Visa's transactions fall 3 percent in April

[May 31, 2012]  NEW YORK (AP) -- Visa says its card transactions in the U.S. fell by 3 percent overall in April.

And the payments network company said in a regulatory filing Wednesday that the amount Americans rang up on their charge cards remained flat in for most of May.

Visa Inc.'s stock fell more than 2 percent in Wednesday trading.

The company was especially hard hit on its debit card transactions, which fell 12 percent in April, compared to an 8 percent gain in credit cards.

Visa makes money by processing card transactions for banks and other issuers. As the largest charge cards payments processor in the world, Visa's transactions volumes have been an indicator of consumer spending trends.

However, that might not be the case now. That's because Visa has dominated the market for debit card transactions and is being hit especially hard by new regulations.

Last October the government limited the fees that banks can charge stores for card transactions. Since then banks have eliminated some debit card rewards programs that encouraged customers to use their debit cards.

Another regulation, which went into effect in April, requires banks to give stores a choice of the network they use to process their payments. In the past, Visa has had deals with issuing banks to process debit cards transactions only on its system.

In the first three months of the year, there's was evidence that rival MasterCard was swiping some market share in debit cards: Its U.S. debit card transactions grew by 21 percent. In the same period, Visa's grew just 4 percent, the slowest in a year.

[Associated Press]

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