Latest results from Mastercard & Visa: what the Macro Compass tells us? 🤔; Google wants to be like Klarna? 🤯; Nubank to launch its own cryptocurrency. A game-changer or just a marketing gimmick? 😳

FinTech is Eating the World, 3 November

Hey Everyone,

And happy Thursday! Today’s issue is so hot and rich in things that I cannot wait for you to read it. Today we look at the latest results from Mastercard & Visa (what the Macro Compass tells us & what lies ahead for both giants), question whether Google wants to be like Klarna (why it makes sense & why Klarna can’t replicate that), and Nubank that’s to launch its own cryptocurrency (is it a game-changer or just a marketing gimmick?). Plus, some brief/longish reads on more crypto VCs hurting, Visa & Crypto, Klarna’s pains, and more! So let’s jump straight into the interesting stuff:

Latest results from Mastercard & Visa: what the Macro Compass tells us? 🤔

Earnings call ☎️ Visa V 0.00%↑ and Mastercard MA 0.00%↑, two of the world’s biggest payments networks recently posted their latest earnings.

Looking at them is like looking at a macro compass that provides you with unique and primary insights. Let’s take a look.

More on this 👉 Both card networks reported slower payments volume growth in Q3 compared to the same period a year ago. Here’s a brief look at how each of them performed.

Mastercard’s Q3 gross dollar volume (GDV) increased 11% year over year (YoY) in Q3, compared with a 20% YoY jump in Q3 2021. That’s a clear drop in the growth rate.

Visa’s payments volume grew 10% YoY on a constant currency basis in the last three months ending September 30, 2022. Volume growth slowed from last year’s 17% YoY increase. Not that sharp, but still a visible drop in the growth rate.

What’s still crazy for me is that both companies have managed to consistently maintain operating margins above 54%. To give you a perspective of how massive it is, remember that an operating margin higher than 15% is considered good. They have nearly 4x that!

What this means? 🤔 It’s clear that the payments volume growth is slowing down compared to last year when the post-lockdown spending boom turbocharged volume gains.

But there’s more to that, so let’s take a closer look at what else the macro compass is telling us and what lies ahead for both Visa and Mastercard.