The San Francisco-based card processor on Wednesday reported fiscal fourth-quarter revenues grew at the lowest rate so far this year, rising 2.6 percent from June 30.
Client incentives -- what Visa spends to persuade clients to use its network -- spiked 37 percent to $576 million from $421 million a year ago.
The results are modestly disappointing, said Chris Brendler, cards analyst at Stifel Nicolaus & Co.
Shares slipped 1.7 percent in after-market trading.
Visa Chief Executive Joseph Saunders said the company spent more in client incentives as a necessary expense to secure future business.
These are investments that create strong and lasting relationships, Saunders said during a conference call with analysts.
The company disclosed during earnings that incentive payments are projected to rise in fiscal 2012.
Visa and other large payment processing companies are beginning to cope with new industry regulations imposed after the 2008 financial crisis, including limits on what they can charge merchants who process customer debit transactions.
The debit and credit card processor has beaten analyst expectations in recent quarters by expanding its international card business, and the number of transactions the company handles continues to rise.
During the quarter, international revenues accounted for 45 percent of the company's total. Chief Financial Officer Byron Pollitt said Visa's international business would account for more than half of the company's revenues ahead of a previous 2015 estimate.
Total processed transactions totaled 13 billion during the quarter, a 9 percent increase over a year ago.
Payment volumes increased 13 percent to $970 billion.
But domestically, Visa is facing renewed competition from rival MasterCard Inc
Over the last year, MasterCard has poached some U.S. banks that have traditionally used Visa to process their customers' debit and credit card transactions.
Visa reported fiscal fourth-quarter net income of $880 million, or $1.27 per share of class A common stock, up from $774 million, or $1.06 per share, a year ago.
Analysts projected Visa would earn $1.25 per share, according to Thomson Reuters I/B/E/S.
Overall, total operating revenues rose 12.6 percent to $2.38 billion from a year ago.
Visa shares declined to $90.50 in after-market trading after the results were announced. Shares had closed up 1.4 percent at $92.02 on the New York Stock Exchange.
(Reporting by Joe Rauch in Charlotte, N.C.; Editing by Gary Hill, Bernard Orr)