Higher economic growth, increased consumer spending and growth in digital payments in several countries are likely to drive increases in payments volume and processed transactions. The demonetization effort in India, which led to an increased shift towards digital transactions in the country, is one example of a growth driver for companies like Visa.
Visa is likely to see an increase in expenses in the fourth quarter due to its continued investments in its products, solutions and technology.
In the third quarter, Visa reported a 39% increase in EPS to $1.20 along with a 15% growth in revenues to $5.2 billion. The company also recorded revenue increases across all its segments along with growth in payments transactions, processed transactions and cross-border volume. For the full year of 2018, Visa has guided for net revenues to grow in the low double-digits.
Last week, Visa’s rival American Express (AXP) reported third quarter results, which topped market estimates. Another competitor Mastercard (MA) is set to report its third quarter results on Tuesday, October 30.
Visa’s shares have climbed 22% thus far this year but looking at the past one month, the stock has dropped 7%. If the company meets expectations, the stock is likely to see a lift.