Mastercard’s latest earnings results show double-digit gains in debit and credit spending, a rebound in cross-border activity — and contactless payments, increasingly, becoming the preferred way to pay.
In terms of headline numbers, the adjusted earnings per share came to $2.35, topping consensus at $2.19. Revenues of $5.2 billion, up 27%, were a bit better than the $5.1 billion that Wall Street had expected.
Drilling down into the data, the company said that gross dollar volumes were up 23% to $2.1 trillion. Cross-border volumes, on a currency neutral basis, were up 53%.
Supplemental materials released by the company in tandem with earnings, showed that in the U.S., the fourth quarter gross dollar volumes stood at $652 million; debit was $334 million, edging credit volumes of $319 million. Debit volumes grew 15% over last year, credit volumes surged by more than 34%. Management noted on the earnings call that outside of the U.S., debit volume growth was 25%, and credit growth was 20%.
Total switched transactions in the quarter were 31.4 billion, gaining 27% year on year. The number of cards out in the field grew by 9% to just under 3 billion, as measured globally.
Management noted on the conference call that, post the end of the quarter, and through Jan. 21, switched volumes were up 27%, and cross-border volumes surged by 47%.
As compared to the fourth quarter of 2019, fourth quarter 2021 switched volumes were 136% of what had been seen pre-pandemic and cross-border volumes were 109% of 2019 levels.
Cross-Border and Digital Initiatives in Focus
CEO Mike Miebach said on the conference call with analysts that cross-border card-not-present spend is moving “in the right direction.” Intra-Europe volumes gained 45%. Management projected that cross-border volumes should return to pre-pandemic levels by the end of the year.
And, Miebach said, continued focus on scaling existing payment flows and new initiatives represents a $115 trillion opportunity for the payment network.
Mastercard, he said, is “leaning into payment innovation in areas like installments, contactless, acceptance and cryptocurrencies.”
As examples, he pointed to the company’s open loop installments program, where the U.S. launch is on schedule for the current quarter. Elsewhere, per commentary on the call, the company is driving new B2B acceptance through a global partnership with Boost Payment Solutions with an initial focus on expanding the use of commercial cards in seven key markets.
“We’re making great progress and expanding contactless acceptance by turning the world’s billions of active smartphones into potential acceptance devices, enabling people to buy and sell whenever, wherever they want,” Miebach said.
Contactless payments now account for one in every two in-person switched transactions globally, up from a one-in-three ratio previously.
In response to questions about real-time payments (and FedNow), Miebach said, “there’s a whole range of use cases where real-time payments, account-to-account, makes a lot more sense than basic ACH or cash. That’s a displacement opportunity that we certainly want to engage in.”
He added that cross-border remittances and bill pay also represent strong use cases for real-time payments.
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