Mastercard says see no evil…

May 20, 2009

Yesterday, the Senate passed by a vote of 90-5 what has been described by the WSJ and others as sweeping restrictions on the credit card industry.

Given how this wasn’t really that big of a surprise and given how the House is expected to pass similar legislation and President Obama is expected to sign it, we found it very surprising that Mastercard (MA) barely mentioned the enhanced regulatory environment when it gave this presentation last week that was filed as an 8K. In a 66 page Powerpoint (which ought to be against a different set of laws), the company mentions the regulatory environment exactly twice. Granted, the legislation will hit the credit card issuers (banks and finance companies) more directly. But it still seems a bit strange to essentially avoid the discussion, especially given the length of the presentation.

There were other interesting tidbits in the slideshow too, though. Slide #7 shows the sharp declines in various types of consumer spending. Not so surprisingly, home furnishings, luxury retail and appliances are down between 20 and 27%. Slide #37 talks about the growing market for prepaid cards, which serve low-income folks. A selling point for these cards, at least according to Mastercard? “Financial inclusion”, which we’ll take to mean everyone else is in debt, so why don’t you join the club? Slide #57 has an interesting graph that shows how the use of debit cards has grown as the economy has faltered.

But the prize for the oddest slide goes to #27, which talks about moving into new segments including the introduction of a credit card designed exclusively for women, which, at least to this woman, seems beyond kooky. This sort of thing might have made sense in the 1970s — I still remember my mom making a point of opening up an account at the First Women’s Bank of New York — but seems a bit dated now.

Image source: Mastercard

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