MasterCard Inc, the world's second-biggest payments processor, on Thursday reported a better-than-expected 20 per cent jump in quarterly profit as people spent more using credit and debit cards.

Mastercard's shares were down slightly in early trading.

Consumer spending in the United States, which accounts for more than two-thirds of nationwide economic activity, has been on an upswing, supported by a tightening labor market and cooling inflation.

Purchase, New York-based Mastercard, like its bigger rival Visa Inc, generates revenue by facilitating credit- and debit-card transactions and both their revenue streams are closely linked to consumer spending power.

Mastercard also benefited from consumer spending outside the United States, with its cross-border volumes — the value of transactions made by overseas card-holders — rising 14 percent on a local currency basis in the second quarter ended June 30.

The company's net income rose to $1.18 billion, or $1.10 per share in the quarter, from $983 million, or 89 cents per share, a year earlier.  

Analysts on average had expected earnings of $1.04 per share, according to Thomson Reuters I/B/E/S.

Revenue climbed 13.3 percent to $3.05 billion, helped in part by Mastercard's acquisition of payment systems company Vocalink.

Last week, Visa reported a better-than-expected quarterly profit and raised its annual earnings forecast, as more people across the U.S. and Europe used its payments network.