Mastercard topped Visa for number of partnerships and announcements in 2020
Disruptive fintechs are stealing the thunder of traditional bank commercial card issuers, analysis of last year’s CPI coverage shows.
Analysis of 300 CPI news stories from last year shows that Mastercard edged ahead of arch-rival Visa as measured by story mentions. Amex was a distant third followed by bankrupt payment processor Wirecard. In a sign that fintechs are seizing the initiative from traditional bank commercial card issuers, only one bank, JP Morgan, appeared in the top 12 list of most mentioned companies.
Amongst the most read Mastercard news, the company launched its Mastercard Track Business Payment Service in the United States which aimed to offer businesses greater control over payments and data exchanged. The company changed its leadership by replacing its CEO Ajay Banga with Michael Miebach however Banga took the role of Executive Chairman of the Board of Directors. It also changed its leadership in Europe by appointing Mark Barnett as President of Mastercard Europe. The company featured in a number of partnerships with Silicon Valley Bank, Marqeta, SumUp, Eedenbull, Tide and Contis.
Its closest rival, Visa also made a number of announcements which mostly focused on partnerships with other payment companies such as Airwallex, Conferma, Nium, Boost Payment Solutions, Bankable, Billhop and CardUp. The company also funded Nium, Neat and Currencycloud.
In the pandemic, Mastercard and Visa also announced support for small businesses with aid sums of $250 million and $210 million respectively.
American Express saw the sharpest decline in its commercial payment volume due to pandemic but that didn’t stop the company expanding its footprint. It launched its proprietary automated accounts payable solution ‘American Express One AP’ for the United States which supports multiple payments including virtual cards and ACH. It also launched business credit cards for Amazon Business small business clients.
A significant development for the card giants was the phase one trade deal between the United States and China which made it easier for American payment companies to operate in China. Following this deal in January 2020, Mastercard and American Express launched a number of announcements to enter the Chinese market.
American Express received its network clearing license in China with its joint venture Express (Hangzhou) Technology Services Company Limited while Mastercard submitted its application to operate in China with NetsUnion Clearing Corporation (NUCC) and also partnered with Bank of Shanghai to enable cross-border B2B payments.
The European rival of card giants, Wirecard, was in the news for all wrong reasons. Before it declared its bankruptcy, it had signed a number of partnerships with Union Bank of Philippines, Sprint, Xolo, Varengold and Visa. In June 2020, the company’s CEO resigned after €1.9 billion cash went missing, following which the company declared its bankruptcy. It sold its operations worldwide to other payment companies such as Paynetics UK, Banco Santander and Railsbank.
Another large institution which was making news was interbank payments consortium SWIFT. In March 2020, SWIFT received a setback when it announced that it delayed the ISO20022 cross-border migration to the end of 2022 but later that year, the organisation announced a number of initiatives which included its new payment strategy to be launched in next two years and piloting low-value cross-border payments services which are built on SWIFT gpi.
As the businesses were looking to get the board on with digital mode of payments, a lot of fintech startups came into prominence particularly Asia-Pacific companies like Nium, Airwallex and EMQ while UK startups Currencycloud and Ebury.
Hong-Kong-based EMQ raised $20 million in Series B funding round and joined Singapore’s FAST network (Fast and Secure Transfers). It also upgraded its network for cross-border payments, launched same-day settlement for cross-border payments in eight countries. It expanded its footprint in Japan as well as South Korea.
Its geographic rival, Nium, received funding from Visa which was an undisclosed amount. It partnered with Volopay and Visa to expand its services in Europe and became a principal issuer in Australia, Banco Hipotecario for cross-border payments, and E9pay for remittance services. Visa also backed another Asia-Pacific based startup Airwallex by partnering with it to launch borderless business cards. The company raised $160 million in a Series D funding round in 2020.
The UK based startups such as Currencycloud and Ebury also made noise in the commercial payments space. The former raised $80 million which was backed by Visa and partnered with other startup players such as VoPay, Wallex, TranSwap, Mambu and Sokin. Its rival Ebury got a boost when the major stake was taken over by global banking group Santander. It partnered with other fintechs such as Cobase, Finverity and the French bank Credit Agricole.