By Tanya Agrawal (Reuters) - Visa Inc (N:V) reported a better-than-expected adjusted quarterly profit and said the mobile payment industry would be "a great driver" for business, sending its shares up nearly 4 percent in extended trading.
The world's largest credit and debit card company and its competitors are turning their attention to mobile payments, an industry given fresh impetus by the entry of Apple Inc (O:AAPL).
Visa, along with Mastercard Inc (N:MA) and American Express Co (N:AXP), have partnered with Apple in the launch of a system - Apple Pay - that allows iPhone users to pay for anything from office supplies to burgers at the tap of a button.
Several analysts have estimated that mobile payments will be a $1 trillion global industry by 2017.
"We have our traditional ways of doing business but ... we see the mobile opportunities in both the developing, the less developed and the developed world being great drivers," Visa Chief Executive Charlie Scharf said on a conference call.
The company, along with its smaller rival MasterCard, is looking to expand in emerging markets, where cash is still the preferred means of doing business.
Earlier on Wednesday, China said it would open up its market for clearing domestic bank card transactions following its promise to reform and free its electronic payments market. The move is expected to benefit both Visa and MasterCard in a market worth over $1 trillion a year.
Visa's shares rose to $223 in extended trading on Wednesday.
STOCK BUYBACK
On a constant dollar basis, Visa forecast 2015 revenue growth in the low double digits in percentage terms. The company also announced a new $5 billion stock buyback program.
Cross-border transactions grew 10 percent on a constant dollar basis in the fourth quarter. Payment volume growth rose 11 percent to $1.2 trillion on the same basis.
"The quarter looked good. The most important thing is that we saw an improvement in cross-border transactions and the share buyback shows confidence," said Gil Luria, analyst with Wedbush Securities Inc.
On an adjusted basis, Visa's net income rose 14 percent to $1.4 billion, or $2.18 per Class A share, for the quarter ended Sept. 30. Total operating revenue rose 8.6 percent to $3.23 billion.
Analysts on average had expected a profit of $2.10 per share on revenue of $3.19 billion, according to Thomson Reuters I/B/E/S.
(Editing by Saumyadeb Chakrabarty and Robin Paxton)