Business

Consumers ready to spend more now than before Covid

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Mastercard Inc. Credit Cards

Benoit Tessier | Reuters

Mastercard CFO Sachin Mehra told CNBC that consumer spending in America is on track to surpass pre-pandemic levels, based on the company’s second-quarter earnings report data.

The payment giant said Thursday large volume of dollars, a metric that reflects purchasing activity, has increased nearly 34% year-over-year over the United States to $ 619 billion. It’s 27% from the same quarter in 2019.

“People are trying to spend and exercise that intention now.” Mehra said in an interview Thursday. “Does the stimulus play a role in this? Absolutely. Does the high level of savings across the board play a role in this? In all. At the end of the day, people exercise their intention to spend. It’s something we’ve seen. And we haven’t even seen trips go back to the levels we used to see pre-pandemic. ”

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Mehra said spending trends also point to increased consumer confidence in the economic recovery.

“The last 12 to 18 months, it was more about non-discretionary categories, food, utilities, things like that. We’re starting to see that now they’re moving into discretionary categories, more about travel, more on accommodation, more around restaurants, ”he added. “You’re starting to see higher growth rates in credit. Debt is growing at a very healthy pace as well.”

Mastercard Thursday beat estimates on revenue and profit.

In the earnings call, CEO Michael Miebach said spending on the store is back, but there is a “secular trend against numbers,” which is a catalyst for its digital payment activities.

“Aversion to money will lead to no contact because it’s a cleaner form of payment.” Mehra said. “Contactless has gone on an even pre-pandemic upward trajectory. People have seen the convention it presents, and it has only accelerated. The United States has always been lazy when it comes to contactless, but that is changing. The aversion to cash is one component. It’s just a good user experience. “


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