SOURCE: Wall Street Equity Research

Wall Street Equity Research

August 24, 2010 09:04 ET

Analyst Study on Visa and Mastercard -- New Credit Card Rules; What Is the Impact on Issuers and Users?

JOHANNESBURG, SOUTH AFRICA--(Marketwire - August 24, 2010) - brings investors market knowledge on the aspects moving the business services stocks, and offers complete analytical research on companies like Visa Inc. (NYSE: V) and Mastercard Incorporated (NYSE: MA). Register with today to gain full access to our complimentary research on these business services stocks.

New credit card rules are now in place and could have varying effects on the card issuer and holder. The major change is to track deal with interest rates and fees. is a specialized website where investors can have specific access to complimentary reports on business services industry; traders looking for analysis on Visa Inc., Mastercard Incorporated and other players in the industry are welcomed to sign up for free at

With regard to interest rates, the new rules affect how they can be changed. Essentially, if a customer's rate has increased since the start of 2009, the issuer must examine the reasons and possibly reduce the rate. In addition, issuers also have review accounts every 6 months to see if a rate reduction is in order. On the surface, this appears to favor the cardholder more than the issuer. However, the ultimate decision to lower rates is up to the issuer who may be very hesitant to lower rates after absorbing losses during the recession. Visit us at to understand the catalysts and forces driving or affecting companies in the business services industry.

The rules regarding fees have also been altered seemingly in favor of the cardholder. Issuers cannot charge unreasonable fees for late payments or any fee at all for card inactivity. In the short term, revenues could suffer from the reduction or loss of fees. However, there may be some loopholes around the wording of the rule changes to allow issuers to implement new fees to offset the losses. 

Taking a look at the earnings for this quarter for two of the dominating players in this space, Visa Inc. reported its financial results at the end of July with profits of $716 million on sales of $2 billion on the back of sturdy worldwide cross-border volumes and process transactions. Investors can register today at to download the full report on Visa Inc.

The other mastodon of this industry, Mastercard Inc. released its earnings in the early days of August with profit climbing by 31% to $458 million on revenue of $1.37 billion boosted by the elevated cross-border volumes, elevated gross dollar volume of the transactions processed amongst others. Investors can access free research on Mastercard Incorporated now by signing up at

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