# Visa revenue growth slows more as tough economy sobers spending
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-01-27
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Visa Inc Q1 Revenue Growth Slows Amid Post-Pandemic Economy
Meta Description: Despite slowing growth, Visa exceeded Wall Street profit targets with a 22% year-over-year increase in cross-border spending and a 7% rise in total payment
URL: https://financedigest.com/visa-revenue-growth-slows-more-as-tough-economy-sobers-spendinghtml

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By Mehnaz Yasmin

(Reuters) -Visa Inc’s revenue growth continued to wind back to pre-pandemic levels in the first quarter as the post-lockdown travel craze ebbed and consumer spending slowed in a tough economy.

The world’s largest payments processor still surpassed Wall Street targets for profit, sending its shares up 1.4% to $227.82 in after-hours trading on Thursday.

Cross-border volumes – a key measure that tracks [spending on cards](https://www.financedigest.com/should-we-be-more-cautious-about-contactless-1-in-4-young-adults-with-contactless-cards-say-theyve-increased-their-spending.html "Should we be more cautious about contactless? 1 in 4 young adults with contactless cards say they’ve increased their spending") beyond the country of issue – jumped 22% year-over-year on a constant dollar basis as a stronger greenback boosted out-of-U.S. travel by softening the [hit from inflation](https://www.financedigest.com/uk-shop-price-inflation-hits-record-8-in-january-brc-2.html "UK shop price inflation hits record 8% in January: BRC") and rising interest rates.

Total [payment volumes](https://www.financedigest.com/fingerprint-cards-ab-signs-partnership-gemalto-secures-worlds-first-volume-order-fingerprint-sensors-dual-interface-payment-cards.html "Fingerprint Cards AB signs partnership with Gemalto and secures the world’s first volume order of fingerprint sensors for dual-interface payment cards") rose 7%.

The growth was, however, far lower than a 40% surge in [cross-border volumes in the first quarter of 2021 and a 20% jump in payments](https://www.financedigest.com/why-blockchain-could-represent-the-future-of-cross-border-payments.html "Why blockchain could represent the future of cross-border payments") volumes.

Year-over-year growth rates are going to moderate as you get past the big (pandemic) recovery,” Visa’s [chief financial officer](https://www.financedigest.com/impact-com-appoints-new-chief-people-officer-to-lead-people-growth-and-excellence.html "impact.com Appoints New Chief People Officer to Lead People Growth and Excellence"), Vasant Prabhu, told Reuters.

Visa’s [revenue recorded its slowest pace of growth](https://www.financedigest.com/gsk-spinoff-haleon-forecasts-2023-organic-revenue-growth-at-top-end-of-view.html "GSK-spinoff Haleon forecasts 2023 organic revenue growth at top-end of view") in seven quarters, gaining 12% to $7.9 billion.

The firm’s exit from Russia will impact reported payments volume [growth rates](https://www.financedigest.com/u-s-job-growth-powers-ahead-unemployment-rate-at-3-4.html "U.S. job growth powers ahead; unemployment rate at 3.4%") in the second quarter, Prabhu said on a post-earnings call.

Earlier in the day, rival Mastercard Inc forecast current-quarter revenue [growth below expectations as pent-up demand for travel was seen slowing](https://www.financedigest.com/uk-recruiters-slow-pace-of-pay-growth-in-march-rec-survey-shows.html "UK recruiters slow pace of pay growth in March, REC survey shows") going forward.

Growth in the travel sector may be harder to come by in 2023 as some of the pent-up demand that stacked up during the [pandemic and was unleashed in 2022 is fading,”](https://www.financedigest.com/zoom-shares-down-90-from-peak-as-pandemic-boom-fades.html "Zoom shares down 90% from peak as pandemic boom fades") said Ted Rossman, senior industry analyst at Bankrate.com.

Visa reported a [profit of $2.18 a share](https://www.financedigest.com/ford-posts-lower-profit-issues-downbeat-outlook-shares-drop.html "Ford posts lower profit, issues downbeat outlook; shares drop"), comfortably above the $2.01 estimated by analysts, according to Refinitiv.

(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Devika Syamnath)


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