Buoyed by improving economic trends around the world, Visa Inc. on Wednesday reported purchase-volume growth in all categories except U.S. credit for the quarter ended Dec. 31. Visa also for the first time reported its operational performance data and financial results simultaneously for the same quarter. It previously reported operational data a quarter later than its earnings.
U.S. debit card sales volume for its fiscal first quarter rose 15.5%, to $238 billion compared with $206 billion during the same quarter a year earlier. Total U.S. debit transactions rose 17.1%, to 6.38 billion from 5.45 billion. Debit volume, which Visa says now accounts for 54% of its total U.S. card volume, includes signature debit and Interlink PIN-debit activity. Debit volume outside the U.S. rose 39.5%, to $53 billion from $38 billion, while total debit transactions outside the U.S. rose 17.3%, to 1.22 billion from 1.04 billion.
U.S. credit card volume fell 1%, to $201 billion from $203 billion a year earlier, while total credit transactions fell 0.42%, to 2.37 billion from 2.38 billion. Credit card sales volume outside the U.S. rose 21.9%, to $278 billion from $228 billion, while total credit transactions rose 11.5%, to 3.59 billion from 3.22 billion.
Total payment volume for the quarter rose in all regions outside the U.S.
In the Asia-Pacific region, combined debit and credit purchase volume rose 21.7%, to $196 billion from $161 billion a year earlier. In the Latin America/Caribbean region, total payment volume rose 36.2%, to $64 billion from $47 billion, while total transactions rose 13.4%, to 1.52 billion from 1.34 billion. In Canada, total payment volume rose 23.7%, to $47 billion from $38 billion. In the Central Europe, Middle East and Africa regions, total payment volume rose 15%, to $23 billion from $20 billion, while total transactions rose 15.4%, to 353 million from 306 million.
Network volume globally (payments volume plus cash volume) totaled $1.23 trillion, up 15% from $1.07 trillion a year earlier. Visa said it processed 10.9 billion total transactions through its various brands during the quarter, up 11.5% from 9.8 billion.
For the quarter ended Sept. 30, the most recent period for which card-issuance numbers are available, Visa issuers had 372 million debit cards on issue, up 18.5% from 314 million a year earlier. Visa issuers had 302 million credit cards on issue, down 10.1% from 336 million.
Outside the U.S., Visa issuers had 608 million debit cards on issue as of Sept. 30 up 10.7% from 549 million. Credit cards on issue totaled 485 million, up 2.5% from 473 million.
During a conference call with analysts yesterday afternoon, Joseph Saunders, Visa Chairman and CEO, said despite the effects of the recession, there is “considerable interest in the higher end of the retail market,” and there is “some evidence” that credit card direct marketing is growing again. “But I would say it’s way too early to say things have turned around. ... We’re back to something that’s close to where we were maybe one-and-a-half to two years ago.”
Asked whether Visa’s debit growth is possibly cannibalizing its credit card operations, Saunders said the current economic environment is favoring heavier debit spending, and it remains to be seen whether credit volume will accelerate when the economy improves. “Until that happens, it’s going to be hard to measure the balance between (credit and debit),” he said.
As a company, Visa reported net income for the quarter of $763 million, up 32.9% from $574 million during the same period last year. Total operating revenue increased 12.6%, to $1.96 billion from $1.74 billion. Total operating expenses fell 3.9%, to $743 million from $773 million a year earlier.
