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Visa stock (NYSE: V) rallying on transactions growth and digital adoption

Visa stock (NYSE: V) rallying on transactions growth and digital adoption
Justinas
Baltrusaitis
Updated: 21 Dec, 2020
2 mins read

Visa (NYSE: V) stock price rallied more than 6% in the last month as investors are hoping that the coronavirus vaccine could help in restoring the traveling industry, which is key to the success of the payment technology companies.

Visa saw a sharp drop in its revenue and earnings in the past few quarters amid travel restrictions and declining consumer purchasing power. However, the business prospects started changing as the company says they have started seeing growth in transaction volume in the past few months. Visa stock price is currently trading around an all-time high of $210.

Visa stock performance. Finviz

Payment Volume growth is adding to sentiments

Although its fourth-quarter revenue of $5.10 billion plunged 17% from the past year period, the market participants are focusing on growth in the debit transaction – thanks to strong e-commerce sales trends.

Its fourth-quarter payments volume surged 4% year over year compared to a 10% year over year drop in the previous quarter. US payment volume has been growing at a robust pace, with 7% year over year volume growth in its September quarter. The cross-border volume fell 29% and processed transactions jumped 3% year over year.

Meanwhile, the market reports show that Visa is likely to expand its market share in the United States in the years ahead. Nilson reported that Visa debit cards would gain more traction than a credit card.

The digital move supports Visa stock performance

Visa has also enhanced investor’s sentiments through the launch of tap to phone digital payment system in more than 15 markets. The company plans to expand the service across the U.S. next year and accelerate its growth to the rest of the world.

“Visa drove the adoption of e-commerce and tap to pay to accelerate cash digitization, successfully unlocked new flows by expanding Visa Direct and B2B partnerships, and facilitated client innovation through our value-added services,” said Chairman and CEO Alfred F. Kelly, Jr.

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Justinas Baltrusaitis
Author

Justin crafts insightful data-driven stories on finance, banking, and digital assets. His reports were cited by many influential outlets globally like Forbes, Financial Times, CNBC, Bloomberg, Business Insider, Nasdaq.com, Investing.com, Reuters, among others.