On Wednesday, the Chief Financial Officer of Mastercard reported that in the first quarter of 2018 the volume of cross-border transactions carried out by the company declined. This happened, among other things, because large banks banned customers from using their payment cards to purchase cryptocurrencies.
According to the disclosure of Mastercard’s financial report published on Seeking Alpha, Martina Hund-Mejean said that the volume of cross-border payments of the company decreased by 2% compared to the last quarter of 2017 “partly because of the reduction in the volume of financing of crypto-wallets”.
“The problem of increasing the volume of cross-border payments, firstly, is that the cryptocurrency financing or financing of crypto-wallets was 1%. We saw this 1% in the fourth quarter, and we see this 1% in the first quarter. The problem is that many banks – particularly in the US – have decided that they will not be allowed to use their cards for this funding mechanism. That’s why we see a relatively large decrease in volume, related to this article,” she explained.
In recent months, several US and Canadian banks, including JPMorgan Chase, Bank of America, Bank of Montreal, Capital One and Citi, have banned cryptocurrency transactions due to credit risks associated with the high volatility of digital currency rates.
In addition, according to CEO Ajay Banga, the decrease in the volume of cross-border payments was also contributed by new restrictions and uncertainty regarding crypto-exchanges.
However, Mastercard hardly considers cryptocurrency as a means of making a profit.
“We do not really count on this direction, because we simply don’t know how to predict it, and moreover – we just don’t want to rely on it,” explained Banga.