Visa Direct Transactions Grow 19% Year Over Year, Credentials Up 7% (2024)

Visa posted results after the markets closed Tuesday (Oct. 24) that showed a continued enthusiasm for Tap to Pay transactions in in-store settings across the globe.

Earnings materials revealed that global payments volume grew 9%, while U.S. payments volume grew 6%. International payments volume grew 11%. Cross-border volume excluding intra-Europe grew 18% with cross-border travel up 26%, management noted on the conference call.

Credit volumes gained 8% to $1.6 trillion, debit was up 9%, also to $1.6 trillion, measured in constant dollars. There are now more than 8.5 billion endpoints, 3 billion cards, 3 billion accounts and 2.5 billion digital wallets in the field, according to Visa’s fiscal fourth quarter results.

CEO Ryan McInerney said on the conference call with analysts that credentials grew 7% and that the company also surpassed 7.5 billion tokens. There were 14 billion tokenized transactions in the fourth quarter, a growth rate surpassing 60% — and with tokenization, approval rates have grown by 5%, along with a 30% reduction in fraud.

In the U.S., he said, Tap to Pay transaction penetration expanded 13 percentage points to surpass 40%. Tap to Pay across the globe now accounts for 76% of all face-to-face transactions, according to call commentary.

And with a granular dive into how the Tap to Pay functionality is being leveraged across different use cases, there was particular uptake in fiscal year that ended in September for Tap to Ride interactions, at 1.6 billion transactions, up more than 30% year over year. The company added 150 new transit systems through the year.

New Payment Flows Gain Ground

McInerney said on the call that new flow-related revenues were up 17% year over year. Total commercial volumes were $1.6 trillion, up 12%.

Visa Direct had 7.5 billion transactions, up 19% year over year, he said, and the total “wallet reach” of Visa Direct now stands at more than 2.5 billion.

“Cross-border P2P transactions grew 65% year over year,” he added.

CFO Chris Suh said on the call, “We saw payments volume growth tick up from July to September, primarily driven by sequential improvement in ticket size growth … since March, our data has not indicated any behavior change across consumer segments.”

Cross-border card-not-present volume is 173% of 2019 levels, he said, and cross-border eCommerce spending has grown year over year in the low double-digit growth rates.

Headed into the current quarter, he said, and into the first three weeks of October, U.S. payment volume was up 5% with debit and credit both up 5%. Cross-border card-not-present volume growth should continue to be in the low double digits, he said.

McInerney said, “I would say we’ve gotten normalized in terms of cross-border travel, but I think what’s interesting is we’ve normalized at a growth rate higher than pre-pandemic levels. People are traveling internationally at this new normal, at a faster rate than they would’ve been, all else being equal.”

Asked on the conference call as to what might be driving Visa Direct transactions, he said that there has been strength in remittances, and with a nod towards new flows, said, “We’re focused on bill payments. We’re focused on earned wage access. We’re focused on insurance disbursem*nts. We continue to focus on P2P more broadly in new geographies around the world, both domestic and cross border.”

Analysts also asked about the impact of any changes on interchange rates, and McInerney noted that the company has managed to perform well “in markets that have higher regulated interchange and lower regulated interchange.”