Visa Inc (V) And Mastercard Inc (MA) Seem Destined For Greatness

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Besides that, PayWave and MasterPass would also challenge eBay Inc (NASDAQ:EBAY)’s PayPal. Consumers would no longer have to re-fill their PayPal wallets to make online transactions, as a PayWave and MasterPass would be directly linked to millions of bank accounts. Furthermore, PayPal’s dominance in domestic and international funds transfer could also be challenged as both PayWave and MasterPass can transfer funds throughout the world.

As of now, PayPal holds 26 international currencies and has a consumer base of over 100 million users. However Visa and MasterCard don’t hold any currencies (no risks of market volatility) and have a larger consumer base of 2.1 billion users and 697.9 million users respectively.

Wrappng up

I firmly believe that Visa Inc (NYSE:V) and MasterCard would continue to grow. Their business models are nearly risk free, and their venture into online mobile payments solutions would play a vital role in accelerating their growth momentum for the years to come. Both Visa and Mastercard Inc (NYSE:MA) may appear to be fairly valued on a forward-earnings basis, but in my opinion, paying 19-20 times forward earnings is nothing for a fast-growing company (or industry).

The article Visa And MasterCard Seem Destined For Greatness originally appeared on Fool.com and is written by Piyush Arora.

Piyush Arora has no position in any stocks mentioned. The Motley Fool recommends American Express, eBay, MasterCard, and Visa. The Motley Fool owns shares of eBay and MasterCard. Piyush is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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