Mastercard and Visa published their quarterly results this past week. While overall net revenue increased for both players in their reporting quarter, the real hits to cross-border revenue started in late March and continued through April.
As we can see, the 2020 Q1 numbers mask the real underlying metrics that many of us have felt and April has shown.
In April, numbers were pretty similar at both Visa and Mastercard:
- Travel-related transactions were down around 80%.
- Card-not present, not travel (i.e. non-travel e-commerce) continued to grow. It went up 10% to 20% in early April and around 30% in the second half of the month.
- Overall, cross-border was down by around 40-50% in April in both businesses with no clear turnaround yet in sight.
The positive from all this is that, while travel is expected to eventually come back and will be likely similar to before, e-commerce and digital could be very different. As Visa’s CEO Alfred Kelly stated in the earnings call: “I think the cash displacement opportunity in the business as well as the explosion of e-commerce are going to be real structural opportunities that didn’t really exist at the same level before Covid-19”.