MasterCard Inc. (NYSE:MA) And Visa Inc. (NYSE:V) Top Analysts Estimates As Overall Card Spending Surges

MasterCard Inc. (NYSE:MA) and Visa Inc. (NYSE:V) saw their Q4 revenue top analyst’s estimates following a pickup in online spending over the holidays, which helped compensate for the slump in overseas travel due to the pandemic.

MasterCard and Visa top analysts’ estimates for Q4 2020

The companies reported a slight decline in revenue in Q4 2020 than what analysts anticipated despite cross-border spending dropping by 20%. Michael Miebach, who recently took over as MasterCard’s CEO said that the momentum the company brings to 2021 shows how the company’s workers stepped up to the pandemic challenges in 2020. Miebach explained that they are encouraged by COVID-19 vaccine availability.

After the firm announced fiscal first-quarter results after regular trading close, MasterCard shares jumped 2.8%, while Visa shares were up 1%. The payment processing firms have benefited significantly following the shift to online shopping. They are trying to revive card spending after the COVID-19 pandemic’s impact on commerce globally.

In Q4, MasterCard’s cross-border fees plummeted 40% as global travel remained suppressed due to lockdowns and travel advisories. However, overall MasterCard card spending increased by 3.1% to around $1.32 trillion, beating analysts’ estimates. On the other hand, Visa saw an increase of 4.8% in overall card spending to approximately $2.47 trillion, in line with analysts’ projections. A presentation on Visa’s website indicated that the company’s card spending has grown by over 10% in recent weeks.

Firms looking for new agreements

Both firms are seeking new card deals, and recently MasterCard announced an agreement to be the network provider of Walgreens.  New York-based MasterCard, Purchase set aside around $2.3 billion in incentive for luring retailers and banks to shift transactions to its network.

Equally, at Visa, rebates added $1.86 billion or a 6% YoY increase. The firm indicated that due to the on-going COVID-19 pandemic and uncertainty surrounding the global economy, it is unable to provide an outlook for the current fiscal year. Visa CEO Al Kelly said that the company’s fiscal Q1 performance showed solid results and growing momentum in a challenging environment.