NEW YORK (AP) — Profits at payments giant Visa Inc. jumped in its most-recent quarter, driven by consumers and businesses getting back to spending on their credit and debit cards after the pandemic.
The San Francisco-based company said Tuesday that it earned $3.58 billion in its fiscal fourth quarter that ended Sept. 30, or $1.65 a share. That’s was up from a profit of $2.14 billion, or 97 cents per share, in the same period a year earlier.
Excluding one-time adjustments, Visa earned $1.62 a share, up 42% from a year earlier. Analysts had been expected $1.55 a share, according to FactSet.
Visa’s results last year were hampered the pandemic-induced global slowdown in travel and economic activity, which cut the amount of money traveling on Visa’s credit and debit card networks. As economies worldwide have reopened, there’s been a tick up in payment volume as well, which goes straight into Visa’s bottom line.
Consumers and businesses spent $2.783 trillion on Visa’s network in the latest quarter, up 17% adjusted for currency fluctuations. Visa saw double-digit growth on both Visa-branded credit cards, as well as debit cards.
Visa executives said they observed that the pandemic brought about a permanent change in consumer behavior: More consumers became comfortable purchasing items online or with their smart phones, which often requires a credit or debit card. This was seen in parts of the economy that have traditionally been cash heavy, like grocery stores, coffee shops and bars.
“The pandemic has further digitized cash,” said Al Kelly, Visa’s CEO and chairman, in a call with investors. “We are positioned even better than where we were before the pandemic.”
That ultimately will be good for Visa’s bottom line. The company earns a fee on each transaction that uses its payment network. The fee varies depending on whether it’s a debit card transaction or what type of credit card is used.
Kelly also said the growth of cryptocurrencies will also be good for Visa’s profits because cryptocurrency investors will need to move money from a traditional bank account to a third-party service to buy Bitcoin and other coins. While Visa’s bread and butter will always be credit and debit cards, Kelly said, he sees its network as being a “single connection point” between cryptocurrencies and traditional sources of money.
Visa also reported its full-year results. The company earned $12.93 billion on an adjusted basis, up 16% from its previous fiscal year. Total revenues last year were $24.11 billion.