© Stocksak. FILE PHOTO – This picture illustration, taken August 2, 2022, shows Visa debit and credit cards. REUTERS/Benoit Tessier
By Mehnaz Yasmin
(Stocksak). Visa Inc reported a rise of fourth-quarter profits on Tuesday. This was due to an increase in payment volumes. The surge in U.S. consumer spending did not show any signs of cooling, despite the slowing economy.
Visa (NYSE 🙂 and Mastercard are capitalizing on a rising demand for cross-border travel, especially within the United States. A stronger dollar encourages more Americans abroad to spend more money and makes it easier for them to use their credit cards.
Ted Rossman, Senior Industry Analyst at Bankrate.com, stated that Visa continues to benefit from the tourism rebound and the ongoing shift from cash.
The Visa results mirror the of American Express (NYSE:), 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.
Visa’s payment volumes increased 10% on a constant dollar basis. Cross-border volumes, which tracks spending on cards outside of the country of issue, jumped 36% in the three months ending Sept. 30.
In the three months ending Sept 30, Visa transactions also increased by 12% to 50.9 billion on a constant basis.
Rossman stated, “The substantial increase in processed transactions is a good indicator that inflation hasn’t been the primary driver for increased spending.”
Net revenue rose 19% to $7.79Billion in the quarter, while operating expense rose 20% to $2.7Billion.
Rival American Express also saw an increase of 19% in expenses during the September quarter, due to higher customer engagement costs and acquisition costs.
In the three months ended September 30, net income was $3.9 billion or $1.86 per Share, compared with $3.6 Billion or $1.65 per Share a year ago.