Image source: Mastercard
(Reuters) – Mastercard Inc’s quarterly profit beat analyst estimates on Thursday, as lower costs helped dull the blow from fewer people using the payment processor’s cards during the novel coronavirus pandemic.
The outbreak has hit large parts of the global retail industry as stores remain shut and shoppers stay at home to avoid catching the highly contagious illness.
Travel bans around the world have taken a toll on payment processors, with Mastercard reporting a 45% drop in cross-border volume on a local currency basis in the quarter.
Gross dollar volume – the dollar value of transactions processed – fell 10% to $1.4 trillion.
The decline in cross-border volume has continued since the quarter ended, even as the number of transactions increased within the United States.
In the third week of July, the value of cross-border volume was down 40% from a year earlier, according to a presentation for investors. U.S. transactions were up 5% while transactions outside of the U.S. were down 3%.
Net income fell about 31% to $1.42 billion in the second quarter ended June 30. Excluding items, profit was $1.36 per share, beating estimates for $1.16, according to IBES data from Refinitiv.
Total operating expenses fell 5% to $1.6 billion in the quarter.
Rival Visa Inc’s results also topped analysts’ estimates on Tuesday as lower-than-expected expenses helped protect against lower consumer spending due to a coronavirus-driven surge in unemployment.
The U.S. government reported earlier this month that retail sales rebounded in May and June from a sharp drop in April, and ended down 8% for the quarter from a year earlier.
Reporting by Noor Zainab Hussain in Bengaluru and David Henry in New York; Editing by Devika Syamnath and Bernadette Baum.
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Source: Reuters
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