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Visa and MasterCard See a Strong Rise in Transactions, Volumes

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Transactions rise

Consumers are making more and more payments through mobile platforms and internet-based purchases, and this shift has been beneficial for the transparent economic system and global payment-processing industry (XLK).

Visa (V) reported a total of 41.8 billion transactions in 3Q16, as compared to 27.9 billion in 3Q15, which represents a rise of 50% YoY (year-over-year). The rise was mainly due to the addition of the Visa Europe business, as well as to higher spending and payment volumes.

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MasterCard (MA) posted also strong 3Q16 earnings, with an 11.0% adjusted rise in global dollar volumes on a stable currency basis. The growth rate was adjusted for regulatory changes in the European Union. The company’s international payment volumes rose 14.0%, as compared to its 5.0% rise in the US payment volumes on a constant dollar basis. In absolute terms, volumes expanded to $1.22 trillion, as compared to $1.16 trillion in 3Q15.

American Express US Biz

American Express’s (AXP) US Card Services segment saw a fall of 13% in revenues to $2.9 billion in 3Q16, as compared to $3.3 billion in 3Q15. These revenues made up 37% of the company’s total business in 3Q, as compared to 39% in the second quarter. Revenues were impacted by a non-renewal of partnerships with select clients, primarily with Costco Wholesale (COST).

American Express is deploying funds for new initiatives as well as partnerships in an effort to add clientele and see higher spending. Other major payment processors in the US include Discover Financial Services (DFS) and Fidelity National Information Services (FIS).

In the next part of this series, we’ll examine these payment processors’ international expansions, performances, and major hurdles.

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