Earnings

Mastercard Gross Dollar Volume Up 14 Pct In 4Q

Mastercard

Mastercard results released Thursday morning (Jan. 31) showed continued gains in processed transactions, tied in part to holiday spending during the quarter that ended with December.

In terms of headline numbers, $3.8 billion on the top line met the Street, while earnings of $1.55 on an adjusted basis were two pennies better than expected.

Gross dollar volume was up 14 percent to $1.5 trillion, and switched transactions in the quarter stood at 20.1 billion transactions, up 17 percent as measured year over year.

Breaking down the gross dollar volume trends, Mastercard said in supplemental materials filed with the earnings report that debit and prepaid transactions gained 12.2 percent to $762 billion, while credit transactions were up 6.6 percent to $787 billion.

Breaking that gross dollar volume down a bit further, the United States saw 10 percent growth to $466 billion, outpaced by the rest of the world at 16 percent to just over $1 trillion.

The company had 2.5 billion cards issued, with 7 percent growth. The bulk of those cards — more than 2 billion of them — were Mastercard cards; the remaining 496 million were Maestro cards.

The revenue trends show that of the total $3.8 billion in top line, transaction processing fees were $1.9 billion up 17 percent on a currency-neutral basis. Cross-border dollar fees came in at $1.2 billion, up 16 percent on a currency-neutral basis.

In commentary on the conference call with analysts, CEO Ajay Banga stated that macro trends showed “solid overall growth” that should continue, though it may moderate moving forward, marked in part by rising interest rates and some of the same macroeconomic concerns — such as Brexit in Europe — that have been part and parcel of other earnings calls such as Visa’s (on Wednesday). Within the United States, said Banga, spending and growth has held up “reasonably well” and in terms of international regions that bear watching, he mentioned Latin America. CFO Martina Hund-Mejean said on the call that international cross-border growth rates have moderated in part due to lapping cryptocurrency purchases.

A look at the supplemental materials show that gross dollar volume growth across Europe was more than 19 percent, and more than 11 percent for Canada.

Banga also took note of the continued “secular shift” toward electronic payments (and where commercial card products such as Mastercard Track are also finding traction). He noted too that contactless payments are gaining ground. He said that roughly half of card present transactions are done using cards that are contactless enabled.   As for faster payments, he termed Mastercard’s efforts here a “marathon.”

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