Mastercard Inc. (MA, Financial)
Cross-border volumes fell about 50% at the start of the pandemic and volumes have only slightly improved since then due to travel and entertainment spending remaining below 2019 levels. Cross-border volumes are important for Mastercard due to the higher fees they realize on these transactions. In other areas though Mastercard has seen some positive developments. Consumer spending in the US has begun to recover as the Commerce Department showed that spending increased 1.5% in July and 1% in August. Another positive development during the year is that due to concerns over hygiene and cleanliness, the use of contactless credit cards and mobile payments has increased. A study by Forrester Research found that 67% of retailers they surveyed accept contactless payment and since January, contactless payments have increased for 69% of retailers. Growth in digital payments means a continued shift away from cash which could benefit Mastercard in the long term.
From Jeff Auxier (Trades, Portfolio)'s Auxier Asset Management fall 2020 market commentary.
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