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Mastercard Incorporated – Best Credit Card Stocks 2020

Mastercard is the second-largest payments processor in the world. Its primary business is to process payments between banks and credit card-issuing institutions. Mastercard was actually a cooperative owned by more than 25,000 financial institutions. It went public in the year 2006. The cooperative’s name was originally Interbank. Then it became Master Charge, and eventually Mastercard. Visa, the largest competitor of Mastercard, was the reason why Mastercard was created. Mastercard is best known for its marketing campaign with the tagline of “There are some things money can’t buy, for everything else, there’s Mastercard.”

Mastercard’s Business

Mastercard is estimated to process some $4.8 trillion purchase transactions in 2019. The card’s network is functional in more than 200 countries. Mastercard handles payments in more than 150 currencies. Mastercard makes money whenever a transaction takes place on its network. Therefore, its revenue is closely linked to the volume of transactions as well as the amount paid by the user in such transactions. The credit card market is an oligopoly with Mastercard and Visa dominating the industry. In fact, both companies have paid significant fines because of such a market structure. Mastercard’s dominance may get disrupted to some extent as governments around the world make efforts to set up local payment networks. The rise of digital currencies could also lead to a structural change in the payments industry.

Performances Of The Best Credit Card Stocks To Buy Now

Mastercard’s stock closed at $344.35 on 4th December 2020. The stock is flat on a 1 month basis. On a year-to-date basis, the stock is up 13.5%. Mastercard has witnessed strong growth on a longer-term basis. Its stock is up 3.5X since the December 2015 levels. Visa, the biggest competitor of Mastercard, has had a flat 1 month. Visa’s stock price closed at $212.68 on 4th December 2020. On a year-to-date basis, Visa is up 11.3%. On a 5-year basis, the stock is up slightly less than 3X. Across different time durations, Mastercard has been slightly better in terms of stock performance than Visa.

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