NEW YORK — MasterCard Inc. (MA) Chief Executive Ajay Banga said card spending between April and late May rose in the U.S. and abroad.
Banga also said the payment processor would be able to deal with an orderly exit of Greece from the Euro currency zone — but some MasterCard issued credit care might not work in case of a disorderly exit.
"You have got a crisis management team, the risk management processes, operational monitoring ... transactions on a real-time basis in a number of these countries," Banga told investors at the Sanford C. Bernstein conference in New York Thursday. But "if it is a disorderly exit and happens overnight... there would be card holders whose cards wouldn't work."
MasterCard would have to "shut off some cards because I wouldn't want to take a Greek card traveling to Germany paying for something in euros and then I end up having to settle based in the euros or the drachma (exchange) rate that I have no conclusion to draw on, or no way to hedge myself against," Banga said.
Meanwhile, spending on credit cards — the dollar amount of transactions made with credit and debit cards — rose in Europe, mainly because payment volumes in Northern Europe, Spain, and Italy "are making up for the weakness of Greece," the CEO said.
Cross border payment volumes from April 1 to May 28 rose about 17%, U.S. volumes rose about 9.5%, and non-U.S. volumes rose about 15.5%, Banga said.
Visa Inc.'s (V) said in a regulatory filing Wednesday its U.S. payments volume was down 3% in April and flat for the first four weeks of May compared with a year earlier.
"Our total overall European volumes are still up 14.5%," because about 60% of MasterCard's business "is from Northern Europe, which right now is not showing any impact from what's going on," the CEO said. In Spain, sales aren't growing, but electronic transaction are, "so our volume in Spain is still growing," Banga said.
European consumer confidence improved in the first quarter from the third and fourth, Banga said Thursday. Still, "I'm just watching that very carefully, because consumer confidence in Europe, really it was not in good shape. In the U.S., consumer confidence tends to show up quicker in volumes. In Europe, it seems to have a dampened effect to take a few quarters before it shows up in our volumes," he said.