Visa, Mastercard and American Express all reported double-digit revenue increases for the last quarter of 2022 as their payment volumes rose on consumer spending that remained sturdy despite the threat of a recession this year.
The card companies’ growth for the quarter slowed, compared to earlier in the year, as they moved past comparisons to periods in 2021 when the COVID-19 pandemic had more of an impact. The deadly pandemic has since eased, prompting consumers to return to in-store shopping, restaurant dining and travel.
“Visa’s performance in the first quarter of 2023 reflects stable domestic volumes and transactions and a continued recovery of cross-border travel,” Visa CEO Al Kelly said during a call with financial analysts to discuss the results for the San Francisco-based company’s fiscal first quarter.
Revenue for Visa’s fiscal first quarter of 2023, which ended on Dec. 31, climbed 12% to $7.9 billion, as payments volume rose 7% over the year-earlier quarter, the company said in a press release Thursday. That was a slowdown from the company’s full prior fiscal year when revenue jumped 22% over full-year fiscal 2022 on a payments volume increase of 15%.
Visa, the largest U.S. card network company, expects more of the same resilient consumer spending later this year.
“At this point, we're not changing the expectations for the second half,” Visa’s Chief Financial Officer Prabhu Vasant told analysts on the call. “Clearly, the dollar has weakened a bit so that will change the exchange rate impact in the second half, but we're not changing any of our views in the second half. They are planning assumptions, and if there is a slowdown, then we will react accordingly.”
The results were buoyed by a recovery in cross-border travel that began last year and has begun to moderate in recent months. That resurgence of travel is unfolding in most parts of the world, with the exception of China, where COVID-19 remains a drag on movement, the companies said.
At Purchase, New York-based Mastercard, the consumer spending dynamics were similar for that company’s fourth-quarter results.
“Consumer spending has remained resilient and we are very well positioned to capitalize on the growth opportunities ahead,” Mastercard CEO Michael Miebach said. While macroeconomic and geopolitical factors make the outlook for the rest of the year “uncertain,” high U.S. employment and stable levels of consumer savings are positives, he said.
Mastercard’s revenue rose 12% to $5.8 billion as gross dollar volume climbed 8%, according to the company’s press release on Thursday.
Cross-border volume was up 31% for the quarter over the year-earlier period, though that was a deceleration from an increase of 44% in the third-quarter last year, RBC Capital Market analysts said in a research note for clients. “Most regions recovered and well above 2019 levels,” the note said.
Mastercard expects the overall positive trends to continue, as long as unemployment doesn’t start to climb, the RBC analyst said.
At New York-based American Express total fourth-quarter revenue, net of interest expense, shot up 17% to $14.2 billion, the company said today in a press release. That increase followed a 12% rise in total network volume.
For 2022 overall, the company said it charted record revenue, which was 25% higher than in 2021. “Our business is in an even stronger position today than before the pandemic,” Amex CEO Stephen Squeri. “We have significantly grown the company’s revenue base.”