Will MasterCard (NYSE:MA) Continue To See Growth After The Departure Of Chase?


MasterCard (NYSE:MA) depends on two main metrics for its business: its average fee per transaction and the number of transactions that the customers make each day. However, there are some small details that the management of the company wants its investors to keep in minds.

The first important factor that can affect MasterCard (NYSE:MA) is the cross border deals. Such transactions have a very high margin. The customers who can use the same MasterCard all over the globe come as a great benefit to the company, for the company does not have to keep separate records for each card. Moreover, the company also gets to charge a higher price.

The chief executive officer of the company, Ajay Banga, mentioned in MasterCard’s recent conference that the company plans on doubling its efforts in order to increase the cross border volumes.

It is important to note here that MasterCard (NYSE:MA) has already entered into a partnership with Transforex. Transforex is a Chinese company that is working with as many as 7 leading tax firms of the country in order to launch the biggest tax refund project in China.  The new platform that Transforex is planning on launching will make the tax refund programs and processes much easier, enabling the Chinese travelers to claim their tax refunds and get them transferred to their MasterCard. And the interesting thing is that this all can be done within the comfort of their homes.

The second issue that the management discussed was about surcharges. This has been in the news that in Australia, the surcharge that the customers have to pay for each of their transactions has been increased. Where this increase in surcharge insulates the sellers to bear the cost of small transactions, it also discourages the customers to use their cards in situations where they otherwise would have used them.

The CEO of the company does not think that this will be a problem for the company. According to him, people get surcharged in a lot of online transactions, and this has always been an issue with online payments.

Another issue that the management discussed was of Chase. Chase, the biggest card issuer of the company, is leaving MasterCard and it will join Visa. The CEO of the company commented that this situation will prevail till 2015.

The company’s domestic numbers will be affected by the departure of Chase. However, MasterCard is optimistic about its growth and future. The company saw an increase of 7 percent in the domestic business in the most recent of its quarters, and it is determined to take the numbers even higher.

Coming to the stock prices of MasterCard (NYSE:MA), the company, during the recent trading session of November 6, 2014, started its stocks at a price of $86 and closed at a decreased price of $85.75. The intraday range for the company’s stocks was recorded to be around $85.49 to $86.38. As far as the market capitalization of MasterCard (NYSE:MA) is concerned, the figures are reported to be at $99.32 billion.