Mastercard preaches optimism when it comes to UK market share
American credit giant Mastercard is a major player internationally – but only around 2% of Britons have a Mastercard debit card. The company’s lightly larger European competitor, Visa, has the market cornered in that regard. However, thanks to a string of wins, Mastercard says it’s about to grab a significant chunk of that business – and multiply its market share by a factor of ten!
According to the company’s president for UK and Ireland, Mike Barnett, the difference is not the fees Mastercard is willing to charge banks (he says they are broadly similar to Visa’s) but rather that Mastercard is “hungrier” and has “differentiated products and services”.
Mastercard’s share price has appreciated by 32% so far this year
SOURCE: Yahoo Finance
Barnett says that people focus too much on the competition between Visa and Mastercard, and he views disruptors like Apple, PayPal and Amazon as rivals just as much: “the idea that it’s just two is a little outmoded. There are several other big players out there and the competitive landscape is changing all the time.”
He also says that the UK is a valuable market for payments due to the rise of cashless transactions. According to the British Retail Consortium, card payments overtook cash for the first time ever last year. While Britain is still behind compared to, for example, Scandinavian countries, the pace at which the United Kingdom is adjusting to contactless technology could close the gap: “We're getting there in the UK – with contactless cash is being taken out of the system very very quickly indeed.”
There’s a lot to think about when it comes to the UK payments scene. However, when it comes to Barnett’s next move, he’s crystal clear: tying up with more of the UK’s banking giants to get Mastercard’s debit cards into consumer hands: “We still want to go after one of the big guys. There's four other big guys left. We're working very hard on flipping more portfolios.”
Dominion holds Mastercard in its Global Trends Ecommerce Fund.
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