Visa’s Results and Transaction Volumes Will Offer Fresh Consumer Insights Ahead of Holiday Rush

With earnings season in full swing, one might well wonder what’s in the cards for payment networks, both figuratively and literally.

Visa will be first out of the gate, reporting its results after the markets close Tuesday (Oct. 26).

In terms of headline numbers, Wall Street sees revenues gaining about 27% year over year to $6.5 billion. Earnings are slated to grow at a relatively accelerated pace, by 37% to $1.54.

While the general narrative across banks, and likely among the card/payment network giants, is and will be that the consumer has been resilient, we might see some puts and takes in the data. After all, nothing travels in a completely straight line, and that includes spending.

To that end, as noted in these digital pages earlier in the month, as per Visa’s latest report from its Spending Momentum Index (SMI), consumers pulled back a bit, at least in terms of the rate of increase in spending.

Read more: Spending Momentum Index Drops Again, Visa Says

The SMI was 108.5 in September, down 1.1 points from the previous month. But with the SMI reading above 100, it’s a sign that consumers are still spending at higher levels than last year. The slowing growth was relatively more pronounced for discretionary purchases month to month from August to September, down 80 basis points to 105, while non-discretionary buying slipped by 50 basis points to 99.6.

Now, growth is still growth, and it may indeed be the case that the slight loss of momentum proves to be a blip in the grand scheme of things, and in effect the U.S. consumer was simply taking a breather before holiday spending begins in earnest. But then again, another metric, consumer confidence, is also showing tempered growth, having dropped to 109.3 in September, down from 115.2 in August. Confidence — in the economy over the near term, in one’s job security, etc. — is what gives us the “go ahead” to pull the trigger, especially on larger purchases.

Double-Digit Volume Growth?

We are likely to see continued double-digit volume growth in the third quarter, as the company continues to lap pandemic pressures. Visa said in its most recent earnings report that payments volume grew 34% to $2.7 trillion (as measured in constant dollars).

See more: Visa Payments Volume Up 34% With Debit ‘The Engine of Cash Digitization’

Breaking that down a bit, the company said that overall credit payments volume was $1.2 trillion, up 31% in constant dollar terms. Debit payments volume, at $1.4 trillion, was 37% higher than last year.

Management has said that cash continues to be displaced, and debit spending was at about 140% of pre-pandemic levels.

“Debit is the engine of cash digitization,” CEO Al Kelly said in July.

Cross-border volumes, excluding intra-Europe volume, were up 53%. We may see commentary on this metric reflect on what is happening along supply chains, and how stockouts may (or may not) snarl spending.