MasterCard has registered a drop on its gains due to the fact that there have been less cryptocurrency purchases with the famous credit card. The information has been released by CNBC on May the 3rd.
MasterCard Gains Drop – Les Crypto Purchases
MasterCard has register a slightly dampened growth because there were fewer individuals purchasing bitcoin and other virtual currencies with the credit card. While cross-border volumes registered a 19% growth, the number dropped 2% compared to the fourth quarter.
MasterCard Chief Financial officer Martina Hund-Mejean commented:
“This is due to the recent drop-off in crypto wallet funding. We expect cross-border growth to moderate somewhat.”
During the last months, some banks have prohibited customers to buy virtual currencies using credit cards. For example, JP Morgan, Bank of America, and Citigroup have banned crypto purchases on credit cards.
The ban did not affect purchases via ATMs, but smaller investors lost one of the few possibilities they had just to purchase cryptocurrencies.
“The MCC code for digital currency purchase was changed by a number of major credit card networks,” explained Coinbase. “The new code will allow banks and card issuers to charge additional fees [on crypto purchases].”
Shares of MasterCard registered a 3% increase on Wednesday after registering first-quarter profits higher than expected by Wall Street.
Purchases with credit cards to buy virtual currencies exploded at the end of the last year when the price of most of the virtual currencies in the market skyrocketed. Bitcoin reached an all time high of $20,000 per coin and later in January other cryptos registered their all time high.
Ajay Banga, president and CEO of MasterCard said during a phone call:
“There’s a lot of concerns even in Japan because one of their biggest exchanges got hacked. As you can see, right now there’s a little less interest than there was in the latter part of the fourth quarter and the first quarter. This is not something we count on because we just don’t know how to predict or we don’t even want to count it.”
This helped the company to increase the revenue from crypto purchases. Since that moment, the market did not generate the same attraction, and lost around 60% of its value. Currently, Bitcoin is being traded around $9600 dollars, Ethereum almost at $800, and Litecoin has reached $162 dollars per coin.
“It’s their job to transact anywhere that the consumer or merchant carries their card, and cryptocurrencies is the place it’s showing up,” said James Friedman, analyst at Susquehanna Financial Group. “But I don’t think it’s relevant to the MasterCard investment thesis, we won’t penalize them for it.”
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