It’s earnings season and yesterday Visa announce results that show it coming back from the trying times of 2020. Debit transactions and faster payment solution Visa Direct were real bright spots. Debit transactions have been growing in remote channels for the last couple of years and that really got a boost during 2020.
Not only have transactions increased, but the average purchase amount have too. Visa Direct, which uses the debit network for credit transactions, saw growth in part driven by B2C disbursements. One cited use case was the use of Visa direct for near instant payouts for workers receiving on-demand payroll deposits through an Earned Wage Access solution. Here’s some of the coverage Digital Transactions published on Visa’s financial results announcement:
Payments companies took a beating as the pandemic raged, but Visa Inc.’s top brass indicated Tuesday afternoon the big network has put the worst behind it. “We believe we are at the beginning of the end of the pandemic,” said chief executive and chairman Al Kelly as he pointed to recovering economies, rising vaccination rates, and some stronger-than-expected results for Visa. “We have bounced back to the pre-Covid trendline,” pronounced Vasant Prabhu, Visa’s chief financial officer.
Total transactions on Visa Direct, which enables nearly real-time transfers between Visa cards—and now, from Visa cards to bank accounts—increased almost 60% in the March quarter, Kelly reported, without citing absolute figures. Some 25 earned-wage access platforms are now among clients using the service, he said, while it also facilitated government distributions for pandemic relief to some 13 million accounts.
The pandemic also drove millions of consumers to e-commerce shopping, a trend that Kelly says will stick as the world enters a post-Covid stage. “We see millions of e-commerce shoppers who weren’t there before. They’re much more comfortable shopping online, [so] we believe this shift will persist even as card-present [activity] begins to return.”
With these trends has come a surge in debit card transactions. Just in the March quarter, the second period of Visa’s fiscal year, total payments volume on debit in the U.S. market rose fully 34% year-over-year, to $657 billion.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
