Contending the worst of the recession likely is over, Visa Inc. on Wednesday reported an increase in card spending both domestically and internationally for the company’s fiscal second quarter ended March 31.
U.S. debit card sales volume, including signature and Interlink PIN-debit, rose 21.3%, to $245 billion from $202 billion during the same quarter last year. Total U.S. debit transactions rose 18.5%, to 6.4 billion from 5.4 billion.
Debit sales volume outside of the U.S. rose 50%, to $51 billion from $34 billion. Total debit transactions outside the U.S. rose 20.5%, to 1.2 billion from 996 million.
U.S. credit card sales volume increased 3.4%, to $182 billion from $176 billion, while transaction volume stayed unchanged at 2.1 billion. Credit card sales volume outside the U.S. rose 30.4%, to $266 billion from $204 billion, and total credit transactions overseas increased by 9.7%, to 3.4 billion from 3.1 billion.
Regionally, in the Asia-Pacific, combined debit and credit purchase volume rose 31.3%, to $193 billion from $147 billion. In the Latin America/Caribbean region, total payment volume increased 38.1%, to $58 billion from $42 billion. In Canada, total payment volume rose 37.5%, to $ 44 billion from $32 billion. In the Central Europe, Middle East and Africa region, total payment volume rose 35.3%, to $23 billion from $17 billion, while total transactions increased 21.4%, to 357 million from 294 million.
Network volume globally (payments volume plus cash volume) totaled $1.2 trillion, up 23.8% from $969 billion. Visa said it processed 10.6 billion total transactions through its various brands during second quarter, up 12.8% from 9.4 billion during the same period last year.
For the quarter ended Dec. 31, the most recent period for which card-issuance numbers are available, Visa issuers had 394 million debit cards on issue, up 18.3% from 333 million a year earlier. Visa issuers had 297 million credit cards on issue, down 11.3% from 335 million.
Outside the U.S., Visa issuers had 630 million debit cards on issue as of Dec. 31, up 10.1% from 572 million a year earlier. Visa issuers outside the U.S. had 488 million credit cards on issue, up 2.1% from 478 million.
As a company, Visa reported net income for the quarter of $713 million, up 33% from $536 million during the same period last year. Total operating revenue increased 9.3%, to $837 million from $766 million. Total operating expenses rose 19% to $1.9 billion from $1.6 billion a year earlier.
Visa’s overall quarterly performance was “fueled by higher-than-expected payments volume growth,” Joseph Saunders, Visa chairman and CEO, said in a news release about second quarter earnings.
Asked during a conference call with analysts about Visa’s cross-border and U.S. spending improvement, Jack Carsky, Visa’s head of global international relations, said “Visa is seeing strong cross-border gains throughout the globe,” up 12% from minus-6% last year.
As for the U.S., Carsky said the increase in spending is more from debit card use, but credit card use is starting to “show signs of life,” especially for nondiscretionary spending such as gas, bills and grocery-store items, he noted.
“The interesting thing is that, while consumer sentiment about the recession is still negative, consumer spending is increasing,” Gwenn Bézard, research director at Boston-based Aite Group LLC, tells PaymentsSource.
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