MASSACHUSETTS, United States — MASTERCARD Inc shares rose to their highest level in a year yesterday after the electronic payment processor posted a higher-than-expected first-quarter profit, and reported consumers continue to swipe credit and debit cards more frequently despite higher gasoline and food prices.

MasterCard also benefited from a global economic recovery that’s driving faster growth in card use overseas than in the US, despite Japan’s natural disaster and nuclear crisis, and heightened political unrest in the Middle East.

Shares of MasterCard rose US$7.33, or 2.7 per cent, to US$282.62 in midday trading, after climbing as high as US$286.80 earlier in the session.

Chief Financial Officer Martina Hund-Mejean told analysts that card use rose at a slightly faster rate in the first four weeks of April compared with the first quarter, despite consumer pressures including higher food and gasoline costs.

However, Hund-Mejean warned that a prolonged rise in prices could begin to hurt MasterCard.

“Over the long term, the inflation could be crowding out other discretionary purchases that people can be making,” she told a conference call.

There’s little sign of that happening so far. MasterCard said its net income rose to US$562 million, or US$4.29 per share, in the three months ended March 31. That was up from US$455 million, or US$3.46 per share, that the Purchase, New York-based company reported in the year-ago period.

Revenue rose 15 per cent to US$1.50 billion from US$1.31 billion a year earlier, with about 60 per cent of revenue coming from outside the US.

On average, analysts polled by FactSet expected earnings of US$4.08 per share on revenue of US$1.45 billion.

Purchase volume increased 13 per cent from the year-ago quarter to US$545 billion. Much of that growth came from outside the US. Purchase volume worldwide excluding the US increased 16.5 per cent, while US purchase volume rose 7.4 per cent.

The company also noted its revenue growth was helped by more consumers travelling across borders and using their credit and debit cards. That type of spending jumped 18.5 per cent during the period.

The number of transactions MasterCard handled rose 11 per cent to six billion versus the previous year.

Debit purchases, where MasterCard lags its larger rival Visa Inc, were up 16.3 per cent globally.

Credit card purchase volume increased 11.7 per cent. The US posted the smallest increase in credit card purchase volume at just 4.9 per cent, compared with a 14.6 per cent gain worldwide.

Expenses rose nine per cent to US$665 million.

President and CEO Ajay Banga said MasterCard is off to a strong start to the year, and he remains “cautiously optimistic” overall about global economic prospects. However, he said he worries about persistently high unemployment in the US, and the prolonged housing market slump.

MasterCard expects revenue to grow 12 per cent to 14 per cent this year, with a slightly higher growth rate in the second half of the year than in the first. The company expects earnings per share to rise at least 20 per cent this year.

On average, analysts expect full-year revenue of US$6.19 billion, implying growth of nearly 12 per cent, and a full-year profit of US$16.71 per share, a growth rate of 19 per cent over last year.

Banga told analysts he is closely watching new rules that will limit the amount merchants must pay for debit card transactions, but doesn’t expect any impact on MasterCard until at least next year. Banga said he had little new information on whether the Federal Reserve or Congress might delay a July implementation timeline for the rules. As proposed, the rule would cut those fees to 12 cents per transaction, from an average of 44 cents for PIN-based purchases and 56 cents for signature-based purchases.

The rules would not directly hit the processors, but would erode revenue for the card-issuing banks using the processors’ payment networks. Until the issue is resolved or the rule is scrapped, investors are uncertain whether banks will demand changes in their contracts with Visa and MasterCard, charge fees for card use or even scrap debit cards altogether. All of these options could have negative consequences for processors.

Visa is scheduled to report first-quarter results after markets close Tomorrow. Analysts expect the San Francisco-based company to report earnings of US$1.20 per share, on revenue of US$2.23 billion, on average.