Debit card transactions continue to fuel growth for Visa (V), which reported Fourth Quarter 2009 earnings today. Debit comprises about 70 percent of Visa’s U.S. transactions and the value of debit payments surpassed credit cards for the first time in the last three months of 2008, and continued to outpace credit card growth.
Joseph Saunders, CEO of Visa, discussed prepaid debit cards as a “key growth area”. In particular, Saunders noted that
“As far as prepaid is concerned, we view this as a product platform for which we will focus on specific segments to fuel continued growth. The key categories remain government disbursement, employee benefits, incentives and rebates, healthcare, and payroll. The keys to continued success in this space are expanding penetration, which is quite good in the U.S. much more nascent internationally, creating consumer preference, and most importantly, improving performance.
While many of the issuance programs currently in place generate millions of cards and good payment volumes, others result in issuance of cards by little volume at the point of sale in favor of cash withdrawals of ATMs. As part and parcel of our overall debit and prepaid strategies, we are implementing programs to boost conversion rates for these programs as we have done and are doing in the U.S.”
Saunders fielded a few questions about prepaid, and the growth in the segment, and suggested that the market will be discussed in greater detail at the Visa Investor Day upcoming in March 2010.