MasterCard said in June it had agreed to pay rival card operator American Express up to $1.8 billion to settle a 2004 lawsuit that accused it of blocking access to the bank-issued card market in the US.

The stock fell more than 10% to $238.90 after it posted a net loss of $746.7 million for the second quarter, compared to net income of $252.3 million a year ago.

Excluding the settlement-related charge, MasterCard reported Q2 net income of $276 million, compared to adjusted net income of $195 million a year ago. Revenue rose 25% to $1.25 billion.

Commenting on the results, MasterCard president and CEO Robert Selander, says: "Businesses, consumers and governments around the world are demonstrating a growing preference for electronic payments, and our cross-border volumes remain healthy as cardholders come to rely on electronic payments and the ease, security and convenience they provide.

"Additionally, more than 50% of our revenue is generated outside of the US, which helps to moderate the impact of an economic downturn in one particular region."

Meanwhile MasterCard rival Visa has reported a 41% increase in net income for the quarter ending 30 June to $422 million, compared to $299 million a year ago, before Visa's IPO.

Net operating revenue in the fiscal third quarter 2008 came in at $1.6 billion, driven by strong contributions from service, data processing and international transaction fees.

Visa says payment volume grew 19% over the prior year.

Like MasterCard, Visa says it continues to benefit from the global migration to electronic payments.

"Despite a challenging economic environment in the United States and a softening in traditional credit card spending, the strength of Visa's debit business drove solid growth in the region. In Asia Pacific, Latin America, Canada and CEMEA, Visa achieved strong growth across its range of product offerings," says Visa chairman and CEO Joe Saunders.