One of the world's largest payment networks, Visa Inc., revealed it profits for the third quarter in the current fiscal year which well beat the mark predicted by financial analysts on Wall Street. This is the tenth consecutive quarter for which Visa has been able to beat the mark set by Wall Street.
This company, based in San Francisco, said in a statement on 29th July that as of June 30th, the net income earned by the financial conglomerate stood at $716 million which is equivalent to about 97 cents a share. The thirty one financial analysts whom Bloomberg surveyed had predicted a value of about 93 cents a share by the end of the third quarter. One time profit of $237 million, which was brought in by selling an investment, is also a part of the net income posted by the company.
Joseph W Saunders, the CEO of the company, may have to work hard to beat the results at the same time next year considering the fact that the Federal Reserve is planning to impose debit card regulations governing Visa and MasterCard.The regulations that come into play will place a limit on the interchange fees, which is nothing but the card swipe fees that the merchants have to pay to the bank when consumers pay for their purchases using debit or credit card.
Saunders made a statement saying that at this point it is very early to predict how the regulations are going to impact the company. He also went on to say that Visa has also portrayed the ability to stand out through any challenging environments and adapted to the changing financial conditions.
The company said that, despite the newer regulations coming into effect in the following months, they will stick to the initial forecast for 2010 which was set at 11 percent to 15 percent net revenue growth. The shares of the company are expected to grow at the rate of 20 cents per share not only during the current fiscal year, but even the next.
MasterCard and Visa are the financial majors that set the limit on the interchange fees. A part of the fees thus collected will be shared with the banks that issue credit cards, like Citigroup Inc., JP Morgan Chase and Bank of America. When the new legislation comes into effect, it will reduce the amount being charged as interchange rates which could significantly impact the earning of not only Visa and MasterCard, but also the credit card lending banks.