Mastercard Q1 profit surpasses estimates driven by higher card spending

Mastercard Q1 profit: Mastercard has reported a first-quarter profit that exceeded expectations, fuelled by higher card spending by US consumers despite challenges posed by rising borrowing costs and persistent inflation.

The New York-based payments giant revealed that gross dollar volume, representing the total value of all transactions processed on its platform, surged by 10 per cent to $2.3 trillion. Additionally, cross-border volume, which tracks spending on cards outside the country of their issue, saw 18 per cent increase.

CEO Michael Miebach attributed the company's impressive revenue and profit growth to robust cross-border volume expansion and securing new deals across all regions. Mastercard's net revenue climbed by 10 per cent to $6.35 billion in the first quarter.

Excluding one-time charges, the payments processor posted earnings of $3.31 per share, surpassing estimates of $3.24 a share, according to data from LSEG.

Despite the strong performance, the payments technology industry is bracing for a significant transformation following Capital One's monumental $35.3 billion deal to acquire Discover Financial. The deal is set to create the largest US credit card issuer, with Capital One aiming to shift its card portfolio from Mastercard and Visa to Discover's network by 2027, projecting a $1.2 billion boost in revenue.

However, Mastercard has assured stakeholders that it does not anticipate any changes in its relationship with Capital One and is committed to maintaining cooperation.

(With Reuters inputs)