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Mastercard beat second quarter-earnings forecasts after logging in an increase in revenue and profit, pointing to the continued recovery in domestic and cross-border spending. The company’s profit increased to $2.07 billion from $1.42 billion, while revenue jumped 36% to $4.53 billion. Gross dollar volume rose 33% to $1.9 trillion, while cross-border volume increased 58%. “International travel is still in the early stages of recovery and represents additional upside potential,” said Mastercard Chief Executive Michael Miebach. During Q2, 2021 earnings call, the credit-card company said while cross-border card-not-present, ex travel, continues to grow at a healthy rate above pre-pandemic levels, it has moderated recently relative to 2019 levels in part due to a reduced contribution from cryptocurrency purchases. Talking about the “episodic” moment between April and June, Sachin Mehra, the chief financial officer of Mastercard, said volatility in crypto price saw more purchases in these months. But then, as the price came down, the inverse effect of that took place.
“So the reality is that, to us, kind of is one of those things which will remain volatile.” “What I will tell you is we've seen a decent level of deceleration take place in how people are utilizing Mastercard products to purchase these digital currencies like crypto over the last three weeks as reflected in the numbers.”
However, the payments giant continues to advance the cryptocurrency industry and is excited about this “vibrant space.” Chief executive officer Miebach talked at length about the value proposition it brings to the table for crypto companies, stablecoins, and central bank digital currency at the earnings call. On the CBDC front, “things are definitely continuing to move forward,” he said, noting that a lot of central banks are engaged on this. Here, Mastercard brings a unique perspective to these players “as a multi-rail provider because all these countries have to make the trade-off.” Its virtual test platform is of a “particularly critical proposition” here. Mastercard is also engaging with regulators for stablecoins regarding what good policy looks like around private sector stablecoins because that is “still unresolved.” As for floating cryptos, with the point of currency stability not solved, they won't enable that as settlement currency on its network. “But clearly, people want to invest in that. They don't want to sell their investments, and we're going to make this as easy as possible,” Miebach. For this, they are working with Paxos to allow digital wallets to stay in crypto, which the broker-dealer settles in fiat. So, Mastercard is “playing a role across the board” because, “This is a relevant technology (and) as a multi-rail player, we got to be in this space because people are looking for answers,” he added.