Visa profit surges as cross-border transactions increase and cashless payments rise

The company's net profit jumped to $4.2bn in three months to June 30

Visa's last-quarter revenue surged 12 per cent on a yearly basis to $8.1 billion. AP

Visa, the world's largest payments company, reported a 22 per cent yearly jump in its 2023 fiscal third-quarter net profit, driven by a surge in payment volumes, cross-border transactions and a greater amount of customers opting to pay with cards instead of cash.

The net profit of the California-based company jumped to $4.2 billion in the three months to the end of June 30. However, it was down 2.3 per cent on a quarterly basis.

Revenue surged 12 per cent on a yearly basis to $8.1 billion, Visa said in a statement.

The company said it had recorded 54 billion processed transactions in the last quarter, a 10 per cent increase over the same period in 2022.

“We reported another quarter of strong results, reflecting stable business trends. Consumer spending remained resilient, driving growth in payments volume and processed transactions,” Ryan McInerney, Visa’s chief executive, said.

“Cross-border volume continued to be a tailwind, fuelled by travel growth from the ongoing recovery and summer tourism,” he added.

Shares of the company, which have increased more than 12.3 per cent over the past year, dropped 0.79 per cent to $236.80 in after-hours trading on Tuesday.

The company’s earnings per share rose 25 per cent to almost $2 in the third quarter.

In the last quarter to June 30, Visa said it had repurchased 12.9 million shares at an average cost of $222.19 per share for $3 billion.

The company said it had $8.8 billion of remaining authorised funds for share repurchase at the end of June.

This week, the company also declared a quarterly cash dividend of $0.45 per share payable on September 1 to all holders of record as of August 11 this year.

Visa's total payments volume in the third quarter surged 9 per cent year-on-year, while cross-border transactions increased by 17 per cent on an annual basis.

The company processed about $3.799 trillion of transactions on its network the last quarter, with Central and Eastern Europe, the Middle East and Latin America accounting for the bulk of its growth. The US, which accounts for about half of Visa's global payments volume, the number of payments rose 4.9 per cent.

The company’s cash, cash equivalents and investment securities stood at $20.9 billion at the end of last quarter, a quarterly jump of 7.7 per cent.

The company’s operating income in the third quarter rose 21.1 per cent on a yearly basis to more than $5 billion, while operating expenses decreased 0.89 per cent annually to more than $3 billion.

Visa did not issue earnings guidance for the current and future quarters.

Visa said it aims to boost growth in the next quarters.

“We are focused on accelerating our growth across consumer payments, new flows and value added services by investing in our brand, innovation, capabilities, people and clients so that we remain at the centre of money movement for years to come,” Mr McInerney said.