MasterCard blames crypto for loss in first quarter growth

MASTERCARD just released their Q1 financial results and made a net income of $1.5 billion.

They stated that this success wouldn’t be possible without the December and January crypto boom when prices were at their best.

Cross-border volumes increased 21% in quarter one compared to the previous year which is more than the 17% increase for the fourth-quarter 2017.

However, the month of April saw the volume increase, down by 2%.

Mastercard CFO Martina Hund-Mejean says this dip is due to the lack of people buying cryptocurrency lately.

Hund-Mejean said: “We expect cross-border growth to moderate somewhat. This is due to the recent drop-off in crypto wallet funding.

“What the issue is that a number of the banks have decided, in particular in the United States, that they would not allow the usage of cards for this particular funding vehicle. And that’s why we have already seen a relatively significant decrease of the volume related to that event.”

There has been a crackdown by card companies on their clients buying cryptocurrencies as their fear is that people wouldn’t be able to pay off their debts.

In February, Lloyds Bank had banned cryptocurrency purchases from credit cards.

On the contrary, Barclays bank had done the opposite and announced they were allowing Coinbase access to a bank account and set up a venture capital unit which will be focused on emerging technologies like Blockchain.

Mastercard president and CEO Ajay Banga said: “The governments around the world – I was out in Asia recently. And Korea, for example, has pulled back on allowing some of these exchanges as well to operate. There’s a lot of concerns even in Japan because one of their biggest exchanges got hacked into and has now been bought out by another company in an effort to bring that back to an even keel.”

Mastercard has also created a special relationship with Spanish bank Santander, they have recently expanded their business into the cryptocurrency market, releasing their app One Pay FX which uses the Ripple technology.

Banga said: “In Europe we continue to gain share in key markets and I’m very pleased to say we’re expanding our relationship with the Santander Group.

Recent posts