Page last updated at 23:31 GMT, Monday, 28 April 2008 00:31 UK

Visa lifted by cash-to-card shift

Visa credit card
Visa has so far proved resilient in the deteriorating economic environment

Visa has posted a 28% rise in profits for the first three months of 2008 as credit card transactions increased.

The electronic-payments firm said net income was $314m (157.6m), up from $246m the year before.

But analysts had expected even better, and Visa shares fell 4% after the US market closed. This suggests they will fall on Tuesday.

These are the first results from Visa since it raised $18bn in the biggest US share sale to date last month.

"Despite a challenging economic environment, Visa recorded strong growth in payments volume and transactions globally and across our diverse suite of products," said chairman and chief executive Joseph Saunders.

He said he saw this trend continuing.

The firm has benefited from an increasing switch to making payments using plastic rather than cash.

Legal battles

Visa is more protected from a US consumer slowdown than its rivals American Express and Discover Financial Services because its customers are not the cardholders, but the banks that issue Visa cards and make the loans to its customers.

It faces bigger risks from potential lawsuits.

Last year Visa agreed to pay American Express $2.1bn to settle a case in which American Express accused Visa of illegal anti-competitive practices.

It faces similar allegations from Discovery Financial Services.

The San Francisco-based firm set aside $292m to cover future litigation costs.

This is in addition to the $3bn it set aside from its initial public offering for potential legal liabilities.


SEE ALSO
Visa in record US stock offering
18 Mar 08 |  Business
Visa for sale at record price-tag
25 Feb 08 |  Business
Visa makes $2.1bn Amex settlement
08 Nov 07 |  Business
More credit card use boosts Amex
22 Oct 07 |  Business
Amex is suing Visa and Mastercard
15 Nov 04 |  Business
Credit card giants lose court bid
04 Oct 04 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2013 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific