Visa vs. Mastercard: Which Credit Card Stock is a Better Buy?

by Bryan

Credit card transactions are rising on the service sector’s reopening and increased discretionary spending ahead of the forthcoming holiday season. So, credit card giants Visa (V) and Mastercard (MA) should benefit. But which of these stocks is a better buy now? Read more to find out.Payment’s technology company Visa Inc . (NYSE:V) facilitates digital payments among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a transaction processing network. V is headquartered in Foster City, Calif. In comparison, Mastercard Incorporated (NYSE:MA) provides transaction processing and other payment-related products and services. The Purchase, N.Y.-based company facilitates the processing of payment transactions, including authorization, clearing, and settlement.

The use of credit cards and other online payment methods has increased significantly over the past year, as people have relied more on digital modes of payments consistent with remote lifestyles. Despite increasing prices, retailers have reported solid sales because spending on services and discretionary items has increased significantly. According to the U.S. Commerce Department, retail sales rose a seasonally adjusted 1.7% in October. This trend should drive growth for credit card companies too. Furthermore, technological innovation and the rapid adoption of digital prepaid card services should enhance the credit card market in the coming months. According to Research and Markets, the global credit card market is expected to grow at a 3% CAGR to hit $103.06 billion in 2021.

MA has gained 0.9% in price over the past month versus V’s negative returns. Also, MA’s 6.5% gains over the past nine months are higher than V’s negative returns. MA is the clear winner with 6.7% gains versus V’s negative returns in terms of their past year’s performance.

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