Mastercard Inc. vowed to slow expense growth as the global collapse in overseas travel crimped spending on its payments network.

• The company is reviewing costs as it seeks to lessen the impact of the coronavirus pandemic on its business. Operating expenses in the first quarter rose 7.3 per cent to US$1.8 billion, Purchase, New York-based Mastercard said Wednesday in a statement. But Mastercard said expenses in the second quarter would only rise by a percentage in the “low single digits.”

Key Insights

• Cross-border spending on cards -- among the most lucrative transactions for Mastercard and its rival Visa Inc. -- fell 3 per cent in the quarter, the first decline in at least two years. The firm noted in a presentation on its website that the trend had continued in April, with cross-border transactions falling 49 per cent in the week ended April 21.
• Spending on Mastercard’s network advanced 5.4 per cent to US$1.15 trillion, above the US$1.13 trillion average of analyst estimates compiled by Bloomberg. Still, the company said it would suspend it share repurchase activity “due to the continued uncertainty around the duration and severity related to the Covid-19 pandemic.”
• Mastercard still had to spend more to lure retailers and banks to use its network. The firm said rebates and incentives totaled US$2.15 billion in the quarter, more than the US$1.99 billion analysts expected.

Market Reaction

• Mastercard shares rose 2.6 per cent to US$271.50 at 8:19 a.m. in New York. The stock has sagged 11 per cent this year, compared with the 3.8 per cent decline of the 71-company S&P 500 Information Technology Index..