Robert Blews, 28 March 2019

 Visa table 


Visa is the world’s largest electronic payments technology company with a retail payments network which is spread across the globe. The company provides its payment platforms under the Visa, Visa Electron, Interlink, and PLUS brands.

Trending away from paper transactions

With developments in technology, customers now have the opportunity to make payments in a number of different forms beyond traditional cash. The most widely used form of paperless transactions is credit and debit cards. Visa’s vast network leaves the company well positioned to ride the wave of a secular shift from paper to plastic. As we move away from using cash for payments, Visa’s total transaction volumes will increase further. The long-term global trend away from paper-based payments toward electronic transactions represents more than US$10 trillion of potential payment volume opportunity worldwide.

Multiple revenue streams

Visa’s revenues consist of services fees, data processing fees, cross-border fees, and other revenues generated from value-added services. 1) Service fee: Visa charges a service fee for participating in the franchise. 2) Data processing fee: a fixed transaction fee based on the number of processed transactions. 3) International transaction fee: charged on cross-border or international transactions, i.e., where the business is located in a different country than the issuing bank. 4) Other revenues: includes revenues for value-added services such as fraud protection, analytics, consulting, loyalty services etc.

Visa’s war on cash

Visa’s management team provided a very bullish long-term growth outlook at the company’s investor day in June highlighting the opportunity to expand its network 10 fold by disintermediating the US$17tn of cash payments globally. The opportunity is multi-fold, and spans across traditional cheque payments, expansion into emerging markets, government payments, business-to-business payments and the shift to digital and mobile payments. Visa has made significant inroads into digital and mobile payments. The company has been working on incorporating a number of new mobile payment products and services to build up a platform that is aimed as a one-stop shop for any business needing payment solutions. For Visa, the shift to digital is important given it processes roughly 43% of all dollars spent on digital channels compared to 15% of dollars spent in the physical environment (excluding China).

Long-term outlook

Visa has impressed with its financial performance and continues to be exposed to one of the most significant secular growth stories in the world. Strong and growing exposure to markets outside the US, especially emerging markets where paperless transactions are likely to see strong growth over coming years. The company has very strong fundamentals and an enviable market position, which should only strengthen as new payment innovations in the mobile space continue to gain traction.


  1. An increase in card regulations globally
  2. Margin pressure from technology investments and debit regulations
  3. Slowdown in global purchase volume growth due to macro uncertainty