# Visa reports rare quarterly revenue miss, shares drop
Author: Pal sinha, Barnali
Author URL: https://startupobserver.com/author/pal-sinha-barnali/
Published: 2024-07-24
Category: Headlines
Category URL: https://startupobserver.com/category/headlines/
Meta Title: Visa Q3 Revenue Falls Short Amid Rising Interest Rates
Meta Description: Learn why Visa's revenue growth fell short, how high interest rates are impacting consumer spending, and what this means for the company's future.
URL: https://startupobserver.com/visa-reports-rare-quarterly-revenue-miss-shares-drop/

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By Arasu Kannagi Basil

(Reuters) -Visa’s third-quarter revenue growth fell short of Wall Street targets in a rare miss for the world’s largest payments processor as steep borrowing costs limited [consumer](https://startupobserver.com/essity-mulls-selling-vinda-stake-and-consumer-tissue-private-label-europe-business/) spending, sending its shares down 4.6% in extended trading.

The U.S. Federal Reserve’s efforts to curb inflation have taken interest rates to their highest since the global financial crisis of 2008, stretching the budgets of lower-income Americans who live paycheck to paycheck.

“In the U.S., while [growth](https://startupobserver.com/standard-chartered-lowers-vietnam-2024-growth-forecast-to-6-0/) in the high-spend [consumer](https://startupobserver.com/essity-mulls-selling-vinda-stake-and-consumer-tissue-private-label-europe-business/) segment remained stable compared to prior quarters, we saw a slight moderation in the lower-spend consumer segment,” Chief Financial Officer Chris Suh told analysts.

Rival credit card giant American Express also missed expectations for second-quarter revenue last week.

“Visa was priced for perfection back in March but has eased since then as unemployment, payment and loan delinquencies, and continued consumer disposable income concerns tick higher,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.

“There is room for business and [consumer](https://startupobserver.com/essity-mulls-selling-vinda-stake-and-consumer-tissue-private-label-europe-business/) spending growth, especially if Fed interest rates decline.”

Visa’s quarterly net revenue of $8.90 billion came in below analysts’ estimates of $8.92 billion, according to LSEG data. It was the company’s first such miss since early 2020.

Payments volume growth cooled down in its Asia-Pacific market, driven primarily by the macroeconomic environment in mainland China. The post-pandemic recovery in the region’s travel demand is progressing at a slower pace than what [Visa](https://startupobserver.com/visa-amazon-reach-global-deal-over-payment-fees/) anticipated.

Visa’s payments volume rose 7% in the quarter on a constant dollar basis, while cross-border volumes excluding transactions within Europe jumped 14%, signaling robust international travel demand.

It expects net revenue growth in the “low double-digit” percentages for the fourth quarter ending Sept. 30, compared with 10.6% reported last year. The company also reaffirmed its annual profit and revenue growth forecasts.

[Visa](https://startupobserver.com/visa-amazon-reach-global-deal-over-payment-fees/) earned $2.42 per share on an adjusted basis for the third quarter, in line with expectations.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Devika Syamnath)


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