Mastercard’s Q4 card tie-ups can help offset potential losses from Capital One-Discover deal

The news: Mastercard’s net revenues increased 14% YoY in Q4 2024, compared with 13% the year prior, per its earnings release.

• Payment network net revenues increased 13% YoY during the quarter, versus 9% YoY last year.
• Value-added services revenues cooled slightly to 16% YoY, down from 19% YoY growth in Q4 2023.

Diving into payment network revenues: While growth was strong across all categories, higher volume from debit cards and international markets led the charge.

• Worldwide gross dollar volume (GDV) increased 12% YoY, while United States GDV rose 9% YoY.
• Worldwide debit and prepaid volume grew 15.2% YoY, compared with credit’s 10.4%.

Mastercard attributed much of this volume growth to new and expanding card partnerships.

• The network renewed credit card partnerships with IHG and Chase, as well as Sam’s Club and Synchrony.
• It also flipped a large Florida-based credit union’s credit and debit portfolio, CEO Michael Miebach said during the earnings call.
• Internationally, Mastercard secured a long-term debit card deal with Saudi National Bank.
• And it made a deal to issue a new co-brand credit card program with Porter Airlines and the Bank of Montreal in Canada.

The payment network also pushed crypto payments, remittances, and consumer bill payments during the quarter to boost network volume, Miebach said.

The bigger picture: Mastercard’s volume could suffer if the Capital One-Discover merger goes through.

• Capital One’s debit volume is primarily on the Mastercard network. Some of that volume may instead start to get sent over Discover’s network instead.
• Mehra said Mastercard has already built in its best estimates on how it will affect the network. It’s forecasting low double-digit net revenue growth in 2025.

We forecast Mastercard's US consumer card network transaction value will total $2.16 trillion in 2025, up 5.8% YoY.

Our take: After enjoying a strong end to 2024, Mastercard faces some uncertainty this year regarding the Capital One-Discover deal.

But even if Capital One migrates some of its debit volume away from the network, Mastercard’s debit growth and new card partnerships will help offset those losses. Pushing into non-card payments and value-added services will also help keep Mastercard in a strong position moving forward.

This article is part of EMARKETER’s client-only subscription Briefings—daily newsletters authored by industry analysts who are experts in marketing, advertising, media, and tech trends. To help you start 2025 off on the right foot, articles like this one—delivering the latest news and insights—are completely free through January 31, 2025. If you want to learn how to get insights like these delivered to your inbox every day, and get access to our data-driven forecasts, reports, and industry benchmarks, schedule a demo with our sales team.