- Oops!Something went wrong.Please try again later.
By Mehnaz Yasmin
(Reuters) -Visa Inc beat estimates for quarterly profit on Tuesday as resilience in consumer spending so far and a summer travel boom across much of the United States translated into higher card spends.
After being holed up at their homes, pandemic-weary Americans are splurging on travel and other leisure related activities, helping the economy to stay on track despite an onslaught from inflation.
Major U.S. banks including JPMorgan Chase & Co and Citigroup Inc have in recent weeks pointed to the resilience in consumer spending in the face of an uncertain economic outlook, a welcome sign for card companies.
The world's largest payments processor raked in higher revenue as payment volumes jumped 12% during the third quarter, helped by a 40% surge in cross-border volumes. Travel-related cross-border volumes were 16% above 2019.
"While a company like Walmart may get hurt if consumers move their spending from higher-margin clothing to low-margin groceries, Visa gets their cut just the same," said Scott Lieberman, founder of TouchdownMoney.com.
"Whether people buy champagne in a bull market or beer in a recession, Visa stands to earn," Lieberman, who covered the credit card industry for nearly a decade, added.
Visa posted an adjusted net income of $1.98 per share, handily beating the $1.75 a share expected by analysts, according to Refinitiv data.
The payments processor's results closely mirror American Express which gained hugely from record card spending and raised annual revenue forecast on Friday.
(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Krishna Chandra Eluri)