Both Mastercard and Visa released their third quarter financial results yesterday. While the networks’ overall businesses struggled, there was some positive growth news released about debit card transaction volumes.
Trying to predict debit card purchases this year has been difficult at best. I am not sure anyone could have predicted the severity of the swing from credit to debit that occurred as consumers became more risk adverse in uncertain time. This was further skewed by the economic impact payments which were delivered to checking accounts through ACH, check, or prepaid debit card. Benefits like unemployment insurance are also delivered through prepaid debit cards for many individuals and certainly that has, unfortunately, seen a lot of growth.
Here’s a summary of Mastercard and Visa debit network volumes, as reported on October 28:
|Mastercard Results (includes prepaid)||% Growth|
|Transaction numbers Q3 2019 vs Q3 2020||7%|
|Transaction dollar volume Q3 2019 vs Q3 2020||20%|
|Transaction numbers up 1st quarter through 3rd quarter 2019 vs 2020||3%|
|Transaction dollar volume 1st quarter through 3rd quarter 2019 vs 2020||7%|
|Visa Results (includes prepaid and Visa Direct)||% Growth|
|Transaction numbers Q3 2019 vs Q3 2020||6%|
|Transaction dollar volume 20% Q3 2019 vs Q3 2020||20%|
|Transaction numbers up 1st quarter through 3rd quarter 2019 vs 2020||0.6%|
|Transaction dollar volume 1st quarter through 3rd quarter 2019 vs 2020||14%|
It is difficult to really compare the two networks as the data reported are different. Visa’s numbers include debit push payments through the Visa Direct platform. Overall, however, it appears that the number of transactions is showing only modest growth over last year, while purchase dollar values are showing strong increases. Should we see the return of business “lockdowns,” like the ones occurring in France and Germany, or if Congress agrees to another stimulus plan, then these numbers will take a different trajectory.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group