(Reuters) - Visa Inc (V.N) topped Wall Street targets for quarterly profit and raised its full-year earnings forecast on Wednesday, as more people use credit cards worldwide to buy everything from gas to online goods.
The world’s largest payments network, like its smaller rival Mastercard Inc (MA.N), gets most of its revenue through transaction fees, which are earned every time a customer swipes their credit or debit card on the company’s network.
Visa has seen card payments grow thanks to higher U.S. consumer spending and rising oil prices.
Higher gas prices translate to a higher dollar volume in transaction fees for Visa.
The company said payment volumes rose 11 percent to $1.99 trillion on a constant dollar basis for the second quarter, with the United States accounting for about 43 percent of the total amount.
Cross-border volumes – the value of transactions made outside the United States – rose 11 percent on constant dollar basis.
Visa’s shares rose 2.7 percent to $124.52 in after-hours trading on Wednesday.
The company now expects full-year adjusted earnings to grow at the high end of a mid-20s percentage digit forecast.
Visa expects double-digit expense growth in the third quarter, due to personnel costs, increased investments and the upcoming FIFA World Cup in Russia, in which the company is an official payment services partner.
Total operating expenses in the second quarter rose 4 percent to $1.74 billion.
Its net operating revenue rose 13 percent to $5.07 billion in the quarter ended March 31.
Net income rose to $2.61 billion from $430 million a year earlier. Earnings per Class A share rose to $1.11 from 18 cents a year earlier.
Analysts on average had expected earnings of $1.02 per share, according to Thomson Reuters I/B/E/S.
Reporting by Pallavi Dewan and Diptendu Lahiri in Bengaluru; Editing by Sai Sachin Ravikumar, Bernard Orr