Global Purchase Volume Up a Tad After Mid-Year Slaughter

Global purchase volume for payment cards rebounded from a year-on-year 14.2% collapse for the second-quarter to a mere 1% gain in the third-quarter due to impact of pandemic-related consumer payments, including beefed-up unemployment benefits, but hampered by the downward spiral of travel activity.

Global purchase volume for payment cards (PDV) in the third-quarter (3Q/20) among the Major 4 U.S. payment networks continued to spiral down over the past year. On an FX (currency adjusted) basis, Major 4 global payment card (credit + charge + debit + prepaid) PDV declined from a 11.3% YOY (year-on-year) FX gain for 3Q/19 to a 3.1% YOY FX gain for 3Q/20. On a nominal dollars, or not currency adjusted basis (NFX) for the third-quarter, PDV rose 1.0% YOY, compared to 8.8% one-year ago, according to PYRPTS.

The Major 4 U.S.-based global networks: Visa [V]; Mastercard [MA]; American Express [AXP]; and Discover [DFS], posted $3864 billion in global PDV for 3Q/20, compared to a revised $3219 billion in the prior quarter and a revised $3826 billion for the year ago quarter, according to figures collected by CardData.

Global Purchase Volume for AXP Total Disaster

Travel and entertainment related global purchase volume for American Express nose-dived 87% in the second-quarter and 69% in 3Q/20. Both figures are foreign currency adjusted by AXP. The company notes airline-related purchase volume fell 92% in the latest quarter and exceeded a 100% decline in 2Q/20. In the U.S. market airline-related PDV was down 90% in 3Q/20. Overall, commercial cards PDV slipped down 23% YOY, compared to a 17% decline for consumer cards, notes Robert McKinley, Senior Analyst for CardWeb and Bankcenter.

Global Card PDV Analysis

Visa, with a 60% share, led the Major 4 global payment card networks worldwide in YOY FX PDV growth. Visa grew 4.0% YOY FX in global payment card PDV for 3Q/20, or 90 bps (basis points) above the peer group average, based on recent analysis by RAM Research.

The Major 4 global third-quarter PDV increased on a NFX basis by 8.8% YOY in 2018; 6.2% YOY in 2017; and 25.7% YOY in 2016. The calculations are skewed by the inclusion of Visa Europe to the Visa Global figures beginning 3Q/16. In 3Q/16 Visa Europe reported $335 billion in PDV and for 3Q/20 Visa Europe PDV was $373 billion, notes CardFlash and CardBuzz.

The Major 4 are now growing at a five-year CAGR (compound annual growth rate) of 9.98% NFX. If Visa Europe is excluded following its merger with Visa in 3Q/16, the CAGR NFX computes to a more realistic 7.77%.

Professor Cardworthy says the bloodbath in global business-related payment card volume is far from over for at least another 18 months. It is virtually impossible to make any five-year projections for card purchase volume since the length of the pandemic is unknown and the impact of the removal of artificial stimuli is a complete guess.

Visa Global Card PDV

Visa reported an 4.0% YOY gain in global PDV for 3Q/20 on an FX basis, compared to 8.9% YOY FX for 3Q/19. Visa posted $2349 billion in 3Q/20 PDV, compared to a revised $1954 billion in the prior quarter and a revised $2268 billion for the year ago quarter. On a nominal basis, Visa global PDV was up 3.6% YOY NFX for 3Q/20. Visa is currently growing at a 13.18% CAGR (unadjusted) or an 9.33% CAGR (adjusted for Visa Europe).

Among Visa’s six regions, PDV, on an FX basis, was up 14.8% YOY in the Central Europe Middle East Africa (CEMEA) region; in the Latin America Caribbean (LAC) region +6.2%; in Asia-Pacific -9.6%; Europe +9.1%; Canada -2.5% and the U.S. +7.5%; all YOY for 3Q/20.

