MasterCard Inc's Endless Growth Opportunity

The payments industry is rife for change from companies like Apple and while American Express understands change lies ahead, the MasterCard CEO reveals the possible opportunity available to it.

Jul 9, 2014 at 9:50AM

MasterCard (NYSE:MA) has been around for 50 years, but believe it or not, it is still a growth company.

MasterCard's CEO, Ajay Banja, recently said:

The future of money won't be about cash or the form it takes. The future of money and commerce will be about breaking down barriers and increasing access for more people across both geographies and incomes. Why? Because with the right payment systems and new innovations in place, how you pay for things drives greater equality of opportunity in society.

He highlighted the changes which will mark the payments industry in the coming years. They will allow for greater inclusion and equality for the more than 2.5 billion adults who don't have access to "the financial mainstream," which allows them do things like pay bills, save money, or borrow, all that we "take for granted."

Only half of the world's adult population have access to a formal financial instituion:

Source: Ajay Banga Says the Future of Money Will Drive Equality, Wall Street Journal.

But that was only half the story.

The massive opportunity
One of the most fascinating bits of insight for investors came when Banga revealed:

We're already seeing the use of money in the form of cash and checks decline and the use of electronic payments increase. Keep in mind, we're at the beginning of this journey, as 85% of the world's retail transactions are still done in cash and check. It's a journey that will get us to a world of greater equality and financial inclusion.

MasterCard has been around since 1966, but this is still a company in the early stages of its growth.

The opportunity that exists across the globe is truly astounding. Outside of the United States, MasterCard saw its purchase volume grow by 15% on a local currency basis from the first quarter of 2013 to the first quarter of 2014. And 65% of its purchases come from foreign countries:

Source: Company Investor Relations.

The reality is, even despite the fact it is a household name, and in the majority of homes a household product (more than 343 million cards in the U.S. alone) there is so much potential growth which awaits MasterCard and the broader payments industry across the globe. And it is only beginning to scratch the surface of that.

As a reason for optimism, all signs point to this possible growth and expansion not only benefiting MasterCard and its investors, but perhaps billions of people across our planet.

Your credit card may soon be completely worthless
There is no denying the opportunities available to MasterCard, but there is one other company which will benefit. You see, the plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Patrick Morris owns shares of Apple. The Motley Fool recommends American Express, Apple, and MasterCard. The Motley Fool owns shares of Apple and MasterCard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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