Status: 01/28/2022 08:58 a.m
Business is booming at the credit card provider Visa – not only because of online shopping, but also because tourism is increasing again. The company expects further economic recovery.
The US financial group Visa is doing good business in the first quarter thanks to flourishing credit card payments. For the three months ended December, net income rose 27 percent from the same period last year to $4.0 billion, or 3.6 billion euros. Sales grew 24 percent to $7.1 billion. Both the volume and the number of transactions increased.
Visa continues to benefit from the boom in online shopping, which is often paid for by credit card. In addition, due to the recovery of travel from the pandemic, international payments, for example for flight bookings or hotels abroad, are also increasing significantly again.
Tailwind through open borders
The Visa management assumes that the economic recovery will continue and drive sales in the current quarter. Above all, the reopened borders are making business grow. According to Visa, cross-border business volume has increased by 40 percent. Tailwinds will come from the ongoing recovery in the travel market, with affluent consumers spending back to pre-pandemic levels, CEO Alfred Kelly said.
According to CFO Vasant Prabhu, even if states decide to reintroduce travel restrictions due to new virus variants, the level will quickly rise again as soon as consumers can travel again.
Mastercard less optimistic
The competitor Mastercard also recently presented figures and increased profits and sales significantly. In the fourth quarter, the company earned a bottom line of 2.4 billion dollars, almost a third more than a year ago. Sales increased 27 percent to $5.2 billion.
However, unlike Visa, Mastercard warned of new difficulties. For example, cross-border credit card payments have fallen slightly again in the past few weeks, during which there were renewed lockdowns and travel restrictions due to the Omicron virus variant. The company was therefore cautious when it came to the outlook for the current quarter.