Visa’s performance in the first quarter of fiscal 2025 showed a significant increase in the number of payment transactions, carried out in digital format, and a growth in tokens and credentials issued by this payment network.
The volume of payments in the mentioned company’s functional environment increased by 9% over the last quarter. In the United States, the corresponding growth was 7%. The volume of cross-border payment transactions increased by 11%. In the United States, debit volumes rose by 8%, while credit volumes were 7% higher. Cross-border volumes were 15% higher in constant dollar terms.
Visa chief executive officer Ryan McInerney said on the conference call with analysts that the quarterly volume of about $4 trillion is related to the shift to digital payments. Currently, the mentioned transactions account for more than 60% of the volume.
In the first quarter of fiscal 2025, Visa issued 4.7 billion credentials. This indicator showed an increase of 7% year-on-year. The company also issued 12.6 billion tokens in the first quarter of fiscal 2025. This indicator increased by 44% year-on-year.
Ryan McInerney stated that in e-commerce on tokenized transactions, Visa has six percentage points higher approval rates. According to him, this circumstance leads to a significant increase in sales for the company’s merchant partners and a 30% reduction in fraud, which is a favorable factor for all participants in the ecosystem. Ryan McInerney also stated that tokens have become one of Visa’s most important platforms for enabling innovations.
Moreover, the head of the company noted the interest in flexible Visa credentials continues to show growth. According to him, the Tap to Add card is currently live to approximately 60% of consumer credit and debit cards in the United States.
Drawing attention to the appeal of tap-to-pay features, Ryan McInerney noted that 74% of all face-to-face transactions logged by Visa are contactless. At the same time, according to him, in markets such as Japan and Argentina, the corresponding indicator shows double-digit growth. In the United States, the share of tap-to-pay transactions increased by 13 percentage points, reaching 57%.
Commenting on the new flows, Ryan McInerney stated that revenue in this segment of the company’s business grew by 19% in terms of constant dollars. He also noted that over the past 12 months, Visa Direct has exceeded the 10 billion transaction mark. Three billion transactions were completed in the last quarter, and volumes increased by 34%. Ryan McInerney drew attention to the launch of the X Money account announced this week as an example of Visa Direct’s growth trajectory.
According to the head of Visa, the joint efforts will allow approximately 600 million active X monthly users to fund their X Money account. In this case, consumers will be able to instantly transfer their funds back to a bank account. Ryan McInerney also noted that there will be creators on the X platform who will be able to get paid much faster. The corresponding opportunity will be available if Visa Direct is used to transfer money back to bank accounts.
Chris Suh, the company’s chief financial officer, said that as volumes and revenue grew, the year-on-year increase in consumer holiday spending in the United States was in the upper-mid-single digits. He also noted that the most intense upward dynamic was observed in such discretionary categories as retail, travel, and entertainment. Moreover, Chris Suh stated that e-commerce, measured as card-not-present, grew by 16% year-on-year. Also, according to him, the volume of commercial payments increased by 6% compared to a year ago.
In the context of forecasting, Chris Suh stated that net revenue is expected to grow from high single digits to low double digits in the current quarter.
Last quarter, Visa recorded an increase in revenue from value-added services. Commenting on this result, Ryan McInerney stated that Visa is very excited about the progress it is making in the value-added services area across the board. He also noted that the firm does not change its emphasis regarding the priority of the areas in which the brand develops products and serves customers. According to him, Visa remains focused on delivering solutions to issuers, acquirers, and merchants, and also on providing solutions to combat fraud and risks in the advisory business and the ecosystem as a whole.
Ryan McInerney noted that, in particular, Pismo and FeatureSpace are notable acquisitions that help build sales pipelines. He also said that the company is still on track to launch its Visa A2A offering in early 2025. According to him, the initial use cases will be tied to the payment of bills. He noted that the power of applying some of the features offered by the company in the account-to-account system will greatly benefit customers and partners in the ecosystem.
The net revenue of the payments industry giant for the first quarter of fiscal 2025 was recorded at the $9.5 billion mark. This indicator showed an increase of 10% year-on-year.
As we have reported earlier, Visa Uses More Than 500 Gen AI Apps.
