Visa’s payments business helps profit exceed Wall Street estimates

Get ready for some good news! Visa Inc just reported a better-than-expected second-quarter profit, and they’re betting on sustained growth at their payments business. This is great news for consumers who are bracing for a milder recession than was once feared.

Visa’s shares have already risen 11% this year, and they’re up another 2.4% in after-hours trading. It’s no surprise, considering that card companies escaped the economic downturn of last year unscathed on the back of a strong dollar and a rebound in travel, particularly in China. Executives have downplayed the turmoil in the economy for several quarters, and it looks like they were right to do so.

“Consumer payments remains a massive opportunity for Visa,” said Chief Executive Officer Ryan McInerney on a post-earnings call. “There is a very long runway for growth in this business.”

Payment volumes for the three months ended March rose 10%, while cross-border volume excluding Europe, a measure of Visa’s revenue from international transactions, increased 32%. That’s a decline from a year ago, but it’s still impressive.

“While the current environment still feels uncertain, we have contingency plans ready and are prepared to take action as needed,” McInerney said. It’s good to know that Visa is prepared for any eventuality.

Transactions processed rose 12% in the quarter, below 19% growth a year before. That prompted an 11% increase in net revenue, the slowest in eight quarters. Visa’s results follow peer American Express Inc, which stockpiled $1.1 billion to cover potential defaults and spent more on promotions, missing Wall Street estimates on Thursday.

On an adjusted basis, Visa earned $2.09 per share in the quarter ended March, exceeding analysts’ estimates of $1.99, according to data from Refinitiv IBES.

It’s great to see Visa doing so well, and we can’t wait to see what the future holds for this payments giant. (Reporting by Mehnaz Yasmin in Bengaluru; Editing by Maju Samuel)

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