Visa Sees Card Spending Rise as Mobile Use Looms Large

Visa Sees Card Spending Rise as Mobile Use Looms LargeVisa, the world’s top credit and debit-card payments network, beat expectations on quarterly profit, bolstered by higher consumer spending in the U.S. and globally.
The company said Americans spent $255 billion using Visa-branded credit cards, a jump of 9 percent from a year earlier. Debit card purchases were flat.
Transactions processed over Visa’s network totaled $13.9 billion, an increase of 6 percent from a year earlier. The U.S. accounted for a 3 percent gain, while international transactions climbed 21 percent.
No. 2 rival MasterCard Wednesday also reported better than expected earnings, but U.S. growth eased as Visa’s rival expands globally, including ventures in developing countries, where most transactions are still done in cash.
Visa’s net profit fell to $1.27 billion in its fiscal second quarter, from $1.29 billion a year earlier. But profit rose to $1.92 per Class A share, from $1.91 per Class A share, reflecting a drop in the outstanding shares following a buyback.
Visa raised its fiscal 2013 earnings growth forecast from the teens to about 20 percent, based on a business model that the company says more firmly fits economic outlooks globally. The company’s posture also stemmed from earlier-than-planned share buybacks.
Total operating revenue rose 15 percent to $2.96 billion.
Visa is make faster headway into payments processing for mobile devices than rival MasterCard. Both networks are targeting customers who increasingly shop online on tablets and smartphones, and those who are more prone to use these devices to for in-store purchases.
In February, Visa reached an agreement with mobile commerce provider ROAM, which will enable merchants of all sizes to accept electronic payments using mobile technology.
Visa and Samsung announced a partnership in February that may involve the smartphone maker’s highly-anticipated Galaxy S IV model set to debut this month.
The agreement allows financial institutions that are planning to launch mobile payment programs to use Visa payWave to download payment account information to NFC-enabled Samsung devices. NFC stands for “near field communications.”
This will enable consumers with Samsung devices to load credit card information and pay for items by tapping their smartphone on a special pad.

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