85% of all retail transactions are made with cash or check, but is that about to change? It looks to be that way as consumers start to leave their cash in the bank and take it out using their credit and debit cards.
In 2010 48% of all retail transactions were done with cards in the US and by 2013 that was up to 50%. A report done by the more »
Over the last several years, the world has begun its switch from paper money to plastic cards. This trend has fueled incredible growth for credit card companies, and made Visa (NYSE: V) a goldmine for investors. After pulling back about 11.5% in less than a month, Visa could be a great value play at this level.
The company and its quarter
Visa is the world's largest retail electronic more »
Visa (NYSE: V) shares were recently dealt a severe blow following the historic Federal Court ruling regarding debit interchange rates.
A US District Court passed the landmark ruling on July 31, 2013, that in effect invalidated an earlier ruling regarding debit card fees levied by card companies. The Wednesday ruling overturned an earlier ruling passed in 2010 and placed into operations in October 2011, that allowed the Federal Reserve to more »
The term "credit score" is tossed around like it's going out of style. Even with the plethora of knowledge available on improving this crucial statistic of financial well-being, many consumers fail to pay off their debt. According to Statistic Brain, which verifies reports through the Federal Reserve and TransUnion, 56% of consumers carried an unpaid balance in the past 12 months. This isn't good for some aspects of more »
Visa (NYSE: V) shares were recently dealt a severe blow following the historic Federal Court ruling regarding debit interchange rates. A US District Court passed the landmark ruling on July 31 that, in effect, invalidated an earlier ruling regarding debit card fees levied by card companies.
The Wednesday ruling overturned an earlier ruling passed in 2010 and operationalized in October 2011 that allowed the Federal Reserve to place an unprecedented more »
This article has been amended to better reflect the ramifications of the debit card ruling.
A landmark ruling in a federal case regarding debit card fees could potentially cost the kings of plastic billions. When and if the hype materializes, which companies are standing to weather this financial storm, and come out the other side stronger?
The Judge Has Spoken
On July 31, a U.S. district court invalidated a more »
The key to making money on the stock market is not a hugely complicated trading strategy requiring terabytes of computing power. It is simply searching for companies that are able to generate sustainable long term value though cash generation and simple business models. This requires several things, the most important of which is an operation that will run itself. The 'key man' risk is an important thing to consider here more »
MasterCard's (NYSE: MA) long-term investors must be quite happy. The stock has experienced a decent gain since its IPO, from around $47 per share in 2006 to more than $610.60 per share at the time of writing. Including the dividend payment, the cumulative return for shareholders has reached more than 1,260%. Is MasterCard still a good long-term buy for investors? Let’s take a closer look.
Growing more »
MasterCard (NYSE: MA) is firing on all cylinders lately, the stock is trading at all-time highs after delivering a blowout earnings report for the last quarter. Valuation may be getting a little frothy but, make no mistake; this global payments powerhouse still has plenty of upside potential for years to come.
There are basically two kinds of card companies with very different business models, players like American Express more »
Dow corporations are among the most recognizable companies in the world, and certain companies within the index can provide investors with superior returns. There are three companies within the index that I am following closely and investors should consider buying.
Earnings were a slight bump in the road
Mortgage banking may steal the headlines, but when it comes to growth stories in finance, it’s all about the unbanked -- people who don’t have a bank account. Traditional banking companies are turning to prepaid cards in an effort to grab new customers, and new fee income.
Revenue and macroeconomic conditions have a very strong positive co-relation for credit services companies. Any improvement in the macroeconomic conditions gets reflected in the revenue of credit services companies. Recent reports from various agencies have indicated that the macroeconomic conditions in the developed countries have shown signs of improvement, which augurs well for this industry. This will help the major players in the industry like MasterCard and Visa improve their more »
eBay's (NASDAQ: EBAY) second quarter results were overshadowed by the company's subdued outlook for earnings for the second half of the year. That's left investors largely overlooking the continued strength of the payments division.
One of the biggest success stories of the Internet boom is PayPal. It first started as a third-party service for the settlement of eBay auctions. The company acted as a middle man between more »
When I see a stock trading for nearly $600 a share, I have the same reaction many investors probably have. It’s frustrating that the company chooses to keep the share price so high, as smaller investors like myself would have trouble accumulating a decent number of shares. While I know intellectually this higher price is the same value as 10 shares worth $60 each, there something gratifying about owning more »
I hate it when $1 billion goes missing don’t you? Much to my surprise, in Visa’s (NYSE: V) most recent earnings, the company reported stellar growth by nearly every metric investors could ask for. Between strong growth, and a new multibillion-dollar stock repurchase program, the market reacted positively to the company’s earnings. However, the company’s outlook leaves a rather large question unanswered, and if I were more »
Consumer spending took a hit when the recession took hold in 2007-2008. Since then, however, consumer spending in the United States has been making a slow but steady recovery:
source: St Louis Fed
At the same time, the estimated usage of cash is expected to decline.
What does this mean? It means we - the consumer - are swiping our cards again, and more often as time goes on! I suppose you more »
Financial service companies experience constant change due to new regulation, political uncertainty, and market consolidation. After the financial crisis of 2008, global leaders implemented various regulations like the Financial Stability Board, or FSB. These regulations have brought financial stability to financial institutions across the globe.
With improving economies around the world, the outlook for the financial industry is also improving. In this article, I have discussed three companies that are more »
“Consumer borrowing in the U.S. climbed in May by the most in a year,” according to Bloomberg. Credit cards, school loans, and automobile loans led the list. While increased spending, particularly using debt, is a good sign, rising rates could materially alter this trend. Stick to higher-end players like American Express (NYSE: AXP) and Toll Brothers (NYSE: TOL).
Americans appear to be spending again. That's a more »
The markets can punish even the best of companies.
Last week eBay (NASDAQ: EBAY) reported earnings that missed on the top and bottom line. Net income came in at $822 million for the quarter, while revenue missed at just under $3.9 billion. Earlier this year, eBay laid out aggressive forecasts, seeking to enable some $300 billion in online commerce by 2015.
The auction and payment company noted that its more »
American Express (NYSE: AXP) has rewarded investors over the past four years. However, based on the broader market’s significant rally, this should be expected. It should also be noted that American Express has underperformed MasterCard (NYSE: MA) and Visa (NYSE: V) over the same time frame. Then again, investing is about looking ahead, not forward.
American Express is different
MasterCard and Visa rely solely on processed transactions. American Express more »
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