Visa beats estimates as global credit-card spending climbs

Processed Transactions

Worldwide spending on Visa payment cards climbed to $979 billion, a 6.3 percent increase when adjusted for currency fluctuations. Processed transactions rose 1 percent to 13.1 billion. Cross-border volume, a measure of spending by cardholders outside their home countries, advanced 14 percent.

Saunders also overhauled Visa’s fee structure on debit cards after new U.S. caps took effect in October. The limits on debit-card fees and processing, mandated by the Dodd-Frank Act, may have helped MasterCard wrest market share from Visa, which handled about triple the amount of such purchases than its smaller rival in the fiscal year ended Sept. 30.

“There will be a permanent deterioration in our debit card volume,” Saunders said on the company’s conference call. “There is absolutely no question about it,” he said. “I don’t expect to be close to where we were when the whole thing started.”

Debit Decline

Visa U.S. debit-card spending dropped 9.4 percent in the quarter to $266 billion, while credit climbed 9.8 percent to $246 billion.

The U.S. Justice Department’s antitrust division issued a civil investigative demand on March 13 asking Visa for information about the new debit-card pricing strategy, Saunders said in May. Saunders said yesterday that he is “comfortable” the company’s actions were appropriate.

Saunders has said he intends to generate more than half of Visa’s revenue from outside the U.S. by 2015, up from 44 percent in fiscal 2011.

Visa’s share of worldwide purchase transactions on credit and debit cards, including those processed by Visa Europe Ltd., fell 1.1 percentage points last year to 64.67 percent as MasterCard’s share grew by almost 0.5 percentage point to 25.57 percent, according to the Nilson Report, an industry newsletter based in Carpinteria, California.

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