When Visa (NYSE: V) reported its 2019 first-quarter earnings three months ago, there were reasons for concern, most notably a significant slowdown in cross-border payment volume growth. This quarter, investors were watching closely to see if the issue was a temporary setback or a sign that something was amiss at the payments network company. This was a new feeling for investors as, since Visa went public in 2008, its returns have topped 1,000%, more than nine times the S&P 500 index's returns over that same period.

The headline numbers certainly appeared fine, if a tad lower than Visa investors are used to. Net revenue rose to $5.5 billion, an 8% increase year over year, while earnings per share (EPS) grew to $1.31, a 17% increase over last year's second-quarter results. This growth was driven by an 8% increase in payments volume to $2.1 trillion and a 9% increase in the number of transactions to 47.4 billion. EPS also got an extra boost by $2 billion of share repurchases made in the quarter. Notably, the revenue growth was the slowest it's been for Visa since its 2016 third quarter, though management did note that currency volatility played a larger factor than normal.

Data source: Visa. YOY = year over year.

While it's premature to say that the cross-border problem is completely resolved, Visa's second-quarter results went a long way to ease investors' concerns. Let's take a closer look at what's been ailing Visa in this crucial area and what the company is doing to fix the problem.

Visa's cross-border payment volume increased only 4% year over year in the second quarter. Image source: Getty Images.

Visa's cross-border woes

As defined by Visa's annual 10-K filing, cross-border transactions occur when a purchase is made with a merchant in a different country than where the Visa card was issued. While Visa doesn't break out its cross-border numbers specifically, the 10-K filing does state, "International cross-border transaction revenues represent a significant part of our revenue and are an important part of our growth strategy." Cross-border revenue is accounted for in Visa's international transaction revenue along with Visa's currency conversion activities.

In Q2, Visa's international transaction revenue rose a meager 3% to $1.8 billion, good for almost 33% of the quarter's total revenue. Weighing in on the slow international transaction revenue growth, Visa CFO Vasant Prabhu said, "Significant headwinds from exchange rates and currency volatility were partially offset by our fiscal year '18 pricing actions and favorable mix, i.e., slower growth in intra-EU volumes." Management said that cross-border volume rose 4%, but didn't give a specific number. This comes after last quarter's 7% cross-border volume growth, which was already noticeably slow.