MasterCard’s Q2 Revenue, Earnings Rise On Higher Payments Volume

Higher spending on its credit and debit cards boosted MasterCard Inc.’s second-quarter net revenue by 21.4% from a year earlier.

The card network on Aug. 3 reported net revenue of $1.7 billion for the quarter ended June 30, up from $1.4 billion a year earlier.

The number of transactions that MasterCard processed grew 17.4%, to 6.6 billion, and the amount customers spent with its cards rose 16.4% on a local currency basis to $811 billion. The latter figure includes card purchases, balance transfers and convenience checks customers made.

Besides higher spending, the company is also benefiting from the conversion of SunTrust Banks Inc.’s and Banco Santander SA’s Sovereign Bank’s card portfolios to the MasterCard network, Ajay Banga, MasterCard president and chief executive, said in a press release.

MasterCard’s net income increased 32.8% to $608 million, or $4.76 per diluted share, from $458 million, or $3.49 per diluted share, a year earlier.

The results mirror those of Visa Inc., which last week reported higher revenue and earnings on increased transaction volumes (see story). The company also unveiled a new pricing structure for merchants that accept its cards in response to the Federal Reserve Board’s new debit card rules, which begin taking effect in October (see story).

MasterCard is expected to discuss its strategy for dealing with the rules on a conference call Aug. 3.