MasterCard (MA) Ajay Banga on Q2 2016 Results
US economy holding steady
“The United States economy is still holding steady. Consumer confidence up slightly, stable job growth, lower inflation, and frankly, prior to the Brexit vote, many parts of Europe were showing steady signs of improvement in both consumer confidence and unemployment. And you know, while it’s still too early to predict the full impact of Brexit, we will obviously watch that situation very carefully.”
Outlook in Asia remains cautious
“The outlook for Asia remain cautious. We’ve got a prolonged slowdown in China, a weaker than expected recovery in Australia. India continues to be a bright spot. Both consumer and business sentiment there remains strong.”
Brazil may be reaching a bottom
“In Latin America, Brazil is still in a deep recession but interestingly, a modest increase in business confidence is beginning to show signs that the economy may be reaching a bottom. In Venezuela, economic conditions continue to deteriorate but Mexico is in a steady growth path.”
Terrorism does affect cross border trends, but actually up so far in July
“Interestingly, in the UK, we’re actually seeing an increase of inbound cross-border spend. So it’s kind of bouncing around but specifically in a couple of countries that got impacted by terrorism, there’s no doubt that it causes some angst in cross-border trends. Having said that, remember what Martina said, right now, our cross-border volumes for the first few weeks of this quarter, it’s only a few weeks, are up compared to where we were last quarter. And in fact, Europe is one of the contributors to that being up.”
I’m not sure I understand the deal between Visa and Paypal
” I can tell you that I’m not clear that I understand enough about what exclusivity Visa signed with PayPal, because we’re not encountering any difficulty while talking to PayPal in that space. So I don’t know exactly what the nature of that exclusivity is. You got to ask PayPal or Visa, because I’m pretty clear that we’ve got enough good conversations going on, not just now but for a little while.”
Martina Hund-Mejean – Chief Financial Officer
Numbers through July 21
“The numbers through July 21 are as follows. Starting with processed volume, we saw global growth of 11%, slightly lower than the 12% we saw in the second quarter. In the US, our processed volume grew 8%, down 1 PPT from the second quarter, with slower growth in credit but higher growth in debit. Gas had less than a 1 PPT negative impact on our July growth, and that’s very similar to the second quarter. And processed volume outside of the US grew 15%, up a bit from the second quarter, primarily driven by Europe and Latin America.”
Cash has a cost of transaction
“because quite frankly, no card payments are a heck of a lot cheaper than what you have to do with cash, right.”
Europe outside of the UK is still an emerging market in terms of card acceptance
“What we haven’t seen yet as much as movement is on the smaller merchants, and that’s obviously where there’s a lot of work that we still have to do. And we’re hoping that that will continue to allow us to change the secular trend in Europe which, outside of the UK, right, in the UK a lot is already electronic side, but in the rest of the Europe, in the Continent, I always call it that this is still an emerging country for us. That will help us on the secular trend from cash and check to electronic forms of payments and will help our numbers over time.”