FILE PHOTO: A screen displays the company logo for Mastercard Inc. on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 29, 2024. REUTERS/Brendan McDermid/File photo
(Reuters) -Mastercard surpassed Wall Street estimates for second-quarter profit on Thursday, driven by strong consumer spending on travel and leisure.
A mix of higher inflation, interest rate pressures and tariff uncertainty has done little to slow American travelers and shoppers so far, offering a boost to payments firms and big banks alike in the first half of 2025.
Payments firms are closely tied to everyday consumer behavior, and most transactions - whether for groceries, fuel, or fewer discretionary items - still flow through the same cards and platforms, helping sustain volume, despite some shoppers paring back on non-essential spending.
Gross dollar volume - the total value of transactions processed on Mastercard's platform - rose 9% in the quarter.
Cross-border volume, which tracks spending on cards outside their country of issue, jumped 15%, pointing to still strong consumer appetite for travel and leisure.
The company wrapped up the earnings season for Wall Street's biggest payments processors. Rival Visa posted market-beating results earlier this week, while American Express also managed to surpass Wall Street's expectations.
Though analysts caution the momentum may not last if elevated interest rates and rising prices from tariffs begin to strain household budgets, that pressure has yet to show up.
In recent years, Mastercard has also diversified its business by expanding into value-added services such as threat intelligence and fraud prevention. Revenue from these services rose 22% on a currency-neutral basis in the quarter.
It posted an adjusted profit of $4.15 per share for the three months ended June 30. That compares with Wall Street estimates of $4.03 per share, according to data compiled by LSEG.
Mastercard's net revenue jumped 17% on a reported basis to $8.1 billion. It beat estimates of $7.97 billion.
Shares of the payments giant rose 2% in morning trading.
(Reporting by Prakhar Srivastava and Manya Saini in Bengaluru; Editing by Sriraj Kalluvila)
