Visa says you can thank the labor market for strong spending

• Key insights: Visa CEO Ryan McInerney said that a strong labor market was driving the uptick in consumer spending, despite widespread uncertainty. 
• What’s at stake: The payments giant posted its highest rate of annual revenue growth in more than 15 years. 

If one were to ask Visa CEO Ryan McInerney what was driving strong consumer spending even in the face of widespread uncertainty, he would point to the labor market. 

Processing Content

“The foundation underlying [U.S. payment volume growth] more than anything is employment,” McInerney said Tuesday during the company’s fiscal fourth quarter earnings call with investors. 

“Anyone in this country who wants a job for the most part has a job, and that strength of employment, despite consumer uncertainty, is delivering … the strength in spending,” McInerney said. “We see the resilience across the spending bands on our network. So, we’ve seen stability in that sense. But in terms of [determining] how strong for how long and what the new normal is, I just think it’s too hard to tell.” 

Unemployment has hovered between 4.2% and 4.3% all year, according to the U.S. Bureau of Labor Statistics. 

Visa’s U.S. payment volume in the quarter rose 10% from a year ago, with credit payment volume increasing 11% and debit payment volume increasing 9%. Globally, processed transactions rose 10%, and cross-border transactions, excluding intra-Europe, rose 14%. Commercial payments volume rose faster than consumer payments volume at 12%, its fastest growth rate in eight years, excluding post-pandemic recovery and acquisitions. 

Revenue for the quarter landed at $12.1 billion, an increase of 13%. Full year revenue hit $46 billion, an increase of 15% — the company’s strongest annual growth rate in more than 15 years, also excluding post-pandemic recovery and acquisitions, McInerney said. 

Commercial and money movement solutions revenue increased 19%, and value-added services increased 30%, McInerney said on the call, noting that together, those two business lines made up more than 40% of Visa’s total net revenue. 

“We processed 281 billion transactions [for the fiscal year], up 9% year over year, and with approximately 80% processing penetration globally,” McInerney said. “And Visa Direct topped 15 billion transactions, representing about $1.5 trillion dollars in payments volume.” 

Net income rose 18% to $6 billion and earnings per share rose 22% to $3.19 per share.

Visa said it expected low-double digit adjusted net revenue growth for its fiscal 2027 and low-double-digit to low-teens adjusted EPS growth, assuming that the macroeconomic environment “stays generally where it is today and consumer spending remains resilient,” Chief Financial Officer Christopher Suh said on the call.

Truist Securities analyst Matthew Coad described Visa’s quarter as “a constructive one.” 

“Network token adoption is a really important part of the Visa story because increased adoption rates provide Visa with pricing power as it is one reason why the payments ecosystem is becoming more dependent on Visa’s network,” Coad said in a research note. Visa uses network tokens for both its ecommerce transactions and its agentic transactions.