Visa Inc (V), Mastercard Inc (MA), & American Express Company (AXP): 3 Credit Card Companies You Shouldn’t Ignore in 2013

Bluebird gets insured with FDIC

American Express Company (NYSE:AXP) announced that its Bluebird Accounts are now authorized by the Federal Deposit Insurance Corporation, which will provide transaction security to its account holders. Bluebird is a prepaid debit card which simplifies customers’ daily spending.

Since the launch of the Bluebird prepaid debit card, total transactions of $275 million from more than 575,000 accounts were reported in the first quarter of 2013. Around 85% holders of Bluebird accounts are new to American Express Company (NYSE:AXP) and 45% are under the age of 35. With this, the total revenue is expected to increase from $6.6 billion in the first quarter of 2013 to $7.3 billion by the end of the fourth quarter.

Fee-based programs are the key drivers for American Express Company (NYSE:AXP) to generate high revenue. Bluebird, Royalty Partners, and the digital wallet system are the key drivers of fee-based revenue. American Express charges transaction processing fee and data processing fees for all three services. As e-commerce has become a global platform, there is a constant increase in the usage of its debit and credit cards. With a CAGR of 15%, $3 billion is expected from fee-based revenue for fiscal year 2014.

Conclusion

With the introduction of the new program supported by Samsung’s NFC enabled mobiles, and the “Visa Personal Payment” service, Visa Inc (NYSE:V) will generate incremental revenue by the end of 2013.

Mastercard Inc (NYSE:MA) will generate additional revenue with the introduction of the MasterPass system in Canada and by expanding its operations in emerging economies.

More customers will be attracted to American Express Company (NYSE:AXP), as it has insured its Bluebird accounts, and its fee-based programs will continue to show better performance.

Therefore, I recommend a buy for all the three stocks.

The article 3 Credit Card Companies You Shouldn’t Ignore in 2013 originally appeared on Fool.com and is written by Madhu Dube.

Madhu Dube has no position in any stocks mentioned. The Motley Fool recommends American Express Company (NYSE:AXP), MasterCard, and Visa Inc (NYSE:V). The Motley Fool owns shares of Mastercard Inc (NYSE:MA). Madhu 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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