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Rising unemployment, lower gasoline prices and a slowdown in cross-border travel adversely affected MasterCard Worldwide U.S. purchase volume during the first quarter, Robert W. Selander, president and CEO, told analysts this morning during a conference call. "We don't believe there's any reason to assume the economic slowdown across the world will improve for the balance of the year," he said, noting he does not expect the U.S. unemployment rate to plateau until "sometime in 2010." MasterCard says U.S. credit card sales volume during the quarter ended March 31 fell 13.7%, to $113 billion from $131 billion during the same period last year. Credit card transactions also were down, by 7.4%, to 1.38 billion from 1.49 billion. U.S. MasterCard credit cards on issue at the end of March totaled 239 million, down 14% from 278 million. U.S. debit MasterCard sales volume rose 5.3%, to $79 billion from $75 billion. Debit card transactions rose 10.2%, to 1.94 billion from 1.76 billion. Debit transaction and sales data include activity of competing brands whose marks also appear on Debit MasterCards. Some 127 million debit MasterCards were on issue in the U.S. at the end of the quarter, up 9.5% from 116 million. Red Gillen, an analyst with Celent, said in an advisory today that while MasterCard posted higher debit card usage, its first-quarter results revealed the network's relatively low share of debit cards. "Unfortunately for MasterCard, it simply doesn't have enough of its debit products in the market to create enough volume to offset the negative growth of its credit card products. (It's) a sharp study in contrasts, as Visa, which dominates the debit card market, posted significantly better earnings (for the same three-month period)." As a company, MasterCard reported net income for the quarter of $367.3 million, down 17.8% from $446.9 million. Net revenue totaled $1.16 billion, down 1.7% from $1.18 billion. Total operating expenses decreased 10.7%, to $594.8 million from $666.4 million, as the company cut advertising, marketing and administrative spending.
