Visa is a payments technology company that connects consumers, businesses, financial institutions and governments to electronic payments. Co. operates a processing network, VisaNet, which facilitates authorization, clearing and settlement of payment transactions. It also provides fraud protection for account holders and payment for merchants. Co. provides a variety of payment solutions that support payment products that issuers can provide to their account holders: pay now with debit; pay ahead with prepaid; or pay later with credit products. Co. also provides a range of digital, eCommerce and mobile products and services.
Visa's economic moat is evidenced by a powerful payment network widely accepted by merchants and is attractive to cardholders. Each new member increased the moat. Visa also has a trusted brand and high customer loyalty.
Visa’s results have been mixed lately. Visa's top-line expansion has been broad based, with each geographic segment reporting solid gains, especially its business overseas. However earnings has slowed. International transaction volumes remain the primary growth driver. There's a lot to like here from an investment perspective. Visa continues to make a big push overseas, with a particular focus on underserved regions where credit and debit card penetration is not pervasive.
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Ownership of the world's largest retail electronic payments network
Scalable and unique global payments processing platform
Wide array of payment products and services
Business model susceptible to litigations
Visa’s open loop system suffers from low control over cardholder service
Regulatory changes could limit profit expansion
Increasing security breaches likely to affect card acceptance
Huge opportunity in global small business spending still untapped
Increasing demand for mobile payments
Significant acquisitions and partnerships may help the company in extending service capabilities
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