Mastercard wins new partnerships without big boost to incentives

[NEW YORK] Mastercard Inc is winning new deals with banks and merchants even without sweetening its incentives as much as analysts expected, helping the world's second-largest payments network post profit that topped estimates in the third quarter.

Mastercard offered its partners US$1.73 billion in rebates, an 18 per cent increase from a year earlier but still below the US$1.84 billion average estimate of analysts surveyed by Bloomberg. The network has said it was boosting incentives in its bid to ink card deals.

Fees from cross-border transactions, or money spent abroad, rose 16 per cent to US$1.34 billion, just below the US$1.35 billion estimate. Mastercard has warned that business would be crimped as fewer consumers are able to buy cryptocurrency using a credit card.

Spending on the firm's network climbed 11 per cent to US$1.08 trillion, missing the US$1.11 trillion average of five analyst estimates compiled by Bloomberg. The company's larger rival, Visa Inc, also posted a smaller jump in spending than analysts expected.

While some analysts predicted the firm would change its forecast for this year's adjusted net revenue, the company said Tuesday it still expects the figure to climb by a percentage in the "high teens." Operating expenses are also still forecast to rise in the "mid-teens" range previously set.

Mastercard shares, which surged 26 per cent this year through Monday, jumped 2.3 per cent in early trading to US$195.50. This year's advance outpaced the 6.1 per cent gain of the 66-company S&P 500 Information Technology Index.

"Our business wins and new partnerships, strengthened by our differentiated services offerings, are helping drive our global momentum," Ajay Banga, Mastercard's chief executive officer, said in a statement announcing third-quarter results.

BLOOMBERG