Payment giants power onward

Brent crude just hit a four-year high, inflation fears are creeping back in, and consumers are starting to feel the squeeze. That puts credit card companies on the spot, which rely on steady spending to drive transactions—so let’s take a look at how they’re holding up, and what comes next.

Visa and Mastercard—two S&P 500 heavyweights (15th and 21st by weighting, respectively)—just reported earnings:

• Visa set the tone with a clean beat after the bell on Tuesday: Revenue jumped 17%, with US payments volume up 8%. Even more notably, cross-border volume climbed 12%—a key growth driver for the company and a closely watched indicator of global travel demand. Shares popped 5.7% on Wednesday, though they gave back 1.5% today.
• Mastercard posted better-than-expected earnings today—unsurprising, given it hasn’t missed an adjusted EPS estimate since 2020—with revenue up 16% and purchase volume rising 9%. But the stock still fell 4.25%, as higher-than-expected expenses weighed on sentiment.

The road ahead

Despite the war in Iran and the subsequent inflationary spike in prices, consumers continue to spend, helping these companies hold up relatively well. But they’re facing a different kind of challenge: Stablecoins are emerging as a real threat to traditional payment networks, offering merchants lower fees and faster settlement—two advantages that could chip away at the dominance of Visa and Mastercard.

But both companies are moving to adapt to, rather than be disrupted by, the shift. Mastercard has been building out its crypto capabilities, including a March deal to acquire stablecoin payments company BVNK for up to $1.8 billion, alongside expanded partnerships with firms like Circle and Binance. Visa is making a similar push, investing in its payments infrastructure with stablecoin- and AI-driven tools.

Looking ahead, both remain cautiously optimistic. Mastercard expects the Iranian conflict to hit hardest in the second quarter and guided for revenue growth at the low end of its forecasted range, though it still raised the high end of its 2026 outlook. Visa also lifted its full-year guidance and expects consumer spending to remain stable despite near-term uncertainty.

So, while macro concerns have weighed on sentiment, pushing Mastercard down 11.88% and Visa down 5.87% this year, the underlying spending data remains solid, suggesting a pullback could look more like an opportunity.—SY