Mastercard (NYSE: MA) announced 2020 Q3 earning results on October 28th, 2020. According to the announcement, net revenue, operating income, and net income decreased year-over-year mainly due to the decline in consumer spending caused by COVID-19. The decline in consumer spending has not yet recovered to the level before the pandemic. However, these parameters recovered in this quarter compared to 2020 Q2.
In addition, according to Visa’s 2020 Q4 earning results, which was announced on the same day, recovery of the consumer spending is continuing although cross-border transactions are still stagnant.
According to the announcement by Visa (NYSE: V), total transaction volume (payment, cash) in LAC countries decreased the most severely by 16.4% followed by Asia Pacific of 10.6% decrease. Meanwhile, Canada and CEMEA decreased by 3.4% and 2.3%, respectively, while the US and Europe showed single-digit growth. On a quarterly basis, total transaction volume fell the most severely from April to June 2020, with double-digit decreases in all regions except for the US. On the other hand, total transaction volume in the LAC countries and the Asia Pacific recovered in this quarter compared 2020 Q2 although decline rates year-over-year are still double digit level.
If the COVID-19 infection in each region becomes more serious in this winter, consumer spending may decline again even though the circumstances may be less severer compared to the preceding quarter.
- Watanabe & Brothers’ Investment is holding shares of Mastercard and Visa.
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