Visa Inc’s revenue growth in the first quarter turned back to its pre-pandemic level, as surge in consumer’s spending as pent-up demand after lockdown and restrictions slowed down amid tough economic outlook.
However, Visa’s profit still exceeded the target of Wall Street that resulted in its shares rose 1.4% to $227.82 in after-hours trading on Thursday.
Cross-border volumes were the main key measure to track spending on cards when holders travel abroad. Visa’s total payment volumes increased 7%, but growth was far lower than a 40% growth in cross-border volumes in the first quarter of 2021 when the payment volume soared 20%.
Vasant Prabhu, Visa’s chief financial officer said the year-over-year growth would moderate after the big pandemic recovery has passed. Visa’s revenue gained 12% to $7.9 billion, its slowest growth in seven quarters.
The CFO noted that the move made by Visa to exit Russia will see an impact on growth rates in terms of payment volume.
Ted Rossman, senior industry analyst at Bankrate.com said that it might be difficult to see growth in the travel sector in 2023 as pent-up demand from the pandemic already happened in 2022 and is fading away.