MasterCard Still Upbeat on International Consumers

MasterCard (MA) may be bracing for slower revenue growth, but its head of international markets still sees cause for optimism abroad.

Even in European countries hit by the sovereign debt crisis, consumers are still using their credit and debit cards for necessities, MasterCard's Ann Cairns said in an interview on Thursday.

"Everybody's worried about sovereign debt and yes, we are … but the truth is that the sovereign debt crisis is not translating into the everyday spend of Europeans. That's still expanding, because people are still putting gas in their car and they're still buying groceries," she said.

MasterCard has increasingly focused on international growth, as regulations and the prolonged economic slump in the United States hit banks' credit and debit card businesses. The second-largest card network now relies on international business for 60% of its revenue, Cairns said.

But that increased emphasis on international business has also made MasterCard vulnerable to economic weakening in other countries. On Thursday, the company said that it expects its revenue growth in the second half of this year to be below the second-quarter growth rate of 9.2%.

Cairns acknowledged that MasterCard is facing some consequences from economic slowing in Asian countries, including China.

"Of course it poses a challenge, and I'm not going to sit here and say, China's growing at the same rate as it was," she said. "But the truth is, it's all relative. Yes, they're slowing, but they're still growing at paces that way outstrip other parts of the world."

Cairns, a longtime Citigroup (NYSE: C) executive who joined MasterCard a year ago from bankruptcy specialist Alvarez & Marsal, runs her business from London, though she travels every week.

She was in New York Thursday to attend the company's annual investor meeting, which concluded with an open house for the new technology MasterCard is testing and using around the world. The network, which is putting pressure on U.S. ATM owners to upgrade their machines to the chip-and-PIN standards long used abroad, has now helped implement much more sophisticated types of cards in South Africa and other countries. The South African government is now using biometrics-based cards, which track customers by their registered voice prints and fingerprints, to disperse some social security benefits.

Cairns said that the international demand for new technology, from biometrics cards to mobile wallets, is causing MasterCard to look beyond its traditional bank customer base for growth.

"When we were owned by the banks, the banks were our main client base. Post-IPO, we're diversifying across our client base, saying, 'Look, we've got to get closer to merchants, to airlines, to telephone companies, and think of them in the same way that we think of banks,'" Cairns said.

"In the past we reached the consumer by forming strong partnerships with banks, and we have no intention of moving away from that…model," she said. "But in order to reach the consumers tomorrow, we have to partner with people like the [telecommunications firms], because consumers are going to be reached through mobile. What we need to do is take that model that we know how to do so well and just start repeating that in the different spaces."