Commercial Payments International

Visa and Mastercard have released their 8K (SEC Filings) ending August and both the card giants have shown some improvements in their payment metrics but are being held back by moribund travel & expense volumes.

Mastercard in its filing said, “We are seeing continued modest improvements and believe that most markets are in the Normalization phase domestically”. The company reported modest growth in switched volumes through July and August and said its switched volume growth rates (excluding T&E) are at the pre-pandemic levels, reflecting the impact of Covid-19 on travel and entertainment.

The company’s geographical regions outside the US showed improvements in the July to August period. Notwithstanding the pandemic, countries such as Brazil, UAE and South Africa have shown year-on-year (YoY) positive growth. The same was echoed by Visa in its filings where it said the positive growth in terms of domestic spending was registered in Brazil, UAE, Italy and the UK while nations such as India and South Africa were reflecting negative YoY.

Mastercard has reported that its cross-border volume in card-present has shown a gradual improvement particularly in T&E related categories but card not present growth has been ‘more resilient than card-present growth over the last several months’. Over the week ending of July 21st and week ending till August, the YoY decline in Intra-Europe cross-border volume fell from 27% to 21% while in the case of other cross-border volume, the change was -52% to -48% YoY in the same period.

Visa’s cross-border volume including Europe transactions under a quarter to date showed 31% decline YoY, while excluding Europe it was 43% decline. “For the few countries that have relaxed their border restrictions, such as Turkey, Mexico and areas of the Caribbean, inbound cross-border card-present spend growth has steadily improved upon opening”, Visa 8K filings noted.

Visa’s senior Vice President, Mike Milotich during an investor conference organised by KeyBanc said, “Many of the borders are still closed and so there isn’t a lot of improvement in the cross-border business at this point”.

Mastercard, in its filings, noted that “Intra-Europe travel growth continues to outpace other cross-border volumes, as border restrictions have been eased in Europe in advance of other locations”.

The numbers posted by Mastercard and Visa do not bifurcate between commercial and consumer spending.