Comparing Visa And Master Card: Scale Makes All The Difference

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Visa (NYSE: V) and Master Card (NYSE: MA) are the two biggest payment companies in the world. The table below compares them in terms of scale.

visa ma comp

As one can see from the table above, Visa has nearly twice the amount of cards in circulation as Master Card. However, Master Card is much more successful at getting its customers to spend more frequently and in higher amounts, as shown in the much smaller difference in annual revenue for the two companies compared to Visa. The upshot of this is that Master Card pays much more in rebates and marketing and promotional expenses compared to Visa. The latter also benefits largely from its huge scale, having to spend much less on acquiring additional customers and on the maintenance of data centers, servers and communication systems on which its payment network runs. Consequently, it posts some of the highest operating margins of any company in the S&P 500.

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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 Visa
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