Visa’s total payments volume grew 11% year-over-year (YoY) on a constant currency basis in its fiscal Q2 (ended March 31, 2021)—an upswing compared with the 5% annual increase it posted in the same period last year, when the pandemic was just taking shape. Visa’s debit volume drove most of the growth in the period: Debit jumped 24% YoY while credit growth remained flat. In the same period last year, Visa experienced 9% and 1% YoY increases in debit and credit volume, respectively. Recent spending broadly reflected overall pandemic-driven payment trends, with consumers favoring debit spending over interest-accruing credit spending.
Visa’s recent gains likely stemmed from improving economic conditions and stimulus payments. In the US—which as one of Visa’s largest markets experienced a 17.6% YoY jump in volume, outpacing overall growth—many consumers were in a better financial position compared with the same period last year: US unemployment steadily improved from January to March, and consumer sentiment has shot up in kind. US stimulus payments, which gave many consumers an extra cash injection to spend using their cards, were another major factor that played into Visa’s recovery. Meanwhile, trends around the world have varied from the US as international lockdown measures diverge and countries take different approaches to COVID-19 vaccine distribution.
Going forward, Visa is setting itself up for further potential growth in two key areas: