Mastercard (MA) Sees a Steady Rebound in Business Volumes

Mastercard Inc. MA has announced second-quarter 2020 operating metrics, which reflected stabilization in business volumes.  

The company’s cross-border business suffered in the first quarter, experiencing a decline of 1% due to lower spending levels induced by the coronavirus.

Nevertheless, Mastercard is undergoing a transitional phase from stabilization to normalization in some markets, driven by the gradual reopening of businesses.

The stabilization phase is characterized by lower level of spending on account of compliance with social distancing and mobility limitations.

The next phase is normalization wherein governments gradually relax restraints and the environment becomes safer for the public at large, enabled by widely available testing and contact tracing kits as well as improved therapeutics even before the rollout of an effective vaccine. This phase is likely to be characterized by a steady recovery in spending to the pre-COVID levels. The company anticipates spending to rebound to normalcy during this phase, but not necessarily evenly.

The company expects specific sectors, such as  home improvement, clothing, healthcare, domestic and intra-regional travel among others to normalize earlier as these witness the ballooning of pent-up demand. Other areas like mass entertainment and long-distance travel will probably take longer to bounce back on track. It’s possible

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