By Pritam Biswas and Rishab Shaju
April 28 (Reuters) - Visa reported a higher second-quarter 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 about 4% 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.
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.
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 Mclnerney 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.
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.
Tensions in the Middle East have disrupted global trade and travel, as airspace closures and rerouted shipping lanes hit supply chains.
Visa's board of directors authorized a new $20 billion multi-year share repurchase program on Tuesday.
(Reporting by Rishab Shaju and Pritam Biswas in Bengaluru; Editing by Tasim Zahid)
