What happened
Shares of financial powerhouse Visa (V +1.23%) slipped 1.8% in noonday trading ET on Wednesday, after releasing data on its transactions and payments volume in the U.S. yesterday.
U.S. payments volume grew 5% year over year in May, with credit card usage up 5% and debit 6%. "Card-not-present" transactions in particular, which generally refer to credit or debit card transactions done over the phone or over the internet, grew 7%.
NYSE: V
Key Data Points
So what
That 7% growth, by the way, contrasts strongly with growth in card yes-present transactions -- essentially in-person purchases -- which grew only 3%. In that regard, Visa's news may actually be of greater interest to investors in e-commerce businesses (where business is still booming) as opposed to brick-and-mortar businesses (where growth evidently wasn't so robust) -- as a gauge of which segment of the economy is growing faster.
Also noteworthy is Visa's revelation that "cross-border volume" -- international purchases -- indicates a big revival in international travel. Such Visa payments outside of Europe were at 151% of 2019 levels in May 2023. These purchases tied specifically to travel were up 139%. This suggests both that more people are traveling (and using credit cards to buy their tickets), and that they're spending more once they get where they're going.
Now what
The big, broad import of Visa's news seems to be that e-commerce is doing well, and so is the airline industry. But of course, Visa's news holds importance for investors in Visa itself as well -- and this may be why the stock is not doing so well today.
Of particular importance here is the fact that if card payments volume grew only 5% in May, that's well below analyst forecasts for 10.9% revenue growth for Visa in the quarter ending in June. Granted, this is just one data point at this time. Granted, too, card payments volume may not grow at a 1-to-1 relationship with revenue.
But then again, it might. And if so, there's a greater likelihood that Visa is going to miss its revenue estimate when Visa's next earnings report rolls around. That report, by the way, is due out on July 24.
Stay tuned.
