Mizuho: Citigroup’s Look at Mobile Payments Mainstays Visa and Mastercard

January 17, 2019         By: Steven Anderson

The credit card is one of the great underpinnings of the mobile payments concept. Not only is it itself a mobile payments platform, it’s also part of the mobile wallet systems emerging like Apple Pay and its contemporaries. So with so many use cases in play, it’s not surprising to hear the field is doing reasonably well, and that’s a point underscored by Mizuho, who recently sent word our way about its look at Citigroup’s earnings report.

The word from Citigroup, Mizuho noted, is good news for both Visa and Mastercard, in the sense that in the worst case, it’s not bad news. Mizuho noted “sequential trends as neutral to slightly positive for card networks Visa and Mastercard.” Given that Citigroup is a major issuing customer here, if Citigroup were having issues here, that would be canary-in-a-coalmine territory.

Not exactly great news, but it gets better. Mizuho also considers the operating environment to be “better than sentiment suggests,” and noted that Citigroup considers that a “disconnect” exists between overall market sentiment and the basic fundamentals underlying the market. That’s actually positive, Mizuho notes, as it means that negative market sentiment—based on things like same-store results from holiday shopping—may be unfounded after all.

Finally, Mizuho notes that mobile peer-to-peer (P2P) mobile payments are a huge part of banks’ digital strategy. Such tools improve customer engagement and help keep customers in the fold. While Citigroup is part of the Zelle network, it’s noted that users are up 11.3 percent year over year to reach 10.8 million total so far.

All of this is good news for the mobile payments market. Failing that, it’s not bad news, and a market that’s not struggling under bad news of any sort is at least reasonably positive. Sure, you have to be a bit optimistic to say that the lack of bad news is itself good news, but considering what else goes along with that, it’s less a desperate stab to find something good about the market and more a fair assessment of the field.

Things could be better in mobile payments right now, sure…but they’re certainly not bad, and the word from Mizuho suggests that mobile may well hold its inertia surprisingly well going forward.