VISA
The world’s nr.1 payments network – VISA Inc., informed that its profits fell 3% which is because of the influence of the strengthening US dollar. Now the company revised the annual forecast for earning-per-share growth.
The net profits of the second quarter fell 3 %, getting to $ 1.55 billion, or 63 cents for a share, from $ 1.6 billion.
The Chief Executive Officer – Charlie Scharf said that VISA still keeps strong and the results and volume trends are in a good situation considering the strengthening US dollar and lower oil prices. VISA is investing in advanced technology which is meant to speed up the mobile and other types of digital or electronic payments.
The revenue in the quarter rose 7.8 %, getting to $ 3.41 billion, which is more than the analysts have estimated. Because the company spent more on technology and personnel, the operating expenses rose to $ 1.13 billion. The spending for VISA card increased in the US by 8.3 % to $ 747 billion, while the growth in Canada, Middle East, Latin America, and Africa regions slowed. The company also stated that the cross border volume rose 8 %.
VISA has now important plans and strategies to increase its dominance and maintain the highest position. In February, Costco Wholesale Corp said that VISA will replace American Express Co. as the only card network accepted in its stores from US. The company is also dealing now with Pizza Hut Inc. to make a technology that allows the clients to purchase from their cars.
MasterCard
The VISA’s most important competitor, MasterCard Inc., which is the second biggest payments network in the world, reported an increase in the quarterly profits by 17 %, due to the fact that people utilize now more and more their cards for payments and also due to the lower taxes.
The company reported on Wednesday that the expenses for the payment of the profit tax fell 22 % to $ 320 million in the first quarter which ended March 31.
The company’s turnover in the world rose 11.8 % to $ 783 billion in terms of local currencies, while cross-border transactions jumped by 19 %.
The net revenue increased by 2.7 % to $ 2.23 billion. The net income grew to $ 1.02 billion, or 89 cents per share, from $ 879 million, or 73 cents per share.