Thursday, July 25, 2024
“In the U.S., we surpassed 50 percent and have 30 cities above 60 percent penetration,” Visa CEO Ryan McInerney told analysts during a July 23 conference call.
The lag in U.S. usage was also brought to light by survey results just published by card-issuing platform Marqueta. The California-based company found just 46 percent of Americans who participated in a recent survey had used contactless payments in the previous seven days, compared to 80 percent in the United Kingdom and 69 percent in Australia.
“The fact that outside the United States, eight out of 10 of all Visa face-to-face transactions around the entire planet are Tap to Pay now, I mean, that just tells you right there that it’s all segments, all demographics, all use cases, all product types,” McInerney explained in response to an analyst’s questioning. What’s more, in about 55 countries contactless penetration is now in excess of 90 percent, he added.
“So increasingly, in most countries for most customers, for most products all around the world, that’s just the default way that people are paying. And in the U.S., the curve is maturing exactly how we’d expect it based on what we’ve seen in 100-plus countries.”
In the United States, one out of two payments being taps is no small achievement. And in some cities it’s way more than that, McInerney noted. In New York, for example, tap-to-pay usage is “above 75 percent” of all face-to-face transactions. “That’s up from just 50 percent two years ago,” McInerney added. “[B]uyers, sellers, they love tapping as a way to pay. And we’re going to continue to see that growth accelerate in a place like the U.S.,” he predicted.
Overall, Visa reported 5 percent payments growth during the third quarter of 2024, lower than past quarters, but not by much.
In the United States, credit and debit both grew by about 5 percent. Card present volume was up 2 percent and card-not-present transactions grew 7 percent.
Visa also saw 4 percent growth during the first 21 days of July. Drilling down, debit card volume was up 4 percent year-over-year and credit was up 3 percent year-over-year for that time period. Card-present volume grew 2 percent and card-not-present volume was up 7 percent during the first three weeks of this month. There were several factors effecting that, Chris Suh, Visa’s chief financial officer explained.
There was Hurricane Beryl, which impacted Texas and other nearby areas. There was growth in ecommerce, especially promotional events like Prime Day. Suh reminded analysts that ecommerce customers are not billed until goods are shipped, and much of that shipping is not immediate. And then there was the major tech outage, cause by a faulty CrowdStrike update that crippled many businesses. “So, when we look at that, no single factor drove that 1 point of change from Q3 to the first part of July. But all things considered, we actually feel pretty good about the three week results,” Shuh said.
McInerney in his remarks to analysts also addressed the ongoing litigation with merchants over interchange and related issues.
In June a federal district court judge put the kibosh on a $30 billion settlement proposal that would have put to rest a long-standing legal battle pitting merchants against Visa and Mastercard www.greensheet.com/breakingnews.php?article_id=3040, suggesting that the case will likely go to trial.
McInerney said Visa felt the settlement “provided meaningful relief to all merchants and we will continue to work toward another settlement.” The Visa chief said “it’s too early to speculate on what that settlement is.” But he urged “everyone to keep in mind that a settlement can occur at any point before, during or after the trial.”
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