Tag: Mastercard

Grow Finance partners with Pismo to issue new Mastercard® credit card for small businesses in Australia

by  on  in Business Financial News

Grow, the fastest-growing company in Australia in 2020-21 according to The Australian Financial Review’s Fast 100 list, becomes Pismo’s first Aussie client

BRISTOL, England and SYDNEY, July 11, 2023 /PRNewswire/ — According to the Australian Banking Association, of the 2.6 million businesses in Australia, the majority (98%) are small and medium enterprises (SMEs)*. As the sector accelerates in 2023, it also suffers from an increase in the cost of goods and services, leading to rising inflation and unemployment rates. In this scenario, entrepreneurs are eager for help.

Australian company Grow is ready to help them. Grow is a leading lending partner for SME businesses looking to expand, manage cash flow and deal in today’s increasingly complex and competitive operating environment. It will launch its first credit card, powered by Pismo.

The Grow Mastercard® credit card will be available in market from September. This new offer will give business owners better cash flow, management and capital to help them improve their businesses.

Grow has chosen Pismo’s all-in-one, public cloud-native financial services platform to support its card-issuing operation. By using a modern and feature-rich platform, it seeks to differentiate itself from other lenders and continue supporting the Australian SME segment, an estimated $410-billion market.

“Pismo brings us its extensive expertise in card issuing and payment processing, which includes managing 42 million cards. The Pismo platform enables us to develop our credit card business without building the infrastructure from scratch. While Pismo focuses on the technology, we focus on supporting Aussie SMEs to grow their businesses,” says David Verschoor, Executive Director and Co-CEO at Grow.

Founded in 2016 in Brazil, Pismo has operations in five continents with 450 employees. It processes 290 million transactions monthly. Pismo provides card issuing infrastructure for Banco Itaú – Latin America’s largest

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How Mastercard Makes Money

by  on  in Business Card Companies

Mastercard (MA) connects many different participants in various kinds of transactions: consumers, merchants, financial institutions, governments, and more. The large majority of Mastercard’s revenue comes from fees paid by its customers, who are not everyday consumers. Rather, Mastercard’s customers are financial institutions, such as banks, that pay a fee to issue credit and debit cards with the Mastercard brand. These fees can take multiple forms, such as interchange fees and additional four-party system fees.

Mastercard facilitates transactions in more than 150 currencies across more than 210 countries and territories. Though the company does not have a monopoly on the payments industry—not only because of similar operations such as Visa but also because of a growing number of new payment service providers—it is nonetheless hugely successful across the globe. A big part of this success has to do with the Mastercard brand and the cachet it holds.

Key Takeaways

  • Mastercard generates revenue by charging financial institutions that issue Mastercard-branded payment products a fee based on the gross dollar volume of activity.
  • Consumers do not pay Mastercard directly for the charges they accrue; rather, these are paid to the issuing financial institution.
  • Mastercard has two reporting segments: Payment Network and Value-Added Services. Payment Network is the key contributor to revenue.
  • Mastercard also breaks down its revenues by geographic area: North American and International. The bulk of revenues and the driver for growth is the International segment.
  • In 2023, the company launched its lifestyle platform, priceless.com in Israel.

Mastercard’s Financials

In April 2023, Mastercard announced its earnings for its first quarter of fiscal year 2023, the three months ending March 31, 2023. For Q1 2023, the company brought in revenues of $5.7 billion, an 11.2% increase year-over-year (YOY). The company had a net income of $2.36 billion for the quarter, down from $2.63

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Visa and MasterCard agree to lower average credit card interchange fee below 1%

by  on  in Business Card Companies

The government has announced new details of an agreement with Visa and MasterCard that will see them lower the amount that they charge retailers when a customer pays for a purchase with a credit card.

Known as so-called interchange fees, they have long irritated merchants by allowing the credit card company to keep a percentage of every sale, instead of a flat fee for each transaction.

On Thursday, the government announced a deal with the two card companies that will reduce interchange fees for in-store transactions to 0.95 per cent, on average.

That means on a $100 purchase, if a customer pays with a credit card, the retailer will get at least $99, where they previously would have kept as little as $97 in some cases.

A government release says on average, the deal will reduce the typical fee that a merchant pays by 27 per cent. 

The fee reductions are expected to save retailers about $1 billion over five years and “make credit card transactions fairer for small businesses, which have less bargaining power than larger merchants to negotiate lower rates,” the government said in a release.

Many other jurisdictions, including the European Union, the United Kingdom, Israel, Australia, China and Malaysia, have capped interchange fees at well under one per cent, but in Canada some cards can charge up to three per cent. Currently, the average interchange fee for a Canadian Visa credit card is 1.4 per cent, Visa says.

Merchants were forbidden from passing those fees on to consumers directly for years, but that all changed last fall when the credit giants agreed to settle a class action lawsuit over the matter, a deal that saw them agree to refund businesses hundreds of millions of dollars for what they charged in interchange fees over the years.

Part

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Visa, Mastercard Beat Earnings: Travel, Cross-Border Outlook Improves

by  on  in Business Card Companies

Colossal credit card companies Mastercard (MA) and Visa (V) report earnings results on Thursday. Mastercard topped expectations for its fourth quarter results before the market opened. And Visa kicked off its fiscal 2023 year by beating forecasts for its afternoon report. MA stock fell Thursday and Friday. Visa stock rose on Friday following its announcement.




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A backdrop of rising interest rates can be a positive for the big credit card processors. But those interest rates also squeeze consumers, who have also grown increasingly wary of a possible recession. Wells Fargo analyst Donald Fandetti expects these factors to make most of 2023 a challenging environment for consumer finance company fundamentals, he wrote in a mid-December research note.

However, easing travel-related concerns and revenue other than consumer credit cards is improving company diversification. Also, additional payment flows outside of consumer cards should extend Visa and Mastercard’s growth, KeyBanc analyst Josh Beck noted on Jan. 9.

On Tuesday, MA stock and Visa stock veered sharply higher and lower amid the New York Stock Exchange’s trading malfunction. Both hit “circuit breakers” and were temporarily halted.

Mastercard Earnings

Mastercard’s gross dollar volume grew 14% through the first three quarters of 2022, to $6 trillion. The company’s cross-border volume spiked 51% during the year, generating $4.8 billion in cross-border fees.

For the fourth quarter, Mastercard’s adjusted earnings rose 13% to $2.65 per share on 12% revenue growth to $5.8 billion. That just beat Wall Street expectations of 9.4% earnings growth to $2.57 per share on 10.9% revenue growth to $5.79 billion.

For Q4, gross dollar volume grew 8% to $2.1 trillion. Cross-border payments volume leapt 31% $1.8 billion and transaction processing fees rose 12% to $3.3 billion.

The results mark seven consecutive quarters of increasing earnings and eight quarters of revenue

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