Mastercard gains as vaccines help consumers get back on the road

[NEW YORK] Mastercard posted a surprise increase in revenue as consumers returned to travel faster than many analysts predicted.

The fees Mastercard collects from overseas spending on its cards dropped 23 per cent in the first quarter, to US$932 million, smaller than the 28 per cent decline Wall Street was expecting.

"We started the year with good momentum, delivering positive net revenue growth this quarter, and are encouraged by the return of domestic spending levels to pre-pandemic trends," chief executive officer Michael Miebach said Thursday in a statement.

After consumers spent much of last year sheltering in place, Mastercard and Visa are set to benefit as travel picks up and vaccines for the coronavirus begin to proliferate around the world. Visa on Tuesday said it has seen a pick-up in Americans visiting Mexico and certain countries in the Caribbean that have opened their borders to tourists.

Overseas transactions are often the most lucrative for both networks. Mastercard said such volume declined 17 per cent during the first three months of the year, which was also a smaller drop than analysts estimated. There are signs a rebound is coming: Such spending climbed 66 per cent in April from a year earlier, Mastercard said.

That helped fuel a 4 per cent jump in net revenue, to US$4.2 billion, topping the US$3.99 billion average of analysts' estimates compiled by Bloomberg.

Mastercard said overall spending on its cards climbed 10 per cent to US$1.3 trillion, helped by a 27 per cent surge in debit volume. Results were boosted by stimulus payments the US government sent directly to consumers' bank accounts.

BLOOMBERG