How Visa and Mastercard Make Money Might Surprise You
Thanks to their incredible profitability, powerful network effects, and growth potential, (NYSE: V) and Mastercard (NYSE: MA) are two of the most outstanding businesses around. Their stocks have been huge winners in the past, both significantly outpacing the S 500 in the last 10 years.
The companies might be on your investing radar, so it's important to understand how these two credit card giants make money. Here's a closer look at the businesses of Visa and Mastercard.
Besides the customer and merchant, there are typically three other key parties involved in a card transaction. These are the customer's financial institution (issuing bank), the merchant's financial institution (merchant acquirer), and the payment network. All collect revenue in some form.
Source Fool.com
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