Retail Spending Volume - MasterCard
October 22nd 2009 02:06
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FROM: The Wall Street Journal
The slowdown in the decline in retail spending will likely brighten prospects for Visa Inc. (V) and MasterCard Inc. (MA) when they report quarterly earnings.
The two giant card networks are usually an investor's dream. The companies' high-return, low-risk business model spared them from some of the worst effects of the credit crisis and economic slump, which engulfed a broad swath of financial-services firms ranging from banks to insurers. But a slowdown in spending by budget-conscious and strapped borrowers, known as spend volume, has taken some of the shine off the companies' results.
In an economic downturn, consumers rein in discretionary expenditures, such as flat-screen televisions, typically charged to credit cards.
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