Master Card Will Benefit From Increased Spending On Promotions Over The Last Three Years

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MA: Mastercard logo
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Mastercard

Master Card (NYSE: MA) has grown its revenue from $ 11.3 billion in 2013 to $ 13.7 billion in 2015. The growth over this three-year period was driven almost equally by increases in revenue from transaction fees, international fees, assessment fees and other services. Over the next three-year period, we expect the company’s revenue growth to increase a little bit as the result of both the company’s entry into the Chinese market and the increasing presence of shopping via smart phones and on e-commerce websites in the lives of customers. These make it more likely that a customer pays through credit or debit cards as opposed to cash or internet banking, thereby increasing possibilities of revenue growth for payment companies like Master Card.

mastercard growth

Over the last three year period, the company has been focused on spending heavily on marketing and promotions and rebates for customers, in order to bring in more partners into the Master Card payment network. We expect the company to realize benefits of these efforts over the next three years and as a result expect more than 40% of the revenue growth to come from increase in revenue from transaction fees.

 

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for MasterCard
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