© Reuters. FILE PHOTO: A Visa credit card is seen on a computer keyboard in this picture illustration taken September 6, 2017. REUTERS/Philippe Wojazer/Illustration//File Photo
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 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 and rising interest rates.
Total payment volumes 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 volumes.
“Year-over-year growth rates are going to moderate as you get past the big (pandemic) recovery,” Visa (NYSE:)’s chief financial officer, Vasant Prabhu, told Reuters.
Visa’s revenue recorded its slowest pace of growth in seven quarters, gaining 12% to $7.9 billion.
The firm’s exit from Russia will impact reported payments volume growth rates in the second quarter, Prabhu said on a post-earnings call.
Earlier in the day, rival Mastercard Inc (NYSE:) forecast current-quarter revenue growth below expectations as pent-up demand for travel was seen slowing 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,” said Ted Rossman, senior industry analyst at Bankrate.com.
Visa reported a profit of $2.18 a share, comfortably above the $2.01 estimated by analysts, according to Refinitiv.