Mastercard Global Card PDV

Mastercard reported an 2.3% YOY FX gain for global PDV for 3Q/20, compared to a 14.9% YOY FX gain for 3Q/19. Mastercard reported $1236 billion in 3Q/20 PDV, compared to a revised $1035 billion in the prior quarter and a revised $1219 billion for the year ago quarter. On a nominal basis, Mastercard global PDV was up 1.4% YOY NFX. Mastercard is currently growing at a 7.70% CAGR.

Among Mastercard’s five regions, PDV, on an FX basis, was up 3.6% YOY in Europe; Latin America -1.8%; Asia Pacific Middle East Africa (APMEA) 0%; U.S. +4.0%; Canada -1.8%; all YOY for 3Q/20.

American Express Global Card PDV

American Express reported global PDV for 3Q/20, on an FX basis, was down 20% for 3Q/20, compared to an increase of 6.0% YOY FX for 3Q/19. American Express had an estimated $236.2 billion in 3Q/20 PDV, compared to an estimate $194.8 billion in the prior quarter and $292.8 billion for the year ago quarter. On a nominal basis, American Express PDV was down 19.3% YOY NFX. American Express is currently declining at a 0.83% CAGR. (Note: American Express reports only gross dollar volume.)

Among American Express’ four regions, PDV, on an FX basis decreased -31% in the Latin America Caribbean Canada (LACC) region; -32% in the Europe Middle East Africa (EMEA) region; -17% in the Japan Asia Pacific Australia (JAPA) region region; U.S. -2%; all YOY for 3Q/20.

Discover/Diners Global Card PDV

Discover and Diners Club International reported PDV decreased 6.3% YOY NFX for 3Q/20, compared to an increase of 3.4% YOY NFX for 3Q/19. Discover/Diners Club reported global PDV for the third-quarter of $42.9 billion, up from $35.0 billion in the prior quarter and a revised $45.8 billion for the year ago quarter. Discover was down 0.8% YOY for 3Q/20 and Diners fell by 31% YOY. Discover and Diners Club are growing at a 3.0% CAGR. (Discover/Diners FX basis is not material to the global Major 4 total).

V+M+A+D Global Purchase Dollar Volume (Nominal$ NFX)

1Q/15: $2217 billion
2Q/15: $2382 billion
3Q/15: $2401 billion
4Q/15: $2486 billion
1Q/16: $2365 billion
2Q/16: $2541 billion
3Q/16: $3018 billion
4Q/16: $2990 billion
1Q/17: $2870 billion
2Q/17: $3082 billion
3Q/17: $3205 billion
4Q/17: $3403 billion
1Q/18: $3355 billion
2Q/18: $3533 billion
3Q/18: $3518 billion
4Q/18: $3679 billion
1Q/19: $3497 billion
2Q/19: $3751 billion
3Q/19: $3826 billion
4Q/19: $3993 billion
1Q/20: $3589 billion
2Q/20: $3219 billion
3Q/20: $3864 billion

Visa Global Purchase Dollar Volume (US$ NFX)

1Q/15: $1168 billion
2Q/15: $1254 billion
3Q/15: $1265 billion
4Q/15: $1305 billion
1Q/16: $1254 billion
2Q/16: $1349 billion
3Q/16: $1859 billion (begin Visa Europe $468 billion)
4Q/16: $1805 billion
1Q/17: $1734 billion
2Q/17: $1860 billion
3Q/17: $1931 billion
4Q/17: $2051 billion
1Q/18: $2018 billion
2Q/18: $2125 billion
3Q/18: $2112 billion
4Q/18: $2194 billion
1Q/19: $2084 billion
2Q/19: $2230 billion
3Q/19: $2268 billion
4Q/19: $2360 billion
1Q/20: $2131 billion
2Q/20: $1954 billion
3Q/20: $2349 billion

Mastercard Global Purchase Dollar Volume ($US NFX)

