NEW YORK, -- After the pandemic, consumers and businesses are returning to credit and debit card spending. This drove Visa Inc.'s most recent quarter of profit growth.
According to the company, which is based in San Francisco, it earned $3.58 Billion in its fourth quarter fiscal year that ended Sept. 30, at $1.65 per share. This was an increase from the $2.14 billion profit, or 97c per share, it earned in the same period last year.
Visa earned $1.62 per share, 42% more than a year ago, excluding one-time adjustments. According to FactSet, analysts had expected $1.55 per share.
Last year's Visa results were affected by the global pandemic that caused a slowdown in travel and economic activity. This reduced the amount of money Visa customers could spend on their debit and credit card networks. Visa's bottom line has seen a rise in payments volume as economies around the world have reopened.
In the most recent quarter, consumers and businesses spent $2.783 trillion on Visa network services. This is an increase of 17% after accounting for currency fluctuations. Visa recorded double-digit growth in both Visa-branded debit and credit cards.
According to Visa executives, they noticed a change in consumer behavior after the pandemic. More people are more comfortable shopping online and using their smartphones. This often requires a debit or credit card. This happened in areas of the economy that were traditionally cash-intensive, such as grocery stores, coffee shops, and bars.
Al Kelly, Visa CEO and Chairman, stated that the pandemic had further digitalized cash in a conference call with investors. "We are better off than we were before the pandemic."
This will ultimately be good for Visa’s bottom line. Each transaction that uses the company's payment network earns it a fee. The fees vary depending on whether the transaction is a debit card transaction, or if a credit card type is used.
Kelly said that the growth in cryptocurrency will be good for Visa's profit because crypto investors will need to transfer money from a traditional bank account into a third-party service to purchase Bitcoin and other currencies. Kelly stated that Visa's bread-and-butter will always be debit and credit cards. However, Kelly believes the network is a single connection point between traditional money sources and cryptocurrencies.
Visa also released its full-year results. Adjusted earnings of $12.93 billion were reported by Visa, an increase of 16% over the previous fiscal year. The company's total revenues for the year was $24.11 billion.