Dividends and US trade official calls India’s Mastercard ban ‘draconian’ e-mails show

Many companies in order to grow sell outside their country borders and it can be a very good thing to do. Sales increase, revenues increase, and profits grow those are good things. Since there are negative aspects such as currency risks, and sometimes government risks.

One company with government risks is Mastercard however this New York headquartered company has some aces in its sleeve with the US government.

In an article by Aditya Kalra of Reuters in India, for multiple reasons, the government of India has banned Mastercard from issuing new cards. The government of India also banned American Express and Diners Club. The Reserve Bank of India says the companies broke the rules regarding local data-storage. It is important to note, the ban does not affect existing customers.

Brendan A Lynch, the deputy assistant US trade representative for South and Central Asia has emailed the Reserve Bank of India to express displeasure and find methods to resolve the problem.

Mastercard counts India as key growth market and 2019 wrote it was bullish on India. Banks which partner with India are finding other companies to issue cards for because credit card fees are important revenue source for banks.

Linking to dividend paying stocks, when a company sells outside its borders and has reasonably significant revenues, one of its new partners is the government in Washington. The government wants trade and revenues to continue to flow to the US and more often than not are willing to help with the company’s concerns. For likely some companies in the country are doing business in the US and they do not want to be shut out of the US market. Governments can do what they want if they are willing to pay a price both domestically and foreign. When you look at your investments and revenue is outside the headquarters of the country, in this case a New York based company getting along with Washington?

There are more questions than answers, till the next time – to raising questions.

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