Moves by major banks to ban their customers from using their payment cards to buy cryptocurrencies led to a dip in cross-border transaction volume during the first quarter of 2018, Mastercard’s chief financial officer said Wednesday.
Martina Hund-Mejean said that the company’s cross-border payments volume rose 19 percent during the first part of 2018 overall – however, that volume was down 2 percent when compared to the last quarter of 2017 “in part due to the drop [in] crypto wallet funding,” she said, according to an earnings call transcript published by Seeking Alpha.
“So the issue in this, first of all, in terms of the stacks, on the cross-border volume growth, the cryptocurrency funding or the crypto wallet funding really was 1 percent. It was 1 percent that we saw in the fourth quarter and it was 1 percent that we saw in the first quarter. What the issue is that a number of the banks have decided, in particular in the United States, that they would not allow the usage of cards for this particular funding vehicle. And that’s why we have already seen a relatively significant decrease of the volume related to that event.”
Over the last several months, JPMorgan Chase, Bank of America, Bank of Montreal, Capital One and Citi from the U.S. and Canada were among a group of banks to bar cryptocurrency purchases due to the supposed credit risk that results from their price volatility.
Furthermore, new restrictions and uncertainty around exchanges have also helped lead to the decline in volume, said chief executive officer Ajay Banga.
Falling interest levels have also not helped, he continued, saying “right now there’s a little less interest than there was in the latter part of the fourth quarter and the first quarter.”
That being said, Mastercard is not interested in counting cryptocurrencies as part of its earnings projections, Banga said, explaining:
“We actually said that this is not something we count on because we just don’t know how to predict it or we don’t even want to count it.”
Based Blockchain Network