Examining the Global Payment Operations of Visa and Mastercard Corporations

Mastercard and Visa Face Significant Decline in Cross-border Revenue Amidst COVID-19 Pandemic

The global pandemic has had a profound impact on the financial industry, and this is particularly evident in the declining cross-border revenue for both Mastercard and Visa. According to recent reports, the decline began in late March and worsened in April, with cross-border transactions decreasing by around 40-50% for both companies with no clear turnaround yet.

The Q1 numbers of 2020 for both Mastercard and Visa initially masked the real underlying metrics, but the situation became more apparent in April. The overall net revenue increased for both companies in their reporting quarter, however, the decline in cross-border revenue was significant. Specific numbers for the decline were not provided in the article.

Travel-related transactions, a major contributor to cross-border revenue, decreased by approximately 80% in April. Despite this, the future of e-commerce and digital transactions is expected to be significantly different post-COVID-19.

Card-not-present, non-travel transactions, on the other hand, increased by 10% to 20% in early April and around 30% in the second half of the month. This trend suggests a shift towards online shopping as people continue to follow social distancing measures.

The CEO of Visa, Alfred Kelly, believes that the cash displacement opportunity and the explosion of e-commerce are potential structural opportunities due to the COVID-19 pandemic. Alfred F. Kelly Jr., the former CEO and chairman of Visa, has also noted that the cash-displacement potential in the business and the boom of e-commerce driven by the pandemic likely represent structural opportunities that did not exist before.

The ongoing global pandemic is believed to be the cause of the decline in cross-border revenue. As the world adapts to the new normal, it remains to be seen how these trends will continue to evolve. Travel is expected to return but may not be the same as before, according to the context of the article.

Mastercard and Visa published their quarterly results this past week, providing a snapshot of their financial performance during these challenging times. The real underlying metrics for both companies are becoming increasingly clear, and it is a testament to their resilience in the face of adversity.