This Week in Payments: Card Networks Strong, Crypto Regs in Focus, Shopify Helps SMBs

This week in payments, Mastercard and Visa both posted strong numbers in the quarter that just ended, cryptocurrency regulation is poised to take a major step forward, and Shopify equipped small- to medium-sized businesses (SMBs) with easier access to working credit.

Major Card Networks Report Resilience

Mastercard is making waves in the payments sector with a post-pandemic commitment to digital channels. The card network’s second-quarter earnings revealed a surge in payment flows and Click to Pay transactions.

Global gross dollar volumes swelled by 12% to $2.3 trillion. In the U.S., credit spending volumes rose 8% to $373 billion, and debit spending was up 2.7% to $345 billion.

“[C]onsumer spending has remained resilient with spending on experiences and travel” as key verticals, Mastercard CEO Michael Miebach said on a call with analysts.

Miebach said companies are striving to make back-office functions more automated and digitized, and virtual cards are an effective solution. Additionally, Mastercard has maintained its trust in blockchain technologies and regulated money like bank deposits and central bank digital currencies (CBDCs). Its value-added services have grown at a high-teens percentage point rate.

Visa also reported strong traction in new payment flows and stable customer spending in its fiscal third quarter.

Payments volume grew 9% throughout the quarter to $3.2 trillion, with credit card spending up 13% and debit growth 7%. Cross-border volumes gained 17% on a constant dollar basis as travel spending remained strong.

“Our new flows capabilities, such as Visa Direct, are an important differentiator to our clients when they’re making consumer payments decisions,” Visa CEO Ryan McInerney said on a call with analysts.

Vasant Prabhu, who is departing the chief financial officer role, said payments volume in the U.S. was up 6% year on year and that transaction growth since March has been steady.

Crypto Clarity on the Way?

The U.S. government is considering a pair of bills to give the cryptocurrency space much-needed clarity. This week, the House Financial Services Committee prepared to discuss one bill, the Financial Innovation and Technology (FIT) for the 21st Century Act, setting out when a cryptocurrency is a commodity or a security. A second bill also under consideration would provide regulations for stablecoins.

“The crypto community believed and had a real conviction what they were doing was so new that existing laws could not possibly apply to them,” Amias Gerety, partner at QED Investors, told PYMNTS. “Once you have that conviction, then you start searching for excuses not to comply.”

Underscoring that, top crypto exchange Binance has exited three European markets — Germany, the Netherlands and Cyprus — to avoid registering under the requirements of the European Union’s Markets in Crypto-Assets (MiCA) policy framework.

Rep. Glenn Thompson of Pennsylvania, an outspoken crypto watcher, said the introduction of FIT “marks a significant milestone in the House Committees on Agriculture and Financial Services efforts to establish a much-needed regulatory framework that protects consumers and investors and fosters American leadership in the digital asset space.”

Read also: US Lawmakers Prepare to Tackle Landmark Crypto Bill

Shopify Debuts New SMB Working Credit Access

As the economy jumps from one foot to the other, SMBs continue facing challenges in accessing financing and resources. Shopify is addressing this issue with its latest initiative, Shopify Credit.

In an interview with PYMNTS, Shopify Director of Product Management Vikram Anreddy discussed how Shopify Credit presents an opportunity for SMBs to access the money they need without running credit checks.

Anreddy told PYMNTS that Shopify Credit was developed to reduce the complexity for merchants so they can focus on building products and growing their businesses.

“We’re in the business of making commerce better for everyone,” he said. “And we really try to arm our merchants with solutions that reduce the complexity of running a commerce business.”

Additionally, Shopify Credit assesses credit limits and eligibility based on the merchant’s business performance rather than their personal credit scores. Consequently, no credit checks are necessary, and the merchant’s credit history remains intact.

The credit limit for Shopify Credit is determined before a merchant signs up. The credit card can be activated in minutes. Anreddy also highlighted Shopify’s attempt to make the credit card unique and tailored to the needs of its merchants.

“We understand the volatility that merchants face in their business,” he said. “We’ve designed the card to help for that by extending that grace period and giving 56 days of free float.”