Visa spending more to please banks after ‘deal’

Bloomberg

Visa Inc had to shell out more money to entice banks to issue their cards on the company’s network.
The firm set aside $1.69 billion in incentives for banks during its fiscal fourth quarter, a 13% increase from a year ago, that topped the $1.51 billion average of analyst estimates compiled by Bloomberg.
The world’s largest payments network — which earlier this year inked a 10-year deal with JPMorgan Chase & Co for the lender’s cards — had warned that it will spend more pursuing such agreements.
The company offered fresh guidance for its fiscal year. Investors can expect client incentives to be 22.5% to 23.5% of gross revenues while net revenue may grow by a percentage in the low double digits.
Visa has seen a slowdown in cross-border spending this year as trade tensions and a stronger US dollar hindered foreign consumers’ spending in the US.
That showed signs of continuing: Overseas spending on the firm’s network climbed by 7%, missing the 7.5% average of analyst estimates.
The stock had climbed 34% this year through the close of trading last week, compared with the 32% advance of the 68-company S&P 500 Information Technology Index. Visa said spending on the firm’s cards climbed 9% to $2.27 trillion, missing the $2.28 trillion average of analyst estimates compiled by Bloomberg.