Bank-Issued Credit and Debit Cards Driving Personal Consumption Spending Away From Cash and Checks; Visa U.S.A. 1999 Card Volume Surpasses $721 Billion.

Business Editors

FOSTER CITY, Calif.--(BUSINESS WIRE)--March 13, 2000

Visa U.S.A., the nation's largest payment card system, today announced that it processed $721.1 billion in consumer and business purchases in 1999, up 18% from the $611.0 billion in 1998. Visa attributed the growth to a booming economy and the popularity of debit and credit cards as the payment method of choice among consumers and businesses.

Credit, debit and business card use is now at an all-time high. Today, 26 cents of every $1 in U.S. discretionary consumer spending is on plastic, with about half of that on Visa, according to the Visa payments panel study. Visa expects the trend toward bank card payments - and away from cash and checks - to continue, given Visa's presence in e-commerce, the popularity of Visa check cards and the rewards, security and convenience of credit and debit cards.

"Every day, more consumers and businesses are choosing to use their bank cards - mostly their Visa cards - to purchase everything from cheeseburgers to office furniture. At most places, it's just an easier and safer way to pay," said Visa U.S.A. President and CEO Carl F. Pascarella. "We are forecasting that Visa alone will surpass $1 trillion in physical and e-commerce transactions in the U.S. within two years."

Growth in 1999 dollar volume was driven by the Visa check card, a card that draws on a customer's bank checking account, which since 1992 has grown to where it now accounts for more than a quarter of Visa's total dollar volume. Dollar volume on the Visa check card reached $183.8 billion in 1999, up 36% from 1998. There are now more than 84.5 million Visa check cards in the U.S., further demonstrating the growing popularity of this convenient alternative to credit.

Non-traditional acceptance categories also drove Visa's growth. Visa volume at movie theaters, for instance, jumped 107% in 1999, as moviegoers spent $195 million with their Visa cards. At fast-food restaurants, where Visa volume rose 66% last year, some $616 million was transacted on Visa cards.

Similarly, Visa card volume for phone bill payments soared 110% last year, while information retrieval and bowling alleys increased 109% and 47%, respectively.

Other, more traditional acceptance categories also had an impact, including recurring utility payments (e.g., gas, electric), which saw 22% Visa volume growth, cable/pay TV at 76%, variety stores at 98%, florists and nurseries at 86%, wholesale clubs at 57% and day care at 33%. In fact, card use for cable TV bills has doubled since 1994, as $1 billion was transacted on Visa last year.

Visa said that it processed 40 billion transactions in 1999, the equivalent of some 1,268 transactions per second, every second of the year. The busiest day of the year: Dec. 24, 1999, when transactions topped 3,500 a second.

Visa's suite of commercial card products, tailored for large and small businesses, represented a major product growth category last year. Volume on bank-issued Visa commercial cards reached $45 billion in 1999, up 42% from 1998. There are now over 9.2 million Visa commercial cards in circulation, up 23% from year-end 1998.

e-Visa, Visa's Internet unit, estimated that some 2% of Visa's 1999 volume - or $13 billion -- was from transactions over the Internet, based on merchant codes entered into the VisaNet system, Visa's processing network. Often, merchants that operate in both the so-called physical and virtual retail worlds do not necessarily categorize their e-commerce transactions as such. As a result, e-Visa's estimates are based on an analysis of VisaNet activity, tracking dedicated e-comm merchants exclusively. e-Visa estimates that some 10% of Visa's annual volume will be coming from Internet-related transactions by 2003.

Also contributing to Visa's 1999 performance was a significant drop in card fraud. Visa fraud levels dipped to just 6 cents of every $100 in transactions.

Visa U.S.A. is the leading payment brand and the largest payment system in the United States, with more volume than all other major payment cards combined. Visa plays a pivotal role in advancing new payment products and technologies to benefit its 14,000 U.S. member financial institutions and their cardholders. There are more than 330 million Visa credit, commercial and check cards, which generate more than $660 billion in annual transaction volume. Visa-branded cards are accepted at over 17 million locations worldwide, including some 500,000 ATMs in the Visa/PLUS Global ATM Network. Visa's Internet address is www.visa.com.