MasterCard, Visa report strong growth as consumers embrace Apple Pay

“Credit-card companies are riding a surging wave in electronic payments and benefiting from continued growth in consumer spending,” Saabira Chaudhuri reports for The Wall Street Journal. “MasterCard Inc. reported better-than-expected quarterly results on Thursday, sending the company’s shares up 7.1% in recent trading.”

“The results — which came after rival Visa Inc. also reported strong results and delivered a better-than-expected revenue outlook for 2015 — show that card giants are benefiting from a wave of migration away from cash and checks toward spending on credit and debit cards even as consumer-spending growth remains mixed globally,” Chaudhuri reports. “‘Cash is the real opportunity for companies like us and that’s what we’re focused on,’ said MasterCard Chief Executive Ajay Banga on a conference call with analysts. MasterCard reported a profit of $1.02 billion, or 87 cents a share, up from $879 million, or 73 cents a share, a year earlier. Revenue rose 13% to $2.5 billion.”

“MasterCard, along with Visa and others, has also joined with Apple Inc. on its Apple Pay mobile payments platform. ‘The recent launch of Apple Pay will only help with the conversions of the physical and digital worlds,’ said MasterCard Chief Executive Ajay Banga,” Chaudhuri reports. “‘When people don’t have to fumble for their wallet and card but can just pay with their cellphones, they will be using that mode of payment a heck of a lot more,’ said Chief Financial Officer Martina Hund-Mejean. ‘Going contactless will be a huge driver.'”

Read more in the full article here.

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  1. Are you listening Discover?

    BTW – A Discover Card rep (very nice lady) told me that when/if Discover signs up, purchases made with Apple Pay will NOT count toward their 5% cash back program.

    Nothing personal against Apple, it’s an NFC thing. Still, they’ll need to fix that.

    1. Discover is still negotiating with Apple for joining Apple Pay. The Discover CEO Nelms certainly wants to be on board and definitely offer the cash back program as an incentive for consumers to use Apple Pay. Talks have been going on for quite a while but I haven’t found out what’s causing the delay.

  2. “‘When people don’t have to fumble for their wallet and card but can just pay with their cellphones, they will be using that mode of payment a heck of a lot more,’ said Chief Financial Officer Martina Hund-Mejean.

    Assuming consumers trust the system. Contactless payment has been available for a while now, right? In Europe more so… but even in the North America… trusting that your identity can’t be stolen/mimicked will go a long ways towards increasing the use of the system. Advantage: Apple.

  3. Might be a bit early for MC/Visa to feel good about increased use since a large part of increased purchase numbers may be due to the novelty of the system.. Wait a few months and see if total CC transactions remain high or usage simply switched for current CC users from CC in hand to CC via ApplePay.

    1. First month or so you will see a lot of usage.

      I don’t see people abandoning  Pay though.. Once they use it and see how easy it is,  Pay will become the first thing they think of when payment is due somewhere.
      Cash/physical card will be the second choice. Just look at those writing checks now.. Outside the elderly hardly anyone does. And many places hand the canceled check back to them after immediately getting the funds.

      I still haven’t used  Pay.. even though I’m set up, just don’t need to get anything where  Pay is accepted right now. Maybe i’ll eat at McDonalds tomorrow for lunch.. The wraps aren’t bad.

    2. I use a debit card, and debit cards used with mobile payments still suck. You have to enter your pin, and usually hit the keypad to tell it you don’t want cash back, then hit it again to tell it the amount is OK. When it’s totally pay-n-go I’ll use it more. Till then the savings in convenience is dwarfed by the annoying questionnaire you have to go thru when you pay.

  4. I’ve used Apple pay twice so far and both time it was flawless. The girl at McD’s was amazed on how fast it was and didn’t know their terminals could do that as no one uses them that way. I’ve had my credit card numbers stole a few times over the years and Discover has changed my card twice and stopped charges 3 times. I hope apple pay will stop all this nonsense.

    1. I think this has a real chance of making us realise how much using cash is a pain. If we can get the benefits of cash without the draw backs then it is indeed a no brainer and a lot more than a card replacement it can be (almost) a whole wallet replacement at least eventually.

  5. I’m going to be using cash and checks more going forward. My plastic has been replaced three times in the past year due to system hacking of various businesses.

    I’m moving to exclusively using the following three payment options in this order of preference:

    1. Apple Pay
    2. Cash – for small purchases
    3. Check – for large purchases

    Naturally wherever I can use Apple Pay I will do so.

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