COMPANY DESCRIPTION

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.

 

ECONOMIC MOAT

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.

 

OUTLOOK

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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STRENGTHS

  • Ownership of the world's largest retail electronic payments network

  • Scalable and unique global payments processing platform

  • Wide array of payment products and services 

WEAKNESSES

  • Business model susceptible to litigations

  • Visa’s open loop system suffers from low control over cardholder service 

THREATS

  • Regulatory changes could limit profit expansion

  • Increasing security breaches likely to affect card acceptance

    Increasing competition 

OPPORTUNITIES

  • 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 

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  

 

The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.

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