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What’s behind Mastercard’s Co-Brand Wins?


Jun. 28 2018, Updated 5:55 p.m. ET

What to look for

The economic and business environment prevailing in an economy affects the business fundamentals of payment processing giants like Visa (V) and Mastercard (MA). The June quarter is expected to be beneficial for these companies primarily because the macro fundamentals are supporting them, which could help them to witness strong retail spending.

Mastercard and its competitors (IYF) are expected to report the following revenues for the June quarter:

  • Mastercard: $3.7 billion
  • Visa: $5.1 billion
  • American Express (AXP): $10.1 billion
  • Discover Financial Services (DFS): $2.6 billion

In the June quarter, Discover Financial is expected to witness a boost in its retail loans primarily because of elevated spending levels. Higher loans could boost the company’s interest income.

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What has helped Mastercard in co-brand wins?

The winning of co-brand deals helps payment processing companies in garnering the attention of the market participants, which could boost their stock prices. At the William Blair Growth Stock Brokers Conference, Mastercard’s Martina Hund-Mejean stated that Mastercard focuses on the pain points of companies in which it is planning to enter a co-brand partnership. In addition, Mastercard also focuses on helping with loyalty, safety, and data analytics initiatives.

As President Trump has targeted the technology sector, the global trade environment might disrupt volumes of the payment processing giants. Market observers expect that these wars might restrict global growth.


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