Mastercard CEO Doesn’t Fear Facebook Competition
According to its S-1 filing, Facebook earned $557 million from ‘payments and other fee revenue’ in 2011, and it “may seek to extend the use of Payments to other types of apps in the future.”
Fears that this would create competition for payment companies such as Visa (NYSE:V), MasterCard (NYSE:MA) and American Express (NYSE:AXP) were brushed off by Mastercard CEO Ajay Banga, who said instead that Facebook was a “huge opportunity” for the industry.
Banga said during Mastercard’s earnings call, “I’m not surprised at all by their payments revenue, because how do you load the Facebook credit right now? You do it through various ways, which includes our cards.”
Tech companies building payment bridges, such as the Google Wallet, and the telco-developed ISIS, have been welcomed by the traditional payment industry. Only time will tell if Banga is being too trusting, but he went on to say, “We’ve had the same questions on telecom companies two years ago and … we engaged with them, we worked with them, and in fact, they realized our value [and] we realized their value.”
Here’s how these stocks are trading now:
Visa, Inc. (NYSE:V): V shares recently traded at $106.95, up $0.89, or 0.84%. They have traded in a 52-week range of $70.45 to $107.12. Volume today was 1,287,623 shares versus a 3-month average volume of 3,828,780 shares. The company’s trailing P/E is 20.09, while trailing earnings are $5.32 per share.
Mastercard Incorporated (NYSE:MA): MA shares recently traded at $387.58, up $6.01, or 1.58%. They have traded in a 52-week range of $240.36 to $384.99. Volume today was 805,704 shares versus a 3-month average volume of 1,060,050 shares. The company’s trailing P/E is 21.76, while trailing earnings are $17.80 per share.
American Express Company (NYSE:AXP): AXP shares recently traded at $52.06, up $0.9, or 1.76%. They have traded in a 52-week range of $41.30 to $53.80. Volume today was 2,597,332 shares versus a 3-month average volume of 6,335,110 shares. The company’s trailing P/E is 12.65, while trailing earnings are $4.12 per share.