7:00PM New York – Visa Inc. third quarter revenue increased 18% and net income surged 41.13% on 13% increase in transactions.

The largest credit and debit card payment processor reported sharply higher earnings as it improves its operating margins, makes inroads in emerging markets and more people in the developed nations use cards.

Visa Inc. third quarter revenue rose 18% to $1.613 billion from $1.365 billion and net income rose 41.13% to $422 million from $299 million in the period a year ago. Earnings per share in the quarter jumped to 51 cents per share based on 776 million class A common stocks.

Excluding litigation, restructuring and purchase amortization charges net income in the quarter rose to $457 million or 59 cents per diluted share based on adjusted 779 million class A common stocks.

Chairman and chief executive officer Joe Saunders said, “'The Company's strong financial performance and double-digit increases in payments volume and transactions in this current economic environment are further proof of the resiliency of our network business model.”

Total processed transactions on Visa's processing system, were 9.5 billion, a 13% increase over the prior year. Visa did not release geographic breakdown of total volume and growth in payment volume for the third quarter.

Visa debit card are increasingly used for day-to-day purchases in the U.S. and credit cards are used for higher ticket items as more consumers rely on credit issued by banks.

In the last seven quarters total processed transaction has grown at a rate between 11% and 15% and has jumped from 8.018 billion transactions at the end of December 2006 to 9.47 billion transactions at the end of the fiscal third quarter in June 2008. In the fiscal 2007 ending in September 2007 total processed transaction rose at 12% to 32.7 billion.

Diversified Revenue Base

For the fiscal third quarter 2008, service fees were $749 million, up 13% over the prior year on a pro forma basis, and were recognized based on payment volume in the prior quarter.

All other fee categories are recognized based on current quarter activity and are also compared on a pro forma basis. Data processing fees rose 20% over the prior year on a pro forma basis to $539 million. International transaction fees, which are driven by cross-border payments volume, grew 44% over the prior year on a pro forma basis to $449 million, as Visa benefitted from higher multi-currency payments volumes across all regions during the quarter.

Other revenue, which includes the Visa Europe licensing fee, was $150 million during the fiscal third quarter, up 26% over the prior year on a pro forma basis. Volume and incentive payments, which are a contra revenue item, were $274 million for the fiscal third quarter.

Nine Months Results

For the nine months ended June 30, 2008, Visa Inc. reported GAAP net income of $1.2 billion, or $1.44 per diluted class A common share based on 767 million shares outstanding. In the period revenue increased 22% to $4.55 billion from $3.7 billion a year ago. On an adjusted basis, net income for the nine months ended June 30, 2008, was $1.3 billion, or $1.67 per diluted class A common share on 779 million outstanding shares.

Visa Raises Outlook

Visa raised its annual operating margin outlook for the current fiscal year to mid 40% range and for the years 2009 and 2010 to mid to high 40% range. For the years through 2010, Visa reaffirmed annual net revenue growth of between 11% and 15% and adjusted diluted class A common earnings per share growth of 20% or more.

The company also guided annual free cash flow of more than $1 billion. The company based its estimates on 41% GAAP tax rate for the fiscal year 2008 and expects to reduce this to between 35% and 36% over the next five years.

Visa Leads the Market

At the end of 2007, Visa processed charges for $3.23 trillion for 44 billion transactions from 1.4 billion cards. During the same period, MasterCard processed $1.9 trillion for 23.4 billion transactions from 817 million cards. American Express processed $562 billion for 4.5 billion transactions from 78 million cards. Discover has issued 57 million cards and Diners Club network has 7 million cards under its logo.

Litigation Exposure