Cross Border Volume is still deteriorated due to COVID-19 Pandemic

Visa (NYSE: V) and Mastercard (NYSE: MA) announced their earning results on January 28th, 2021.

According to Visa’s 2021 Q1 earning results, revenue, operating income and net income showed single-digit decline of 6%, 4% and 4%, respectively (3 months, YoY). Meanwhile, Mastercard’s 2020 Q4 results showed revenue, operating income and net income declined 7%, 14% and 15%, respectively (3 months, YoY).

Although both Visa and Mastercard have been negatively impacted in their performance due to the COVID-19 pandemic, their performance were being improved over time. Such improvement in management indicators will be expected to continue in the future. However, the cross border volume of both companies remain deteriorated, down 21 to 29%, respectively (3 months, YoY). This may not be able to be improved as long as majorities of borders remain closed. 

In addition, according to Mastercard’s earning results, GDVs (Gross Dallor Volume) in APMEA and Canada were down 0.5%, and 0.7%, respectively, but up 1.2% in Europe (3 months, YoY, local). In addition, GDV in the US showed a relatively large growth of up 3.9% (3 months, YoY, local). In total, GDV is still down 2.0% (12 months, YoY, USD).

Both Visa and Mastercard completed M&A in the three months ending December 2020, and repurchased common stock up to 1.8 billion USD, and 1 billion USD, respectively.

Important Notice 

  1. Watanabe & Brothers’ Investment is holding shares of Mastercard and Visa.
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