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Visa's (V) February Payment Volume Suffers Weather Adversity
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Visa Inc. (V - Free Report) reported a 9% rise in U.S payment volumes for February, which lagged 11% growth experienced in January.
The decline came on account of weather-related impacts during the third week of February and less gains from stimulus-related spending.
The 9% rise in U.S payment volumes was driven by 22% higher spending via debit cards, partly offset by a 4% decline in credit card spending.
Additionally cross-border volumes declined 16% year over year for the month under discussion, which is better than the January's decrease of 21%. This improvement in cross-border volumes was driven by a higher spending level across countries like Europe, the Asia Pacific, CEMEA and Latin America with Italy, Singapore and Hong Kong improving significantly as they lapped 2020 restrictions.
Excluding intra-Europe transactions, cross-border volumes declined 26% year over year in February but the same improved from the 32% fall experienced in January. This uptrend was owing to higher transactions made via card not present.
Global processed transactions increased 2% year over year in February from 3% growth in January. The same suffered the unfavorable weather events in the United States and COVID-related restrictions, globally.
However, in March 2021, the company is experiencing a moderate improvement for U.S. payments volume and more significantly, for cross-border volume excluding the intra-Europe transactions, partly owing to the the lower level seen in 2020.
Business from the United States has been faring better for Visa amid the ongoing pandemic era for sometime after experiencing a blip in the initial months (March and April 2020) of the lockdown. Thereafter, with the gradual relaxation of restrictions, business volumes are steadily picking up. This is further evident from growth in processed transactions, which reflects the prevalent worldwide shift to electronic payments, partially offset by the impact of COVID-19.
The significant rise in online shopping is likely to bump up card-not-present (CNP) transactions, which occur in absence of both the cardholder and the credit card. This is commonly applicable to orders placed remotely over the phone or via fax, Internet or email.
Visa’s debit business is the key beneficiary of this rapid shift to e-commerce from cash, even for in-person transactions. In the United States, debit is growing twice the rate in the pre-COVID times.
The company saw substantial buoyancy in the number of people activating their cards online and making more transactions through its usage. This means that the whole transition from face-to-face commerce to e-commerce denotes a remarkable change and is here to stay.
As a matter of fact, this speedy switch from cash to the digital remittances bodes well for Visa as the method is mostly preferred by the millennials. Also, the coronavirus episode prompted the aged population to resort to the digital practice, given its hassle-free process, comfort level and safety. Therefore, purchases made through digital mediums seem a permanent phenomenon.
Even after the expansive vaccine rollouts in the market, some of the changes intensified by the pandemic will be eternal and digital payment is a case in point. Other stocks in the same space including American Express Co. (AXP - Free Report) , Mastercard Inc. (MA - Free Report) and Discover Financial Services (DFS - Free Report) are also set to benefit from the boom in online sales.
The stock has rallied 13.4% in six months’ time compared with the industry’s growth of 12.9%.
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Visa's (V) February Payment Volume Suffers Weather Adversity
Visa Inc. (V - Free Report) reported a 9% rise in U.S payment volumes for February, which lagged 11% growth experienced in January.
The decline came on account of weather-related impacts during the third week of February and less gains from stimulus-related spending.
The 9% rise in U.S payment volumes was driven by 22% higher spending via debit cards, partly offset by a 4% decline in credit card spending.
Additionally cross-border volumes declined 16% year over year for the month under discussion, which is better than the January's decrease of 21%. This improvement in cross-border volumes was driven by a higher spending level across countries like Europe, the Asia Pacific, CEMEA and Latin America with Italy, Singapore and Hong Kong improving significantly as they lapped 2020 restrictions.
Excluding intra-Europe transactions, cross-border volumes declined 26% year over year in February but the same improved from the 32% fall experienced in January. This uptrend was owing to higher transactions made via card not present.
Global processed transactions increased 2% year over year in February from 3% growth in January. The same suffered the unfavorable weather events in the United States and COVID-related restrictions, globally.
However, in March 2021, the company is experiencing a moderate improvement for U.S. payments volume and more significantly, for cross-border volume excluding the intra-Europe transactions, partly owing to the the lower level seen in 2020.
Business from the United States has been faring better for Visa amid the ongoing pandemic era for sometime after experiencing a blip in the initial months (March and April 2020) of the lockdown. Thereafter, with the gradual relaxation of restrictions, business volumes are steadily picking up. This is further evident from growth in processed transactions, which reflects the prevalent worldwide shift to electronic payments, partially offset by the impact of COVID-19.
The significant rise in online shopping is likely to bump up card-not-present (CNP) transactions, which occur in absence of both the cardholder and the credit card. This is commonly applicable to orders placed remotely over the phone or via fax, Internet or email.
Visa’s debit business is the key beneficiary of this rapid shift to e-commerce from cash, even for in-person transactions. In the United States, debit is growing twice the rate in the pre-COVID times.
The company saw substantial buoyancy in the number of people activating their cards online and making more transactions through its usage. This means that the whole transition from face-to-face commerce to e-commerce denotes a remarkable change and is here to stay.
As a matter of fact, this speedy switch from cash to the digital remittances bodes well for Visa as the method is mostly preferred by the millennials. Also, the coronavirus episode prompted the aged population to resort to the digital practice, given its hassle-free process, comfort level and safety. Therefore, purchases made through digital mediums seem a permanent phenomenon.
Even after the expansive vaccine rollouts in the market, some of the changes intensified by the pandemic will be eternal and digital payment is a case in point. Other stocks in the same space including American Express Co. (AXP - Free Report) , Mastercard Inc. (MA - Free Report) and Discover Financial Services (DFS - Free Report) are also set to benefit from the boom in online sales.
The stock has rallied 13.4% in six months’ time compared with the industry’s growth of 12.9%.
Visa currently carries a Zacks Rank #3 (Hold ).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>