Visa Q1 - Strong Volume Growth

The payments processing giant Visa released outstanding financial and operating results, on Thursday the 30th of January. In a record quarter, the company processed over $3 trillion in transactions, up 11%, which drove revenues to grow by 10% to $6.05 billion. Profits of $3.27 billion also grew at the same clip of 10%. Visa's high fee cross-boarder transaction volume growth increased by 9%.

The payments giant paid $1.75 billion during the quarter in what they call client incentives, which are contracts with their clients, merchants, and other partners to increase their payments network. In 2020, Visa expects to pay 22.5% to 23.5% of gross revenues as client incentives.

Visa said that they are benefiting from the shift to "tap-to-pay" cards at other places outside speed-points. For example the new Gautrain station payment drive where you can just use your contactless bank card to tap into the station and not use your Gautrain card. Visa does the same thing for the New York's Metropolitan Transportation Authority, where they have a large number of commuters.

Visa bought one of Silicon Valley's hottest FinTech startups called Plaid for $5.3 billion in January 2020. Plaid is an interloper that provides electronic plumbing that connects financial startups to consumer bank accounts. It was founded by a pair of former Bain consultants in their early 30s. The company has over 200 million linked accounts.

Without the Plaid acquisition, Visa still expects to grow earnings in the midteens and revenues to grow by low double-digits. Visa is still one of the most impressive companies out there when it comes to finding new ways of expanding their business. Europe still provides more growth opportunities for this business. Stay long!