Financial institutions Visa and Mastercard forecast significant advantages in the travel and digitalisation sectors for Q2 2024.
Mastercard Posts Strong Q3 2024 Performance in Cross-Border Payments
Mastercard, one of the world's leading payment companies, has announced its expected growth in net revenues for Q3 2024. The company aims to grow its net revenues at the high end of a low double-digit range, excluding acquisitions.
The company's strong performance is evident in its payment network net revenue, which saw an overall increase of 7%, or 9% on a currency-neutral basis. This growth was driven by a 20% surge in cross-border card-not-present transactions and a 15% rise in cross-border travel volumes.
The global cross-border payments market is projected to grow significantly, expanding from approximately USD 176.2 billion in 2024 to USD 356.7 billion by 2034, at a compound annual growth rate (CAGR) of around 7.2%. Mastercard, alongside Visa and bank transfers, is a major facilitator in this market.
While specific quarterly data for Visa and Mastercard's cross-border payments growth rates in Q2 2024 and Q3 2024 is not available, both companies are expected to report higher quarterly profits in 2024. This growth is supported by steady consumer spending, including cross-border transactions.
The growth in cross-border payments is fueled by increased travel, e-commerce, and remittances. However, geopolitical tensions and trade uncertainties could introduce some pressure, particularly on high-margin cross-border travel-related transactions for Visa and Mastercard.
Innovation trends in cross-border payments include real-time payments, multi-currency wallets, AI-powered fraud detection, and embedded finance tools. Mastercard has been at the forefront of these innovations, with its value-added services and solutions seeing a 18% increase in net revenues.
Mastercard's Q2 2024 net revenue increased by 11% (13% on a currency-neutral basis) to $7bn, resulting in a 3% rise in its share price. The company also expanded its portfolio of money transfer solutions through a new deal with Nigeria-based Access Bank.
In summary, while exact quarterly growth rates for Visa and Mastercard’s cross-border payments in Q2 and Q3 2024 are not provided, the industry is experiencing steady growth at about 7.2% CAGR globally, supported by digital innovation, resilient consumer spending, and expansion in real-time and multi-currency payment solutions. Analysts remain attentive to travel demand and geopolitical factors that could moderate growth momentum in the near term for these companies’ cross-border segments.
Mastercard's growth in cross-border transactions is driven by technology, with a 20% surge in card-not-present transactions and a 15% rise in cross-border travel volumes. The finance sector, including Mastercard, is expected to benefit from the significant growth in the global cross-border payments market, fueled by technological innovations such as real-time payments, multi-currency wallets, and AI-powered fraud detection.
