Ordering more credit cards is good news for Visa
US residents have been ordering new credit cards more often over the past few months. Good news for the card issuer Visa Inc. (V), as the company receives a percentage of each transaction.
The Wall Street Journal reported that in October, “the number of applications for credit cards reached a pandemic peak.” According to the publication’s journalists, an October survey showed that almost 27% of US consumers have applied for a new credit card in the last 12 months.
One in four Americans has requested a new credit card, increasing consumer activity. In addition, Visa receives 1.3% to 2.5% transaction fees from each sale made using its cards. Thus, the more cards there are, the more profitable it is for the issuer. Therefore, it is not surprising that after the announcement of an increase in the volume of ordered cards, Visa shares rose in price at the auction on December 6.
At the end of October, Visa presented a report for the fourth quarter of 2021. The company’s revenue increased by almost 30% year on year to $6.6 billion. Earnings were $1.62 per share, and net income increased by 45%. For business, Visa does not play a significant role in exactly how customers spend money — in regular stores or online, since any spending by customers is an opportunity to receive a commission from a transaction.
Recall that Visa previously reported on the likely expansion of the ecosystem, which will make it available for accepting different types of cryptocurrencies. In addition, the company has presented plans to create a universal payment channel that will act “as a hub, connecting several blockchain networks and ensuring the secure transfer of digital currencies.” At the auction on December 6, the V stock was worth $196.32.
