Reuters) - MasterCard Inc reported a better-than-expected 15.5 percent jump in quarterly profit as a rise in global consumer confidence encouraged its customers to use cards to make purchases, sending its shares up 7 percent.
MasterCard followed large rival Visa Inc in reporting an increase in cross-border transactions, which had taken a hit in the preceding quarter following Russian sanctions and a strengthening U.S. dollar.
Visa's shares were up as much 9.4 percent, single-handedly powering the Dow Jones Industrial Average to positive territory. The company reported a better-than-expected adjusted quarterly profit on Wednesday and also announced a $5 billion share buyback program.
Consumer confidence in the third quarter improved globally as concerns about the economy and job prospects eased, according to a survey by global information company Nielsen. U.S. consumer confidence also rose in August to its highest level since October 2007.
"Cross-border volume and revenue were the most important, that's where investors were concerned," Gil Luria, an analyst with Wedbush Securities, said.
MasterCard's cross-border volume fees rose 14 percent to $835 million in the quarter.
Worldwide purchase volume, or the total amount of purchases made with MasterCard-branded cards, increased 11 percent to $843 billion in local currency terms.
The company said U.S. purchase volume rose 8.2 percent to $288 billion.
MasterCard and Visa are also turning their attention to mobile payments and have partnered with Apple Inc in the launch of Apple Pay, which allows iPhone users to pay using their phones.
Chief Executive Ajay Banga said on a conference call that the company plans to use mobile-based payments as a key tool of its cash displacement efforts.
MasterCard's net income rose to $1.02 billion, or 87 cents per share, in the third quarter ended Sept. 30 from $879 million, or 73 cents per share, a year earlier.