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Visa gets vaccine boost as domestic spending back near pre-COVID levels

Visa gets vaccine boost as domestic spending back near pre-COVID levels 1

By Noor Zainab Hussain

(Reuters) -Visa Inc beat estimates for quarterly profit on Tuesday, with domestic spending almost back to pre-pandemic levels and international travel on the road to recovery as rising vaccinations and reopening economies take effect.

Payment companies are seeing an uptick in volumes from the coronavirus-induced slump as travel and entertainment spending gathers force, while the rise of e-commerce during lockdowns also drives transactions.

Visa reported a 34% jump in third-quarter payment volumes on a constant dollar basis, while the number of transactions processed surged 39%.

“In our domestic businesses, we are pretty much back to where we were, had the pandemic never happened,” Chief Financial Officer Vasant Prabhu told Reuters.

“The one area of our business that is still not back to where it was is cross-border travel. That is the next stage of recovery,” he said.

Cross-border volumes jumped 47% on a constant currency basis in the quarter.

Travel spending volumes at Visa were approaching 2019 levels in July, while entertainment surpassed those levels in May, Prabhu told analysts on a call.

Total revenue climbed 27% to $6.13 billion. Assuming July trends continue, Visa’s fourth-quarter net revenue growth is expected to be in line with the third quarter, Prabhu said.

Net income rose to $2.58 billion in the quarter ended June 30 from $2.37 billion a year earlier. On an adjusted basis, Visa reported a profit of $1.49 per share, compared with Refinitiv estimates of $1.35.

Prabhu said there was no evidence of an impact from the Delta variant of the coronavirus on people buying things in their home countries.

“Even as infections are climbing, people don’t seem to be changing their habits like they were before,” he said.

A recent announcement by the UK and Canada regarding border openings in August should boost the current quarter, Prabhu added.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Devika Syamnath and Shinjini Ganguli)

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