Visa and Mastercard Beat Earnings Estimates on Travel and Services, Not Stablecoins
Visa and Mastercard both beat Wall Street earnings estimates this week, powered by cross-border spending, higher transaction volumes and fast-growing services businesses. Stablecoins, the fastest-growing corner of both companies’ strategy, contributed almost nothing to the results.
Visa reported fiscal fourth-quarter net revenue of $12.1 billion, up 13 percent from a year earlier, and adjusted earnings of $3.48 a share, up 17 percent. Mastercard reported third-quarter net revenue of $9.8 billion, up 14 percent, and adjusted earnings of $5.31 a share, up 21 percent. Visa reported on Oct. 27; Mastercard reported on Oct. 29.
How the card networks make money
Neither company lends money. Both run the networks that move payments between a shopper’s bank and a store’s bank, taking a small fee on each transaction. Results rise with the number and value of transactions, especially cross-border payments, which carry higher fees, and with sales of security, data and marketing services.
What drove the quarter
Visa’s payments volume rose 9 percent on a constant-dollar basis, cross-border volume rose 14 percent, and processed transactions rose 10 percent to 74.2 billion. Service revenue rose 14 percent to $5.26 billion and data-processing revenue rose 16 percent to $6.25 billion. For the full fiscal year, net revenue reached a record $45.9 billion, up 15 percent, which chief executive Ryan McInerney called the strongest growth in more than 15 years excluding the post-pandemic recovery and acquisitions.
Mastercard’s gross dollar volume, the total value of purchases and cash withdrawals on its cards, rose 7 percent in local currency to $3.0 trillion, and cross-border volume rose 11 percent. Payment-network revenue rose 11 percent to $5.7 billion, while value-added services and solutions revenue rose 19 percent to $4.1 billion, 41 percent of total revenue. Mastercard kept its full-year outlook for revenue growth at the high end of the low-double-digit range.
Both companies also faced rising costs. Visa’s client incentives, payments to banks and partners, rose 21 percent to $5.1 billion, and Mastercard’s adjusted operating expenses rose 12 percent to $3.9 billion.
Stablecoins are growing fast from a tiny base
Visa said its stablecoin settlement run rate surpassed $25 billion annualized, about ten times the pace of a year earlier. Settlement is the back-end step in which card issuers and acquirers pay each other what they owe. Visa now settles in five stablecoins across 10 blockchains in all five of its regions. The figure is a run rate, the current pace extrapolated over 12 months, not the total processed during the fiscal year. Against annual card payments volume well above $10 trillion, it is less than 0.2 percent. Visa does not disclose separate revenue for its stablecoin business.
Stablecoin-linked cards are growing too. Visa said it has more than 225 stablecoin-linked card programs, with about 5 million cards issued in more than 50 countries, and transaction volume up more than 150 percent from a year earlier. But a purchase on such a card is processed like any other card purchase, so the spending is already counted inside the payments-volume growth above. Five million cards is small next to the billions of Visa cards in circulation.
Mastercard bought stablecoin infrastructure firm BVNK for up to $1.8 billion, completing the deal in August, and launched its Global Money Platform on Oct. 15, two weeks before its earnings report. The platform lets banks, fintechs and businesses hold fiat currency and stablecoins side by side, convert between them, issue stablecoin-linked cards and pay out to local bank accounts. Its first users are businesses such as Nuvei and Marqeta, and with the platform only weeks old, any meaningful revenue contribution is likely years away.
The market reaction split. Visa shares fell nearly 2 percent in after-hours trading after its report, as investors weighed the jump in client incentives and a cautious fiscal 2027 outlook of low-double-digit revenue growth. Mastercard shares rose nearly 5 percent after its report.
