VISA forecast second-quarter revenue below market estimates on Thursday (Jan 25), eclipsing an upbeat earnings report that was powered by customers swiping their credit cards for big purchases during the holiday shopping period and robust travel.

Shares of the world’s largest payments processor fell 2.7 per cent in volatile extended trading after it forecast an increase of “upper mid to high single-digit” in second-quarter net revenue.

Analysts on average had expected a rise of 12.1 per cent, according to LSEG data.

The outlook for payments firms has been marred by worries that a slowing economy and high interest rates will continue to pressure the wallets of consumers, particularly those in the lower-income bracket.

Recent economic data also shows inflation in the United States has begun to moderate, a trend that typically hurts card companies, which charge a percentage on the dollar value of transactions.

Payments volume increased 8 per cent in the first quarter on a constant-dollar basis.

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US consumers shrugged off the impact of sticky inflation to ring in a solid holiday season, snapping up beauty products, apparel and electronics that were on steep discounts both online and in retail stores.

Meanwhile, no weather-related disruptions in the final stretch of the year ensured travel within the US and to international destinations also remained uninterrupted, lifting leisure, entertainment and cross-border volumes.

Cross-border volume excluding intra-Europe, a gauge of international travel demand, increased 16 per cent in the first quarter. It had surged 31 per cent in the year-ago quarter.

Adjusted profit of US$2.41 per share sailed past analysts expectations of US$2.34. REUTERS