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The Wrong Reason to Buy MasterCard and Visa

By Patrick Morris - Mar 11, 2014 at 7:17AM

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In the wake of data scandals that rocked American consumers, MasterCard and Visa recently announced a partnership to protect people everywhere.

MasterCard ( MA -2.74% ) and Visa ( V -1.86% ) are major competitors, but a recent agreement shows their willingness to protect consumers and their businesses.

It turns out America has long lagged the rest of the world in regulations to protect consumers making payments, but MasterCard and Visa are aiming to change that through a partnership. However, this agreement likely won’t only help consumers, but also the businesses themselves as people everywhere will continue to trust MasterCard and Visa and will likely be less willing to try new and emerging payment technologies like Bitcoin if they know their data is safe.

In this segment of The Motley Fool’s financials-focused show, Where the Money Is, banking analyst David Hanson is joined by Fool contributor Patrick Morris to discuss what this partnership between MasterCard, Visa, banks, credit unions and retailers to enhance the security of the payments industry following the Target ( TGT -1.42% ) and Neiman Marcus data breeches means to both individuals and the investors.

Most importantly, Patrick and David remind investors the shares' past performance isn't a reason to blindly invest in these companies.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Target Corporation Stock Quote
Target Corporation
TGT
$240.39 (-1.42%) $-3.45
Mastercard Incorporated Stock Quote
Mastercard Incorporated
MA
$306.28 (-2.74%) $-8.64
Visa Inc. Stock Quote
Visa Inc.
V
$190.16 (-1.86%) $-3.61

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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