ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Mastercard, Visa Report Profits, Thanks To Debit Cards

Mastercard, Visa Report Profits, Thanks To Debit Cards

April 16, 2010 | Updated on April 16, 2010
Add to Favorites:
The content is accurate at the time of publication and is subject to change.

Debit cards are currently delivering big business for such giants as Visa and Mastercard, presenting a glaring shift in spending patterns. This is quite evident in the U.S., wherein consumers are not expected to use credit cards for daily purchases, such as groceries.

Global issuer Mastercard said profits climbed 25 percent as higher fees allowed it to recoup lost revenues from flat credit card usage.

Mastercard further disclosed that usage of its credit cards fell by nearly eight percent in the US during the fourth quarter of 2009. It however said that usage of its cards in the rest of the world increased by around nine percent during the same period.

On the other hand, Mastercard said that usage of its debit cards spiked internationally, with global transactions rising to 16.5 percent over the previous year and posted revenues of US$ 2.8 billion.

According to Mastercard, shoppers based in the US had made $2.16 billion of those transactions, which meant an rise of 12.5 percent.

Mastercard officials said that more US consumers are choosing to use debit cards for their day-to-day expenses, while setting aside their credit cards for more expensive, grander purchases.

Despite the recession, US consumers have been comfortable with the plastic card and this has even replaced the use of cash and cheques in cashiers or purchase counters in stores. Mastercard stressed that the use of the debit card gives the consumer more control over their money.

Mastercard's main rival Visa, on the other hand, likewise disclosed big profits also due to rising debit card use. Visa had reported a 33 percent increase in profits for the latest quarter, which surprised analysts.

Visa attributed this increase to the continued shift to electronic payments, which has been seen through the rise of debit card use. According to Visa, debit card transactions grew 17 percent in the last quarter of 2009, compared to the same period in the previous year.

Purchases through its debit system now comprise a majority 54 percent of its total US payment volume, Visa added.

Compared to Mastercard, Visa is a bigger player in debit cards having made big inroads in the market in recent years. But Mastercard, it said, was dead-set in encroaching into Visa's market share.

According Mastercard officials, the company has been more responsive to the needs of customers and adding more value to their offerings despite tougher competition in the market. Mastercard has recently inked deals with Suntrust in the US and Barclays in the UK.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!