Visa Inc. warned the frenzy in cryptocurrencies is beginning to moderate, a trend that may offset broader cross-border spending growth on the firm’s cards.
Overseas spending — a key metric because such transactions are more lucrative — jumped 47% in Visa’s fiscal third quarter, topping analyst estimates. Excluding travel, online cross-border spending jumped 56%, a 12 percentage-point improvement from the second quarter, with much of the gain coming from cryptocurrency purchases.
The firm has already begun to see such activity moderate, according to Chief Financial Officer Vasant Prabhu. That could hinder growth in cross-border spending even as foreign travel makes a slow return.
“There was quite a big increase in crypto purchases,” especially in April and May, Prabhu said in an interview. “But by June it had begun to fall back.”
Visa shares slipped 1% to $248.40 at 5:56 p.m. in late trading in New York. The stock has climbed 15% this year, compared with the 17% advance of the S&P 500 Information Technology Index.
The pick-up in crypto spending buoyed overall volume on Visa’s cards, which soared to $2.72 trillion in the quarter, a 34% jump from a year ago when much of the world was under strict lockdowns. That topped the $2.57 trillion average of analyst estimates compiled by Bloomberg.
Revenue climbed a whopping 27% to $6.13 billion, topping the $5.86 billion average of analyst estimates. Profit, though, was hindered by a $1 billion tax charge and climbed just 9% to $2.58 billion, or $1.18 a share. On an adjusted basis, profit was $1.49 compared with the $1.35 average of analyst estimates.
Visa, a sponsor of the Olympic Games in Tokyo this month, has said that it will invest more in marketing. Operating expenses in the quarter jumped 12% to $2.07 billion, led by a 54% increase in marketing costs.
Visa has been on a bit of a deal spree in recent weeks. In June, the payments giant agreed to buy Swedish open-banking platform Tink AB for 1.8 billion euros ($2.1 billion). Last week, the firm said it would buy Currencycloud, a cross-border payments platform, for 700 million pounds ($972 million).
“I’m very encouraged by the recovery trajectory across the board and pleased with the momentum in many of our key growth areas,” Chief Executive Officer Al Kelly said on a conference call with analysts.