Mastercard Europe is blowing Visa Europe out-of-the-water, scoring major gains across-the-board. Combined card activity for Visa and Mastercard credit, debit, charge and prepaid cards, on a currency adjusted basis (FX), posted weaker than expected year-on-year (YOY) gains in the first-quarter (1Q/19). Visa [V] and Mastercard [MA] gross dollar volume (GDV) increased to 10.4% YOY FX, while purchase dollar volume (PDV) edged up to 11.1% YOY FX in the first-quarter.
On a non-currency, or nominal basis (NFX), Visa and Mastercard payment card GDV increased to 1.8% YOY NFX, while (PDV grew 1.3% YOY NFX in the first-quarter. Cards-in-Force (CIF) for Visa and Mastercard expanded by 63 million, or up 6.1% YOY for 1Q/19, according to figures collected by CardData.
The growth in GDV and PDV was driven Mastercard up 17.5% YOY FX and 18.4% YOY FX, respectively. Visa posted a mere 5.7% YOY FX gain in GDV and a soft 6.6% YOY FX gain in PDV, according to analysis by RAM Research.
For 1Q/19 Visa and Mastercard posted a combined US$965 billion in GDV, compared to US$1029 billion for 4Q/18, and US$948 billion for 1Q/18. PDV reported for Visa and Mastercard combined was US$694 billion for 1Q/19, compared to US$733 billion for 4Q/18, and US$685 billion for 1Q/18.
Visa Europe gross transactions (GTX) increased 1.7% YOY in 1Q/19 to 10435 million, compared to a revised 11052 million in the prior quarter and to a revised 9736 million in the year ago quarter. Mastercard Europe (GTX) increased 25.7% YOY in 1Q/19 to 9343 million, compared to a revised 9514 million in the prior quarter, and to a revised 7433 million in the year ago quarter.
Cards-in-Force (CIF) for both Visa and Mastercard, rose 6.1% YOY and stood at 1094 million at the end of 1Q/19, compared to 1081 million for 4Q/18 and 1031 million on-year ago.
Even though Visa controls nearly 59% of European payment card market, Mastercard is a real powerhouse, growing all metrics by nearly three times over Visa, notes Robert McKinley, Senior Analyst of CardFlash, CardData and CardTrak.
U.K. Economic Factors
U.K. card debt ticked downward again in May to an annual rate of 5.5%, its lowest annual growth rate in more than five years. Overall the annual growth rate of consumer credit slowed to 5.6% in May, the lowest growth since April 2014. However, consumer credit increased by £0.8 billion in May, in line with the monthly average increase since July 2018 reports the Bank of England.
The British Office for National Statistics reports in March through May period retail sales increased by 1.6% when compared with the previous three months, with growth across all stores except department stores and household goods stores. In May, online retailing accounted for 19.3% of total retailing, with an overall growth of 8.2% when compared with the same month a year earlier. Clothing sales posted a strong decline of 4.5%.
The GfK Consumer Confidence Index for the U.K. declined to -13 in June 2019, erasing a 3-point rebound to -10 in the previous month and missing market consensus of -11, as global growth concerns and domestic policy uncertainty weighed on sentiment.
While the U.K. economy is dealing with a unique situation in Europe, the softness in consumer spending is widespread in Europe. Tensions in the Mid-East, global trade war, and recessionary concerns are also major factors impacting card usage in Europe.