Visa Inc (V.N) reported a better-than-expected quarterly profit on Thursday, joining smaller rival Mastercard (MA.N), as a solid holiday shopping season boosted transactions on its payment network.

However, shares fell 1.52 per cent in extended trading as Visa sees higher full-year expenses and slower revenue growth in the current quarter.

"Our outlook for the fiscal second quarter net revenue growth remains a couple of points below the full year rate," Chief Financial Officer Vasant Prabhu added.

Net income rose to US$2.52 billion in the first quarter ended Dec. 31 from US$2.07 billion a year earlier, while earnings per Class A share rose to US$1.07 from 86 cents US.

The payment processor recorded a gain of US$1.13 billion related to the new U.S. tax law and a charge of US$1.15 billion tied to the repatriation of funds held overseas.

Excluding items, Visa earned US$1.08 per share. Analysts on average expected 99 cents US, according to Thomson Reuters I/B/E/S.

Total operating revenue rose nine per cent to US$4.86 billion, reflecting growth in payments volume and processed transactions.

Operating expenses rose 12.8 per cent to US$1.54 billion and Visa said it expects expenses to rise in the second quarter as well.

Payment volumes rose about 10 per cent to US$1.93 trillion, on a constant dollar basis, with the United States accounting for about 43.3 per cent of the total.

Cross-border volumes — the value of transactions made outside of the United States — increased nine per cent, on a similar measure.

Visa said it would repurchase US$7.5 billion of its stock and it has US$9.1 billion of funds available for share buybacks.

Earlier in the day, Mastercard reported a 20.2-per-cent jump in quarterly revenue.