Visa Inc reported a rise in fourth-quarter profit on Tuesday, helped by a jump in payment volumes as U.S. consumer spending showed no signs of cooling even against the backdrop of a slowing economy.
Payment networks such as Visa and Mastercard are making the most out of a pent-up demand for cross-border travel, especially in the United States, as a stronger dollar encourages more Americans to make trips abroad and splurge on shopping.
“Visa continues to benefit from the travel rebound and the ongoing shift away from cash,” said Ted Rossman, senior industry analyst at Bankrate.com.
Visa results mirror that of American Express, which reported a stronger-than-expected profit as travel and entertainment spending in international markets surpassed pre-pandemic levels for the first time on Friday.
On a constant dollar basis, Visa’s payment volumes surged 10%, while cross-border volumes – a key measure that tracks spending on cards beyond the country of issue – jumped 36% for the three months ended Sept. 30.
Transactions processed by Visa also rose 12% on a constant dollar basis to 50.9 billion in the three months ended Sept 30.
“The substantial growth in processed transactions is a good indication that inflation isn’t the primary driver of increased spending,” Rossman said.
Net revenue rose 19% to $7.79 billion for the quarter, while operating expenses jumped 20% to $2.7 billion.
Rival American Express also saw a 19% rise in expenses in the quarter ended September on higher customer engagement and acquisition costs.
Net income was $3.9 billion, or $1.86 per share, in the three months ended Sept. 30, compared with $3.6 billion, or $1.65 a share, a year earlier.
(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Anil D’Silva)
This article was written by Mehnaz Yasmin from Reuters and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.
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