What’s Driving Master Card’s Revenue Growth

-1.67%
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Market
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MA: Mastercard logo
MA
Mastercard

Master Card ‘s(NYSE: MA) main business involves its payment network. The company charges a transaction fee for every transaction made using a credit or debit card issued by it. Depending on whether or not the card was issued by a bank in the same country as the transaction was made, the company also charges an assessment fee or a cross border volume fee. In addition to this business, the company also offers a whole host of other services. These include, but are not limited to, identity and theft protection services, reward programs for customers and other kinds of analytics. Growing this revenue stream involves a huge amount of investment on part of this company, and it is primarily this kind of investment that gives the company an advantage over competitors.

Comparing the first three quarters of the fiscal years 2016 and 2015, the company has grown its revenue by around 14.4%. However, the payments network business alone has only grown by 13.1%. It is the 22.5% growth in revenue from other services that has led to the company’s high growth. Since, these services only make up around 1/6th of the company’s overall revenue so far, the overall impact from this growth is low, but it is possible that continual investment in this area could eventually become the biggest growth driver for the company going forward.

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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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