Visa Reports Robust Results As Pandemic Nears The End

Jul 21, 2021

The distribution of the third round of stimulus checks has produced a windfall for Visa Inc. As the U.S. government delivered direct payments to millions of struggling Americans, the credit card network saw their volume on U.S. debit cards soar 31% to $806 billion due to the boost in consumer spending. 

Overall spending on the company’s debit cards reached $2.4 trillion during the quarter, exceeding estimates. 

Vasant Prabhu, Visa’s vice chairman and chief financial officer, said in an interview:

“People are starting to use debit more often than they did before in terms of the point of sale, and in more categories than they did before and for smaller transactions than they did before. And as time goes on it becomes a habit.”

Visa Bounces Back 

Visa shared that it also saw an increase of 1.3% to $232.80. In fact, its stock has grown 5.1% this year alone. 

An increase in certain overseas travel has also contributed to Visa’s favorable results. Where before, during the beginning of the outbreak, governments restricted travel and advised consumers to stay inside, lowering credit card spending.

The company also experienced a surge in spending by U.S. consumers in both Mexico and the Caribbean, exceeding “pre-pandemic levels” during the same quarter.

This is especially true since these are the only destinations that U.S. citizens are able to travel to. 

A Bloomberg survey initially predicted a 5.1% decline, however, Visa’s overall revenue only had a 2% dip to $5.7 billion. 

The first three months of the year also saw positive growth for all credit card transactions.

In the March quarter, known as the second period of Visa’s fiscal year, the total payments volume just on debits in the U.S. market increased 34% year-over-year to the amount of $657 billion. Whereas the overall U.S. credit card volume only saw an increase of 1.5% to $500 billion. 

Visa Direct transactions increased nearly 60% during the March quarter.

Committed To The Crypto Space

Not only is Visa exploring ways to settle transactions in cryptocurrency, but it is also working on enabling purchases using crypto with Visa cards. They also want to facilitate crypto cash-outs converted to fiat currency. Visa also wants to authorize fintech to provide a crypto option for their customers. The firm is working closely with central banks in order to accept central bank digital currencies. 

Visa is gearing up to ride the “buy now, pay later trend”, where customers are able to access their purchases right away, but make payments over a few installments, interest-free. 

Pandemic Fueled Surge Of eCommerce

The pandemic brought radical changes to consumer buying behavior that will likely remain post-Covid-19. This boost in online activity was mostly driven by debit purchases. According to the chief executive and chairman of Visa, Inc. Al Kelly, debit has ultimately become the “cash of the e-commerce world.”

Kelly also believes that the worst is now behind them and is convinced that we are now at “the beginning of the end of the pandemic”. As more economies are now in recovery, the vaccination rates are slowly rising, and Visa is showing results that are much stronger than anticipated, there is much hope for the future as everyday life and business can resume as usual as before the pandemic. 

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.