Visa Inc.'s fiscal third-quarter net income rose 40.4% from a year earlier due partly to a gain it recognized from the revaluation of a deal with Visa Europe.

Its net income was $1 billion. Excluding the gain, Visa on Wednesday said its net income rose 23%, to $883 million, in the quarter that ended June 30, or $1.26 per diluted share.

That beat analysts' averaged estimate of $1.23 per share, according to Thomson Reuters.

The San Francisco payment network's operating revenue rose 14.4%, to $2.32 billion, due to higher service, data processing and international transaction revenue.

The company said its payments volume for the quarter ending March 31, on which its fiscal third quarter revenue is based, grew 13%, to $862 billion. Visa reported similar growth for payments volume in the fiscal third quarter.

"We benefited from growth in global payments volume and solid cross border and processed transaction growth," Joseph Saunders, Visa's chairman and chief executive, said in a press release.

Several of Visa's largest credit card issuers recently reported rising purchase activity.

Jason Kupferberg, a senior analyst with Jefferies & Co., wrote in a research report on July 22 that average year-over-year credit card growth rates rose to 11.6% in the quarter ending June 30 from 9.5% in the preceding quarter.

Bank of America Corp. posted a 4.2% year-over-year increase in credit card purchase volume in the quarter that ended June 30. JPMorgan Chase & Co.'s volume rose 10.2%, and Citigroup Inc.'s volume rose 1.5%, according to a research note published July 19 by Keefe, Bruyette & Woods Inc.

Earlier this month Visa executives reiterated confidence in their ability to mitigate the negative effects of new debit card regulations. The regulations, which the Federal Reserve Board finalized June 29 per an amendment to the Dodd-Frank Act, cap the amount of interchange fees that card-issuing banks can earn on debit transactions. The law also prohibits Visa and other networks from having exclusive processing deals with issuers.

While the regulations are expected to crimp revenue for processing networks and their issuers, the final rules were less onerous than they could have been, capping debit interchange at 21 cents per transaction plus an allotment for fraud costs. The Fed initially proposed a 12-cent cap in December.

Visa's shares closed at $87.75 on Wednesday, up more than 16% from their closing price a day before the Fed finalized its rules in June.

"As we address the new regulatory landscape, we are prepared to deliver on our financial goals and remain an industry-leading growth company in the global transactions space," Saunders said in the release.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.