PYMNTS-MonitorEdge-May-2024

Visa Expects Revenue Hit As Virus Fears Curb Travel, X-Border Payments

Visa has joined in the line of companies with revenue impacted by the coronavirus, as the company announced that spending overseas has decreased dramatically, according to Bloomberg.

The company said cardholder spending overseas had especially been impacted for travel-related purposes, as people are less inclined to travel as the virus spreads worldwide. Growth is expected to be about 2.5 to 3.5 percentage points lower than Visa anticipated earlier this year. The company said it probably wouldn’t have a forecast on future quarters until April’s earnings call.

Visa said cross-border growth rates were deteriorating, and trends to-date at the end of February don’t fully reflect the impact the coronavirus could have globally.

Because of that, the company said, the deterioration may not have hit bottom yet in terms of company earnings.

Cross-border eCommerce hasn’t been impacted yet, Visa said, except for travel spending and in some Asian markets.

Visa’s shares had previously jumped 5.8 percent on Monday (March 2), but slipped by 1.2 percent in late trading as the news broke.

With the coronavirus impact, Visa now joins the ranks of its competitors, such as Mastercard and PayPal, in warning investors of the likely shortfall in funds. The virus, which has hit the continental United States as of this past week, has killed thousands worldwide and infected many more.

Mastercard said last month that it has knocked 2 to 3 percentage points off a predicted forecast, which translates to growth of around 9 percent to 10 percent on a currency-neutral basis, excluding acquisitions.

PayPal, meanwhile, anticipates around a 1 percent drop in its revenue in the first quarter, it told investors in late February. While business traffic was still going strong, PayPal said it anticipated weaknesses in eCommerce traffic.

But while factories and commerce have taken blows due to the virus, the digital world could act as a balm for missed opportunities. Using the internet to make sales and conduct business could keep things going. Among the examples already seen are a soccer match played to fans solely over live-streaming, and a fashion show presented over an internet camera rather than an in-person display.

PYMNTS-MonitorEdge-May-2024