MasterCard Beats Estimates on Price Increases

MasterCard Inc., the world’s second- largest credit-card network, rose the most in three months of New York trading after beating analysts’ profit estimates by raising the price of processing international purchases.   Along with cost-cutting, it appears from its most recently announced increase for April 2009 that raising prices is the strategy MasterCard will continue.

The continuing adoption of credit and debit cards worldwide has cushioned the effects of a U.S. slowdown.   Visa and MasterCard, which collect fees to shuttle payments between financial institutions, are insulated from rising credit-card defaults because the networks process transactions and don’t make loans to cardholders.  Banks that issued Visa and MasterCard to cardholders have reported declining profits as lending charge-offs rise.


by Ty Hardison

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