By Pritam Biswas and Rishab Shaju
April 28 (Reuters) – Visa beat estimates for Wall Street profit on Tuesday as the world’s largest payment processor benefited from a steady rise in payment volumes despite ongoing macroeconomic uncertainty, sending its shares up over 6% in extended trading.
U.S. consumer spending rose more than expected in March as the U.S.-Israeli war with Iran boosted gasoline prices and receipts at service stations, while tax refunds supported spending elsewhere.
Payments volume, a gauge of overall consumer and business spending on Visa’s network, jumped 9% in the second quarter.
“Consumer spending remained resilient, and our strategy and innovations fueled strong performance in consumer payments, commercial and money movement solutions and value-added services,” said CEO Ryan McInerney in a statement.
Visa, which operates a digital payments network across more than 200 countries and territories and is used by billions for everyday transactions, is well positioned to weather any potential economic downturn.
The company’s business model is insulated as it depends on transaction volumes rather than credit risk, allowing strength at the top end of the income spectrum to offset softness at the bottom.
Data processing revenue came in at $5.54 billion, up 18% from the year-ago period.
American Express, which generally caters to affluent customers, also beat Wall Street estimates for first-quarter profit last week as its wealthy customer base splurged on travel and entertainment, lifting its card spending growth to the highest in three years.
Mastercard, the company’s direct peer, is expected to report its quarterly earnings later in the week.
CROSS-BORDER FOCUS
Visa’s cross-border volume in the second quarter rose 12% on a constant-dollar basis, down slightly from the 13% it reported in the year-earlier quarter.
The company’s cross-border indicators, viewed as a real-time gauge of global trade and travel, are closely monitored by analysts and economists. Investors were closely awaiting this metric in the run-up to the second quarter earnings.
Tensions in the Middle East have disrupted global trade and travel, as airspace closures and rerouted shipping lanes hit supply chains.
“We are watching the impacts from the conflict in the Middle East closely,” McInerney said in a post-earnings call.
Visa’s board of directors authorized a new $20 billion multi-year share repurchase program on Tuesday. The company also raised its full-year 2026 earnings per share guidance to low-teens, from an earlier forecast of low-double-digit growth.
“The Olympics and FIFA (World Cup) are exciting opportunities this year, and we also see further expansion opportunities for sponsorship beyond sports,” Chief Financial Officer Chris Suh said.
The company’s adjusted net income rose to $6.3 billion, or $3.31 per share, in the three months ended March 31, compared with $5.44 billion, or $2.76 per share, a year earlier.
Analysts were expecting a profit of $3.10 per share, according to estimates compiled by LSEG.
STABLECOIN STRENGTH
Greater regulatory clarity and wider adoption of stablecoins have opened avenues for card networks to move beyond traditional cards into faster, lower-cost digital payment rails.
In March, Visa expanded its collaboration with Bridge, a developer-focused stablecoin platform to bring stablecoin-linked cards to over 100 countries across Europe, Asia Pacific, Africa and the Middle East by the end of year.
“We currently have a $7 billion annual run rate of stablecoin settlement volume, and it’s growing fast, up more than 50% since last quarter,” CEO McInerney said in the analyst call.
In 2023, Visa became one of the first major payment networks to pilot transaction settlements in stablecoins by enabling clients to fulfill their settlement obligations in USDC.
(Reporting by Rishab Shaju and Pritam Biswas in Bengaluru; Editing by Tasim Zahid)
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