MASTERCARD reported first-quarter profit that exceeded Wall Street expectations on Wednesday (May 1), on higher card spending by consumers despite rising borrowing costs and persistent inflation.

Wage growth and a tight labour market have ensured job security for card users, allowing them to spend without restraint even as the Federal Reserve keeps monetary policy tight.

The payments processor earned US$3.31 per share on an adjusted basis, beating estimates of US$3.24 a share, according to LSEG data.

“These appear to be solid, though unspectacular, results,” HSBC analyst Saul Martinez wrote in a note.

Travel trends in Asia Pacific, which lifted pandemic curbs later than the rest of the world, continued to be a drag due to tougher comparisons from last year.

Mastercard’s shares dipped 0.6 per cent as the company’s cross-border spending volumes for the first four weeks of April slowed, but it said that was tied to the timing of Easter.

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The festival occurred in the first quarter this year compared to April in 2023, leading to tougher year-ago comparisons.

Net revenue rose 10 per cent to US$6.35 billion in the first quarter.

No impact from settlement

Mastercard CEO Michael Miebach said the company does not expect any “dramatic” impact from the estimated US$30 billion settlement it, along with rival Visa, signed in March to limit credit and debit card fees for merchants.

The settlement, one of the largest in US history, could pacify critics who have accused the companies of operating a duopoly and end nearly two-decade-long lawsuits.

However, last week retailers, including Target and Walmart, urged a judge to reject the accord, saying it does not go far enough. REUTERS