Mastercard's earning's call showed accelerating growth across the board (MA)

pulse

May 3, 2018 5:01 PM

BI PRIME: Mastercard saw “very strong” growth across key metrics in Q1 2018, according to the firm’s earnings call held early Wednesday. The brand processed $1.4 trillion in gross dollar volume (GDV) in the first quarter, a figure that represents 14% annual growth on a constant currency basis.

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Mastercard saw “very strong” growth across key metrics inQ1 2018, according to the firm’s earnings call held early.

The brand processed $1.4 trillion in gross dollar volume (GDV) in the first quarter, a figure that represents 14% annual growth on a constant currency basis. That’s up from the 8% year-over-year (YoY) growth the firm posted on $1.2 trillion in volume in Q1 2017. And it’s a much faster increase than the approximate 6% YoY card growth seen in the quarter, indicating that the firm is growing its audience but also pushing up engagement.

Cross-border spending was a major driver.Cross-border volume grew 21% annually in Q1 2018 — a vast increase from the 13% YoY growth seen in the prior Q1 — driven up by Europe, according to the firm’s earnings presentation. It’s unsurprising that customers are spending more outside of their home markets, as weexpectcross-border e-commerce alone to grow at a 29% CAGR, and that doesn’t account for brick-and-mortar sales made abroad.

But the ecosystem is shifting. noted

And shifting drivers will force Mastercard to re-evaluate the way it approaches growth, which makes it important to watch the other high-growth areas that Mastercard invests in as a way of anticipating performance.

For Mastercard, the pursuit of high-growth initiatives to compensate for unexpected upcoming headwinds in areas of strength is a smart growth play, and one that’s likely to benefit it in the long run as it aims to maintain its place in the ecosystem.

pulse