Visa Posts First Quarter Profits - This week Visa posted its fiscal first quarter report that reflected the positive growth in payments volume and profits. Net income of the California based credit card and debit card network for the first quarter was $574 million against $424 million in the same quarter a year ago. For the full year of 2009 Visa expects further net revenue growth.
For 2009 the company expects net revenue growth in the high single-digits while experts forecast revenue of $6.79 billion for the year. Adjusted earnings per class A share are expected to increase by 20% or more with net revenue growth at the lower end of the prior estimate of 11% to 15% through 2010. But the company made a reservation saying that annual revenue growth could be affected in 2010, if the current economic conditions persist beyond 2009.
When a cardholder uses a Visa card to pay, the cardholder, merchant (store), acquirer bank, and issuer bank all play a role in the transaction. For example, a cardholder uses a Visa card to buy a pair of sneakers. It's actually the merchant's bank, or the acquirer bank, that reimburses the merchant for the pair of sneakers purchased with the card. The cardholder's bank, or issuer bank, then reimburses the acquirer, usually within 2 days. And finally, the issuer collects from the cardholder, whether through funds from the cardholder's bank account if a debit card is used, through billing if a credit card statement if a credit card is used, or from a prepaid pooled bank account if a prepaid debit card or gift card is used. |
