Visa processed $3.325trillion in transactions on its network during the quarter, up 7.4% from a year earlier. Much of the payments growth came from Europe and Latin America, but US payments grew by 5.1%
Visa Inc. , the payment processing giant, announced on Tuesday that its fiscal third-quarter profits had risen by 9% on an adjusted basis.
This increase is due to consumers and businesses shifting their payments from cash to credit and debit cards. The San Francisco-based firm reported earnings of $4.87 billion, or $2.40 a share, compared to a profit of $4.16 billion, or $2.00 a share, in the same period a year earlier. After excluding one-time items, Visa’s earnings were $2.42 a share, which was in line with what analysts had expected, according to FactSet.
During the quarter, Visa processed $3.325 trillion in transactions on its network, marking a 7.4% increase from a year earlier. The growth in payments primarily came from Europe and Latin America, but US payments also grew by 5.1%, outpacing US economic growth.
Visa earns a fee from every transaction processed on its network. These fees vary depending on the industry and whether the transaction is made with a credit or debit card, but they generally range between 1% to 4%. Since the pandemic, more consumers worldwide have been shopping online for goods and services, resulting in increased revenue for Visa in the form of fees.
Even traditionally cash-heavy businesses like bars, barbers and coffee shops have started accepting credit or debit cards as a form of payment. While the world is steadily shifting towards digital payments, the rate of adoption appears to be decelerating slightly. Visa has reported a slowdown in the growth of credit and debit card payment volumes from 8% to 7%.
This could be partially attributed to Visa’s market becoming too large to maintain its previous rapid growth, but it could also be due to a decrease in new industries for Visa to transition to digital.
