Magazine article American Banker

MasterCard Busy Scouting Targets for Acquisition

Magazine article American Banker

MasterCard Busy Scouting Targets for Acquisition

Article excerpt

Armed with a stock currency that has risen almost fourfold since its May 2006 initial public offering and a sizable cash hoard, MasterCard Inc. is actively vetting potential acquisitions, its chief financial officer said.

"We proactively go out. We look at targets, opportunities, we interview our senior management team, we talk to investment banks, we talk to our customers, and go through a formal screening process, and a rating process. Obviously we feel a lot better having ammunition," Chris McWilton said during an investor meeting at the company's Purchase, N.Y., headquarters Thursday.

MasterCard is "looking at acquisitions across a broad spectrum," Mr. McWilton said. "We've looked at some and walked away because we thought the price was too high or" the target posed integration problems.

Also at the meeting, executives expressed confidence in the essential role of MasterCard's bank customers in evolving payment technologies.

Chief executive Robert Selander said the telecommunications companies do not appear to have an interest in becoming credit providers.

"Most of the phone companies are OK when you're making a purchase from a vending machine, but when you go in and buy an Armani suit, they don't have a process to support that," he said.

Besides, said Art Kranzley, an executive vice president at MasterCard, "we know in the marketplace that consumers are not interested ... in putting purchases like Armani suits on their telephone bills. So I think that really started changing some of the thinking of the network operators, as well as some of their experience with providing credit. So what we're finding now is ... there is a lot of discussion among network operators and financial institutions, as well as ourselves" about "what's the best way that we can all align."

Mr. Selander said MasterCard is "engaged with telecom operators as well as our issuers in trying to structure a way to ensure that we keep the banking system involved in payments. …

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