Visa U.S. Growth Down – 3rd Qtr 2009

Jon Perry

Jon Perry

Visa payment transactions are down 2.5% and cash transactions down 10.9% in the United States.  While fairing well in Central and Latin America, it appears that the state of the U.S. economy can be partially seen in these numbers.

This would imply that Americans are tightening their belt, especially on cash advances.  In a previous article, we reported that for the first time in history, Visa’s Debit Card usage exceeded Credit Card usage in the 4th Quarter, 2008.  In that Form 8-K Visa filed with the SEC,  it broke out Debit and Credit cards separately. In the current Visa Earning Results, Debit and Credit cards are lumped together.

Visa has solid earnings, with 19% and 16% growth in Central America and Latin America respectively.  Visa projects in its earning report, “Annual net revenue growth of high single digits in 2009 and at the lower end of the 11% to 15% range in 2010, given certain economic recovery assumptions.”

What is very interesting in the report is Visa’s strategic alliance with Monitise UK.  Montise, a leader in payments through mobile devices, is coming to America.  The United States is behind the power curve when it comes to payments using your telephone.  This has been around a long time in the Pacific Rim and Europe.  Monitise is looking for banks.  On Montise’s website it states, “We’re working with our partners to expand our services one financial institution at a time.”

I would expect to see earlier adoptors by banks, jumping on this band wagon.  Imagine buying your next soda using your cell phone.  In fairness, Nokia has been testing this in the U.S. for at least five years.

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