Mastercard’s first-quarter earnings beat Wall Street estimates | PaymentsSource

One of the early impacts of President Donald Trump’s tariff policy has been a decline in people traveling to the U.S., a response that reduces some cross-border payments but not all, according to Mastercard.

“What is not coming into the U.S. is going to other regions,” CFO Sachin Mehra said during Thursday’s earnings call.

Foreign travel to the U.S. fell 14% in March, according to the most recent data from the U.S. Travel Association, noting that the drop came before the April 2 tariff announcement. That followed a 2% decline in February, the first such fall since spring 2020 during the early days of the COVID-19 pandemic..

The declines have been attributed to political opposition to Trump’s policies. An April 10-11 survey of Canadians found 60% were “staying away” from the U.S. due to the president’s policies, according to Longwoods International.

 During Thursday’s earnings call, Mastercard said its cross-border payments and travel revenue sources are diversified. Like most payment companies, Mastercard said the impact of Trump’s tariffs have not yet affected overall payments. But it did note international travel declines in March and through the first three weeks of April.

 Much of that decline has been in U.S.-bound travel, Mastercard said. Other corridors, particularly within Europe, the Middle East and Africa and the Asia Pacific, have grown in recent weeks. The payment company’s overall travel volume has “shown stability,” but there have been shifts within the category, Mehra said.

In a research note before Thursday’s earnings report, Jeffries said inbound U.S. travel is 4% of Mastercard”s net revenue. A decline in inbound travel of 20% — Jeffries estimate — would not pose a risk to Mastercard’s second quarter or full year 2025 outlooks but would “keep a lid” on the company’s stock price.

Mastercard has embedded flexibility into its existing 2025 strategy to anticipate economic and political uncertainty, CEO Michael Miebach said during Thursday’s earnings call. 

Not all travel

Mastercard also touted its artificial intelligence investments as a way to broaden revenue sources. The card network this week launched Mastercard Agent Pay, a platform that expands Mastercard’s existing generative AI technology, which enhances customer service, security and onboarding by generating automated responses to customers. 

Agent Pay digs deeper into the card network’s data and AI tools to help shoppers curate a mix of purchases for an event, assist merchants on supply-chain management or help a retailer build a marketing or sales program, Mastercard said. Agent Pay uses agentic AI, or a form of artificial intelligence that aims to reduce or eliminate human supervision.

The card network is partnering with Microsoft to scale the platform, with other partners including IBM, which is contributing B2B technology, and payment firms like PayPal’s Braintree and Checkout.com for security. The card network relies on its global payment network of issuers and merchants to accrue payment information that can feed AI engines.

“We have access to enormous amounts of data,” Miebach said, noting AI enables one of every three service products.

In another move, Mastercard expanded an existing partnership with payment firm Corpay, including a 3% stake for Mastercard. 

Corpay will be a preferred provider of currency risk management and integrated payment technology for Mastercard’s financial institution clients. Mastercard and Corpay will also extend an existing collaboration on virtual cards. And Mastercard’s Move disbursement service will be available to Corpay’s customers, including small to medium-size businesses.

Eighty-five percent of Mastercard’s service, or non-payment, revenue is recurring, Miebach said. Recurring revenue is considered safer from volatility due to economic shifts, which can cause short-term declines in payment volume. “It’s a stable baseline for growth,” Miebach said.

Mastercard’s earnings

For the quarter ended March 31, Mastercard reported net income of $3.3 billion, up 9% from the prior year, and net revenue of $7.3 billion, up 17%. Adjusted earnings per share were $3.73, up 16%. Those results were better than Wall Street analyst expectations of $7.13 billion in net revenue and adjusted earnings per share of $3.57, according to a Zacks Investment Research survey.

Cross-border volume for the quarter was up 15%; global gross dollar value was $2.4 trillion, up 9%; U.S. GDV rose 7%; and total cards in the market were 3.5 billion. Mastercard affirmed its 2025 outlook, calling for net growth revenue at the high end of the low teens.

“While there is uncertainty in the world, we’ve built a diversified, resilient business model and proven strategy that enables us to effectively navigate various economic environments,”  Miebach said in prepared remarks. 

In a research note following the earnings release, Jeffries analysts’ said Mastercard’s earnings were a “clean beat” and it maintained its buy rating, though Jeffries added the company’s cross-border payments growth had slowed more than Visa, due to a slower pace of travel purchases.

Investors are looking for signals that Trump’s tariffs and related concerns will cause consumers to reduce spending, particularly on discretionary items such as travel and dining.

 Among other payment companies, Visa said consumers have been “resilient,” though it also reported a slump in travel payments. PayPal said it has flexibility to shift strategy if necessary and can offer buy now/pay later and merchant credit to consumers and merchants if the economy sours. And American Express said it is not planning to change its product updates, noting consumer payments have held strong. Block reports earnings Thursday afternoon.

Wolfe Research and Mizuho both said Thursday that Mastercard and Visa’s spending trends into April showed no clear slowdown in U.S. payments.