Commercial cards help boost Visa quarterly profits by 33%

Fast growth in commercial cards contributed to Visa’s strong fiscal third quarter 2019 results. According to a filing on 27 July, the firm’s GAAP net income is reported at US$3.1bn, which is up 33% year-on-year. Adjusted net income showed an increase of 11%. Net revenues hit US$5.8bn, representing a rise of over 11%.

The results show that commercial cards are Visa’s fastest growing segment. In the US in the three months to 31 March, nominal payment volume in commercial cards reached US$153bn, up 11% year-on-year. Globally, the figure hit US$245bn for the period, up 7% and growing faster than the consumer debit (5%) and consumer credit (1%) in that period. In the nine months to 31 March, Visa’s commercial payment volumes were up 13% year-on-year in the US and 10% globally.

Partnerships with B2B providers were essential in delivering this growth, Visa CEO Al Kelly told investors on a 23 July earnings call. “We work together to support and innovate our world-class co-brand partners and to further extend into the commercial space with B2B solutions”, he said.

The firm says that the growth in revenues was driven by a continued growth in overall payments volume, cross-border volume and processed transactions. Payments volume for the three months to the end of June 2019 increased 9% on the previous year on a constant-dollar basis.

Cross-border volume growth for the same quarter was up by 7%. Excluding cross-border transactions within Europe, which have revenue yields similar to Europe’s domestic volume, growth was at 9%.

Total processed transactions, which represent transactions processed by Visa for the three months to the end of June 2019, stand at 35.4 billion. This represents year-on-year growth of 12%.