailers for handling debit card purchases, setting a cap of about 24 cents (15p) per transaction, versus the previously unregulated average of about 44 cents (27p).
In addition, merchants are allowed to choose which network processes their transactions. That choice was previously made by the merchant's bank.
The changes give MasterCard an opportunity to take even more business from Visa. The company has poached Visa clients such as Huntington Bancshares and SunTrust Banks over the past year.
But CEO Ajay Banga will not resort to a full-court press to win new debit card business. Mr Banga aims to keep the business MasterCard already has while looking for "strategic and surgical opportunities" to convert a bank to the MasterCard brand, he said.
For the three months to September 30, MasterCard reported net income of 717 million US dollars (£450 million) or 5.63 US dollars per share. That compares with 518 million US dollars (£325 million), or 3.94 US dollars per share, for the same period a year earlier.
Revenue jumped 27% to 1.82 billion US dollars (£1.14 billion), from 1.43 billion US dollars (£897 million) last year.
© 2011 Press Association
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