The spending by consumers in the US using the debit cards of Visa Inc (NYSE:V) surged by 24% in August and 26% in July 2020 YoY even after the expiry of unemployment benefits. A drop of 8% in credit card spending in the US has offset an increase in a debit card.
Aid ends in July
Several million households in the US benefited from the $600 million aid, which ended in July 2020. The lawmakers have not decided on the extension of unemployment benefits.
A drop in overseas spending
In Q4, the cross border volume involving Visa declined by 31%. Visa enjoys a significant share of overseas spending by its cardholders compared to domestic transactions. According to a filing by Visa, travel-related overseas spending is reported only by a small percent because most of the borders are closed due to coronavirus crises. However, domestic spending increased considerably YoY in several nations.
Move money quickly through Visa Direct
Visa and Paypal Holdings Inc (NASDAQ:PYPL) extended their global partnership to provide real-time access to money for small businesses and consumers, who sends or receives funds through Venmo, Paypal, or Xoom. The collaboration allows using instant transfer service of Paypal, which uses Visa Direct, to facilitate quick cross border and domestic digital payments.
Secure and fast digital payments are an essential part of life because everyone wants to get earnings on the same day for survival during coronavirus or receive or send funds overseas.
CPO of Visa, Jack Forestell said providing real-time access to funds for small businesses or transferring money quickly to your loved ones is vital during the ongoing coronavirus crises. Visa’s alliance with Paypal allows small businesses worldwide and consumers with quick and secure payment options to ensure financial stability.
A growth of 80%
The real-time push payments platform of Visa, Visa Direct, which facilitated P2P (person to person) payments, reported a growth of 80% in transactions in Q3 2020 in the US. Eligible customers of Paypal can either receive or pay funds to businesses, family, and friends or transfer money quickly to Visa Cards from their Venmo and Xoom accounts or Paypal accounts.
Microbusinesses and small businesses can improve their cash flow by getting real-time access to earnings. According to reports, 76% of the SMBs in the US struggled because of cash flow shortages and 91% of them seek assistance in real-time settlements.