Visa and Mastercard have both published their latest results, and although we’re not quite seeing numbers that compare with the pandemic-hit Q2 2020, the signs of recovery are looking strong. Both have seen improvements in travel-based cross-border spending and cross-border ecommerce remains solid.
Mastercard Q2 2021 results
- Cross-border spending has continued to recover, growing 58% on a local currency basis in Q2 and bringing growth for H1 to 11%.
- Card-not-present cross-border spending, excluding travel – the category that covers ecommerce – continues to be “very strong”, with healthy growth compared to pre-pandemic levels. However, a drop in cryptocurrency purchases has moderated growth.
- Looking to travel, we are still in the early stages of recovery, although Mastercard did see improvements in cross-border travel, increasing 39%. It now stands at 66% of 2019 levels, helped in particular by a strong uptick in travel between the US and Latin America, as well as within Europe. The company is also seeing an increase in bookings for travel between the US and Europe, which is likely to help growth in Q3, although Asia-Pacific is still seeing far slower recovery.
- The company is also seeing benefits from its efforts beyond its core product area, notably with Mastercard Send. This is being seen in particular with P2P money transfers, with WhatsApp payments in Brazil and cross-border P2P transfers in Europe through partnerships with Checkout and MoneyGram.
- Mastercard’s cryptocurrency efforts are also moving forward, with a pilot with Pax’s, Circle and Evolve Bank & Trust designed to connect cryptocurrency wallets to Mastercard’s network and simplify conversions to fiat currency. The company is also partnering with Consensus to help develop crypto applications leveraging Mastercard’s ecosystem.
- These developments helped produce an acceleration of the overall momentum we saw in Q1, producing a 31% increase in overall net revenue to $4.5bn, which is now 10% above pre-pandemic 2019 levels.
Visa Q3 2021 results
- Cross-border volumes aren’t quite back to normal, but the uptick with saw in the previous quarter is continuing to gain momentum. Cross-border volumes excluding transactions within Europe are at 82% of 2019 levels – a 7-point improvement on Q2 – and a 53% improvement compared to Q3 2021, when much of the world was in lockdown.
- Travel is also beginning to improve, with cross-border travel excluding within Europe now at 50% of 2019, 6 points higher than the last quarter, and Visa anticipates far more recovery here over the next few quarters.
- Despite this, ecommerce continues to at elevated levels compared to before the pandemic, with card-not-present excluding travel seeing a one-point increase compared to Q2.
- Visa Direct (inc. Earthport) also continues to be a strong growth driver, seeing $0.5bn more transactions this quarter than Q3 2020, with growth in the mid-50s. This was helped by adoption from various banks, as well as the launch of P2P payments on WhatsApp as well as P2P transfers and merchant settlement for PayPal in Australia powered by the technology. Visa anticipates growth to continue, helped in part by the upcoming integration by global platform GoFundMe.
- Visa also touched on its recent acquisition of Currencycloud, noting that the company’s front-end transactions via their API will pair well with Visa’s settlement capabilities across its range of networks to provide “compelling value propositions” for its partners.
- The company also continued to develop its cryptocurrency efforts, and now has more than 50 crypto wallets and platforms, together driving over £1bn in payments volume in the quarter.
- These improvements helped Visa achieve an overall revenue increase of 27% to $6.1bn.