Visa and Mastercard’s Resilience in Economic Downturns
Credit card giants Visa and Mastercard operate on a fundamentally different risk model than issuing banks during economic downturns. While banks bear the brunt of consumer credit risk, these payment networks thrive on transaction volume—a dynamic that often remains stable even in recessions.
The payment processors collect fees on every swipe, tap, or click, creating a revenue stream insulated from defaults. Their asset-light infrastructure processes transactions without carrying debt exposure, making them less vulnerable to economic cycles than traditional lenders.
Market analysts note this structural advantage often gets overlooked. "Payment networks become toll roads for commerce," observes one portfolio manager. "People might spend differently during downturns, but they rarely stop spending altogether."
