The increase in the customer spending helped Visa profits soar in the right direction. The second quarter profits soared high to 33% for the second quarter of the current fiscal year. The company, based on the current trend, has forecast strong growth in revenue for the current year.
The growth of Visa is still dependent on the debit card usage of its consumers since most of them still prefer using the debit cards and funds in their checking account rather than the credit cards. The proof that consumer spending has increased over the last quarter is the fact that Visa has been able to collect a large amount as fees from merchants who accept these cards to pay for the goods purchased.
In the United States, more than 19% of the purchases were completely using Visa debit cards. There was an 18% in terms of dollars that was noted during the usage of these cards. There was a 33% increase in terms of dollars used for making purchases in other countries and more than 20% of the world population used Visa debit cards to complete their transactions.
Joseph Saunders, the CEO and Chairman of Visa observed the fact that the gains in terms of the earnings were fueled by an increase in the volume. He also went on to mention that the company looked forward to an optimistic growth this year and was confident about the improving economic conditions.
Visa, which operates out of San Francisco, showed revenue of $1.96 billion which is significant jump as compared to the $1.65 billion the previous year.
The profit forecast by Thomas Reuters per share was 91 cents. However, the current revenue posted by Visa beat the forecast significantly.
After months of going through a bad patch, the usage of credit cards rose very meagerly by 0.3%. Considering that it has taken five quarters for this positive trend to show up, this has a significant bearing. There was a total increase of 1.5% in the transactions made using the credit cards.
Andy Miedler, an analyst with Edwad Jones termed this as "another testament to how consistently Visa delivers strong results."
Miedler went on to mention that one of the main reasons for Visa to show good growth in revenue was the fact that it is an undisputed leader in the debit card market. Based on the current results, Visa is looking forward to a much better growth this fiscal year as compared to the last.