Growth rates for Visa’s debit and credit card payments volume have declined, on a monthly basis, since February, an earnings report from the company Tuesday showed.

The fiscal second-quarter report from the San Francisco-based card network giant charted the payment flow expansion slowing slightly more, on a monthly basis, for debit than for credit relative to last year. Overall, the company reported a 5.1% growth rate for the three months ended March 31, and credit expanding 6.2% for the period, according to supplemental earnings data.

The slower debit growth follows the implementation of a new Federal Reserve rule requiring more competition in the processing of cards used for e-commerce. The Federal Reserve last October approved a clarification of Regulation II, making clear that merchants must have access to multiple networks for routing debit card transactions. That clarification gave a boost to networks that compete with Visa, which dominates card processing in the U.S.

During a Visa management call Tuesday to discuss the latest quarter earnings results, an analyst asked about the decline in growth for debit card volumes in the U.S., noting a decrease in restaurant sales among lower-income clients for the Darden Restaurants chain.

In response, Visa’s chief financial officer, Chris Suh, said the impact of the Reg II clarification was “stable.” Previously, he had called out a “modest impact from Reg II,” for the company’s first fiscal quarter, ended Dec. 31. In the Tuesday call, he also cited the overall U.S. card business as having “relatively stable volumes.”  

The slide in credit and debit card growth continued in April, according to a Visa earnings presentation that accompanied the latest report from the company.

Despite the constrained growth, the U.S. card volumes did increase, with the credit business climbing to $749 billion and the debit volume rising higher, to $812 billion. 

The growth in those card volumes was larger outside the U.S., the company’s supplemental data showed. Internationally, credit card payment volumes climbed 9.4% while debit card volumes increased 9.1% for the fiscal second quarter, compared to the year-earlier period.

Visa’s net income for the most recent quarter rose 10% to $4.7 billion, over the same period last year, on a revenue increase of 10% to $8.8 billion. 

The company, which provides a variety of payment services to consumers and businesses, also derives revenue from other services, including those related to payment acceptance, risk mitigation and identity verification.

Visa still forecasts a rise in overall card appeal as it seeks to persuade users of cash and checks to shift to cards, Visa CEO Ryan McInerney noted during the call. He also pointed to the opportunity for shifting consumers using domestic card services in other countries to the Visa fold. “There is a very long runway ahead,” McInerney said on the call.

Correction: The story teaser was updated to show that the card declines were during the third quarter.



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