How Visa, MasterCard, American Express make money

Digital payment era reshaped by payment networks like Visa, MasterCard, American Express and China Union.

Due to Forbes market share without China Union data.

Visa Inc is market leader with 52% market share. MasterCard and American Express each 22%. Visa Inc growing faster because of balanced expansion strategy based on competitive pricing and high ticket partnership.

In every country seasonal sales driving up last quarter results because of holidays and festival season. Business model volume dependable.

Historically Visa and MasterCard were credit card supporters. American Express followed charge card with fixed settlement date. IPO date, IPO price and current price see on table.

In included data not mentioned stock split which influence on price per share.

Business model of all 3 companies similar based on volume and similar charges per transaction. During every transaction information shared through companies network for authorization. If credit card used loan risk borne by issues and not by Visa, MasterCard. American Express use “close-loop” network and also dependable on volume, as more times card used as more revenue for company.

China Union founded in 2002,operates in mainland China under approval of People’s Bank of China. Due to Wikipedia it’s largest payment organization in world accepted in 171 counties. Mostly accounts linked with Aliexpress and WeChat.

That was brief look at ways how payment networks working, creating profits. In next chapter we will take deeper look in Visa Inc money making process.

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