Purchases of cryptocurrencies with credit cards cause Mastercard to break profit record

Although the impact of cryptocurrencies on Mastercard's financial balance has attracted the attention of its executives, the CEO of the brand clarifies that digital currencies are not part of the corporation's business strategy, since their volatility and unpredictability make them little predictable and reliable.

This May 2, Mastercard, the giant of credit and debit cards, published its financial results for the first quarter of 2018, showing a record net income for the date: USD $ 1.5 billion, and total revenue of USD $ 3.6 billion. The brand attributed part of this success to the increase in the prices of the cryptocurrencies of December and January, since these are acquired through bank cards. Therefore, the brand expects the results to fall after the recent downward trend of digital currencies.

Mastercard recognizes the influence of cryptocurrencies

The impact of cryptocurrencies in the accountability of the banking brand is given because customers can use MasterCard to buy and sell cryptocurrencies, and then make cross-border payments or store them in their digital wallets.

For MasterCard, cross-border volumes increased 21% during the first quarter compared to the previous year, which is more than the 17% increase for the fourth quarter of 2017. However, if the month of April is included, the increase in the volume decreases by 2%. Mastercard's finance director, Martina Hund-Mejean, attributes this recent decline to a reduction in the number of people who buy cryptocurrencies with their credit cards.

Hund-Mejean said: "We hope that cross-border growth moderates a bit. This is due to the recent decrease in investments in cryptographic portfolios. "

These banks include: Bank of America, JPMorgan Chase, Citigroup and Lloyds, which, in February, banned the purchase of digital currencies through credit cards, citing price volatility and possible credit risks. On the other hand, Barclays announced that they were allowing Coinbase to open a bank account and since then they have established a venture capital unit focused on new technologies, such as Blockchain.

In addition, bank card companies have cracked down on the purchase of cryptocurrencies as they fear that people can not pay the debts they can accumulate.

Although Mastercard criticizes the recent bear market for a drop in cross-border transactions, some people have been using low prices to grow their holdings. Chinese investor Cai Wenshang informed Sina that he had achieved his goal of owning 10,000 bitcoins through several purchases made in recent months. During the first quarter of 2018, the price of Bitcoin fell to USD $ 6,000 and since then it has recovered over USD $ 9,680.

Mastercard emphasized its relationship with Santander, a bank that has expanded into the cryptocurrency market by launching its One Pay FX application using Ripple's technology.