Visa Profit Falls on Lower Payments Volume -- Update
July 28 2020 - 6:26PM
Dow Jones News
By Orla McCaffrey
A drop in payments activity pushed Visa Inc. earnings down 23%
in the quarter that ended in June.
The largest U.S. card network said payments volume fell 10% from
the year-earlier period.
Credit-card payments volume dropped 20%. Debit-card payments
volume rose 3%.
"All of the business drivers were significantly impacted by the
pandemic, " Visa Chief Executive Alfred Kelly said on a call with
analysts Tuesday afternoon.
The company declined to provide an earnings outlook for the
remainder of the fiscal year, citing "significant uncertainty in
the global economy" caused by the coronavirus pandemic.
Still, Visa said U.S. payments activity "meaningfully improved"
each month of the quarter, and spending picked up globally
throughout the quarter.
Suppressed travel activity helped push cross-border
transactions, excluding those within Europe, down 47% in the
quarter, Mr. Kelly said.
Net income fell to $2.4 billion from $3.1 billion. Revenue
dropped 17% from the year-earlier period to $4.8 billion, matching
analysts' estimates.
Visa's shares closed Tuesday down slightly at $196.74, just
before the company reported. The shares fell sharply in after-hours
trading.
Last week, Democratic Sen. Richard Durbin asked the Federal
Reserve to probe allegedly anticompetitive practices forcing
merchants to pay excessive debit-card fees levied by large networks
like Visa and Mastercard Inc. The Electronic Payments Coalition,
which represents card networks and issuers, said at the time that
merchants do have options when they route transactions.
Mastercard is set to report earnings on Thursday.
Write to Orla McCaffrey at orla.mccaffrey@wsj.com
(END) Dow Jones Newswires
July 28, 2020 18:11 ET (22:11 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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