Visa Volumes Jump, But Europe A Headwind

Payments giant Visa posted growth in payments volumes and got a boost, as can be expected, from its Visa Europe acquisition.

In the wake of the recent announcement that CEO Charles Scharf would be resigning at the end of the year, Visa’s fourth quarter results showed some line items a bit better than The Street expected, at $0.78 a share in net income versus $0.62 a year ago.

The Street had expected $0.73, and revenues at $4.26 billion edged The Street at $4.23 billion. The total payments volume for the September period came in at $1.9 trillion, up 47 percent from a year ago (of course, including the Europe operations). Total processed transactions came in at 41 percent growth, to just under 26 billion.

However, guidance may have fallen a bit short, as management said sales for this current fiscal year would be in the range of 16–18 percent. Analysts were shooting for 20 percent growth. That shortfall stems from continued macro-concerns stemming from Europe, and management said on the earnings call that Brexit might dampen payments activity in the region.

Drilling down into the numbers, Scarf told analysts on the conference call that the U.S. payments volume was up 11 percent year over year and up one percentage point sequentially. Costco helped boost credit payments volume in the U.S., up 19 percent. The total cross-border growth was 10 percent as measured year over year.

As for Visa Checkout, Scharf said on the call that, at year end, the total tally was 15 million consumer accounts, tied to $162 billion in addressable volume. Repeating earlier announcements from the day, the platform is being opened to let users integrate digital wallets. Scharf noted in remarks: “Issuers, digital wallets and payment app providers can access a streamline set of APIs to easily integrate Visa Checkout open platform and immediately begin to offer payments to their customers shopping online on their mobile devices.”

“For example, an online shopper who uses a digital wallet from a participating Visa issuer or Android Pay would simply click the Visa Checkout button on a merchant’s checkout page and authenticate their identity through biometrics to complete a purchase.”

Visa Direct push payments were also strong, said management, as Visa Direct volumes stood at 5 billion transactions in the United States.