Visa Inc., a leading payment processing company, announced a 9% increase in its fiscal third-quarter profits, driven by the ongoing shift from cash to credit and debit card payments by consumers and businesses. The company reported earnings of $4.87 billion, or $2.40 per share, compared to $4.16 billion, or $2.00 per share, in the same period last year. Adjusted earnings stood at $2.42 per share, meeting analysts' expectations.
During the quarter, Visa processed transactions worth $3.325 trillion on its network, marking a 7.4% increase from the previous year. The growth in payments was particularly notable in Europe and Latin America, with the U.S. also experiencing a 5.1% increase, outpacing the country's economic growth rate.
Visa generates revenue by charging a fee for every transaction processed on its network, typically ranging from 1% to 4% depending on the industry and card type. The surge in online shopping due to the pandemic has boosted Visa's fee revenue globally.
Even traditionally cash-centric businesses like bars, barbershops, and coffee shops have embraced credit and debit card payments, further contributing to Visa's revenue growth.
Despite the overall trend towards digital payments, Visa noted a slight slowdown in the growth of credit and debit card payment volumes, dropping from 8% to 7%. This deceleration could be attributed to the company's market size reaching a saturation point and a potential scarcity of new industries transitioning to digital payments.
