MasterCard Posts Loss Fueled by Settlement

Still the company has "significantly accelerated" its focus on cost structure, "while making sure we remain prudent in allocating resources to those investments that will enable us to drive growth worldwide, today and in the future," Selander said.

MasterCard is working with its financial institution customers to "address risk management, reduce write-offs, improve segmentation efforts, and deliver more relevant messages to cardholders," he added.

MasterCard's U.S. credit card gross dollar and purchase volume totals fell in the quarter, while its debit card business showed double digit increases. MasterCard has been making a big push to increase its debit card business in the states, which will offset the slowness in credit card business as the economy softens.

Last week MasterCard rival Visa (V Quote) also reported a loss for the quarter based on litigation charges related to Discover. The company, along with American Express (AXP Quote) alleged that Visa and MasterCard conspired to keep them out of the bank-issued card business.

Analysts say that despite the rocky few quarters both Visa and MasterCard may experience as a result of lower consumer spending, the long-term business models for both are solid as consumers and businesses increasingly use electronic payment methods as opposed to cash.

Separately American Express said last week that it plans to cut 7,000 jobs or roughly 10% of its workforce as it lays out details on a cost restructuring program in the wake of the financial turmoil that is hitting even wealthy consumers.