Visa Inc. has lost about 4% of the revenue booked during its most recent fiscal year by pulling out of Russia, but the impact is unlikely to be noticeable within a year thanks to the company’s global sales growth, its finance chief said.
The San Francisco-based payments giant’s exit from Russia due to its invasion of Ukraine will make it difficult to compare this year’s revenue with last year’s, Chief Financial Officer Vasant Prabhu said this week. “For the next couple of quarters, the comparisons will be tough,” he said. “In the short run, it’s lost.”
Visa finance chief Vasant Prabhu.
Photo: Patrick T. Fallon/Bloomberg News
But by next year, the lost revenue should be made up by growth elsewhere, Mr. Prabhu said. Visa’s global net revenue climbed 10% in the year ended Sept. 30 from the previous 12 months to $24.1 billion. Russia accounted for about 4% of Visa’s revenue in the year ended Sept. 30.
Visa said March 5 that it would suspend its operations in Russia. The company shut down the business five days later and began winding down pending transactions, a spokesman said.
Before the invasion, Ukraine represented 1% of Visa’s revenue, the company said last month.
Many Western businesses, including payments companies Mastercard Inc. and American Express Co., also said they would pause or end their operations in Russia after its invasion of Ukraine in late February.
Visa has offered relocation to all of its 210 Russia-based employees. The company is assisting those who have decided to leave in sorting out new roles, Mr. Prabhu said. The company declined to say how many workers have taken Visa’s offer to relocate to another country.
“Over time, we believe that we will find roles for anyone from our Russian office who wants another job at Visa elsewhere, outside of Russia,” he said.
Other companies, including ratings firm S&P Global Inc., are offering severance packages to employees in Russia who are losing their jobs.
Russians can continue to use Visa’s branded cards to pay for things in the country, although the company no longer generates revenue there. The cards don’t rely on U.S. systems to process payments in Russia. The cards for years have used the National Payment Card System, a homegrown network overseen by Russia’s central bank.
For Visa, revenue from the rebound in global travel and the continuing recovery of the company’s cross-border payments business will likely more than make up for the sales generated in Russia, said Brett Horn, senior equity analyst at financial-services firm Morningstar Inc.’s research division. Visa’s global cross-border volume increased 40% in the quarter ended Dec. 31 from the prior-year period.
“I expected growth to be unusually high this year and now maybe not quite as much,” Mr. Horn said.
Write to Mark Maurer at [email protected]
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