) continued to show impressive growth helped by global adoption of
credit and debit cards that raised net revenues for the first
fiscal quarter of 2013 by 12% year-on-year, taking the calendar
year growth to 13%. The company maintained momentum in transaction
growth as Visa processed transactions increased by 4% year-on-year,
the payments volume also increased by a similar percentage. Rebates
given to banking clients remained around 16% through the three
months ending December, in line with the historical trend.
$151 price estimate for Visa
is in line with the current market price.
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In July 2010, Visa acquired CyberSource, a data center operator.
Billable transactions through the online payment gateway have grown
rapidly since the acquisition with a 28% year-on-year growth
reported in the last quarter.
The Dodd-Frank bill, which requires banks with more than $10
billion in assets to use separate payment processing networks for
signature authorized and PIN authorized debit card transactions,
continued to affect Visa's debit transaction volumes, although the
effect was less pronounced in the last quarter than previous
quarters. The debit payment volume in the U.S. declined 4% in the
December quarter, an improvement over the 6% decline observed in
the September quarter. We expect the effect to wear off in the long
term as the market adapts to the new regulations.
Credit card volumes continued to grow with an 11% year-on-year
increase in the U.S. and 7% growth rate outside the U.S. We expect
this trend to continue over the next few years with increased
penetration in developing economies. Please read our article: Will
Visa And MasterCard Be Able To Capitalize On Mobile Wallet
International fees account for a quarter of revenues and have
maintained a double-digit growth rate over the last few years. Visa
charges its banking clients around 1% of the gross dollar volume of
an international transaction, where the acquirer's and the issuer's
country is different. The global cross-border volume increased by
11% in the December quarter, with 9% growth in the U.S. and 11%
outside the U.S.
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