Visa announced it had processed a record-breaking $2.5 billion ($3.5 billion AUD) in transaction volume with crypto-linked cards in the first fiscal quarter of 2022.
Crypto booming for Visa
Growing demand for crypto payments is nothing new, but probably only a few realised how big the market had become.
During Visa’s recent earnings call, the company announced that its customers made $3.5 billion AUD in payments with crypto-linked cards in the first fiscal quarter of 2022. Impressively, that made up 70% of all crypto volume for Visa in the fiscal year of 2021. Company executives were highly pleased with the growing numbers, underlining that Visa was in a great position to fulfill the demand for crypto payment services.
CFO Vasant Prabhu said in an interview that the company took the growth in demand as a signal that customers see the utility of having a Visa card linked to a crypto account. He stressed:
“There’s value in being able to access that liquidity, to fund purchases and manage expenses, and to do so instantly and seamlessly.”
Visa CEO Al Kelly said that the company would continue to lean into the crypto space and that a key part of Visa’s strategy was to provide connectivity, scale, consumer value proposition, reliability, and security for crypto offerings. Both executives said that earnings and revenue had exceeded expectations, prompting Visa’s stock to move high in after-hours trading.
Visa forming strong partnerships in crypto
Although conventionally perceived to rival cryptocurrencies with its services, Visa has actually turned into a valuable partner for several crypto-related companies.
Its network of crypto wallet partners has grown from 54 to 65 and includes some of the industry’s biggest names like Coinbase, Circle, and BlockFi. Almost 100 million merchants worldwide already accept crypto as payment option. CFO Prabhu highlighted that growth was not related to a single sector, but that numbers were up across the board:
“Looking at the broad categories of spend, we don’t see the volume concentrated in a specific merchant vertical with these programs. People are using their crypto-linked cards to spend in a variety of ways — retail goods and services, restaurants, travel. They’re increasingly being treated like a general purpose account.”
Prabhu also pointed out that payment volume was up despite volatility in the markets and that crypto rewards played a significant role in the value proposition of many cards. He noted that especially crypto newcomers were excited by the option to earn rewards in cryptocurrencies for spending fiat money.
Visa had previously noted the growing interest in crypto payments by companies, so growth numbers did not come as a surprise for analysts familiar with the company. Although the company does not plan to add any cryptocurrencies to its balance sheet, it famously entered the NFT space by buying a Crypto Punk. Clearly, Visa realises the value of the rapidly surging crypto market, evidenced by its efforts to develop smart contracts.
It will be interesting to observe whether Visa will manage to satisfy demand by the private sector incorporating cryptocurrencies as payment options and by the public sector, for whom it is developing CBDC capabilities. Either way, the future looks bright for Visa.