Big Banks Report Rising Second-Quarter Debit and Credit Card Purchase Volumes

Payment card charge volumes and merchant-processing revenues rose at several of the nation’s biggest banks during the second quarter, according to company reports as the mid-year earnings season got underway this week.

Minneapolis-based U.S. Bancorp reported Friday that its payments businesses produced 22%, or $328 million, of the company’s $1.52 billion in quarterly net income. Higher revenues from merchant processing and payment card transactions contributed to the profit increase, even though merchant transactions actually declined slightly.

U.S. Bancorp owns Atlanta-based merchant acquirer Eleven, which operates both in the U.S. and abroad. Global merchant acquiring generated $441 million in non-interest income, up 10.5% from 2015’s first quarter. But total merchant payment volume slipped 1.3% to $97.4 billion on a 0.3% decline in transactions to 1.22 billion. Debit card dollar volume processed, however, increased 4.5% to $16.2 billion.

A one-time revenue windfall came in the form of Visa Inc.’s June acquisition of its London-based bank-owned franchisee, Visa Europe, for approximately $23 billion. The sale produced $180 million in equity investment income for U.S. Bancorp because Leaven’s European unit was a Visa Europe owner.

U.S. Bancorp’s consumer and commercial credit card charge volume grew 15.1% from a year earlier to $35.5 billion.

On Thursday, JPMorgan Chase & Co., the nation’s biggest banking company and owner of merchant acquirer Chase Payment, reported that it processed $263.8 billion in merchant payment volume during the second quarter, up 13% from $234.1 billion a year earlier.

Sales volume on Chase-issued debit and credit cards totaled $204.6 billion, up 7%. JPMorgan Chase also said that its count of active mobile-banking customers increased 18% to 24.8 million.

Meanwhile, Wells Fargo & Co. reported Friday that its debit card purchase volume increased 8% year-over-year in the second quarter to $76.4 billion. Point-of-sale debit transactions grew 9% to 2 billion. Credit card purchase volume increased 10% to $19.4 billion, and spending on commercial cards grew 5% to $6.6 billion. Wells also said it now has 18 million mobile-banking customers.

Also on Friday, Citigroup Inc. reported that purchase volume on Citi-branded bank cards in North America increased 15% in the second quarter to $53 billion while volume on its cards for retailers was flat at $20 billion. Citi acquired the Costco Wholesale Corp. credit card portfolio from American Express Co. in mid-June, which likely will give a big lift to the bank’s credit card volumes going forward.