UPDATE 2-Visa says U.S. payment volume decline stabilizes

* Cross-border volume decline accelerates in April-May

* Global processed transactions grow 8 pct in April-May

* Shares are up 0.32 percent at $68.88 (Updates with CFO and analyst comments, adds byline)

By Juan Lagorio

NEW YORK, June 10 (Reuters) - Visa Inc (V.N) said the pace of decline in U.S. payment volumes stabilized in April and May, helped by a more intensive use of debit cards, but the contraction of cross-border volumes accelerated, as consumers cut back on spending and travel.

However, Chief Financial Officer Byron Pollitt said at an investor conference on Wednesday that the growth in the number of global processed transactions accelerated in April and May, as people used their cards more often but for smaller transactions. He said the trend reflected a movement from cash and checks to electronic payment systems such as debit and credit cards.

Pollitt said U.S. payment volumes -- the amount cardholders spend using Visa's network -- fell 3 percent in April and May, compared with the same period of 2008, in line with the decline seen in the January-March second fiscal quarter.

But Pollitt said it was too early to consider this an "inflection point" in the downward trend sparked last year by the credit crisis.

He added that the debit business, which is driven by spending in nondiscretionary items such as gasoline and groceries, supported the trend, as debt-burdened Americans trim their borrowing and use their credit cards less.

"There is a shift to debit from credit. That is a function of the deleveraging of the world," said Robert Lutts, president and chief investment officer at Cabot Money Management.

Spending on debit cards surpassed credit volume in the United States in the first three months of 2009 for the first time in the history of Visa, the world's largest payment network.

Cross-border payment volumes continued to fall, by 9 percent in April and May compared with the same period last year -- a deterioration from the 6 percent decline reported for the second quarter.

"Cross-border volumes have continued to drift down," Pollitt said at the William Blair conference in Chicago.

Pollitt also said global processed transaction growth accelerated to 8 percent in April and May, from a 6 percent increase in the January-March period, as more people around the world replace cash for credit or debit cards.

Visa is partially insulated from the global credit crisis because it processes transactions rather than extends credit. However, revenue growth has slowed along with transaction volume as consumers try to reduce their debts.

"The business is going to look much better by the end of this year," Lutts said, betting on a global economic recovery by the end of 2009.

Visa shares rose 0.26 percent to $68.81 in afternoon trading on the New York Stock Exchange. The stock is up 28 percent in 2009. (Reporting by Juan Lagorio, editing by Gerald E. McCormick)