MasterCard Inc (MA), Visa Inc (V): Three Reasons to Buy This Global Payments Powerhouse

Emerging markets make especially attractive growth prospects for the industry over the coming years. To begin with, economic growth increases the number of transactions these companies process, and emerging markets will most likely continue outperforming developed ones in terms of economic expansion for years into the future.

Besides, cash still accounts for a whopping 85% of transactions around the world, as economic development increases access to baking and financial services in emerging countries, plastic will continue replacing paper money in these markets. Emerging markets are significantly underpenetrated when it comes to financial services in general, and this should provide a strong secular tailwind for MasterCard for years to come.

MasterCard Inc (NYSE:MA) has a fantastic business model with big and growing profit margins, the company also enjoys remarkable competitive advantages due to the network effect its globally recognized brand. As debit and credit cards continue replacing cash over the next years, the company is in a privileged position to benefit from that trend, especially in emerging markets.

Andrés Cardenal owns shares of MasterCard. The Motley Fool recommends American Express, MasterCard, and Visa. The Motley Fool owns shares of MasterCard.

The article 3 Reasons to Buy This Global Payments Powerhouse originally appeared on Fool.com.

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