Visa USA Posts 11.6 Percent Growth in 2003

Usage on Visa payment cards issued by U.S. financial institutions surpassed $1.1 trillion in volume for a single calendar year, the greatest volume reached during a 12-month period in the history of electronic payments. During the past year, the number of Visa-branded credit, debit, prepaid, and commercial cards issued by Visa Member financial institutions in the U.S. rose to 429 million. These cards generated 16.1 billion transactions in the U.S., up 11.7 percent over 2002. Credit cards remained the primary source of Visas volume in 2003, growing 6.6 percent to $650 billion. Over the last decade, however, as Visa continues to move strongly beyond its credit roots to become a payments company, debit cards, which allow consumers to pay for purchases with ready funds, have become an increasingly significant driver of volume growth. These complementary products provide consumers and businesses with a broad range of payment choices. In 2003, debit represented 41 percent of Visa volume, and 59 percent of total Visa transactions. Visa check card volume grew 19.5 percent to $454 billion. By comparison, in 1993 Visa check cards represented just 6 percent of total Visa volume and only 8 percent of total transactions. Visa also posted significant gains in prepaid cards, the result of broad consumer demand for gift cards during the 2003 holiday season, and made substantial inroads into new merchant sectors that have traditionally been dominated by cash and checks. These include quick service restaurants, bill payments and movie theaters. Visa Excels Despite Tough Environment Visas growth is especially notable considering the sluggish economy in the first half of 2003, and the range of business challenges that confronted the organization during the year. Visas progress came amidst a historic year during which Visa resolved its merchant litigation; expanded Visa usage in new acceptance markets; accelerated the adoption of prepaid cards; and renewed or initiated partnership agreements with more than 450 leading financial institutions. Visa Milestones for 2003 In addition to the continued expansion of Visas debit program, the past year included other key milestones and advancements for the financial institutions that issue Visa cards, as well as the merchants that accept Visa cards, including: -- Four consecutive quarters of share growth in Visa credit card purchase volume that enabled Visa to reaffirm its leadership position in the bankcard credit category with a 57.4 percent share of purchases. -- Ongoing momentum in Visa commercial card growth, where Visa posted a 20.4 percent increase in volume. Of particular note is Visas growing presence in the Small Business category, where Visa usage topped $56.6 billion, a 28.6 percent increase over 2002. -- More mainstream awareness and greater popularity of Visa prepaid cards including Visa gift cards and payroll cards. Visa prepaid card sales and cash volumes grew last year by more than 240 percent, primarily due to more than 300 major employers and several payroll providers now offering the Visa Payroll card as a paycheck alternative. Visa annual volume placed on Visa prepaid cards now exceeds $1 billion, on track with Visas business plans to reach $50 billion in prepaid card volume in the next five years. Visa also is experiencing growth in the government sector as states explore new ways to securely, conveniently and more efficiently deliver disbursements. Currently 5 states are piloting distribution of child support payments through Visa prepaid cards. -- The continued growth of Interlink, Visas U.S. PIN-based point-of sale network, which enables consumers to use their ATM cards at more than 1.2 million merchant locations in all 50 states. Interlinks volume in the U.S. increased by 35 percent to $35.2 billion, while transactions increase