MasterCard sees controlled explosion in Asia plastic
By Eveline Danubrata and Mark Tay
SINGAPORE (Reuters) - MasterCard Inc is counting on responsible spending and rare defaults among its customers in Asia, along with a greater use of credit by the region's young, its chief financial officer told Reuters on Wednesday.
A growing middle class and rising consumption also set Asia apart from the West, the electronic payment giant's CFO Martina Hund-Mejean said.
"We are seeing a change in Asia. The older population are saving first and then they are spending. But when we do analysis on the younger population, we are seeing people using more and more of the credit line," she said in an interview.
"I sure hope that Asia doesn't go the way that the U.S. went, where they had to learn their lesson, but I think at this point, we see responsible behavior in Asia. It could be honor or 'face' that makes them not go overboard."
MasterCard charges fees to process card payments between the banks of merchants and buyers via its global network, its main rivals being Visa Inc and American Express Co.
A litigation-related charge took a large bite out of MasterCard's fourth-quarter earnings, but it beat analysts' estimates for the seventh straight quarter as consumers around the world used their plastic more.
Asians tend to spend on items such as travel, dining and entertainment, as well as home furnishings, and this can only grow, as many of these markets are underdeveloped relative to the United States, Hund-Mejean said.
"Population change, more middle class and consumption growth are big characteristics of Asia-Pacific. The other thing that I would say is the women. Women have the purse strings in many Asian countries," she said. Continued...