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Visa's 2017 Growth to Ride on Emerging Markets and US Spending

PART:
1 2 3 4 5 6 7 8 9
Part 3
Visa's 2017 Growth to Ride on Emerging Markets and US Spending PART 3 OF 9

Visa’s Transactions to Benefit from US and Asia Spending

Global growth

Visa (V) has posted over 40 billion transactions over the past couple of quarters. The Visa Europe acquisition, increased spending, and better macro fundamentals boosted the company’s transaction figure. The company saw $40.8 billion in transactions for fiscal 1Q17 compared to $29.0 billion in fiscal 1Q16. Excluding the acquisition of Visa Europe, growth came from spending in Asia and the US. Total transactions denote the payments and cash transactions reported for clients on their operating certificates.

Visa&#8217;s Transactions to Benefit from US and Asia Spending

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Visa garnered a 1% additional growth in transactions due to the rise in oil prices (USO). Visa posted an operating margin of 66% in fiscal 2016. The company’s peers in the industry posted the following margins in 2016:

  • Discover Financial Services (DFS): 44.4%
  • MasterCard (MA): 53.5%
  • American Express (AXP): 24.7%

Processed transactions

In fiscal 2Q17, Visa’s transactions and processed transactions could get a boost from Asia, the US, and high-single-digit growth in Europe. The company saw processed transactions of $23.7 billion in fiscal 1Q17. Excluding the Visa Europe acquisition, the company saw a growth of 13%, which was higher than 12% in the previous quarter. The growth was mainly due to new additions like Costco (COST) and USAA. Its international processed transactions rose, mainly due to the demonetization of higher currency notes in India.

Processed transactions include transactions for Interlink, Visa, Visa Electron, and PLUS cards processed by Visa’s networks.

In January 2017, Visa saw a 13% rise in US payment volumes on a constant dollar basis. Excluding the Visa Europe acquisition, cross-border volumes rose 13.0% during the same period, and processed transactions rose 14.0%.

In the next part, we’ll study Visa’s data processing and international revenues in 2017.

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