Visa sees lower revenue growth after debit crackdown
Visa Inc
The San Francisco based-company said on Wednesday it now expects annual net revenue growth in the high single-digit to low double-digits range for the next fiscal year ending September 30, 2012.
Visa still expects annual net revenue growth of 11 percent to 15 percent for fiscal 2011.
The Federal Reserve finalized last week rules slashing the swipe fees merchants pay banks and networks such as Visa and MasterCard Inc
The impact is manageable, Chief Executive Joseph Saunders told analysts during a conference call on Wednesday.
He added that the rules affect, but far from eliminate, a portion of the U.S. debit revenues that make up about 20 percent of Visa's global net revenue.
Banks pay card networks such as Visa and MasterCard for processing debit transactions and investors had worried that a cut in the fees that banks earn from retailers would translate into a cut in the fees they were willing to pay the networks.
Visa said in a conference call with analysts on Wednesday that its new guidance contemplates some pricing concessions to banks, but executives would not be more specific.
Saunders said during the call he expects the 2012 fiscal year to bear the weight of the debit fee crackdown, and that revenue growth would regain momentum in fiscal 2013.
The company also expects lower profits next year. It sees earnings per share growth in the middle to high teens in fiscal 2012, compared with the greater than 20 percent earnings-per-share growth it expects for the current year.
Last week, the Fed softened its initial restrictions, which were required by the 2010 Dodd-Frank financial reform law. But the final rules are still expected to cost the banking industry some $9.4 billion out of an estimated $23 billion in annual debit card processing fee revenue, according to the website, CardHub.com.
The softened rule was a victory for banks such as Bank of America Corp
Visa also said on Wednesday it completed a $1 billion share repurchase program it authorized in April. Its shares closed down slightly at $88.20 on Wednesday.
(Reporting by Maria Aspan; editing by Andre Grenon)
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