New payment flows and Click to Pay transactions surged for Mastercard in the second quarter of 2023 as consumers and businesses continued to turn to digital channels as their spending remained buoyant.
Earnings materials from the company detail that global gross dollar volumes swelled by 12% to $2.3 trillion. In the United States, credit spending volumes were up 8% to $373 billion, debit spending was up 2.7% to $345 billion.
CEO Michael Miebach said on a conference call with analysts that “consumer spending has remained resilient with spending on experiences and travel” as key verticals.
Domestic volume growth remained healthy, said Miebach, while cross-border travel spending is now 154% of 2019 levels.
Miebach also noted on the call that the payments network has been scaling its Click to Pay functionality to streamline and improve the guest checkout experience. Click to Pay transactions, according to commentary on the call, were up 70% year on year, as the technology now has gone live across 30 markets.
Miebach said B2B remains a key area of focus as the payments giant sees potential in aiding business clients as they embrace virtual card transactions. Accounts payable, invoicing and other back-office functions “are large [total addressable markets] with a lot of clear pain points,” he said. “Companies are looking to automate these processes, digitize these processes, get rid of the paper, and virtual cards are a solution that works tremendously well.”
Elsewhere, “we believe in the potential of blockchain technologies,” said Miebach on the call, adding that “regulated money such as bank deposits and [central bank digital currencies (CBDCs)] need to be part of the solution, and they should interoperate with traditional systems. We can help with that.”
Chief Financial Officer Sachin Mehra detailed that overall cross-border volume increased 24% globally for the quarter on a local currency basis.
Card present growth across overall spending was marked by increases in contactless penetration, he said.
“Contactless now represents over 60% of all in-person switched purchase transactions,” Mehra said.
Value-added services grew at a high-teens percentage point rate.
Management said it expects net revenue growth for the full year to remain in the low teens percentage points. Mastercard shares were 1% lower in intraday trading.
During a question-and-answer session with analysts, with a nod to new Federal Reserve routing rules on debit transactions, Miebach said: “It’s still early days, we have to see where that goes… we stand ready to compete.”
Real-time payments represent another opportunity, the CEO said, as the company already has a footprint in several of the countries in which faster payments are already in place or are going live.
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