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Is Mastercard a Better Buy Than Visa?

Is Mastercard a Better Buy Than Visa?
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Many investors feel this way Master Card Credit Card (NYSE: MSc) It is a better investment than Visa (NYSE: V) Simply because it is a little smaller and therefore has more room to grow. But as contributor Jason Hall explains to fellow Matt Frankel, CFP, in this… Lie Live section Registered on September 20This may not be the only reason.

Jason Hall: It is clearly a smaller company. It’s the smaller of the two and I think a lot of people look at it and say, OK, OK, that means it can get bigger, faster because it’s smaller.

But the bottom line is, I think the biggest chance of those two for Mastercard is that this is the company that has been more focused on company-to-company payments in particular very soon. She definitely invested more in building this part of her business. It is still too early to know how that will pay off. But it has some advantages and the fact that it moves faster there. I think this might come in handy, and that alone for me was reason enough to rank it higher than Visa.

Matt Frankel: I will agree with that. I think MasterCard has done a better job overall in the area of ​​innovation. They are slightly smaller players than Visa in a market with very high barriers to entry.

lounge: indeed.

Frankel: There are four big players in payment processing; Visa MasterCard, American Express (NYSE: AXP)And explore (NYSE: DFS). Visa and MasterCard combined I think over 80% of the market doesn’t quote me that, but I think it’s right there.

lounge: It is high.

Frankel: I bet you can’t tell me who number five is.

lounge: Not outside of China. I think it’s important to note that we’re talking outside of China because there are some very large payment processors inside China.

Frankel: There are and in some foreign markets large markets, but in the United States there are four. I don’t even know if there is a number five. If I were to start a new project today, I would accept these 4 credit cards. There will be nothing on my mind.

lounge: Someone has to pay me to take another card.

Frankel: Yes, it’s mind boggling how prevalent these two companies are, and it’s also one thing to point out with both Mastercard and Visa since we just mentioned some of the international markets.

Many international markets have Mastercard and Visa acceptance, and credit card acceptance in general is not as universal as here. In some parts of Latin America for example, you have to have cash in a lot of places, and these are markets where Visa and Mastercard are. The credit card economy isn’t built up to that point or debit cards for that matter. In many of these overseas markets, there is still plenty of room for their growth. I think I rated MasterCard a little higher.

They were five (out of eight fintech stocks) and that was my number six only because they are a slightly smaller company which generally means a little bit more growth potential. Mastercard has been a bit bolder when it comes to embracing new technologies and, as Jason said, person-to-person and business-to-business payments.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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