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2025-07-29 18:07:13
Payment Giants Hit Record Profits? Market Undercurrents Beneath Consumption Data] ⑴ Visa and Mastercard are expected to report higher quarterly profits this week, primarily driven by resilient consumer spending trends. ⑵ Analysts will closely monitor how demand for travel and discretionary purchases responds to Trump's tariff rhetoric. ⑶ Earnings reports from the world's largest payment processors will further confirm the consumer resilience previously signaled by JPMorgan Chase and Wells Fargo. ⑷ Oppenheimer analysts note that Visa and Mastercard remain top choices given their broad consumer reach and resilience to economic downturns. ⑸ The two major payment networks have successfully diversified their business models by providing value-added services such as threat intelligence and fraud reduction. ⑹ However, some analysts predict a potential slowdown in consumption in the second half of 2025, with cross-border travel pressured by trade tensions and geopolitical risks. ⑺ A slowdown in Canadian travel to the US and escalating tensions in the Middle East in June have fueled concerns about potential growth headwinds. ⑻ Analysts will also examine whether the current surge in transaction volumes is driven by consumers preemptively purchasing goods in anticipation of tariff increases. ⑼ Total spending on bank-issued credit and debit cards grew modestly in the second quarter, with Bank of America seeing a 110 basis point increase and JPMorgan Chase a 40 basis point increase. ⑽ JPMorgan Chase analysts believe that overall spending trends are stable enough to weather macroeconomic fluctuations, and the data is neutral for payment networks and acquirers. ⑾ Investors will focus on stablecoin forecasts. While both companies plan to launch related products, the recently passed Genius Act has raised concerns that stablecoins could replace payment intermediaries in the long term. ⑿ As of Friday's close, Visa and Mastercard shares were up nearly 13% and 8%, respectively, year to date, outperforming the S&P 500's 8.6% gain.
