Californian credit card giant Visa Inc. profit tumbles 23% as payment volumes sour
by SOURAV D | VIEW 6944
Late on Wednesday, Visa Inc., the San Francisco, California-headquartered credit card behemoth, had released its quarterly earnings’ report for fiscal fourth quarter of the year that ended on September 30, while the American multinational payment processor had missed Wall St.
estimates for its fourth-quarter profit, as tens of millions of people across the globe who had been laid-off due to the pandemic-led economic downturn appeared to have continued to keep a lid on their spending. Notably, it had been only the second time when the credit card titan had reported a decline in quarterly revenue on a year-on-year basis since its public market debut in 2008.
On top of that, the San Francisco-headquartered American multinational payment processor had also said on Wednesday that the credit card mogul had witnessed a decline of 10 per cent in total spending on a constant dollar basis, while the number of transactions processed over Q3, 2020, slid as much as 13 per cent compared to the same period a year earlier.
Adding further strains, the 72-year-old financial services company incorporated in Fresno, CA, long-hailed for its Visa-branded credit card, debit cards alongside prepaid cards, had also reported a 47 per cent plunge in cross-border transactions during its fiscal fourth quarter of the year as the global-scale pandemic outbreak had continued to hurt travel-related demands.
Visa Inc. profit tumbles as beaten-down travel sectors drag
More importantly, the quarterly earnings’ result of Visa Inc. came forth shortly after another credit card giant Master Card had missed profit estimates and raised a red flag over the consumers’ credit card spending adding that a curb on travel-related spending would likely to remain as a major setback at least until late-2021.
In tandem, according to Visa Inc.’s quarterly earnings’ report for the quarter that ended on September 30, the credit card giant’s net income fell by $2.4 billion or $1.07 per Class A share, compared to a net income of $1.34 per Class A share or $3.03 billion registered at the same time a year earlier, while the company’s net revenue took a tattering header of 17 per cent to $4.8 billion.