By Agency reporter

Wednesday, 3 Nov 2010

NEW YORK: MasterCard Incorporated, the world‘s second- biggest payments network, posted third-quarter profit that exceeded most Wall Street estimates, as more consumers paid with credit and debit cards.

Net income climbed by 15 per cent to $518m, or $3.94 a share, from $452m, or $3.45 a share, in the same period a year earlier, the Purchase, New York-based company said on Tuesday in a statement. The average estimate of 29 analysts surveyed by Bloomberg was for earnings of $3.54 a share.

Chief Executive Officer, Ajay Banga, who took over the top job at the start of the quarter, is repurchasing shares and targeting markets beyond the United States to boost revenue growth. He‘s trying to accelerate the worldwide consumer shift from cash and checks to plastic, while taking market share from larger rival Visa Incorporated, based in San Francisco.

“Our volume outside the US outpaced growth in the US,” Banga said on Tuesday in a conference call with analysts. ”The Asia Pacific and Latin America regions just continue to deliver strong double-digit growth.”

Net revenue increased 4.7 per cent to $1.43bn from $1.36bn as operating expenses dropped 4.1 per cent to $662m.

MasterCard advanced $5.71, or 2.4 per cent, to $244.70 at 9:46 a.m. in New York Stock Exchange composite trading. The shares had fallen 6.6 per cent this year through Tuesday.

Worldwide spending on MasterCard and Maestro-branded cards climbed 7.9 per cent to $514bn based on local currencies, the company said. Spending by consumers outside their home countries surged 15 per cent. Processed transactions rose 0.6 per cent to 5.8 billion.

Visa and MasterCard had declined more than 20 per cent earlier this year as Congress included caps on debit-card interchange, or ”swipe,” fees, in the Dodd-Frank financial- regulatory overhaul. Both companies are awaiting word from the Federal Reserve on how the central bank will interpret Congress‘s mandate to regulate the fees.

Last month, they settled a US antitrust lawsuit by agreeing not to bar merchants from steering customers to cheaper card brands and alternative payment forms. A separate antitrust case brought by merchants is pending in the federal court.

Visa last week posted fiscal fourth-quarter net income of $774m, a 51 per cent increase, as processed transactions and total card spending climbed.

Source: Punch