For VISA Cards, US and Int’l payment volume growth held steady in the quarter. US purchase volume growth (+10% YoY) remained steady at last quarter’s level as tailwinds from the Chase credit portfolio conversion (from MA) were somewhat shadowed by slight deceleration in debit volume growth (likely a result of lower gas prices). International payment volume growth also remained steady in local currency. Most notably, crossborder volume growth, which had been anemic for several quarters, ticked up nicely from 7% last quarter to 10%, driven by a pick up in the EU travel from the Middle East, China, and Australia.
VISA extended a multiyear agreement with Bank of America, its second largest issuer, on both the credit and debit side that will allow VISA to grow share vs. its prior agreement (BoA is 75% VISA /25% MASTERCARD). Additionally, VISA also renewed several other deals globally.
VISA – Online & Mobile Platform Opportunity
VISA disclosed that online purchase volumes account for 19% of business today and that tablet / mobile based purchases are growing in the high double digit to triple digit rate, meaningfully higher than the single digit growth for face-to-face transactions. This remains the biggest driver for VISA concerted efforts / investments to increase its share of digital transactions through various initiatives including Visa Checkout, Visa Token Services, Visa Digital Services, and its partnership with Apple Pay.
VISA’s Big Opportunity in China
On October 29th, the State Council announced that domestic and foreign firms can apply to set up card clearing operations, which could finally open up an opportunity for VISA and other networks to enter the Chinese market. However, at this time no details or timelines have been provided, hence the implications for the networks remain unclear.
In India, VISA Payment Network faces tiff competition from Mastercard and Indigenous RuPay network adopted by all the PSU Banks.