Casual observers might be surprised to learn that shares of Mastercard, which most people associate with the humdrum business of charging merchants for credit card swipes, are soaring. Last week, the card giant's stock hit an all-time high of $575, and many analysts predict it will keep climbing—not least because Mastercard recently forecast compound annual growth of 12% to 14% for the next three years.
Is this due to consumers charging up a storm? Not exactly. While an uptick in transactions is certainly helping the company's growth story, the real growth story lies in Mastercard's recent embrace of services, which now make up 40% of the company's revenue.
