Earnings Review: Continuing momentum, strengthening relationships

January 28, 2021 | By Sachin Mehra

If you joined our earnings call earlier today, you heard how we continued to deliver for our customers, our partners and our consumers in a challenging year. We’re proud of the efforts of our teams and their focus on delivering products and services that enabled every day commerce to operate.

While the pandemic may continue to be a factor in the near-term with expected improvements in the second half of 2021, there are some positive trends to note.

In the fourth quarter, we saw revenue and EPS growth rates continued to improve from earlier in the year. From a volume perspective, our switched volume growth rates were similar to what we saw in Q4 of 2019 – aside from travel and entertainment, which continued to be challenged as people and businesses changed their activities.

That plays out today as we continue to believe that most markets are in the Normalization phase domestically – where spending levels gradually improve as restrictions are eased relative to what we saw in the trough of the COVID-19 crisis in the second quarter of 2020. In the first few weeks of January, we have seen stronger volume growth in the U.S., supported in part by the recent fiscal stimulus, while switched volumes in Europe have slowed considerably due to increased lockdowns in countries such as the U.K., Germany and Italy.

As we look to the upcoming year, we are confident in the foundation we have established, seen in several efforts over the past quarter:

Deepening partnerships

Over the past several quarters, our relationships with co-brand partners, financial institutions and fintechs have expanded across all corners of the globe. We highlighted some of these on the call and look to share more in the coming quarters. Our teams are bringing the core payment functionality, value-added services and know-how to help them navigate today’s challenge, meet immediate needs and plan for future growth.

Strengthening the consumer experience

Consumers are showing that the new habits learned as part of the pandemic – increased use of online shopping and contactless – continue to remain, pointing to further opportunities for us to continue to work with merchants to deliver an enhanced digital shopping experience to them. Our token services are supporting both Click to Pay purchases and registered users at merchants such as Netflix, Etsy and Didi. The trust and security tokens deliver is increasingly important, as more than 70% of all online shoppers have their information saved with a merchant.

Enhancing choice in how the world pays

We continue to innovate our card programs, while addressing a broader set of payment flows with our multi-rail capabilities. In the quarter, we completed our acquisition of Finicity, expanding our open banking capabilities. And, we continue to build out capabilities to support cross-border remittances, business payments and national real-time payments.

The challenges of the past year have shown just how resilient our business is. Our efforts to deliver on the strategy of grow, diversify and build continue to serve us and our customers well. And, we will continue to carefully manage our priorities and the elements we can control to deliver on the long-term growth opportunities in the months and years to come.

Photo of Sachin Mehra
Sachin Mehra, Chief Financial Officer, Mastercard