Visa's Global Transactions Engine is Roaring: Sustainable or Not?

Visa Inc. V is benefiting from a clear resurgence in international travel and global consumer spending resilience, with cross-border transaction volumes standing out as a major growth lever. In its most recent quarter (second-quarter fiscal 2025), Visa reported a 13% year-over-year jump in cross-border volume, reflecting a robust growth in international activity.

International transaction revenues rose 18.6% in 2023, 8.8% in 2024 and 12.1% in the first half of fiscal 2025, driven by higher cross-border volumes. We expect the trend to continue and the metric to witness a nearly 12% year-over-year jump in fiscal 2025.

International transactions now account for 50.5% of Visa's total payment volume and are a high-margin component of its business. The company’s continued expansion into underpenetrated markets will further lift cross-border payment flows, aided by strategic partnerships and localized offerings. Over the first half of fiscal 2025, Visa witnessed 14.2% growth in payment volumes in the CEMEA region, 9.6% in Europe and 6.1% in Latin America. However, during this time, Asia Pacific witnessed a 1.2% decline, following a 0.9% fall in fiscal 2024 and 0.2% in fiscal 2023.

Nevertheless, as long as FX volatility remains subdued and travel patterns hold up, this high-fee stream could remain a durable growth pillar. Still, with international volumes highly sensitive to macro shifts, investors will need to watch global mobility trends closely heading into the second half of fiscal 2025.

Mastercard & AmEx Also Ride the Global Wave

Visa’s cross-border tailwinds are not unique. Mastercard Incorporated MA reported a 15% Y/Y increase in cross-border volumes in the first quarter of 2025, slightly outpacing Visa. Meanwhile, American Express Company AXP posted 13% Y/Y growth in international card services billed business, though its premium customer base shows strong spending resilience.

Mastercard’s emphasis on value-added services and its broader acceptance footprint in Asia are giving it an edge in certain corridors. However, American Express relies more heavily on affluent U.S. consumers and corporate T&E spending, limiting its exposure to broader global flows. Compared to Visa and Mastercard, AmEx has more control over its network but less global coverage, making its cross-border growth path more constrained.

Visa’s Price Performance, Valuation and Estimates

Shares of Visa have jumped 16.4% in the year-to-date period, outperforming the 6.6% growth of the industry.

Visa is trading at a premium to the industry, with a forward 12-month price-to-earnings of 29.87X. The figure is well above its five-year median of 26.92X and the industry average of 23.38X.

The Zacks Consensus Estimate for Visa’s fiscal 2025 earnings implies a 12.9% jump from the year-ago period. It witnessed 11 upward estimate revisions in the past 60 days against one downward movement.

Visa stock currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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