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Two major card issuers reported strong quarterly earnings last week that were bolstered by increased spending from US consumers on both services and goods.
American Express’s billed business increased 6% year over year for Q4, which ended December 31, and 9% for the entire fiscal year. That includes a 6% rise in spending on goods and services, and a 19% increase on travel and entertainment.
Visa, meanwhile, reported an 8% YoY increase in payments volume and a 9% boost in processed transactions.
Visa’s CFO, Chris Suh, told investors that retail spending was “similar to last year,” but “growth on key shopping days from Thanksgiving to Cyber Monday was much stronger.”
More tapping: Visa CEO Ryan McInerney also highlighted that more consumers are using tap to pay, and it’s helping lift spending at retailers.
“We believe the tapping provides the best buyer and seller experience in the face-to-face environment and we’ve seen that play out in the results,” he said during an earnings call. “In a recent Visa study in the US, we saw on average two more transactions a month and spend lift of $70 a month for those who tap with a Visa debit card versus those who don’t tap.”
Visa highlighted that Lowe’s enabled tap to pay acceptance in the last quarter, though global adoption of the technology continues to outpace the US.
Outside the US, tap to pay purchases increased 5% from last year and made up 77% of face-to-face transactions, compared to 45% penetration in the US.