Visa Posts Higher Profit as Consumers Embrace Cards (Update2)

[bemildred]

Source: Bloomberg

Feb. 3 (Bloomberg) -- Visa Inc., the world’s biggest payments network, posted a 33 percent gain in fiscal first- quarter profit as consumers used credit and debit cards instead of cash for more purchases. The stock rose in late trading.

Net income for the three months ended Dec. 31 advanced to $763 million, or $1.02 a share, from $574 million, or 74 cents, a year earlier, San Francisco-based Visa said today in a statement. The average estimate of 30 analysts surveyed by Bloomberg was 92 cents. Net operating revenue rose 13 percent to $2 billion.

Chief Executive Officer Joseph W. Saunders, 64, is taking advantage of a shift by consumers from cash toward cards and electronic payments. The switch, fueled by a growing preference for debit cards, helped Visa and No. 2 payment processor MasterCard Inc. weather the recession even as the U.S. unemployment rate neared 10 percent.

“By all measures, Visa’s fiscal first quarter was a strong start to the new year,” Saunders said in the statement. “We were able to capitalize on the secular trend to digital currency.”



Read more: http://www.businessweek.com/news/2010-02-03/visa-posts-higher-profit-as-consumers-embrace-cards-update2-.html

[endless october]

1. can't build an economy on credit instead of jobs.

we either abandon the cheap imported goods model or we credit crash over and over and over again.

Visa and its buddies masked the crash that should have happened in the 80s, and then again in the 90s. the latest crash was too big for cheap credit to mask.

[customerserviceguy]

2. This isn't just about credit

It's about moving to a cashless society where electronic payments, including debit card payments, are going to become the norm. I really don't use a lot of cash anymore, it's almost too much trouble to deal with.

[caraher]

4. I haven't either, but I'm trying to use cash more

Mainly to deny the VISA folks the fees they skim in each transaction. Using plastic helps feed the beast.

[Snow Bird]

5. Cash control in most retail environments is a very expensive

proposition. Look for more and more of the Fresh and Easy® model. The stores near me have no human intervention in the payment transaction. There isn't a "cash register" in the place.

[customerserviceguy]

6. It makes it easier and quicker for gasoline purchases

Except in NJ and OR, where they are required to pump the gas for you. I do fill up in NJ, because it costs between 25 and 50 cents a gallon less.

[dixiegrrrrl]

3. This is not good.

Not good if people are being forced by the economy to resort to usury interest rates on cards.
Not good that Visa is making out like a bandit.

[Frank Booth]

8. That's not how Visa makes it money.

It's the banks that issue Visa cards that charge the usurious rates.

[tomm2thumbs]

7. fillin 'em up, only to walk away from 'em later

folks will do what they have to do to survive

[defendandprotect]

9. Don't think I want to be in the "digital currency" camp --

Our credit cards offer benefits --

but still, I've tried to stop using them.

Not successfully!!

[truthisfreedom]

10. “We were able to capitalize on the secular trend to digital currency.”

OMFG. Like credit cards are currency. They're enslavement, asshole. You dickwad weasel shithead.

[RUMMYisFROSTED]

11. 33% gain nearly matches their interest rates.

:thumbsdown:

[JerseygirlCT]

12. Interesting

I would have thought people would be turning away from credit cards - what with the exorbitant rates, etc.

I know I've been using cash far more often.