Visa and Mastercard’s focus on cross-border
Quarterly results season is in full swing and Visa and Mastercard posted strong cross-border numbers. In remittances, Ria reported continued strong growth. Facebook also issued a stark warning about its blockchain project Libra.
To Visa and Mastercard…
Mastercard’s cross-border performance continues to outshine Visa. Both companies are acquiring in capability and the last three months saw the closing of Transfast (Mastercard) and Earthport (Visa) which will develop each company’s cross-border product offering.
With both companies focusing on building capabilities outside of their card networks, Visa’s CEO Alfred Kelly says it best:
“The enterprise-level volume that has traditionally been wires and checks is just going to require a whole different approach than the approach in the carded area.”
Which means we expect a lot more from both companies in the cross-border space and more acquisitions to follow.
Ria keeps chugging along
Euronet’s remittance segment, Ria, continues to grow at double digit rates, taking an increased share of the overall market.
However, for the entire money transfer segment (Ria & XE), Q2 saw only single digit growth of 6% year on year for money transfer volumes and over 7% for transaction volumes. This was due to XE feeling the impact of Brexit uncertainty (50-60% of XE’s business is UK outbound) and Ria’s Walmart business suffering from an increased burden of ID requirements.
Cash payout also remains a critical component and we continue to see growth of the major player networks. Ria’s payout locations jumped to 385,000 worldwide, up 8% from a year ago. Cash isn’t dying anytime soon.
Facebook’s big Libra concession
In Facebook’s Q2 earnings this week, the company has made some big admissions regarding its proposed crypto project Libra, little more than a month after launching the project (our analysis on its impact on the cross-border sector is here).
“There can be no assurance that Libra or our associated products and services will be made available in a timely manner, or at all.”
Wow. And Facebook nicely sums up the bet it is making in its own words here:
“We do not have significant prior experience with digital currency or blockchain technology….
We will also incur increased costs in connection with our participation in the Libra Association and the development and marketing of associated products and services, and our investments may not be successful. Any of these events could adversely affect our business, reputation, or financial results.”
So much for an easy ride.