An increase in consumer spending – not by volume but rather in the value of the things they bought – helped MasterCard post large profits in the second quarter.
The company, which processes a large percentage of all credit card transactions in the U.S., said that profits rose 31 percent between April and June of this year thanks to decreased operating expenses and an increase in consumer spending on a per-purchase basis. In addition, American consumers spent more overseas in the three-month period.
"We are pleased with our performance in the second quarter," said MasterCard president and chief executive officer, Ajay Banga. "Solid GDV growth, particularly in markets outside the U.S., continued momentum in worldwide cross-border volumes, and thoughtful expense management all contributed to good financial results this quarter."
The company’s numbers showed what could be a renewed consumer confidence, because while the company’s profits climbed considerably, the number of total transactions it processed was essentially flat, increasing just 0.1 percent. This is an indicator that while consumers aren’t making more purchases, they are buying more expensive items.