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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowPayments processing giant Visa Inc. posted an 18% rise in its fiscal fourth-quarter profits Tuesday, as the company continues to benefit from the growing use of credit and debit cards globally.
The San Francisco-based company said it earned $4.82 billion in the quarter, or $2.33 a share after one-time adjustments. That’s compared to a profit of $4.09 billion, or $1.93 a share, in the same period a year ago. Visa beat analysts’ forecasts, according to FactSet.
Since the COVID-19 pandemic, Visa has benefitted from a fundamental change in consumer behavior that has led to the broad acceptance of digital payments in places where traditionally cash was king, as well as from the growth in online shopping. The acceptance of digital payments goes straight to the bottom line of Visa and its competitor Mastercard, which take a fee from every transaction that is run on their networks.
Visa reported a 9% rise in payments volume on its network and a 10% rise in the number of transactions on its network. Consumers spent $3.196 trillion on Visa’s network globally last quarter, with the company posting a healthy 6% growth in spending in the U.S., the company’s largest market.
For the full year, Visa saw $12.338 trillion spent on its network compared to 2022. For comparison, that’s twice the entire U.S. government’s annual budget.
“I am confident in our ability to deliver against a backdrop of geopolitical and economic uncertainty,” said Ryan McInerney, the company’s CEO, said in a prepared statement. “There is tremendous opportunity ahead and I am as optimistic as ever about Visa’s role in the future of payments.”
Visa’s stock rose about 1% in after-hours trading following the release of the earnings report.
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I still gag that VISA and Mastercard are like a hidden tax on the economy. In the US we pay 9 times more per transaction than they do in the EU. Credit card fees are around 2.7% in the US, and in the EU they are capped by regulation at 0.3%.
This is a huge amount of money! We need to give up this hidden tax on everyone (people paying cash still pay more to cover these fees to merchants) because it raises prices for everyone! Worse yet, the guy paying cash is still paying for some rich guys vacation to Hawaii, because the merchant has to cover this hidden tax.