03:21:06 AM Thursday, May 08, 2008

MasterCard Captures the World: More Credit Cardholders

MasterCard, one of the biggest global credit card networks, has reported a significant increase of their profits over the first quarter of 2008. There was a 14% rise in company's shares. The increase of company's revenues was caused by the number of foreign and domestic transactions that has considerably risen lately.

Mostly MasterCard is obliged to its overseas markets for this success. The number of MasterCard credit card owners outside the U.S. has considerably grown. Plus, MasterCard keeps winning more and more hearts and wallets within the U.S. The company reaches its goals playing fair and square. MasterCard has been gaining their customers' trust for over half of a century.

The company's profits over the first quarter of this year are more than twice higher as compared to the same period of 2007. According to financial reports, MasterCard has increased their revenues from $214.9 million (last year's revenue over the first quarter) to $446.9 million during January, February, and March. The company's gross dollar volume went up by 14.1%, transaction volume augmented by 15.7%, and cross-border transactions boosted by 23.6%. This resulted in the increase of the company's profits.

Unlike Visa credit card company that gets about two-thirds of their total revenues from domestic transactions, the major part of MasterCard's income comes from overseas transactions. MasterCard's foreign branches are rapidly developing and bring much profit. For instance, such overseas MasterCard branches as those in the Middle East, Latin America and South Asia have experienced a considerable growth.

But MasterCard does not stop at what has been accomplished. They do their best to become the leading credit card network and capture the electronic payments market in the U.S. They are planning make their credit cards accepted by health care providers, American public utilities, and major rental companies. The reason why MasterCard strives to increase the transaction volume through the above-mentioned services sectors is quite clear. A shelter and health are one of the basic human wants. These spheres will always bring profit. But most companies in these areas prefer checks to credit cards.

The increase of cross-border transactions shows that more and more Americans going abroad for pleasure or on a business trip choose credit cards as a means of payment instead of cash. And many people choose MasterCard credit cards. And the increased cross-border acquiring fees in the beginning of this year did the company a good turn by boosting its revenues.

MasterCard's financial success under the current U.S. economical situation of spending slowdown and subprime mortgage crisis went beyond the boldest expectations of financial analysts. MasterCard is really encouraged with their results. But the company's major rivals - Visa, American Express, and Discover are breathing down their neck. Besides, this unstable economical situation in the country keeps the credit card giant on the trot all the time.

So, MasterCard lays their hopes on overseas credit card markets. Even in case of American credit card market collapse the company will stay afloat.