Credit Card Gist

MasterCard said it expects China to overtake the U.S. as the world’s largest credit card market by number of cards by 2020, citing the country’s rapid urbanization.

However, that doesn’t necessarily mean MasterCard will benefit, as China UnionPay Ltd. owns a monopoly on processing card payments.

(Via YouTube.com)

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MasterCard’s profit jumped by almost a third in the second quarter, the second-biggest credit card payment network reported in a regulatory filing on Tuesday. Although it beat most analysts’ expectations, MasterCard’s profit lagged that of bigger rival Visa’s 38 percent increase, reported earlier this week.

MasterCard’s income was $458 million, or $3.49 per share, up from $349 million, or $2.67 per share, a year ago. The number of transactions processed by the company remained virtually unchanged at 5.6 billion, however cross-border transactions grew by 15.2 percent.

Internationally, the Purchase, N.Y.-based payments processor’s volume grew by 8 percent, while in the U.S. the growth was less than 1 percent. Worldwide, there were more than 1.6 billion MasterCard and Maestro credit and debit cards in use.

MasterCard’s revenue was $1.37 billion, up 7 percent from $1.28 billion a year ago. The company said the increase was due to the higher cross-border volumes, higher gross dollar volume of processed transactions and the impact of pricing changes of approximately 4 percentage points.

Operating expenses fell by 10 percent to $648 million, as a result of layoffs in 2009.

(Via MarketWatch.com)

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

AT&T and Verizon, the U.S. biggest mobile carriers, are teaming up with Discover Financial and Barclays Bank to enable consumers to use their phones to make credit and debit card payments and take on industry giants Visa and MasterCard, according to a report by Business Week.

The partners, which also includes Deutsche Telekom AG unit T-Mobile USA, will be offering a contactless service that allows users to pay by waving their phones by a specially equipped device at a store’s checkout. Similar services are already available in Japan, Turkey and the U.K.

The venture will be using Discover’s payment network to process the payments, while Barclays will be managing the accounts. Discover is currently the fourth-biggest U.S. payment network, behind Visa, MasterCard and American Express.

These developments are coming in the wake of Congress passing a law requiring the Federal Reserve to ensure that fees Visa and MasterCard issuers charge merchants for accepting card payments, are “reasonable and proportional” (read lower). Now the U.S. Department of Justice is considering suing Visa for banning merchants from charging customers who use credit cards instead of cash.

The pressure is clearly being felt. “If we change our rules in these areas, this could cause a material, adverse effect on our business,” Visa said today in a regulatory filing.

(Via YouTube.com)

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

The financial overhaul legislation, passed by Congress last week, gives the Federal Reserve the authority to regulate the interchange fees, which are the fees charged by card issuers for each transaction involving one of their cards. Rod Bourgeois, an analyst at Sanford C. Bernstein & Co., talks about the likely impact of the new law on Visa and MasterCard.

(Via YouTube.com)

Learn how to lower your card acceptance cost

Learn how to accept credit and debit cards at the lowest processing costs. The Payment Card Acceptance kit contains a video and an e-book:

• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).
• E-Book – Payment Card Acceptance Guide (19 pages).

A consumer’s 77-cent soda actually cost her $1.28 because she stopped at Arco AMPM and paid with her debit card. Arco has a 45-cent fee that you must pay every time you use your debit card at all Arizona Arco AMPM locations. And, since they don’t take credit cards, debit cards are used a lot. Are these fees legal?

(Via ABC15.com)

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).