Worries over Visa’s coronavirus performance


Daniel Webber
Daniel Webber
Founder & CEO
Daniel is Founder and CEO of FXcompared and has 18 years of experience in the international finance world focusing on cross-border payments, technology and the property sectors. Daniel is widely… Read more
  • Cross border payments for the firm outside of Europe are down by over 20% over the course of March alone – with problems attributed to coronavirus
  • The firm has shared some of the risk factors which could affect its business performance in the coming weeks
  • “The extent to which the coronavirus outbreak impacts our business, results of operations and financial condition will depend on future developments”, Visa said

Global financial services provider Visa has become the latest firm in the cross border payments space to suggest it could be facing problems due to the coronavirus.

The firm, which is a ubiquitous provider of bank cards around the world, is suffering as economies across the globe contract in the face of reduced consumer spending and increased job losses.

According to an official filing from Visa to the US regulator the Securities and Exchange Commission (SEC), overall volumes of credit dropped for the firm over the course of March.

By this particular metric, they went down by 7%.

Over the course of Q1 as a whole, however, growth – in the US at least – was still positive, with the figure there standing at around 5%.

The same pattern was observed for debit volumes.

By that measure there was a drop in March in particular, this time of 1% – but across Q1 things were up for Visa, with a rise of 8% noted.

However, it was on the international money transfer side of things that the numbers rose.

In March alone, for example, Visa saw its cross border payment levels (excluding Europe) go down by 23%.

Across the quarter, levels were down by 3%.

In the filing, Visa explained some of the “operational factors” which may cause it to lose financially.

One of these, it said, was “third party disruptions, including potential outages at network providers, call centers and other suppliers”.

It highlighted the risk of fraud too, saying that “increased cyber and payment fraud risk related to COVID-19, as cybercriminals attempt to profit from the disruption, given increased online banking, e-commerce and other online activity” was a risk – as was “merchant, acquirer and issuer failures and credit settlement risk”.

It also offered some warnings about what life for Visa might be like beyond the coronavirus.

“The extent to which the coronavirus outbreak impacts our business, results of operations and financial condition will depend on future developments”, it said.

It added that these “are highly uncertain and are difficult to predict, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.”

Visa is not the only firm to have been forced into responding to the coronavirus pandemic.

If you’d like to stay up to date with the latest news on how firms around the world are responding to the crisis, click here.

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