1. Visa is enjoying broad-based expansion
U.S. payments volume growth accelerated from 10% to 11% due to strong debit spending and commercial volume growth. U.S. consumer debit growth accelerated, fueled by positive macroeconomic conditions, Visa Direct, and rising gas prices. Commercial volume has been accelerating steadily in the past three quarters, with gains across small business credit, large, and middle market programs.
International payments volume also grew 11% on a constant dollar basis. Growth stepped up across Asia, driven by China, India, and Korea, and in Latin America, driven by Brazil. Growth across the Middle East and North Africa accelerated. Growth in Europe remains healthy.
-- CFO Vasant Prabhu
Visa is benefiting from several powerful trends, including the expansion of the global economy, the growth of e-commerce, and -- most important -- the trend toward digital payments and away from cash transactions. In turn, Visa is experiencing robust growth in nearly all of its major markets around the world, with revenue rising 15% year over year to $5.2 billion in the third quarter.
2. Visa Europe integration is ahead of schedule
Europe continues to exceed our financial expectations once again this year and relative to the original acquisition model. We now expect accretion from the Visa Europe acquisition to be at double-digit levels in Fiscal Year '18. This exceeds our original acquisition expectations and is two years ahead of schedule.
Visa expects to complete its integration of its $23 billion acquisition of former subsidiary Visa Europe by the end of calendar 2018. In 2019, Visa intends to shift its focus to capturing the sizable growth opportunities in Europe. CEO Alfred Kelly noted that approximately 60% of consumer spending is completed via cash transactions in several of Europe's largest economies, such as Spain, Italy, and Poland. Visa believes it can increase its payment volume in these markets by displacing cash, as well as by taking share from less competitively advantaged rivals.
3. India is another massive growth opportunity
We're very pleased with what's happening in India. The cash disbursement opportunity is great. I'd remind everybody that we are the market leader in India. We're well positioned. We have greater than 50% shares in India. We're continuing to grow at very healthy clips in '18 and that's growing over very, very high growth in the prior year of '17.
Visa generated payments volume growth of "well over 20%" in India during the third quarter. The company recently lowered its fees for debit transactions to appease regulators, but it expects volume increases to more than offset these price cuts over the long term. Visa is also working with card issuers to drive awareness, as well as the usage of new payment technologies such as contactless transactions. Additionally, Prabhu noted that India is in the "very, very early stages of its maturation in payments," and that Visa intends to capture a significant share of the country's digital payment growth in the coming decade.
4. Capital returns will remain a key part of Visa's strategy
We also returned approximately $2.2 billion of capital to shareholders this quarter, consisting of almost $1.8 billion of share repurchases and nearly $500 million through dividends.
-- CEO Alfred Kelly
Visa's bountiful profits and free cash flow allow it to reward investors with share buybacks and a growing dividend income stream. In fact, Visa repurchased 13.6 million shares at an average price of $128.80 in the third quarter, and a total of 46 million shares at an average price of $119.60 so far in 2018. With shares now trading for about $140 today, these repurchases have already created significant value for Visa's shareholders.
Better still, with dividend payments currently comprising only about 20% of its earnings, investors can expect more dividend hikes and share repurchases from Visa in the years ahead.