Visa USA Kicks-Off the Holiday Season with Nearly 16% Increase in Sales Volume

SAN FRANCISCO – Visa USA, the world’s leading payment brand and largest payment system, announced today that spending (sales volume) on Visa branded payment cards during the first week of November 2004 (November 1-7) increased 15.7 percent over the same period last year.

Spending on Visa cards during the first week of November rose to approximately $22 billion, according to Visa’s Holiday SpendTrak report. Consumer spending on Visa branded credit cards surpassed $10.8 billion while debit spending reached more than $9 billion, a 5.8 and 28.7 percent increase from the same period in 2003, respectively.

There are more than 450 million Visa branded credit and debit cards in the United States. Those cards represent over 14 percent of Personal Consumption Expenditures (PCE), indicating that consumers spend more than $14 out of every $100 using a Visa branded card. Only cash and checks have a greater share of PCE, making Visa products a strong indicator of consumer spending behavior.

“These early numbers are encouraging, as they indicate that consumers are not only continuing to spend, but increasingly they’re doing so with available funds accessed through their Visa check cards,” said Wayne Best, senior vice president for strategic and economic analysis. “The Visa data reflects a general increase in consumer spending combined with the continued migration of consumer and business spending away from paper forms of payment, such as cash and check, to plastic forms of payment, such as Visa.”

Mr. Best adds, “Based on this week’s spending data and our broader economic analysis, Visa is cautiously optimistic that this will be a good holiday season for merchants, consumers and Visa’s Member financial institutions.”

To ensure that retailers are able to provide speedy check-out and minimize abandoned purchases, Visa recently upgraded VisaNet, the largest and most advanced payment system in the world, to sustain the expected 6,200 transactions per second during the peak of the holiday shopping season. That’s 21 percent more than last year’s peak, when Visa processed an average of 5,119 transactions per second sustained during a one-hour period on December 24.

The upgrade also ensures Member financial institutions, cardholders and merchants that Visa can deliver secure and reliable payments even during the busiest shopping days of the year. In fact, VisaNet is designed to provide sufficient capacity levels so that the system can processes not only Visa debit and credit payments, but also stands-in for other payment brands, processors and financial institutions during peak processing periods.

RETAIL SPENDING ON THE RISE
For the first week of November, Visa spending in the retail category rose by 7.7 percent, totaling $7.3 billion. Spending in the retail category of “Discount, Mass Apparel and Drug Stores” experienced the biggest surge during the week, showing a 18.4 percent increase compared to the same time period in 2003. Other retail categories that showed strong growth compared to the same week in 2003 include:

• Home and Garden (12.7 percent growth)
• Department Stores and Apparel (8.9 percent growth)

About Visa USA Holiday SpendTrak Reports
The Visa USA Holiday SpendTrak reports provide insights into consumer spending behavior. Based on proprietary data, this report presents timely statistics based on approved authorizations of Visa branded credit, debit and commercials cards in key market segments. Prepaid card spending (i.e. gift card) is reflected in the debit card numbers. Growth comparisons are to the same period from the prior year. Growth in Visa volume reflected in the SpendTrak report is the result of two major factors: increased spending by consumers and business; and the overall migration of spending from paper forms of payment (cash and checks) to electronic forms (Visa). SpendTrak includes specific data for key retail categories and breaks down purchase activity by geographic region.

About Visa
Visa is the world’s leading payment brand and largest payment system, enabling banks to provide their consumer and business customers with a wide variety of payment alternatives. Nearly 21,000 financial institutions worldwide rely on Visa’s processing system, VisaNet, to facilitate $2.5 trillion in annual transaction volume with virtually 100-percent reliability. Cardholders in more than 150 countries carry more than 1 billion Visa-branded cards, accepted at millions of locations worldwide. Within the United States, nearly 14,000 financial institutions issue 396 million Visa cards, accounting for more than $1 trillion in annual transaction volume. Visa offers a trusted, reliable and convenient way to access and mobilize financial resources – anytime, anywhere, anyway.