Visa’s incentive spending, international business boost profit

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Visa spent less on client incentives than analysts expected during its fiscal fourth quarter, showing the world’s largest payment network is resisting pressure to ramp up efforts to get banks and retailers to route more spending its way.

Credit-card lenders are upping rewards for consumers and payment networks are boosting incentives for merchants as the battle intensifies in the $90 billion swipe-fee industry. Visa’s 12 percent jump in client incentives to $1.5 billion fell short of the $1.65 billion average analyst estimate. President Donald Trump’s trade war is no match for profit at Visa.

Cross-border volume, a measure of spending abroad, climbed 10 percent in the period. The San Francisco-based company cited its acquisition of Visa Europe two years ago as well as a shift to commercial client contracts. Total spending on Visa’s network climbed 4.5 percent to $2.09 trillion. That missed the $2.15 trillion average of three analyst estimates compiled by Bloomberg.

Visa’s stock rose 1.1 percent to $135.79 in extended trading. It had rallied 18 percent this year in regular trading before the report, compared with the 6.6 percent gain of the 66-company S&P 500 Information Technology Index.

Profit in the quarter ended Sept. 30 was $2.8 billion, or $1.23 a share, beating the $1.20 average of 33 analyst estimates compiled by Bloomberg. Visa estimated that revenue for its next fiscal year may rise by the low double digits.

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