Visa reports sharp drop in consumer spending
US, WASHINGTON (ORDO NEWS) — Visa again lowered its forecast for revenue growth in the second financial quarter. The multinational corporation pointed out that the coronavirus pandemic has led to a sharp reduction in the costs of cardholders in many countries.
The company now expects a 1% adjusted revenue growth “at the top of the average single-valued range.” Card expenses for this period (financial quarter II – January, February, March) are likely to grow by 1% in the “lower part of the high unambiguous range.”
This is not the first reassessment from Visa in March this year – the company has already lowered its forecasts amid falling key indicators in Asia.
“Since the virus has spread in the past few weeks, the effects that we have seen in Asia in February are now visible in the rest of the world. And this is marked by a rapid deterioration in costs associated with cross-border travel,” the company said in a statement.
The decision of the governments of dozens of countries to quarantine citizens has already hit the Visa and Mastercard businesses, causing a serious slowdown in credit card costs. Mastercard even stated that it would not make a forecast for the whole of 2020.
This month, expenses of Visa cardholders fell by 4% in the United States, expenses of customers of the company in other countries of the world decreased by 19%.
“Since countries have introduced social distance, the costs of flights and hotels, as well as domestic expenses, especially with regard to travel, restaurants, entertainment, and fuel, have fallen sharply,” the company said in a statement.
Amid a sharp drop in turnovers and negative forecasts, Visa shares fell a total of 12% this year. At the close of recent trading, they held at $ 165 apiece.
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