Mastercard: Fewer Crypto Purchases Lead To Drop in Quarter 1 Growth

According to the report given on Wednesday by the chief financial officer of MasterCard, the major banks’ moves which were to ban the customers from the use of their credit and debit cards in the purchase of cryptocurrencies led to a drop in the cross-border transaction volume in 2018 first quarter.

Mastercard chief financial officer Martina Hund-Mejean declared that the organization’s cross-border payments in volume rallied by almost 19% in the first quarter of 2018. However, this was down with only 2$ when it was compared to the last quarter in 2017. Party, this was due to the drop in the crypto wallet funding. This is according to Seeking Alpha which is an earnings call transcript.

Mastercard CEO made it clear on the call that cryptocurrency is not a major part of corporate strategy because of its unpredictability.

She explained,

“So the issue in this, first of all, in terms of the stacks, on the cross-border volume growth, the cryptocurrency funding or the crypto wallet funding really was 1 percent. It was 1 percent that we saw in the fourth quarter and it was 1 percent that we saw in the first quarter. 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.”

Mastercard CEO Ajay Banga spoke about his recent travels to Asia and mentioned the fallout from Tokyo-based Coincheck’s $530 million NEM hack. Instead of blaming the banks that issued the credit card bans, Banga pointed to waning demand for cryptocurrency transactions today versus Q4 2017 and Q1 2018. He said,

“There’s a lot of concerns even in Japan because one of their biggest exchanges got hacked. As you can see, right now there’s a little less interest than there was in the latter part of the fourth quarter and the first quarter.”

Last year, Banga previously wrote-off decentralized digital currencies as “junk”. Visa’s CFO similarly went on a tirade against bitcoin.

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