Visa Inc. has exceeded expectations with its quarterly profit thanks to a resurgence in e-commerce and online spending. The company, which is the world’s largest payment processor, witnessed a 5% increase in total spending when comparing constant-dollar basis to the previous year. This growth comes after a 10% drop in the previous quarter. The recovery in payment volumes can largely be attributed to customers turning to online shopping while staying at home during the COVID-19 pandemic.

Alfred Kelly Jr., Visa’s Chief Executive Officer, emphasized the sustained strength of debit and e-commerce volumes, as well as resilient domestic spending in most countries. These factors played a significant role in Visa’s positive financial performance for the quarter. Despite the challenges presented by the pandemic, Visa’s shares rose by 1.2% in extended trading. Additionally, the company announced an $8 billion share buyback program, which further boosted investor confidence. However, cross-border volume faced a decline of 21%, primarily due to reduced travel demand caused by border closures. European transactions were particularly affected, experiencing a 33% drop in volumes.

Due to the ongoing global health crisis and the uncertainty surrounding it, Visa did not provide a forecast for the full-year of 2021. However, its competitors, Mastercard Inc. and American Express Co., expressed optimism about a potential rebound in their businesses as lockdown measures ease and vaccination efforts improve, ultimately leading to increased travel.

For the first quarter ending on December 31, 2020, Visa reported a net income of $1.42 per Class A share, surpassing analysts’ estimates of $1.28 per share. The company’s net revenue decreased by 6% to $5.69 billion.

Overall, Visa’s strong quarterly performance highlights the resilience of the e-commerce sector amidst the challenges brought on by the COVID-19 pandemic. With more consumers turning to online shopping, payment processors like Visa continue to play a crucial role in facilitating secure and convenient transactions.

Useful links:
1. Visa official website
2. Financial Times article on Visa’s performance