Bang-Up Year for Visa, But MasterCard Grew Faster

Visa International reported, as expected, that it had a banner year in 1994, with consumer sales jumping 22%.

The San Francisco-based association said it was the only payment system to register double-digit growth in each of its regions. Credit and debit volumes rose to $630.6 billion, from $519 billion in 1993.

However, the aggregate growth rate of 22% trailed the 26% at MasterCard International, which last month reported global gross volume for 1994 of $389.9 billion.

Despite MasterCard's gains, its market shares remained well behind Visa's everywhere except in Asia and the Pacific, where reported card volumes are inflated by data on China's fast-growing market, which include other clearing activity.

In the United States, Visa turned the tide on MasterCard's recent increases in market share, which came on the strength of cobranding. Visa U.S.A. gained 28% to $290.8 billion, MasterCard 24% to $172.4 billion. Both percentage rates were the best in 10 years.

The associations have benefited from wider card acceptance by merchants, including those in relatively new categories for card use, such as gas stations and supermarkets.

Consumers' expanding appetite for credit and debit cards, which continues to eat away at cash and personal-check spending, also contributed to the groups' growth last year.

The number of Visa cards issued worldwide rose by 58 million, or 17%, to 391 million. The number of cards issued under the MasterCard brand rose 21%, to 276 million.

Average spending per Visa card worldwide was up 4.5%, to $1,550, which Visa said is the industry's highest per-card average. MasterCard does not release a comparable statistic, but its 1994 sales divided by its 276.9 million cards, including on-line debit cards, equaled $1,408.

"In consumer payments, we outgrew our competition in the United States, Canada, and Asia/Pacific regions while maintaining our share position in Europe and Latin America," said Edmund P. Jensen, chief executive of Visa International.

In Latin America, there were 19.7 million Visa cards in circulation at the end of the year, and spending went up 18%, to $22 billion.

MasterCard attributed its growth in that region to the popularity of cobranding. Sales volume was up 16.9%, to $18.5 billion, and the number of cards increased 14.3%, to 17 million.

Cobranding was also a strong factor in the Asia/Pacific area, MasterCard's second-fastest-growing region. At the end of the year there were 53 million MasterCard cards in force, generating $91 billion in volume.

Visa reported $73 billion in Asia/Pacific sales volume, a 21% increase. The association also tallied a 12% increase in the number of cards, to 69 million.

In Visa's Europe-Middle East-Africa region, its second largest after the United states, sales rose 14.2%, to $212 billion. Cards in force jumped 10.2% to 77.9 million.

By comparison, MasterCard reported $90.1 billion in sales volume in Europe, where it operates in tandem with an affiliated company, Europay International. MasterCard had an additional $4.6 billion in spending in the Middle East and Africa regions. Cards in force in those regions included 34.4 million Eurocard-MasterCard cards and 1.3 million in the Middle East and Africa.

MasterCard also said it has commitments for 73.9 million Maestro-edc debit cards in the Europay area and 3.8 million in the Middle East and Africa.

In Canada, MasterCard's greatest growth came from the debit side. Last year, National Trust and Bank of Montreal launched the Maestro on-line product, boosting MasterCard's penetration in that market by 2.4 million cards. In credit cards, MasterCard sales volume reached $13 billion, with 9.6 million cards in force, and growth was flat.

Visa's more dominant Canadian presence grew 20% in sales, to $33.2 billion, and the number of cards increased by 10%, to 18.2 million.

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