Visa Q1 led by Travel Surge, new payment volume

Visa reported first-quarter financial results that showed continued progress in new payment streams, including Visa Direct and contactless payments.

Payment volume for the three months ended December 31 increased 7% compared to the prior year on a constant dollar basis.

Volume across borders, excluding intra-Europe, was up 31%. As had been seen with other payment networks’ Mastercard, travel-related and cross-border spending suffered a strong setback amid increasing tourism.

Visa said in its additional filings that credit volumes, in constant dollar terms, rose 11%, to $1.5 trillion, more than debit, which grew 3%, to just under $1.5 trillion.

The total number of Visa cards increased by 8% year-on-year to 4.1 billion cards. The number of debit cards grew by 8%, outstripping credit card growth of 6%.

CEO Al Kelly, who, as reported last year, is stepping down to be replaced by president Ryan McInerney, said that in consumer payments, credentials grew 11%, excluding Russia – “with strong double-digit growth in the US, India and Brazil. “

He noted that tap-to-pay penetration for face-to-face transactions was 72%, excluding Russia and the US. penetration for the first time.

New payment flow-related revenue increased more than 20%, Kelly said, with strong growth seen in B2B payment volume and Visa Direct transactions. With a specific nod to Visa Direct, he said the real-time push payment offering logged 1.9 billion transactions in its fiscal first quarter, up 39% year-on-year. Non-U.S. Visa Direct transactions, Kelly said, grew by about 20 percentage points.

B2B commercial payment volume grew 15% year-on-year, he said.

CFO Vasant Prabhu said payment volume in the US was up 9% year-on-year and 44% over 2019 in constant dollars, a sign of continued consumer resilience. Current spending on US cards was 26% higher than the company’s 2019 levels. Non-US volume, he said, was 65% higher than in 2019.

“The recovery of cross-border travel continues, but as expected the pace of recovery has slowed as most borders are now open, including Japan in October and now China in January,” he told analysts.

And as for the outlook for the current quarter, Prabhu said, “we assume that trends in domestic payment volumes and processed transactions are maintained with some advantages that overlap Omicron last January.”

And as he noted later in the call, Prabhu added that Visa has “demonstrated strong consumer payments, growth digitization and customer wins, new flows and value-added services. Momentum remains very strong, despite an uncertain macro environment.

Debit has remained robust, executives noted on the call, and has been among the biggest beneficiaries of the push for digitization — even as credit has recovered. The company will focus on expanding Visa Direct to new geographies and use cases, according to the call, for payments and remittances for the gig economy.

As Kelly said on the call, “there is tremendous opportunity in the traditional card world, both in the consumer space as well as the B2B space. There are still hundreds of millions of people to bring it to the financial mainstream. There are still trillions of dollars spent on cash and check. And when you look at the B2B space, we see a total addressable market of about $120 trillion across card options, cross-border debt and receivables.”

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