Mastercard’s Transactions Grow 17%, Partly Because of More U.S. PIN-Debit Volume

Mastercard Inc. reported Tuesday that it switched nearly 17% more transactions in the first quarter than it did a year earlier. Most of the growth came from overseas, but some of it resulted from more U.S. PIN-debit volume, company executives said.

Purchase, N.Y.-based Mastercard said it switched 14.7 billion transactions worldwide versus 12.6 billion in 2016’s first quarter. It was the third quarter in a row with 17% or greater transaction growth. At a morning conference call with analysts, chief financial officer Martina Hund-Mejean cited the sources of growth as the Asia-Pacific and Africa-Middle East regions, as well as increases in select countries such as the United Kingdom and even France, which is coming off a period of weak economic growth.

“The last really bright item I can call out for you is PIN switching in the United States,” Hund-Mejean said. “That has been well into the double-digit space over the last three quarters.”

U.S. payment card networks are still scrambling for volume more than five years after the Dodd-Frank Act’s Durbin Amendment took effect. The law requires debit card issuers to offer merchants a choice of at least two unaffiliated networks for routing each transaction. Without giving details, Hund-Mejean said Mastercard has been working with debit issuers to get its brand on the back of cards as a PIN-debit option, and encouraging merchants to route transactions over Mastercard’s network.

“In general, life is progressing well in the processing and switching space,” chief executive Ajay Banga said in reference to the worldwide transaction increase.

The U.S. PIN-debit growth, however, wasn’t enough to offset lost volume from long-time Mastercard issuer USAA, which switched its big credit and debit card portfolios to Visa Inc. brand last year. Mastercard’s quarterly U.S. debit purchase volume was flat at $154 billion on 3.9 billion transactions, down 0.8%.

Mastercard posted U.S. credit card purchase volume of $170 billion in the first quarter, up 4.9% from $162 billion a year earlier, on 1.89 billion transactions, up 2.3%.

Mastercard’s quarterly net income topped $1 billion—specifically, $1.08 billion—and was up 12.7% from $959 million a year earlier, on net revenues of $2.73 billion, an increase of 12% on a currency-neutral basis from $2.45 billion last year.

The company completed its acquisition of U.K.-based VocaLink Holdings Inc. in the first quarter. Banga told analysts that Mastercard is planning new links between its own services and those of VocaLink, which operates the U.K.’s Faster Payments service and provides automated clearing house services in several countries.