1Q/15: $783 billion
2Q/15: $842 billion
3Q/15: $853 billion
4Q/15: $883 billion
1Q/16: $836 billion
2Q/16: $898 billion
3Q/16: $882 billion
4Q/16: $896 billion
1Q/17: $860 billion
2Q/17: $926 billion
3Q/17: $975 billion
4Q/17: $1032 billion
1Q/18: $1028 billion
2Q/18: $1083 billion
3Q/18: $1082 billion
4Q/18: $1145 billion
1Q/19: $1090 billion
2Q/19: $1180 billion
3Q/19: $1219 billion
4Q/19: $1276 billion
1Q/20: $1151 billion
2Q/20: $1035 billion
3Q/20: $1236 billion

American Express Global Purchase Dollar Volume ($US NFX)

1Q/15: e$233.3 billion ($245.6b GDV)
2Q/15: e$248.9 billion ($262.0b GDV)
3Q/15: e$246.0 billion ($258.9b GDV)
4Q/15: e$259.5 billion ($273.2b GDV)
1Q/16: e$241.1 billion ($253.8b GDV)
2Q/16: e$255.8 billion ($269.3b GDV)
3Q/16: e$238.6 billion ($251.2b GDV)
4Q/16: e$250.0 billion ($263.2b GDV)
1Q/17: e$239.7 billion ($252.3b GDV)
2Q/17: e$256.1 billion ($269.6b GDV)
3Q/17: e$258.3 billion ($271.9b GDV)
4Q/17: e$276.5 billion ($291.4b GDV)
1Q/18: e$269.6 billion ($283.8b GDV)
2Q/18: e$281.7 billion ($296.5b GDV)
3Q/18: e$280.0 billion ($294.7b GDV)
4Q/18: e$293.6 billion ($309.0b GDV)
1Q/19: e$280.9 billion ($295.7b GDV)
2Q/19: e$296.1 billion ($311.7b GDV)
3Q/19: e$292.8 billion ($308.2b GDV)
4Q/19: e$309.0 billion ($325.2b GDV)
1Q/20: e$265.3 billion ($279.3b GDV)
2Q/20: e$194.8 billion ($205.1b GDV)
3Q/20: e$236.2 billion ($248.6b GDV)

Note: (e) American Express Discloses Gross Dollar Volume (GDV); Based on Internal Guidance AXP PDV is Historically 95% of GDV.

Discover + Diners Club Global Purchase Dollar Volume ($US NFX)

1Q/15: $32.9 billion ($26.4b + $6.5b)
2Q/15: $36.8 billion ($30.0b + $6.8b)
3Q/15: $37.0 billion ($30.4b + $6.6b)
4Q/15: $38.5 billion ($31.7b + $6.8b)
1Q/16: $34.3 billion ($27.6b + $6.7b)
2Q/16: $37.9 billion ($30.7b + $7.2b)
3Q/16: $38.0 billion ($30.7b + $7.3b)
4Q/16: $39.3 billion ($32.5b + $7.3b)
1Q/17: $36.5 billion ($29.1b + $7.4b)
2Q/17: $40.0 billion ($32.2b + $7.8b)
3Q/17: $40.2 billion ($32.2b + $8.0b)
4Q/17: $43.7 billion ($35.3b + $8.4b)
1Q/18: $39.2 billion ($30.8b + $8.4b)
2Q/18: $43.5 billion ($35.1b + $8.5b)
3Q/18: $44.3 billion ($35.9b + $8.4b)
4Q/18: $45.9 billion ($37.2b + $8.7b)
1Q/19: $41.2 billion ($32.9b + $8.3b)
2Q/19: $45.2 billion ($36.7b + $8.5b)
3Q/19: $45.8 billion ($37.4b + $8.4b)
4Q/19: $48.0 billion ($39.2b + $8.8b)
1Q/20: $41.7 billion ($34.0b + $7.7b)
2Q/20: $35.0 billion ($30.7b + $4.3b)
3Q/20: $42.9 billion ($37.1b + $5.8b)