Agentic commerce, stablecoins and steady consumer spending were among the highlights of Mastercard’s third-quarter earnings report on Thursday (Oct. 30).
CEO Michael Miebach said on the call that “we continue to see healthy consumer and business spending in the quarter with the macroeconomic environment still generally supportive. Inflation levels have remained fairly steady and labor markets remain well balanced.”
He said the consumer payments “secular opportunity is tremendous” with $11 trillion and 1.5 trillion transactions still happening in cash and checks across the world. The rental market represents a particular opportunity, he told analysts, as most payments are done through ACH and checks, and the transactions are recurring in nature.
Agentic Commerce Is Here
In discussing the potential in artificial intelligence, he said that “agentic commerce is here, and we’re at the center of it with our global acceptance reach … we’re now working with key players such as OpenAI on their agentic commerce protocol and with Google and Cloudflare to set industry standards, all to drive safety and security … with Mastercard Agent Pay, we’re enabling agents to facilitate transaction over Mastercard’s payment network in a secure and scalable way. We already have agents registered and have tools in place for easy onboarding as others are ready,” he said. Value-added services revenues gained 22% year over year.
“Our acceptance framework enables any Mastercard merchant to participate without significant development or integration a no code approach,” he added. In response to analysts’ questions on agentic commerce, Miebach said that “what we have done here is we created a merchant framework that allows us to integrate and engage with merchants and with other parties that bring out protocols, like Stripe and OpenAI … to make this very easy for merchants. That’s important.”
“The runway for agentic’s focus of services in consumer and business use cases is long,” Miebach said at another point during the call.
Stablecoins represent another growth engine, according to the CEO, who said they “are an attractive and growing opportunity for our network.” Year-to-date transactions with stablecoins and cryptocurrency are up 25%, he said.
Mastercard Move has seen 35% transaction growth tied to disbursements of remittances, said Miebach, and “we have embedded stable coins into Mastercard move capabilities to support disbursements, remittances, and B2B use cases. This spans prefunding with stablecoins to sending stablecoins across the globe, which can be received in any local fiat currency or supported stablecoin.”
CFO Sachin Mehra said on the call that among the factors driving net revenues 15% higher to $8.6 billion were 7% growth in U.S. debit and credit spending volumes. Cross-border volumes were up 15%.
“We continue to see an increase in contactless penetration, which in Q3 stood at 77% of all in person switched purchase transactions,” said Mehra, up 6 percentage points from a year ago.
Looking ahead, the company anticipates that the fourth quarter will see “continued healthy consumer and business spending, according to Mehra. Net revenue growth is expected to be at the high end of a low double-digit range, said the CFO.
Shares were up 0.6% in early trading on Thursday.
Asked on the conference call about the state of consumer spending into the current quarter, Miebach said that “what we’re seeing is continued steady growth both across affluent and mass market, throughout the U.S. and across the globe. So overall, the consumer continues to spend.”
Source: https://www.pymnts.com/