Visa and Mastercard have announced their latest earnings – Q4 2022 for Mastercard and Q1 2023 for Visa. Both companies have noted revenues rising as a result of travel markets opening up and continued consumer spending, despite suspended operations in Russia. Cross-border volume has continued to grow, but has slowed down for both companies compared to last year. 

Visa Q1 2023 earnings highlights

• Net revenues increased by 12% YoY to £7.9bn in Q1, driven by a 22% YoY growth in cross-border volume (31% excluding intra-Europe), a 7% increase in payments volume and a 10% increase in processed transactions. 
• Across 52.5 billion total processed transactions, international transaction revenues were a big driver, growing 29% to $2.8bn. 
• Revenue growth was notably slower this year (12% compared to 24% in Q1 2022) as a result of a stronger dollar and discontinued operations in Russia. However, Visa said that revenues had still exceeded expectations as a result of higher FX volatility and cross-border growth.
• Travel-related cross-border volumes were 20% higher than in 2020, driven by the Asia-Pacific region, inbound improvements to the US and the World Cup. Visa expects mainland China revenues to recover this year after the country lifted Covid restrictions in January.
• Visa Direct saw 1.9 billion transactions during the quarter, up 39% YoY (excluding Russia). Non-US Visa Direct transactions as a percentage of total transactions grew nearly 20% from Q1 21 to Q1 23.
• Visa sees strong potential in the B2B space, with its estimated total addressable market of about $120bn across cards, cross-border, payables and receivables. Visa also mentioned that the rollout of real-time payment systems in countries such as India will help benefit the company’s value-added services in this arena too.
• The company has not changed its guidance, and is expecting full-year growth to be somewhere in the mid-teens on a constant-dollar basis. It said that Q2 revenues would likely see a revenue impact of almost five percentage points as a result of suspended operations in Russia.

Mastercard Q4 2022 earnings highlights

• Mastercard saw its net revenue increase 12% YoY, driven largely by cross-border volume growth of 31%. Across its fiscal year 2022 as a whole, the company’s adjusted net revenue increased by 18% while cross-border volume grew by 45% on a local currency basis. 
• Cross-border volume fees increased by 40% – Mastercard said that these fees were nine percentage points higher than volume growth due to a more favourable mix, as higher-yielding ex-intra Europe cross-border volumes grew faster than intra-Europe cross-border volumes during the quarter. 
• Inbound travel remained steady or increased in all regions compared to 2019. In the earnings call, executives said that cross-border volumes in Western markets will continue to recover at a ‘healthy but not accelerating pace’.
• As with Visa, lifted restrictions are expected to boost recovery in the Asia-Pacific region. China’s inbound cross-border travel volumes were roughly 1% of total volumes before the pandemic.
• Mastercard is expanding its remittances focus through Mastercard Send, partnering for example with money transfer provider Paysend. 
• Higher levels of FX volatility supported growth in 2022 but going forward the company expects foreign exchange to be a tailwind of approximately 1% for the year as the euro strengthens against the US dollar. 
• For full year 2023, the company expects net revenues to grow in low double digits, which considers an approximated 1.5% impact from Russian-related revenues in 2022.

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Joe Baker

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Joe is Principal Editorial Analyst at FXC Intelligence, writing and editing reports, news and analysis to support the company’s weekly content and client projects. Before joining FXC Intelligence, he worked as a B2B copywriter, journalist and editor covering a broad range of topics, including technology, transport, retail and the food and beverage industries. He has a BA in Philosophy from the University of Warwick.