Visa Credentials, Crypto Wallets Top $2.5B in Payments Volume

Payment network Visa showed resilience in cross-border spend, and tap-to-pay gaining in key markets.  Along the way, consumer spending on debit and credit cards has continued into the current quarter.

CEO Al Kelly pointed Thursday (Jan. 27) to new payment flows’ potential far outpacing the consumer side of the business.

As for the numbers the Street had and has been watching, Visa’s adjusted fiscal first-quarter earnings came in at $1.81, 11 cents better than the Street.

The consolidated top line of $7.1 billion was up almost 24%, and beat consensus by about $270 million.

Supplemental materials provided by the company in tandem with earnings show that nominal payments volume was up 20% year on year to $3 trillion. Overall credit volumes were up 20% to $1.5 trillion. Debit volumes were up 19% to about $1.5 trillion.

Cross border volumes gained 40% year over year, as measured in constant dollars.

Total cards out in the field were up 10% to 3.8 billion.  Credit cards gained three percent to 1.2 billion; debit cards surged 13% to 2.6 billion.

Read also: Visa X-Border Payments Volumes Surge 38%

Kelly said on the conference call with analysts that tap to pay continues to gain ground: He noted that in Brazil (which he said remains a key growth market for the company) tap to pay has grown from 5% penetration to 24% in the past year. In India, tap to pay penetration has doubled to 16% over the same period.  In the United States, tap to pay penetration is at 20%, outpaced by major metro areas.

Crypto Commentary

As for cryptos, management noted on the call that there are over 65 crypto platforms and exchanges that are partnered to issue Visa credentials. This quarter, per Visa stats, Visa credentials and crypto wallets had more than two and a half billion in payments volume, which is already 70% of the crypto-0-related payments volume for all of fiscal 2021.

Said Kelly on the call: “In addition to embedding credentials and crypto platforms, we continue to innovate around our settlement and crypto API capabilities, which have been key differentiators for us.”

Elsewhere, according to commentary on the call, Visa installment shows promise and enables financial institution clients to seamlessly offer BNPL through existing credentials on any Visa transaction.

New payment flows, he said, represent a $185 trillion opportunity, 10x that of consumer payments.

Visa Chief Financial Officer Vasant Prabhu said, “we had a very sharp recovery in cross-border travel in October and in November as much of the globe … moved to reopen borders or announced timetables to open borders and lifted restrictions.”

Payments volume Prabhu, said, remained “robust” subsequent to the end of the quarter; total payments volume in the quarter is 32% higher than 2019’s levels as seen in the U.S.

Overall card present spend, said the CFO, was up 25% in the quarter, measured year over year and 17% above 2019’s levels, driven by retail and entertainment spending.  Ecommerce spending was up double-digit percentages in the quarter, and 40% above 2019’s levels. As consumer engagement continues to grow cross border travel-related spending, excluding intra Europe, grew 102% year over year and was 72% of 2019 levels, Prabhu said. Commercial B2B payment volumes gained 28% year over year, up 26% over 2019.

See also: For Visa, APIs — And Acquisitions — Target Cross-Border Payment Pain Points

Looking beyond the quarter that was just reported, management said on the call that U.S. payments volume was up 13% with debit up 4% and credit up 25% (boosted in part by stimulus payments). January spend growth versus 2019 was up 40% with debit up the robust 52% and credit up 29%. Card not present non-travel growth remains strong at 67% about 2019 up 17 points from the first quarter.

Looking ahead, Kelly said on the call, “sustained longer term opportunities” will come from eCommerce adoption, which he said will stick, and from the continued displacement of cash.  Visa Direct and B2B Connect offer potential within B2B.

“There are a good number of levers that we can push that provide  terrific growth for us going forward,” Kelly said on the call.