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MasterCard: Latin America revenue to double by 2019

MasterCard: Latin America revenue to double by 2019

Posted by Juan Gavasa on August 27, 2014

MasterCard Inc (MA.N), the world's second-largest debit and credit card company, expects net revenue to double in Latin America over the next four to five years on strong consumer spending and a shift to electronic payment from cash, a leading executive told Reuters.

In recent years, a growing middle class has driven a boom in consumer spending in Latin America and helped sustain economic growth.

"There's much more growth here in Latin America in terms of percentage growth year over year than you have in places like the U.S. or Europe," Ann Cairns, the president of MasterCard's business outside North America, said in an interview on Tuesday.

"The reason is you're having a combination of consumer spending (growth) and also you have a secular shift of cash to electronic payment," Cairns said after wrapping up a tour in the region.

A lack of access to financial services throughout Latin America also presents an opportunity for MasterCard. Only around 39 percent of the population in Latin America has access to financial services, compared with almost 90 percent in high-income countries, according to World Bank data.

"You have a big cross section of the population who are just pure cash-based economy. So if you can get a good secular shift to occur in places like that, then you're going to have a big change," said Cairns, whose international division accounts for 60 percent of MasterCard'sbusiness.

MasterCard, which handles payments for 2 billion cardholders and tens of millions of merchants, should see revenue in its international division outpace growth in North America. It will grow to represent 70 percent of total business "over the next few years" as the company looks to incorporate another half a billion people as clients, Cairns said.

The company reports only net revenue figures for its overall operations so it could not give details of how much Latin America represents. MasterCard's net income rose to $931 million in the second quarter ended June 30, from $848 million (512.54 million pounds) a year earlier.

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