Visa beats estimates as vaccines boost travel, retail spending

Visa Inc beat estimates for quarterly profit on Tuesday as speedy vaccine rollouts spurred consumers to spend more on travel and entertainment, boosting volumes for the world's largest payment processor.

Payment companies are seeing an uptick in volumes from the coronavirus-induced slump as economic stimulus and rising vaccinations take effect, with the rise of e-commerce during lockdowns also driving up transactions.

Visa said payment volumes jumped 34% from last year on a constant dollar basis during the quarter, while the number of transactions processed surged 39%.

Overall retail sales in the United States unexpectedly increased in June, data showed, as the reopening of the world's biggest economy unleashed widespread demand for travel and shopping, with a further boost expected in the coming months.

"Visa delivered another strong quarter as many key economies are well into a reopening-driven recovery," Chief Executive Officer Alfred Kelly Jr said.

"Additionally, cross-border travel spending improved as vaccination rates rose and more borders opened," he said.

Cross-border volumes at Visa soared 47% on a constant currency basis. Total revenue jumped 27% to $6.13 billion in the third quarter ended June 30.

Net income rose to $2.58 billion, or $1.18 per Class A share, from $2.37 billion, or $1.07 per Class A share.

On an adjusted basis, Visa reported a profit of $1.49 per share, beating analyst estimates of $1.35, according to Refinitiv data.

Rival American Express Co beat estimates for second-quarter profit last week, driven by a recovery in global consumer spending, especially on travel.