Mizuho logo

Mizuho Drops New Word on Mobile Payments Leaders PayPal and Visa

February 5, 2019         By: Steven Anderson

When it comes to mobile payments, two of the biggest names around are Visa and PayPal. The two firms make up a hefty share of the market, and even have direct impact on some other mobile payments platforms. Mizuho, meanwhile, keeps careful track of developments in this field, and recently dropped word our way about its own assessment of this leading duo.

First, Mizuho’s word about Visa: there was good news and bad news on this front as both revenue and earnings per share (EPS) figures came in not just at expectations but also above them. That was good news, especially coming off the hot holiday shopping quarter, but there was also bad news to be had. The revenue figures saw some losses in cross-border operations, and there were concerns that the weakness would carry on into February, which means that much of Visa’s fiscal second quarter would be obscured by the trending-downward cross-border numbers.

PayPal, meanwhile, likewise offered mixed news. While the loss of eBay is no longer in the cards, at least in the short term, it’s not exactly doing PayPal any favors right now. Volume growth on eBay sales was flat this quarter. However, PayPal’s work with Venmo is doing much better, with run-rate revenues hitting the $200 million mark. The problem there, however, is that these still aren’t enough for Venmo to hit a break-even, according to word from PayPal management. All told, Mizuho remains neutral on PayPal overall.

So we can see here how there are issues with even the leaders of the market. While Visa’s issues seem mainly related to fear that the cross-border payments traffic won’t pick back up, there’s not much of an issue with the fundamentals besides potentially temporary cross-border weakness. PayPal’s issues are a bit deeper in that one of its biggest sources of revenue is flat, at least for now. There’s plenty of reason to be cautious, certainly, and there’s almost as much reason to proceed.

In the end, however, we see here that the mobile payments market is about as volatile as it is young. There’s a lot of room for growth and disaster here, even for some of the most established leading firms herein.