I love Visa (NYSE:V). It's hard to come up with an example of a company with a more impenetrable moat. The enormous barriers to entry and near duopoly it shares with MasterCard (NYSE:MA) are a thing of beauty.

What worries me is the increasing disconnect between Visa's valuation and the grim reality facing global consumers. With shares priced for perfection at roughly 20 times forward earnings, there's little room for error and big expectations for future growth. Yet, yesterday's quarterly report shows that the glory days of unrelenting growth investors have been used to aren't entirely sustainable in this economy.

Net income for Visa's fiscal second quarter came in at $536 million, or $0.71 per share. That was a big increase over last year's period, which included a hefty one-time litigation provision related to a lawsuit with American Express (NYSE:AXP).

But that's where the good news ends. Not surprisingly, credit volume fell off a cliff, sliding 4.2% in the quarter. Debit made up for a lot of that shortfall, rising 5.6%, but it wasn't enough to curtail the bleeding, leaving Visa with its first decline in worldwide payment volume since becoming a public company. Have a look:

Period Ending

Worldwide Payment Volume Growth

December 31, 2008


September 30, 2008


June 30, 2008


March 31, 2008


There's a one-quarter lag in its payment volume reporting, so the most recent data doesn't portray early 2009, when economic conditions -- led by unemployment -- became considerably worse.

Hence you get a situation I've been warning about for a while now: Credit transactions are evaporating, and what slack debit can pick up isn't enough to stop declines in payment volume. Net-net, people are spending less, and that's the last thing investors counting on perpetual growth want to hear.

I suppose a healthy dose of cost cutting can keep earnings growth on a roll for a while, but is a 20-forward P/E multiple in the middle of the horrific recession truly appropriate for a company tied to a permanently spend-spooked consumer? Factor in massive cutbacks in credit lines from banks like Bank of America (NYSE:BAC) and Citigroup (NYSE:C), and I'm in the skeptics' camp.

Maybe you have a different take? I'd love to hear it. Feel free to share your thoughts in the comment section below.

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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. American Express is a Motley Fool Inside Value selection. The Fool owns shares of American Express and has a disclosure policy.