Final charge volume figures for the U.S. general-purpose card market in 1993 showed a healthy 15.2% gain to $486.4 billion spent with plastic.
But MasterCard's growth again beat the industry average, while Visa's trailed it (see chart). As a result, the historically huge gap between them has narrowed: MasterCard gained 1.4 share points, to 28.2% of the market, while Visa dropped 0.4 point, to 44.7%
American Express Co.'s share continued to fall, dropping 0.9 point to 18.5% despite volume gains. Discover card's share rose to 6.7% from 6.5%, and Diners Club fell to 1.9% from 2.2%.
MasterCard said 38% of its charge volume, and perhaps 70% of its growth, stemmed from its aggressive move into co-branded cards. Most offer rebates or free merchandise based on use of the card, and analysts say those incentives have spurred more consumers to use plastic.
MasterCard and Discover have adopted a value positioning, while Visa continues to focus on wide merchant acceptance and a more prestigious image.
But card choice results from "more than just the prestige aspect," said Dan Murray, senior VP-credit products at MasterCard. "It's what does the product deliver, and what are the consumer's needs."
Visa has belatedly jumped on the co-branding wagon after earlier resisting, putting itself in direct competition with MasterCard for oil companies, supermarkets and healthcare providers as both merchants and co-branding partners.
"We're the leader, so it's harder for us to grow by quite the leaps and bounds that MasterCard might or even Discover might," said a Visa spokesman.
AmEx also plans to jump into co-branding and move more aggressively into revolving credit cards, and Discover-the first to offer cash-back rebates-continues to promote that feature.