Credit card companies, Visa Inc (NYSE:V) And Mastercard Inc (NYSE:MA) faced a glum outlook today by none other than the Investment banking firm, Sandler O’Neill which downgraded the two companies citing macro headwinds. CNBC‘s Brian Sullivan reported the news on ‘Street Talk’.
” […] Analyst Chris Donat cutting Visa Inc (NYSE:V) to neutral and listen up cutting Mastercard Inc (NYSE:MA) to sell . The note headline says that macro headlines may slow revenue growth especially in developing markets where economists keep cutting their forecasts […],” informed Sullivan.
Strong macro economic data, especially in the emerging markets is vital for the growth of both Visa Inc (NYSE:V) And Mastercard Inc (NYSE:MA). There is a strong potential for the companies to grow in this region on account of strong hold of primitive banking in these economies. Visa Inc (NYSE:V) And Mastercard Inc (NYSE:MA) are a way out of just that. They are the future of banking.
Since in emerging markets a vast majority of population is still using cheque books, bank drafts and good old cash to make payments, at a time when credit cards and online banking are a norm in the developed world, Visa and Mastercard are their hope to modern banking. However, signs of emerging economies slowing down in terms of poor figures from the manufacturing sector or political instability can have a detrimental impact on the finance sector.
Despite the disappointing news, Visa Inc (NYSE:V) is trading at $212.09 which is 1.13% up for the day. Mastercard Inc (NYSE:MA) joined in this upswing and is trading at $74.48, up 1.42% for the day.
Visa Inc (NYSE:V) And Mastercard Inc (NYSE:MA). have also been suffering lately with regards to stock valuations because of apprehensions that mobile banking is going to cast dent in their revenues. This was seen especially after the release of Apple Inc. (NASDAQ:AAPL)’s Apple Pay, which uses Near Field Communication (NFC) for making mobile payments.
As is the case with other technologies, most of them are developed first in the developed parts of the world and then those
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