Mastercard (NYSE: MA) and Visa (NYSE: V) are two of the largest payments companies in the world. As a result, they have a great view on consumer spending that’s taking place. With both companies reporting their earnings results for the third quarter of 2026 earlier this week, the bottom line is that consumer spending remains strong in the USA and other parts of the world. Here’s what they are seeing.
*What’s shown in italics between the two horizontal lines below are quotes from Mastercard and Visa’s management teams that I picked up from their earnings conference calls.
From Mastercard
1. Mastercard’s management sees consumers and businesses continuing to spend despite economic and geopolitical uncertainty; management sees the economy as having a resilient backdrop; Mastercard’s business fundamentals remain strong; management is seeing a supportive macroeconomic environment with balanced labor markets, strong household balance sheets, and continued wage growth; management sees European consumers as being very resilient
While there continues to be economic and geopolitical uncertainty, consumers continue to spend, businesses continue to invest, and commerce continues to expand. The economy, our overall business, and our network have a resilient backdrop…
…As mentioned, consumer and commercial spend was healthy in Q3 and so far into Q4. Our business fundamentals are strong, and we continue to deliver solid growth across both our payment network and value-added services and solutions…
…This is all underpinned by a supportive macroeconomic environment with balanced labor markets, strong household balance sheets, and continued wage growth. To date, consumers and businesses have demonstrated resilience. There is heightened geopolitical uncertainty, which has persisted for some time, driving energy prices higher and putting more focus on monetary policy around the world…
…If I take a look at the macro environment right now, the European consumers are very resilient.
2. Worldwide GDV (gross dollar volume) was up 7% year-on-year in 2026 Q3 in constant-currency basis; cross border volume was up 11% globally in constant currency, driven by both travel and non-travel cross-border spending (cross border volume growth was 12% in 2026 Q2); switched transactions was up 9% year-on-year in 2026 Q3; card growth was 5% in 2026 Q3, with Mastercard ending the quarter with 3.8 billion cards in circulation (there were 3.7 billion cards in 2026 Q2, and year-on-year growth was 5% then); domestic assessments were up 13%, cross-border assessments were up 16% and transaction processing assessments were up 14%
Worldwide gross dollar volume, or GDV, increased by 7% year-over-year. In the U.S., GDV increased 6%, with credit growth of 10% and debit growth of 1%, which includes the impacts of the Capital One debit migration. Outside of the U.S., GDV increased 8%, with credit growth of 6% and debit growth of 10%. Cross-border volume increased 11% globally for the quarter, reflecting continued growth in both travel and non-travel related cross-border spending…
…Switched transactions grew 9% year-over-year in Q3…
…Card growth was 5%. Globally, there are now 3.8 billion Mastercard and Maestro-branded cards issued…
…All growth rates are described on a currency-neutral basis unless otherwise noted. Looking quickly at each key metric. Domestic assessments were up 13%, while worldwide GDV grew 7%. The six PPT difference is primarily driven by pricing and mix. Cross-border assessments increased 16%, while cross-border volumes increased 11%. The five PPT difference is driven primarily by pricing in international markets and mix. Transaction processing assessments were up 14%, while switched transactions grew 9%. The five PPT difference is primarily related to pricing and a favorable mix, partially offset by lower revenue from FX volatility.
3. In 2026 Q3, Mastercard’s operating metrics were in line with Q2 and remained strong (switched volume was up 9%, switched transactions was up 9%, and cross-border volume was up 11%); in October so far, Mastercard’s operating metrics continue to be strong with worldwide switched volume growth of 10% (9% in the USA, and 11% outside of the USA), switched transactions growth of 9%, and cross-border volume growth of 10%
Starting with Q3, switched volume and transaction metrics are generally in line with Q2 and remained strong. Of note, the sequential increase in the U.S. switched volume was primarily due to recent commercial wins. Looking at cross-border. First, lower yielding intra-Europe volumes were down sequentially from Q2 to Q3, driven by the impacts related to a new customs fee in the E.U., timing of large retail promotional events, and lower crypto purchases in the quarter compared to last year. These impacts on intra-Europe cross-border were the primary reasons for the decline in card not present ex-travel sequentially. Growth in higher yielding other cross-border remained stable and slightly higher quarter-over-quarter.
As we look to the first three weeks of October, spend remained strong with metrics generally in line. A few points to note. In the U.S., switched volume improved sequentially as we begin to see the lapping of the Capital One debit migration, the lift from recent commercial wins, and higher spend on gas. As a reminder, the Capital One debit migration began towards the end of Q3 last year and continued through Q1 2026. Looking at cross-border, the sequential impacts remain predominantly intra-Europe. Growth in cross-border card not present ex-travel continued to see the impacts from two of the areas I noted earlier, notably the customs fee and a tougher comp due to higher spend on crypto purchases last year. The slight deceleration in cross-border travel was due to timing of holidays. Overall, underlying spend remains strong and consumers and businesses are spending.
From Visa
1. US payments volume growth was good at 10% in 2026 Q3 (FY2026 Q4); both discretionary and non-discretionary spend growth remained strong; there was good growth in both US credit and debit volumes; growth across consumer spend bands was consistent with prior quarters, with the highest spend band continuing to grow the fastest; there was no sign of weakening in spend among the lower-spend consumer band
U.S. payments volume grew 10% year-over-year, generally consistent with Q3, as we saw several factors from Q3 continuing to play a role, including the cost of fuel, retail, strong Visa Direct growth, and FIFA-related spend. From the FIFA World Cup round of 32 matches on July 1st through the final on July 19th, we continued to see both U.S. host cities as well as destination cities benefit from the influx of FIFA fans, with total U.S. card-present spend payments volume growth elevated above pre- and post-tournament levels. For the quarter, both U.S. discretionary and non-discretionary spend growth remained strong. Fourth quarter U.S. credit grew 11% year-over-year, and debit grew 9%. Growth across consumer spend bands remained relatively consistent with prior quarters, with the highest spend band continuing to grow the fastest. We did not see signs of the lower-spend consumer weakening in our volumes.
2. Visa’s cross-border volume growth remained strong in 2026 Q3 (FY2026 Q4) at 14%, up from 12% in 2026 Q2; cross-border e-commerce volume was up 17% in 2026 Q3 (FY2026 Q4), up from 16% in 2026 Q2, driven by retail, including spending on AI platforms
Q4 total cross-border volume was up 14% year-over-year, more than two points above Q3, primarily due to travel. Travel-related cross-border volume was up 13%, three points of acceleration from Q3, primarily driven by improvements in both CEMEA inbound and outbound. Overall, U.S. inbound cross-border growth for July remained elevated following strong growth in June, reflecting in part the demand around the FIFA World Cup. Focusing on inbound cross-border card-present spend, U.S. host cities increased by over 20% year-over-year from July 1 to July 19, with the most significant increases driven by fans from Argentina and Colombia. Cross-border e-commerce volume was up 17%, more than one point above Q3, primarily driven by retail, including spending on AI platforms.
3. Payments volume on Visa’s network continues to grow in October 2026, with US payments volume up 10%, cross-border volume up 15%, e-commerce volume up 17%, and processed transactions up 10%; management will soon stop discussing intra-quarter payment volume trends
Let’s look at the drivers through October 21st with volume growth in constant dollars. U.S. payments volume was up 10%, with credit up 11% and debit up 9% year-over-year. For constant dollar cross-border volume, excluding transactions within Europe, total volume grew 15% year-over-year, with e-commerce up 17% and travel up 13%. Processed transactions grew 10% year-over-year…
Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life. I currently have a vested interest in Mastercard and Visa. Holdings are subject to change at any time.