Mastercard caps strong quarter for card giants as consumer spending holds up

By Utkarsh Shetti and Pritam Biswas

Oct 29 (Reuters) - Mastercard on Thursday rounded out a strong quarter for payment networks with a profit beat, as consumer spending held up despite worries over still-high inflation and economic uncertainty.

Shares of the company rose more than 4% in afternoon trading, while rivals Visa and American Express were up about 2% each.

A steady labor market and still-strong wage growth have helped cushion the squeeze from soaring gasoline prices due to the war in Iran and higher costs of living.

Some of the spending growth this year was driven by higher gas prices, Mastercard's newly appointed CFO Ling Hai told Reuters in an interview, while stressing that the short-term benefit on price could be hindered if inflation levels remained high.

Mastercard's payments network, like that of rival Visa, spans more than 200 countries and territories, helping insulate it from economic downturns as billions of consumers rely on its network for everyday purchases.

Spending was growing across income cohorts, Hai added, as mass consumers were allocating more of their budget on essentials, while higher-income earners kept up discretionary purchases.

Additionally, credit card usage often tends to rise during economic slumps as consumers lean on borrowing to offset financial shortfalls.

"Cash-strapped consumers might swipe their card to ride through the rougher times," said Brian Jacobsen, chief economic strategist at Annex Wealth Management.

STRONG QUARTER FOR PAYMENT NETWORKS

The results follow earnings beats from Visa earlier this week and American Express, which caters to affluent customers, earlier in the month.

Still, card executives have remained cautious given the uncertain economic backdrop, as concerns over a pullback from inflation and a higher interest rate environment persist.

"We see resilience across the spending bands on our network. So we have seen stability in that sense. But in terms of like how strong for how long, and what the new normal is, I think that's just too hard to tell," Visa CEO Ryan McInerney told analysts on Tuesday.

Cross-border growth numbers across Visa and Mastercard have remained steady, highlighting the strength of affluent consumers who are using their purchasing power to keep discretionary spend intact.

The second half of the FIFA World Cup, which spanned from June 11 to July 19, has been a positive driver of cross-border payment metrics for card networks, buffering a hit to travel from escalating tensions in the Middle East.

Cross-border volumes at Mastercard, a metric that tracks spending on cards outside the country they were issued in, jumped 11% in the quarter.

Mastercard shares have gained about 7% so far in 2026, underperforming both the broader markets and its peer Visa. Still, the stock has been trading near record levels, closing Wednesday just 3.6% below its all-time high set on October 22.

It posted an overall adjusted profit of $5.31 per share, surpassing analysts' average estimate of $5.16 per share, according to data compiled by LSEG.

(Reporting by Pritam Biswas and Utkarsh Shetti in Bengaluru; Editing by Vijay Kishore)