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18/10/2021

MasterCard Stock

MasterCard is a word generally associated with a credit card flanked by two interlocking circles, red and orange. But behind this payment system is a highly successful company that has become one of the leaders in its sector. 

This world-renowned brand has a track record that is of interest to many investors. Its assets continue to grow despite crises, market volatility and the emergence of new forms of competition. 

Introducing MasterCard 

History

In 1966, Wells Fargo, United California Bank, Crocker National Bank, Bank of California and Marine Midland Bank jointly formed the Interbank Card Association (ICA). This association gave birth to "Master Charge: the Interbank Card", the current MasterCard.

In 1968, ICA formed a strategic alliance with Eurocard International. Together, the two groups signed an innovative agreement, which allowed the payment instruments of one group to be accepted in the payment network of the other, and vice versa. As a result, ICA credit cards were accepted in Europe. 

In 1969, First National City Bank joined the network by contributing the assets of its Everything Card. In 1979, the company was permanently named MasterCard. 

In its early days, the company was organized as a cooperative. Its management was provided by 1,400 of the 25,000 financial institutions that issue payment cards in the group's colors. The company went private in 2002

In 2006, MasterCard became a publicly traded company. Today, the company is one of the leaders in the payment market. 

In 2020, the group's turnover will be close to 15,301 billion dollars

MasterCard milestones over the past 20 years 

  • 2002 : merger with Europay International (the company that owns Eurocard) 
  • 2009 : acquisition of Orbiscom, an electronic payment company known for its controlled payment number technology
  • 2010 : acquisition of DataCash, a company specializing in security and fraud prevention in the field of payment processing
  • 2017: acquired NuData Security, which specializes in protecting user accounts on mobile devices and online platforms
  • 2017 : acquisition of VocaLink, specialized in instant payment
  • 2019 : Acquisition of Ekata, a company specializing in online identity verification

Mastercard's business model  

MasterCard specializes in payment solutions. Its core business is the issuance and marketing of payment cards. The company plays a vital role in the global economy by providing an infrastructure that connects customers and merchants around the world. 

The group also offers services (advice, assistance, analysis, information, etc.) in the financial sector. As evidenced by its recent acquisitions, MasterCard is also entering the digital economy. MasterCard is also strengthening its expertise in technological innovations applied to finance.

MasterCard's revenue is divided into 4 segments: 

  • National assessment fee : 27%
  • Cross-border assessment fee : 22%
  • Transaction processing fee : 34%
  • Other income : 17%

Introduction and quotation of MasterCard stock

MasterCard was first listed on the New York Stock Exchange (NYSE) on May 25, 2006. The value of a share at the time of the IPO was $39

This IPO gave the company a new impetus. The company is increasing its acquisitions and innovations to meet the changing needs of consumers. 

At the same time, its stock continues to increase in value year after year. MasterCard's stock price is currently $367.22

Factors influencing MasterCard's share prices    

So far, MasterCard has a strong position in its industry with more than 2 billion users. Its payment cards are accepted in over 200 countries. Its future positioning depends on various factors. 

To remain a leader, MasterCard must adapt to changing consumer trends and payment methods. One of the things to watch out for is MasterCard's online payment strategy. 

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