Plastic

Visa sales soar as consumers ignore inflation and keep swiping on summer travel

Thursday, April 28, 2022 by Robinhood Snacks |

Splurging on a new Tulum fit… or three. Credit-card companies are racking up profits as you go on a pre-summer swipe spree. Last quarter, Visa’s sales jumped 25%, from a 2% decline a year ago. Now it expects to top pre-pandemic levels this year. FYI: Visa makes up over half of the US payments market.

  • Jett(spend)ing: Visa's cross-border volume — aka the number of transactions outside the US — made up nearly half of revenue as international biz and leisure travel picked up.
  • Visa’s CEO says pent-up demand for summer bookings is “very high” and cross-border travel spend, including Europe, is already above 2019 levels.

Dusting off the passport… As most pandemic-era restrictions have now been lifted, consumers are making up for lost time when it comes to travel. More than 80% of Americans will take at least one trip with family and friends this year, and at least half plan to spend more than before the pandemic. For tourists visiting the US, Visa execs say there’s “plenty of recovery” to come.

  • Big balances: Last quarter, rival Amex saw a 121% rebound in entertainment and travel spend, while Capital One got more swipes in its “heavy spender” category.
  • Swipe-off: Mastercard, which has a similar biz to Visa, is also expected to score a travel-related sales surge when it reports earnings today.
THE TAKEAWAY

Consumer spending is in a U-turn… People aren’t spending less — they’re spending differently. Think: moving dollars from DoorDash and Netflix and into restaurants and delayed vacays. But it’s TBD how long the spree can last: concerns are rising that the global economy might be in for a significant slowdown that could hit consumers just as they’re venturing back into their pre-Covid routines.