Profits at the world’s foremost card companies, Visa and MasterCard, exceeded expectations this quarter, with MasterCard seeing shares rise to August 2011 levels and Visa reporting the biggest single day jump since June 2011.
MasterCard earnings jumped from $879m to $1.02 billion (87 cents per share), with overall revenue up 13% to £2.5 billion. Meanwhile, Visa’s profits hit $1.07 billion ($1.72 per share), a rise from last quarter but still markedly less than the $1.19 billion reported this time last year.
Card use continues to outstrip cash, both in the US and across most developed nations. However, a recent slump in growth in Europe and Latin America had raised concern among investors in Visa and MasterCard. The strong Q3 results have helped to assuage these fears.
Although overall consumer spending continues to stall, card companies in particular are benefitting from the shift away from cash and cheque-based payments. “Cash is the real opportunity for companies like us and that’s what we’re focused on,” MasterCard Chief Executive Ajay Banga told the Wall Street Journal.