New capital flows outpace card growth as payment networks focus on banking opportunities

Beyond debit and credit card issuance and consumer spending, the network is poised for future growth supported by new payment flows.

The recent flurry of financial results from Mastercard and Visa highlights the rise of alternative payment systems as funds flow across borders, digital channels and new use cases.

Certainly, the cards still have momentum.

Visa indicated in it Latest report that Credit expenditure increased by 8% in the first quarter of the fiscal year, outpacing the 9% year-over-year increase in debit expenditure (in constant currency terms). Total cards issued increased by 6%, debit cards issued by 8%, and credit cards issued by 4%.

Mastercard stated the following: own results that Overall cards in the market increased by 7% year over year. U.S. debit spending rose about 4%, while credit spending rose nearly 7%.

However, when we delved into new payment structures and services, the growth became even more pronounced.

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Visa CEO Ryan McInerney said the total volume of credentials increased 6% year over year, and the company issued 8.7 billion network tokens, an increase of 55% through its most recent fiscal year. Stated. Visa Direct transactions grew 20%, and new payment flows should outpace consumer payments revenue, management said.

“We think there’s a $200 trillion annual opportunity across B2B, B2C, P2P and G2C, which is certainly a huge number,” McInerney said. “We are working with our clients to provide Visa commercial and funds transfer solutions and help them digitize these flows on our network.”

Visa Direct transactions (which allow for transfers between accounts) increased by 20% to 2.2 billion. He also said transactions increased by more than 65% year-on-year due to P2P cross-border activities.

“We are also driving growth by winning and retaining transactions across consumer payments, account-to-account payments and new flows,” Mastercard CEO Michael Miebach said in an earnings call. Stated. Revenue from value-added services and solutions rose 17% to $2.7 billion on a currency-neutral basis, the company said in a filing.

The CEO said new developments in Europe represent a significant opportunity, driven in part by the Payment Services Directive (PSD3 transition).

“The underlying payments growth also helps drive services, and payments growth brings with it an increase in rich data. Our services turn that data into valuable insights,” he said.

Management said on the conference call that Mastercard’s open banking technology through Finicity locations in the U.S. has now been extended to 90% of the company’s deposit accounts. Management focused on the bank’s payment capabilities on the conference call as evidence of non-card use cases. As reported by PYMNTS, This feature allows merchants to offer their customers the ability to pay directly from their bank account.