July 26 (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.