Ongoing economic turmoil in Europe has hit the card networks unevenly so far.

American Express Co. in January reported a modest slowdown in growth in the fourth quarter, while MasterCard Inc. earlier this month said growth remained strong in the region. (Visa Inc., which separated itself from its European unit in 2007, said earlier this month that the European crisis has not had a big effect on the main company's volumes.)

"MasterCard has seen a diverging trend relative to American Express," says Keefe Bruyette & Woods analyst Sanjay Sakhrani. "That's been driven by the fact that Amex customers are more credit-card-centric and therefore do more discretionary spending, whereas MasterCard is more debit-card-centric and spending is more nondiscretionary," he adds.

"There was a concern that you'd see a meaningful slowdown in Europe and that didn't materialize" for MasterCard, says Sakhrani. "Some of that thought came after American Express, where they did see a meaningful decline in their growth rate."

American Express reported that billed business growth in Europe, the Middle East and Africa fell to 4% in the fourth quarter from the prior year. The company did not report results for Europe separately.

"Europe has particularly weakened given debt and economic concerns, and we've seen slower growth in several markets such as Italy and France," American Express chief executive Kenneth Chenault said at a Feb. 8 meeting with investors. "While one month doesn't make a trend, our European billings growth in January did not weaken further, but was generally consistent with the fourth quarter on an FX-adjusted basis, as were our January billings overall."

An American Express spokeswoman would not comment further on the company's performance or outlook in Europe.

Meanwhile, MasterCard has shown few signs of trouble, reporting continued growth in Europe. The company said earlier this month that total purchase volumes in Europe grew to $184 billion in the fourth quarter, up 9.5% from a year earlier.

During a conference call with analysts, chief executive Ajay Banga said growth continued to be strong in the region. He also downplayed the company's exposure in some of the most troubled countries, including Portugal, Italy, Ireland, Greece and Spain, which accounted for less than 5% of MasterCard's 2011 global net revenue.

"You should remember that our European region is comprised of nearly 60 markets, extending far beyond Western Europe and the Euro Zone," he added.

But Banga cautioned that the company is monitoring consumer sentiment, which is linked with spending, adding that "we continue to watch our European business closely."

A MasterCard spokeswoman did not respond to a request for comment.

Some observers say that the networks have avoided bigger slowdowns because any decreases in spending have been offset by market share gains in the region.

"The conversion of cash to plastic has been an ongoing trend that's been benefiting" MasterCard and Visa, says payments consultant Philip Philliou.

Darrin Peller, an analyst at Barclays, adds that Europe offers much more opportunity for networks to pick up growth, as more consumers still use cash and checks and the region "is generally much more un-penetrated for cards."

Along with the shift to cards from cash, the card networks may gain as countries move from local networks to MasterCard or Visa, he adds. If such gains were excluded, MasterCard might be showing more of a slowdown, akin to American Express, he says.

"If you look at MasterCard's numbers in Europe, and back out market share gains around processing transactions, volume trends and processing transaction growth trends may be lower than included in the reported data points," adds Peller. "What I would suggest is that underlying volume trends are probably slightly less strong than actual reported trends, a lot more reflective of what you're seeing with American Express."

Visa said earlier this month that the European crisis has not had a big effect on its volumes. Its Visa Europe Ltd. franchise reported that spending on Visa cards grew 14% in 2011 and annual revenue grew to a record €1 billion.

On a first-quarter earnings call with analysts, Visa's chief financial officer Byron Pollitt noted that "the exciting drama unfolding in Europe has yet to really play out on the volumes." He separately said that non-U.S. cross-border volumes increased 14% for the quarter and 17% in January, but the company did not disclose figures for Europe alone. A Visa spokesman declined to comment for this story.

"I think the biggest concern over MasterCard relative to Visa is that MasterCard has Europe in their volume stats and Visa doesn't," Sakhrani says. "For Visa it's about cross-border transactions, they do share in cross-border revenue in Europe."

Sakhrani also points to the Single Euro Payments Area initiative, which is "incentivizing or leading banks to consider moving away from their domestic network or partnering with MasterCard or Visa for cross-border transactions."

"That's also been an opportunity for MasterCard to take market share in the region," says Sakhrani.

On the most recent earnings call, Banga noted that processing for domestic transactions in SEPA grew 256% over the prior year.

"These are still off small numbers, but the fact is that all that SEPA regulation change is finally beginning to give us some opportunity," Banga added.

A spokeswoman for Discover said the company's exposure in Europe is "very limited," and declined to speak further.

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