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Mastercard updated Q2 2020 operating metrics reflect COVID-19 impact

Mastercard has updated its operating metrics with an additional two weeks of information, in which it is monitoring the impact of the COVID-19 pandemic and related actions being taken by governments as it relates to border restrictions, social distancing measures and opening of businesses, and the resultant impact on spending levels.

With an additional two weeks of activity, Mastercard believe that we are starting to see the transition from the Stabilisation phase to the Normalisation phase in some markets, although it is very early days.

The Stabilisation phase is characterised by spending stabilising around new lower levels as a result of compliance with social distancing and mobility limitations. The Normalisation phase occurs when these restrictions are relaxed and spending begins to gradually recover from the new lower levels, with some sectors recovering faster than others.

The table below shows weekly growth trends of certain operating metrics versus the comparable year ago period.

Week ending
April 7

Week ending
April 14

Week ending
April 21

Week ending
April 28

Week ending
May 7

Switched Volume1

(25)%

(30)%

(20)%

(17)%

(12)%

United States

(22)%

(26)%

(15)%

(12)%

(6)%

Worldwide less United States

(28)%

(33)%

(25)%

(22)%

(19)%

Switched Transactions2

(24)%

(24)%

(20)%

(16)%

(12)%

Cross-Border Volume1

(48)%

(55)%

(49)%

(49)%

(43)%

1. Mastercard-branded programs only

2. Total number of transactions switched by Mastercard

Additional commentary:

  • Impact of COVID-19Switched Volume is showing an improving trend over the past two weeks, in part due to the relaxation of social distancing measures in several markets and the impact of fiscal stimulus in the US.
  • Switched Transactions trends are similar to what we are seeing in Switched Volumes.
  • Cross-Border Volume continues to be impacted by the decline in travel, although we have seen modest improvements over the last week in part due to an increase in intra-Europe travel.
  • We believe card present growth (orange line) has bottomed and remains minimal due to the lack of travel, although we have seen modest improvements over the last week in part due to an increase in intra-Europe travel.
  • Card not present growth (yellow line) has been more resilient than card present growth.
    • We continue to see strong growth in card not present volumes, excluding online travel related spend (green line).
    • Online travel related spend, which accounted for roughly a third of card not present cross-border volume in 2019, improved modestly in the first week of May, but remains minimal.

Additionally, Mastercard continue to see strong demand for our Data & Analytics and Cyber solutions. In Q2, they expect services growth will continue to outperform its core products and deliver positive growth.

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