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Visa and Mastercard FX decline slows down

The two big card networks reported their quarterly results yesterday. Top line revenue remains down quarter on quarter, 14% and 17% for Mastercard and Visa respectively. 

Cross-border volumes did start to show some signs of recovery in the quarter though, with volumes contracting at a slower pace. 

What’s supporting the recovery and what is still holding it back

Positive cross-border factors:

  • Travel within the EU during the quarter was up, driven by the summer holiday period and an easing of the lockdowns
  • Card not present transactions, continue to hold up well and ecommerce growth remains strong, over 20% up year on year
  • An expectation that personal travel will recover faster than business travel, with personal being the bigger driver of revenues

Constraining cross-border factors:

  • Travel outside the EU is still anemic 
  • Yields are lower within the EU than outside the EU holding back revenue growth (our data uncovers this pricing)
  • A return to more lockdowns through the winter
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