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Visa and its profits from the crypto market: overview

Photo of: Joseph Stone
by Joseph Stone

Crypto is a lively market for Visa, whose international transactions have jumped 53%. At least in the first half of the year. Now, the crypto euphoria is fading.

The first half of 2021 has been historic for many of the economic players in the crypto market, as well as for investors. However, the crash of crypto stocks in mid-May put an end to this euphoria.

Nevertheless, the last few months of Q2 are still very positive, especially for payments giant like Visa. Its latest financial results attest to this. The firm already revealed recently that crypto bank cards had generated more than $1 billion in spending during the first half of 2021.

Crypto purchases have been slowing down since June, but investors’ interactions with crypto platforms, such as exchanges, are also helping to drive Visa’s international revenues. These services are indeed established in multiple jurisdictions around the world.

For the global payments specialist, these operations are leading to a very significant increase in revenue in its fiscal 3rd quarter – the 2nd calendar quarter.

“Cross-border volume, excluding transactions in Europe, which drive our international transaction revenues, increased by 53% in constant dollars for the quarter ended June 30, 2021. Total cross-border volume, in constant dollars, increased 47% in the quarter” Visa detailed in its results.

The trend did not remain unchanged throughout the three months, however. As the firm’s CFO, Vasant Prabhu, points out, it was the first two months that generated this revenue explosion.

Visa is on the offensive in cross-border payments. Traders and crypto investors are not unaware of it, the surge in the price of crypto-currencies is concentrated between April and May. In mid-May, the volume of transactions remains high, but this is due to a massive sale of assets, following the panic of investors.

Visa’s CFO thus confirms a drop in crypto-currency purchases since June. As a result, without sustained momentum in the crypto market, Visa is expected to see a decline in cross-border volume. Yet, for Visa, processing these transactions abroad is proving particularly lucrative. These transactions contribute in part to the company’s 27% increase in quarterly revenue to $6.1 billion.

And Visa intends to expand its presence in this sector even further. The giant has reached an agreement to acquire a cross-border payments expert, Currencycloud. Note that the latter now counts Ripple, the issuer of XRP, among its partners.