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The big network executives aren’t quite ready to come right out and say it, but they’re certainly coming close to declaring their systems are just about at pre-pandemic performance levels. The latest example came Tuesday afternoon, when Visa Inc.’s results for the quarter ended June 30 prompted chairman and chief executive Al Kelly to point to “a record quarter” with $2.7 billion in payments volume. And, he told equity analysts during a conference call, “we expect much more recovery to come.”
The quarter, which for Visa constituted the company’s fiscal third quarter for 2021, “exceeded our expectations,” added Vasant Prabhu, the company’s chief financial officer. “This has been our strongest growth quarter since the pandemic started.”
But while neither executive ventured to declare that Visa has put the Covid nightmare behind it, they presented plenty of results to back up their slightly more modest interpretation. For Kelly, one such indicator was sheer transaction volume. In the latest quarter, for example, Visa “for the first time ever” averaged 600 million daily transactions, he said, adding, “We see a very good beginning to what will be a very good recovery.”
Clearly, it was a robust quarter for Visa, according to the statistics. The global network handled 55.2 billion payment transactions, for example, up from 40.7 billion in the same period last year, or fully 36%.
On a product basis, the company’s Visa Direct network, used for fast payouts to gig workers and other markets, registered half a billion more transactions than in the same quarter last year. Card-not-present volume, driven by consumers’ flight to e-commerce channels, was up 59% compared, not to the same quarter last year, but to the same quarter in 2019, according to Prabhu.
Alongside the recovery in payment volumes, Visa during the quarter continued to pursue its strategy in open banking, striking an agreement to acquire Europe’s Tink AB for $2.15 billion. The deal came five months after Visa was forced by a Justice Department antitrust suit to abandon its pursuit of data-aggregator Plaid Inc., but now the company is positioned to make a play in this market, and not just in Europe. Open banking refers to technology that can verify the ownership and funding of bank accounts and facilitate transfers between those accounts and fintech providers.
“The epicenter of open banking is in Europe, it’s ground zero,” Kelly told the analysts Tuesday. “It’s early days, but there’s going to be increasing adoption of open banking. There’s no reason we can’t take it to other regions, such as Asia or [Central Europe, the Middle East, and Africa].” The open-banking strategy furthers a long-term plan at Visa to move beyond card-based payments into what the company refers to as a “network-of-networks” configuration involving other payment flows.
For the quarter, Visa posted $6.13 billion in net revenue, up 27% from the same quarter last year. For the nine months ended June 30, net revenue totaled $17.5 billion, up 4.8% over the same period in 2020.
