„There are some things money can’t buy. For everything else, there’s Mastercard“
– Mastercard
Priceless.
It is a word I will always associate with a company.
They have accomplished what every advertising campaign tries to deliver. Creating an emotional, thought-provoking and memorable impact. It focuses not only on the features of their products, but also on the experiences they can provide.
You guessed it right; it is Mastercard’s consistent and recognizable message.
It all started in 1997 with the very first commercial that ran during the Baseball World Series. To this day, it remains a masterpiece.
The ad hit right at the heart.
Chart 1: Mastercard’s Priceless Baseball Commercial, 1997
The campaign did not tell people to spend money to have a close relationship but moved beyond that. The mothers were all over the place and wanted their husbands to have the same closeness with their sons.
It was not only the origin of “There are some things money can’t buy. For everything else, there’s Mastercard”, but also of an enormous growth and success story.
In a twin pack.
Toll Operators
Every time I traveled by car to France or Italy, I thought about the owners of those damn toll booths. They must be making a fortune. After all, I paid one!
What a business to own.
Yet the beauty of the stock market is that you can participate in such business models.
Specifically, in Mastercard. And its older twin brother Visa.
These two giants dominate the payments industry.
Contrary to popular belief, Visa and Mastercard do not issue credit cards (unlike American Express), but only provide the settlement network. Hence, they only process the payment. This means they have little exposure to the credit risks from cardholders who miss payments. But they win big when consumers spend more.
Little downside but significant upside.
They function just like toll operators that facilitate the transfer of payments. Their network involves four players:
- Consumer (you)
- Merchant (Migros)
- Acquirer (Migros’ house bank)
- Issuer (your house bank)
When a consumer (you) swipes their card to make a purchase from a merchant (Migros), Mastercard’s/Visa’s network communicates back and forth between the acquirer (Migros’ house bank) and the issuer (your bank) to authorize, clear, and settle the payment.
Swift and smooth. In the blink of an eye.
A highly lucrative business.
Chart 2: Mastercard & Visa’s network transaction process

Market Leadership and Cash Cow
Founded in the 1960s, both Mastercard (MA) and Visa (V) have grown into financial powerhouses. They enjoyed a first mover advantage and amassed a global market share of 63% (MA 24%/V 39%).
In the US it is even 87% (MA 26%/V 61%).
To put this into perspective, out of 100 card transactions in the whole big world, 63 are processed either via Mastercard or Visa.
Think for yourself. Do you know a place where neither a Mastercard nor a Visa is accepted? They have reached essentially universal acceptance in more than 200 countries.
Consequently, they share a duopoly.
For every transaction, they earn between 0.15%-0.30% of the total volume spent. Meaning, for a $100 transaction they make $0.15 – $0.30.
Visa and Mastercard consistently achieve double-digit top- (revenue) and bottom- (net income) line growth.
With digital payments surpassing cash globally just a few years ago, this trend has significant potential. The pandemic accelerated the shift to alternative payment methods. Emerging markets (Mastercard’s edge) also offer growth opportunities as developed markets may slow down.
Chart 3: Trends in US noncash payments, by number, 2000–21, in billions

Come Rain or Shine
During this week’s busiest earnings season, both Mastercard and Visa showcased the strength and resilience of their business models. Their quarterly reports confirm the presence of structural tailwinds.
Growing popularity of cashless payments.
Increased card spending.
Resurgence in travel.
This reaffirms their position as long-term quality compounders. Lest we forget, both have very little debt. And inflation? It even benefits them – you pay more, they earn more.
Speechless?
Or priceless after all?
Chart 4: Mastercard (MA) & Visa (V) vs S&P 500 (SPX) since 2008

arvy’s takeaway: In a world where cashless is king, two giants reign supreme. Mastercard and Visa, the toll operators of digital payments, have woven their way into our lives, processing transactions globally. As we move towards a cashless society, their profits surge. But what does the future hold? Will they continue to shape our financial landscape, or will disruptive forces challenge their dominance as some dark clouds do appear on the horizon? In this ever-evolving financial dance, the ultimate question remains: Are they truly priceless?
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