Visa's Q1 2025: Diverging Perspectives on Cross-Border Growth, Value-Added Services, and Regulatory Impacts

These are the key contradictions discussed in Visa's latest 2025 Q1 earnings call, specifically including: Cross-Border Volume Growth Expectations, Value-Added Services Revenue Growth Strategy, U.S. Volume Growth and Cross-Border Dynamics, and Impact of Regulatory Changes:



Strong Financial Performance:
- Visa reported $9.5 billion in net revenue for the fiscal first quarter of 2025, marking a 10% year-over-year increase.
- EPS was up 14% year-over-year.
- The growth in revenue was driven by improvements in key business drivers such as overall payments volume, cross-border volume, and an increase in processed transactions.

Consumer Payment Trends:
- Visa's consumer payments segment saw an increase in credentials by 7% year-over-year and tokens by 44% year-over-year.
- The company continues to grow its digital presence with 4.7 billion credentials and 12.6 billion tokens.
- Growth in consumer payments was driven by the launch of new credential offerings, increased digital wallet adoption, and the expansion of tap-to-pay technology.

Cross-Border and E-commerce Expansion:
- Cross-border volume excluding intra-Europe grew 16% in constant dollars, with e-commerce transactions benefiting from strong retail spending.
- Cross-border card-not-present volume, excluding travel, rose 16% year-over-year.
- The growth in cross-border and e-commerce transactions was fueled by increased retail spending, particularly during the holiday season, and higher foreign exchange rates.

Value-Added Services Revenue Increase:
- Visa's value-added services revenue grew 18% in constant dollars, driven by strong performance in consulting and marketing services, Issuing Solutions, and Risk and Identity Solutions.
- Acquisitions such as Featurespace and Pismo played a role in enhancing capabilities in fraud prevention and risk management, contributing to revenue growth.

Commercial and New Flows Growth:
- Visa Direct transactions grew 34% year-over-year, and new flows revenue grew 19% in constant dollars.
- The increase in new flows was attributed to stronger cross-border performance and growth in Visa Direct across regions.
- The use of Visa Direct for B2B payments and remittances, especially in Latin America, contributed significantly to the growth.