How Mastercard Plans To Beat Visa

Mastercard is the second largest card network in the U.S., accounting for more than a quarter of all purchase volume using a payment card. 

As the world transitions to a more cashless society, Mastercard’s value has continued to soar. 

Shares of the company have seen nearly 100% gain over the past 5 years, outperforming American Express, Discover and even Visa. 

So how is Mastercard able to generate so much revenue and how does it set itself apart from the rest of its competitors?

Crypto Cards - a New Payments Disruption?

Account openings of crypto-backed cards are outpacing traditional cards. Using Visa and Mastercard as the rails, several crypto platforms now enable consumers to make everyday purchases with cryptocurrency. Analysts say it's a crucial step to making crypto a mainstream form of payment.

Is this the start of a new payment disruption?

Read the full details from The Financial Brand HERE.

Digital Payments - US still in the Dark Ages

Even though the US is home to both Silicon Valley and Wall Street, yet it has long seemed in the dark ages on digital payments.

Just consider that until 2018 card purchases still required hand signatures, 15 years after Europe switched to chip-and-pin. Then the cosy credit-card duopoly, consisting of Visa and Mastercard, works with the banks to issue cards, with the result that there has been too little competition and sky-high profit margins. 

The key to making payments more competitive in the US is to create a new network of financial plumbing: a “real-time” interbank-payment system that will permit near-instant and cheap transfers.

Read more from The Economist -Fintech comes to America at last

 

Libra Cryptocurrency could be in danger, as Mastercard, Visa and Ebay pull out

Facebook’s cryptocurrency Libra took a major hit last Friday, when Mastercard, Visa and Ebay left the Libra Association, who supervises the project. Stripe and Argentina-based Mercado Pago have also left the initiative.

On Monday, the companies who are part of the Libra Association will formalize their participation in the initiative. Companies such as Visa and Mastercard may have second thoughts, as global regulators have raised concerns about the project.

Earlier this month, PayPal also left the Libra association. The departures mean that Libra no longer has the support of any major digital payment company.

Despite these setbacks, Dante Disparte, the head of communications at the Libra Association, has said that "We are focused on moving forward and continuing to build a strong association of some of the world's leading enterprises, social impact organizations and other stakeholders" and that membership of the association may grow and change over time.

Last Wednesday, French finance minister Bruno Le Maire said that Libra should not be developed in the European Union and said, "it should not be the role of a private company to try and get a sovereign currency like a sovereign state."

Valdis Dombrovskis, the Executive Vice President-Designate of the European Commission, also said this week that Libra needs to be tightly regulated to preserve monetary stability and to prevent money-laundering operations.

In the U.S., Federal Reserve Chairman Jerome Powell said earlier this year the cryptocurrency raises "many serious concerns regarding privacy, money laundering, and consumer protection." Treasury Secretary Steve Mnuchin has also said that the currency could be used to finance terrorist operations, and that it represents a "national security issue."

Libra was unveiled by Facebook in June, and was touted as a digital currency that can be managed from one's phone. The cryptocurrency is particularly directed at the 1.7 billion people on the planet without access to a traditional bank account.

Here's Why Visa and MasterCard Are Rooting for Apple Pay

From The Motley Fool –

“By now, the phrase "cash or credit" is so firmly entrenched in Americans' vernacular that our decision seems almost instinctive. However, the collective answer is worth billions to the world's largest corporations.

On one hand, you have those dependent on credit and debit card transaction fees, including banks and the so-called toll-road operators - Visa, MasterCard) and American Express - strongly preferring that you opt for the latter.

On the other hand, merchants are hoping that cash or cash equivalents - including gift cards, checking accounts, and private-label store cards - are your preferred transaction method. The reason: These payment methods are generally cheaper for them to process. Recently, a consortium of merchants including Target, Wal-Mart, ExxonMobil, and Best Buy have banded together to form the Merchant Customer Exchange, or MCX: a mobile payment system owned and controlled by merchants.”

Read more>>

Visa announces Mobile Location Confirmation service; travelers should welcome verification technology

From ZD Net –

“Visa will begin rolling out a new geo-location service, powered by Finsphere, in April. Your smartphone and financial institution will work together to improve your card purchasing experiences.

Finding out that your credit or debit card has been disabled while traveling around the world can result in lost sales and major frustration. Given today's smartphone and electronic banking technology you would think there was a better way to integrate the two.

Last week Visa announced Mobile Location Confirmation, powered by Finsphere. In combination with your smartphone, mobile banking application, Visa, and Finsphere's services geo-location data will be used to verify the legitimacy of your transactions.”

Read more>>

Major flaw discovered in Visa contactless cards

From Payment Eye

“The £20 limit on Visa contactless cards can be bypassed by making transactions using foreign currencies, security experts from Newcastle University have found.

Normally a PIN needs to be entered to authenticate larger transactions, but researchers – and potential thieves – are able to bypass this security step and charge as much as the equivalent of £999,999.99 in dollars, euros or any other foreign currency.”

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