Industry News

07/12/2009 - Visa is expected to hit a record high in earnings in early 2010, bolstered by the economic recovery and increase in electronic payment processing, Reuters reported.

Reuters analyst Juan Lagorio reported that the "world's largest payment network could easily beat earnings expectations," thanks to an acceleration in payment processing transaction growth.

"It's fairly possible to get back to the old high," Bob Napoli, an analyst at Piper Jaffray, told Reuters. "The catalyst is that you continue to get a gradual global economic rebound, and spending gradually improves."

In particular, Visa's performance will be bolstered by an increase in debit card payment processing, a slowed decline in credit card processing, and an increased use of credit and debit cards abroad.

Lagorio also noted that Visa has been relatively protected from the global economic downturn because it does payment processing instead of lending funds, and that payment processing transactions have kept increasing even during the recession "thanks to a secular shift from cash to electronic payments."

Visa's latest earnings report showed that the payment processing company posted a fourth quarter net income of $552 million and a net operating revenue of $1.9 billion, which represents a 10 percent increase over the previous year.