Visa Tops 4.7 Billion Credentials, Logs 44% Growth in Tokens YOY

Visa’s fiscal first-quarter results noted significant growth in payments done digitally, and in tokens and credentials issued by the payments network.

Payments volume grew by 9% in the latest quarter, as the U.S. was up 7%, and cross-border volume was up by 11%. Within the U.S., debit volumes were up 8% and credit volumes were 7% higher. Cross-border volumes were 15% higher in constant dollar terms.

CEO Ryan McInerney said on the conference call with analysts that the quarterly volume of about $4 trillion is being driven by the shift to digital payments, which now account for more than 60% of volume.

Tokens and Credentials Growth

The company has issued 4.7 billion credentials, which represented 7% growth YOY, and has also issued 12.6 billion tokens, representing a 44% surge YOY.

“If you just look at eCommerce on tokenized transactions,” McInerney said during the call, “we have six percentage point higher approval rates. That [translates into] significantly higher sales for our merchant partners and 30% reduction in fraud rates, which is good for everybody in the ecosystem … Tokens have become one of our most important platforms for enabling innovation.”

McInerney added: “Interest in our Visa flexible credential continues to grow.” The “tap to add” card, he told analysts, is now live for about 60% of U.S. consumer credit and debit cards.

With a nod to the appeal of tap-to-pay functions, the CEO noted that 74% of all face-to-face transactions logged by Visa are contactless, with double-digit growth in markets such as Japan and Argentina. In the U.S., tap-to-pay was up 13 percentage points to 57%.

Turning to new flows, McInerney said that revenues in that business line were up 19% in constant dollars. Visa Direct has crossed the 10 billion transaction level on a trailing 12 month basis, with three billion transactions in the latest quarter, and where volumes were up 34%. He noted the announcement this week of the launch of the X Money account as an example of the momentum behind Visa Direct.

The joint efforts will “allow the 600 million or so active monthly users of X to fund their X Money account,” McInerney said. “They’re going to be able to transfer funds back to their bank account instantly … There will be creators on the X platform that can now get paid much faster when they use Visa Direct to move money back into their to their bank accounts.”

CFO Chris Suh said that, as volumes and revenues grew, “in the U.S., consumer holiday spending growth was in the upper-mid-single digits on a year-over-year basis. The consumer categories with the strongest growth were discretionary categories such as retail, travel and entertainment.” eCommerce, as measured as card-not-present volume, was up 16% YOY. Commercial payments volume rose 6% YOY, he said.

Looking ahead, Suh said net revenue growth is expected to be in the high-single digits to low-double digits in the current quarter.

As value-added services revenue accelerated in the quarter, McInerney said: “We’re very excited about the progress that we’re making in value-added services across the board. There’s no change in emphasis as it relates to the priority or the prioritization of the areas where we’ve been building and building products and serving clients. So we continue to be very focused on delivering solutions to merchants and acquirers, very focused on delivering solutions to issuers, very focused on delivering fraud and risk solutions, broadly across the ecosystem as well as the advisory business.”

Pismo, in particular, and FeatureSpace, he said, are notable acquisitions that are helping to build sales pipelines.

Elsewhere, McInerney said that the company remains on track to launch its Visa A2A offering in early 2025, with the initial use cases tied to bill payments.

“The power … of taking some of these Visa capabilities into the account-to-account space is going be a great benefit for our clients and our partners in the ecosystem,” he said.