News : Prepaid Credit Card UK

Credit card giant aims to increase profit 50%

2008-05-30 11:11:22

BEIJING, May 30 -- Mastercard Inc, the credit card company which had its shares surge more than 600 percent since going public two years ago, raised its profit target as much as 50 percent on consumers' growing preference to pay with plastic.

The company expects net income to increase an average 20 percent to 30 percent annually over the "longer-term," Purchase, New York-based MasterCard said Thursday, compared with a previous goal of 15 percent to 20 percent.

MasterCard, the world's second-biggest card network after Visa Inc, has beaten analysts' profit estimates every quarter since Chief Executive Officer Robert Selander took it public in May 2006. Selander is under pressure to keep profits rising while the U.S. economy slows, and Visa tries to increase its market share as consumers abandon cash and checks for cards.

The company said revenue may grow an average 12 percent to 15 percent annually, from the previous 8 percent to 10 percent.

The old targets were announced after MasterCard's initial public offering. Consumers will use credit and debit cards for 55 percent of all U.S. transactions by 2011, rising from 40 percent in 2005, according to the Nilson Report, an industry newsletter based in California.

Visa processed 60 percent of the 5.2 trillion U.S. dollars spent on general purpose payment cards around the world in 2006, more than the 32 percent controlled by MasterCard, according to Cowen and Co. analyst Moshe Katri.

Source: http://news.xinhuanet.com/