The world’s largest payments processor, Visa’s, first-quarter profit beat Wall Street estimates, as easing concerns about an economic slowdown and discounts encouraged customers to splurge during the holiday shopping season, Reuters reported over the weekend.
According to the news agency, retailers offered deep discounts on everything from apparel to toys and luxury products to lure cost-conscious consumers while online sales remained strong thanks to a boom in mobile shopping.
Payments volume — a gauge of overall consumer and business spending on Visa’s network — jumped nine per cent, while revenue rose 10 per cent to $9.5 billion in the quarter.
Visa also benefited from strong domestic and international travel demand, driven by improved pricing and the absence of severe weather-related disruptions. Cross-border volume excluding intra-Europe, a measure of international travel demand, jumped 16 per cent.
Processed transactions rose 11 per cent in the quarter. The San Francisco, Californiabased company posted an adjusted profit of $2.75 per share in the three months ended Dec. 31.
Analysts, on average, had expected $2.66 per share, according to data compiled by LSEG. Although higher-for-longer interest rates were expected to be a dampener, consumer spending continues to be underpinned by a solid labor market and continued wage growth.
“Consumer spending in the U.S. and around the globe is quite resilient and strong,” said Chief Financial Officer Chris Suh in an interview with Reuters.
The trend bodes well for Visa and rival Mastercard as they pocket a small fee off each transaction on their networks. Mastercard earlier in the day reported a fourth-quarter profit that beat Wall Street estimates as consumers ramped up spending during the holiday season.
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