Visa Inc. (VS), the dominant payment card network, delivers the goods (a/k/a profits) over any other payment card network, but MasterCard (MC) continues to deliver solid results as well.
During the first quarter of this year (Q1/14), net income (after tax) among the world’s two top payment card networks rose 21.2% to $2468 million, according to CardData.
VS Q1/14 net income rose 25.8% to $1598 million, compared to $1407 million in the prior quarter and $1270 million in the year-ago quarter.
MC Q1/14 net income rose 13.6% to $870 million, compared to $623 million in the prior quarter and $766 million in the year-ago quarter.
Visa noted the Q1/14 results include a tax benefit of $218 million of which $201 million relates to prior periods. Net operating revenue was $3.2 billion, an increase of 7% nominally or 9% on a constant dollar basis over the prior year, driven by solid growth in service revenues, data processing revenues and international transaction revenues. The strengthening of the U.S. dollar impacted net operating revenues by 2 percentage points of negative growth during the quarter.
MasterCard noted net revenue for the first quarter was $2.2 billion, a 14% increase versus the same period in 2013, both as-reported and adjusted for currency. Net revenue growth was driven by the impact of a 14% increase in gross dollar volume, on a local currency basis, to $1.0 trillion; an increase in processed transactions of 14%, to 9.8 billion; and an increase in cross-border volumes of 17%.
RAM Research predicts Visa and MasterCard profits will top $2200 million in the second quarter of 2014.
RESOURCES:
For more data on Payment Card Profits access CardData®. For information and commentary on Payment Card Profits visit the searchable CardFlash® Library of more than 58,000 articles published since 1995. Custom RAM Research® projects on Payment Card Profits are available exclusively through CardWeb.com.®
NOTES:
VISA –
Total volume, payments volume and cash volume, and the number of payments transactions, cash transactions, accounts and cards represent cards carrying the Visa, Visa Electron and Interlink brands. Card counts include PLUS proprietary cards.
Payments volume represents the aggregate dollar amount of purchases made with cards carrying the Visa, Visa Electron and Interlink brands for the relevant period; and cash volume represents the aggregate dollar amount of cash disbursements obtained with these cards for the relevant period and includes the impact of balance transfers and convenience checks; but excludes proprietary PLUS volume. Total volume represents payments volume plus cash volume.
Visa payment products are comprised of credit and debit programs, and data relating to each program is included in the tables. Debit programs include Visa’s signature based and Interlink (PIN) debit programs.
The data presented are based on results reported quarterly by Visa’s financial institution clients on their operating certificates. Estimates may be utilized if data is unavailable. On occasion, previously presented information may be updated.
MASTERCARD –
MasterCard’s GDV represents purchase volume plus cash volume and includes the impact of balance transfers and convenience checks; “purchase volume” means the aggregate dollar amount of purchases made with MasterCard-branded cards for the relevant period; and “cash volume” means the aggregate dollar amount of cash disbursements obtained with MasterCard-branded cards for the relevant period. The number of cards includes virtual cards, which are MasterCard-branded payment accounts that do not generally have physical cards associated with them.
The MasterCard payment product is comprised of credit, charge and debit programs, and data relating to each type of program is included in the tables. Debit programs include MasterCard-branded debit programs where the primary means of cardholder validation at the point of sale is for cardholders either to sign a sales receipt or enter a PIN. The data include information with respect to transactions involving MasterCard-branded cards that are not processed by MasterCard and transactions for which MasterCard does not earn significant revenues.
The data set forth in the GDV, purchase volume, purchase transactions, cash volume and cash transactions columns is provided by MasterCard customers and is subject to verification by MasterCard and partial cross-checking against information provided by MasterCard’s transaction processing systems. The data set forth in the accounts and cards columns is provided by MasterCard customers and is subject to certain limited verification by MasterCard. A portion of the data set forth in the accounts and cards reflects the impact of routine portfolio changes among customers and other practices that may lead to over counting of the underlying data in certain circumstances. All data is subject to revision and amendment by MasterCard’s customers subsequent to the date of its release.
