By KEN SWEET, AP Business Writer
NEW YORK (AP) – Profits at payments giant Visa Inc. surged in its most recent quarter, driven by consumers and businesses returning to spend on their credit and debit cards after the pandemic.
The San Francisco-based company said on Tuesday it earned $ 3.58 billion in its fiscal fourth quarter that ended September 30, or $ 1.65 per share. That was up from earnings of $ 2.14 billion, or 97 cents a share, in the same period a year earlier.
Excluding one-time adjustments, Visa gained $ 1.62 per share, up 42% from the previous year. Analysts were expecting $ 1.55 per share, according to FactSet.
Visa’s results last year were hampered by the global slowdown in travel and economic activity induced by the pandemic, which reduced the amount of money traveling through Visa’s credit and debit card networks. As economies around the world reopened, so did the volume of payments, which directly affected Visa’s results.
Consumers and businesses spent $ 2.783 billion on Visa’s network in the last quarter, up 17% after adjusting for currency fluctuations. Visa saw double-digit growth on Visa-branded credit cards, as well as debit cards.
Visa executives said they have observed that the pandemic has resulted in a permanent change in consumer behavior: more and more consumers have become comfortable shopping for items online or with their smartphones, which requires often a credit or debit card. This has been observed in traditionally cash-rich sectors of the economy, such as grocery stores, cafes and bars.
“The pandemic has further digitized money,” Al Kelly, CEO and chairman of Visa, said on a call with investors. âWe are even better positioned than where we were before the pandemic. “
It will ultimately be good for Visa’s bottom line. The company charges a fee for every transaction that uses its payment network. The fees vary depending on whether it is a debit card transaction or the type of credit card used.
Kelly also said that the growth of cryptocurrencies will also benefit Visa’s profits, as cryptocurrency investors will have to transfer money from a traditional bank account to a third-party service to purchase Bitcoin and other parts. While Visa’s bread and butter will always be credit and debit cards, Kelly said, he sees his network as a âone-stop-shopâ between cryptocurrencies and traditional sources of money.
Visa also released its annual results. The company earned $ 12.93 billion on an adjusted basis, up 16% from its prior year. Total revenues last year were $ 24.11 billion.
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