The Covid-19 pandemic has badly affected the global economy. However, Visa (NYSE: V) is not facing this situation. Visa reported a whopping growth of 37% in May. In comparison to its growth in April, Visa’s witnessed a surge. For instance, the payment volume in the United States in May improved by three points from April. However, Debit remained elevated at 151% of 2019.
While card-present surged 4 points from April to 2019’s 113%, Card not present continues to maintain its strong position at 159% of 2019. Moreover, in Value-Added Services, Visa continues to shine and is expected to grow by 20% in the next quarter.
Although the COVID-19 pandemic has accelerated digital payments, the higher charges of using Visa & Mastercard (NYSE: MA). have badly affected the cross-border volume. As a result, the COVID-19 is proving to be the great enemy of travel companies.
Global transactions
Globally, payment volume was stable in May compared to trends in April. With the surge in transactions worldwide, especially in Europe, Global transactions were 121% of 2019 in May. However, payment volume in India and other countries of Asia showed no improvement, thanks to new restrictions imposed to contain the Covid-19.
Excluding the intra-Europe transactions, in May, cross-border volume enhanced 6 points to 85% of 2019, including Card-not present volume that remains at 162% of 2019. Moreover, transactions related to travel improved by 5 points from April. As a result, overall cross-border volume surged to 98% in May. Though in April, Cross-border volumes rallied, the situation is expected to improve in upcoming months.
The Opportunity
According to Chetan Woodun, an SA Contributor, Visa’s usage is enhancing as financial institutions are issuing digital currencies, and digital currency is going to further surge at a whopping CAGR of 82.4%. Moreover, as cross-border payments are less costly than traditional ones, Visa will witness more good days. According to Librarian Capita, another S.A. Contributor, the Visa EPS will grow by 20% in the third quarter.
