Visa
Visa cards REUTERS

Visa said it expects a slowdown in card transaction volumes and revenue growth in the third quarter partly due to US sanctions on Russia.

The world's largest credit and debit card company said it expects nominal revenue growth to be in the mid-single-digits, a couple of percentage points below its second-quarter growth rate of 7%.

The company and its rival MasterCard stopped providing services to two Russia-based banks as part of Barack Obama's sanctions on the country after the crisis in Ukraine.

Following the development, Russian President Vladimir Putin said Visa and MasterCard would lose market share as a result of the sanctions, as the country was planning to develop an alternative payment system.

"We are caught between the politics of the United States and the politics of Russia," Visa CFO Byron Pollitt said during the company's earnings conference call.

"We're clearly seeing a drop-off in cross-border volume and sanctions are expected to have some impact on volume."

The company added that it is assessing the situation in Russia and hopes to continue its business there.

"We have 100 million cards there (in Russia) and it is not in anyone's best interest, inclusive of the Russians, to make those cards not available to their own citizens," Pollitt said.

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Visa also attributed the slow revenue growth to the strength in the US dollar, but noted that its revenue would rebound in the fourth quarter.

The company said it expects full-year revenue growth in the range of 10 to 11%. It maintained its earnings forecast, assuming "several pennies of earnings per share impact" from the situation in Russia.

Visa earlier reported a 26% increase in its second-quarter profit, even though revenue growth slid to a single digit in percentage terms for the first time in more than four years.

"Our underlying business drivers remained strong during the fiscal second quarter with payments volume continuing to grow at solid levels," Charlie Scharf, Visa CEO, said in a statement.

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