Visa, the world’s largest electronic payment network, beat forecasts and reported a fiscal first quarter profit jump of 33 percent, with its growth in debit card payment transactions outpacing credit cards by 72 percent.
Visa’s numbers shows that consumers continue to rely more on debit cards and are holding off on reviving credit card revolving debt as the economy continues to struggle.
Visa isn’t necessarily impacted by low demand for credit because it doesn’t lend money, but collects fees from each transaction from the use of either debit or credit cards carrying its logo.
Visa said profit was $763 million, or $1.02 a share, in its fiscal first quarter ended Dec. 31, compared with profit of $574 million, or 74 cents a share, in the same quarter a year earlier, beating analysts’ average expectation of 91 cents a share.
Revenue growth was strong in all segments, climbing 13 percent to $1.96 billion from $1.74 billion a year ago.
Payments volume for the fiscal quarter grew a total of 14 percent – 11 percent for its credit card programs and 19 percent for its debit card programs.
The total number of processed transactions for the three months ended Dec. 31, 2009, totaled 10.9 billion, a 12 percent increase over the prior year.
Visa said its “operational performance highlights” during the three months ended Sept. 30, 2009, included payments volume growth, on a constant basis, at 2.5 percent over the prior year at $720 billion; and total cards carrying the Visa brands rose 5 percent worldwide over the prior year to 1.8 billion.
“By all measures, Visa’s fiscal first quarter was a strong start to the new year, as we continued to execute well against our business plan,” said Joseph Saunders, chairman and chief executive officer, Visa. “We were able to capitalize on the secular trend to digital currency and grow revenues, as we expanded our payments network and processing capabilities to drive transaction growth through effective marketing programs.”
