Visa Inc. (V.N) is staying out of the rewards war in cards.

The company spent less on client incentives than analysts expected during its fiscal fourth quarter, showing the world’s largest payment network is resisting pressure to ramp up efforts to get banks and retailers to route more spending its way.

Key Insights

• Credit-card lenders are upping rewards for consumers and payment networks are boosting incentives for merchants as the battle intensifies in the US$90 billion swipe-fee industry. Visa’s 12 per cent jump in client incentives to US$1.5 billion fell short of the US$1.65 billion average analyst estimate.
• President Donald Trump’s trade war is no match for profits at Visa. Cross-border volume, a measure of spending abroad, climbed 10 percent in the period. The San Francisco-based company cited its acquisition of Visa Europe two years ago as well as a shift to commercial client contracts.
• Total spending on Visa’s network climbed 4.5 per cent to US$2.09 trillion. That missed the US$2.15 trillion average of three analyst estimates compiled by Bloomberg.

Market Reaction

Visa’s stock rose 1.1 per cent to US$135.79 in extended trading. It had rallied 18 per cent this year in regular trading before the report, compared with the 6.6 per cent gain of the 66-company S&P 500 Information Technology Index.

Know More

• Profit in the quarter ended Sept. 30 was US$2.8 billion, or US$1.23 a share, beating the US$1.20 average of 33 analyst estimates compiled by Bloomberg.
• Visa estimated that revenue for its next fiscal year may rise by the low double digits.