Crypto-related transactions using Visa were a significant boost to the company’s cross-border volume, although the company CFO sees a gradual decline in the surge.
The crypto markets have seen extraordinary growth this year, with lucrative spillover consequences for third parties like Visa. According to the company’s senior executives, though, this may already be dwindling.
The payments behemoth’s recently announced financial data for fiscal Q3 2021 indicate encouraging numbers for cross-border and international transactions, a crucial statistic for investors looking for early signs of epidemic recovery.
Visa announced earlier this month that its crypto-enabled cards cleared more than $1 billion in total spending in the first quarter of 2021, indicating an influence on foreign volume as crypto users deposited monies onto crypto platforms in multiple jurisdictions. These consequences can still be seen in the company’s latest quarterly results, which show that:
“Cross-border volume excluding transactions within Europe, which drive our international transaction revenues, increased 53% on a constant-dollar basis for the three months ended June 30, 2021. Total cross-border volume on a constant-dollar basis increased 47% in the quarter.”
However, Visa chief financial officer Vasant Prabhu noted in a new interview that much of the crypto-driven momentum behind increasing cross-border spending was limited to the first two months of the quarter.
Prabhu said that after a surge in crypto purchases in April and May, it had begun to decline by June. Given the shaky recovery to international travel, Prabhu warned that cross-border trade could be on the slide if the crypto market does not pick up.
The overall picture for the past quarter demonstrates that Visa’s foreign transaction processing brought in large income, which is significantly more profitable for the company than intra-national spending.
Despite the fact that much of the world was under stringent lockdowns last year, the business reported a 34 percent increase in payments using its cards year over year.
In addition, the corporation posted net revenues of $6.1 billion for Q3 2021, a 27 percent gain over the $5.86 billion average of expert projections.
Visa has signed a binding agreement to acquire Currencycloud, a cross-border payments platform that services around 500 financial and technology clients in over 180 countries, according to the article.
Currencycloud and Ripple, the startup behind XRP, have just formed cooperation to collaboratively investigate novel cross-border transaction mechanisms.