You may have already noticed, that on the banking market, there are only a few big names in the sector of payment methods such as credit cards. Among those large companies which generate of course extremely high turnovers, there is the company Visa, whose securities are listed on the stock market. Here is therefore some information about its activities, but also some recommendations to help you carry out an objective and concrete analysis of its value in order to set up your investment strategies.
The Visa Group announced yesterday a strategic partnership with Goldman Sachs on a global scale to enable international money transfers to businesses of all sizes. Explanations.
In terms of opportunities, we can point out in particular, those offered by emerging markets. The latter which are not yet fully equipped, represent in fact a very lucrative market for Visa and its direct competitors. The group’s ability to position on these markets is therefore an important issue in the years to come. You should monitor any eventual contracts and news related to these emerging countries.
The strong rise in the use of credit cards to the detriment of other means of payment such as checks, or cash is also a promising phenomenon for Visa, which must seize this opportunity to further develop its clientele.
The use of credit cards has also been boosted by the strong development of online commerce and of internet in general. Thanks to a high level of security, Visa is particularly well positioned on this since you can do secure online transactions with its credit cards. Visa is also surfing the waves of a new fashion, a new advanced payment method which is the payment through smartphones.
Finally, since the Basel III (Third Basel Accord), Visa is considered as a bank player but is not influenced by the current regulatory framework in this sector which protects it from certain risks.
Visa products and services are also threatened since some years by a new form of competition. It is of course, electronic payments methods, which are currently in full bloom. These include digital wallets such as PayPal which is also one of Visa’s customers, but also new methods such as dematerialized currencies like the Bitcoin and the other developing electronic currencies on the online market.
As you might know, Visa is a company that commercialize banking cards of the same name in France and everywhere around the world. However, its activity is divided into two major sectors, the first of course concerns the sale of payment methods such as credit cards, debit cards or online payment cards, and the second gathers all the services such as support, assistance or management of partner networks.
This American company generates most of its turnover in the United States.
Visa share price is currently listed on the NYSE Main Market in the United States. Visa is also part of the composition of the Dow Jones Industrial Average Index.
The group Visa does not have many competitors in the highly regulated and closed sector of banking cards. However, it is interesting to know more about its two main competitors which are American Express and Mastercard.
American Express is currently the leader banking cards supplier from an international point of view. This American company specializes in providing methods of payment such as credit cards or traveler’s checks, and is the leader in the organization of business trips in the world.
The group Mastercard is listed in the NYSE and is also an American company specialized in payment and withdrawal systems based in New York. It is Visa’s main competitor on the European market. It offers credit cards and debit cards under the brand of Mastercard but also Maestro and Cirrus cards. Paying with these cards is accepted in more than 32 million stores around the world, which give us an idea of its notoriety.
The group Visa has established over time several strategic partnerships with other important companies. We invite you to find out some of these partnerships here:
This is the case for example of its strategic partnership created with PayPal in 2016.
Always in 2016, Visa associated to the car manufacturer Honda in order to create a payment system integrated in vehicles.
In 2015, Visa also associated to the company Orange in order to participate in the creation of the Orange Cash system integrated to the smartphones, now named “smartshopping”.
Finally, Visa is also a partner of the group Publicis which is in charge of promoting the group’s sportive partnerships around the world.
Taking a position on the long term and when it is going upwards on the value of visa shares with CDFs or the integration of some of its shares in your stock portfolio requires the possibility that this title is likely to earn points in the months and years to come. But for that, you must of course be aware about the advantages of this asset for investors and the strengths of this company. This is what we propose you to find out here more in detail thanks to some information about the advantages of Visa.
One of Visa’s greatest strengths is of course its very strong popularity in the whole world. In fact, when we think about credit cards, the three big names that automatically come to mind are Visa, Mastercard and American Express and not the names of the banks that provides the credit card. This notoriety is in fact a pledge of trust by users and future clients.
Visa also has a very interesting positioning on the market of credit cards with extremely low competition. In fact, the current situation is that of a duopoly and two main players in this market remains Visa and Mastercard which are the only ones targeting the mass market at the moment. The operation of their branch of credit cards makes them particularly attractive to customers who carry out small repetitive transactions. One might think that the group American Express is also a direct competitor of Visa but in reality, Visa’s positioning is much more selective and sharp than that of the other two groups. Visa targets the mass market with a very large volume of transactions every second, which offers potential recurring and repetitive sales potential which is the major strength of this company. The use of a credit card on a daily basis has in fact become a real reflex for consumers.
On the other hand, Visa focuses its activities first of all on debit cards rather than on credit cards. The group has thus successfully reduced the risk connected to credit cards.
We should also mention, the quality and selective acquisitions made by Visa which perfectly keep up with its core activities. This avoids a certain dispersion that could be perceive as dangerous or risky.
Finally, one of the main qualities of Visa concerns the quality of its marketing relations and communication with the general public. We notice in particular the efforts made in the sponsoring of big sportive events such as the Olympic Games which allowed it to reach a very large audience despite an important investment. Thus, Visa has succeeded in increasing the power of its brand and its notoriety this way it can face its competence more serenely.
In order to carry out a precise analysis of the possibilities of expansion of Visa it is of course recommended to learn about the advantages of this company, but also about its disadvantages. Some weak points in fact could limit its potential to continue developing and make the price of its shares fall on the long term. Here is therefore a summary of the disadvantages of this asset and of this company.
Among the biggest negative points of Visa, we can mention particularly the option established by Visa Europe which was the possibility of asking Visa Inc to redeem its shares. Such a request will of course have very important consequences on the group’s finances with a very large and rapid outflow of funds.
It should also be pointed out that even if the company targets a mass clientele, we regret its limited choice of high end cards on the market where its competitor American Express is particularly well positioned. This specificity could thus influence the group’s results on the long term and slow down its development on certain segments of the population.
Finally, Visa is, like all the other company in this sector of activity, highly exposed to the world of finance and the risks of the banking sector which we know is not very stable in recent years.
If you would like to know the latest financial publications of the Visa Group, you can consult them freely and free of charge on the company's website, in the section reserved for investors. For the financial year 2019, the company's turnover was USD 22,977 million and its net income USD 12,080 million. The group's current market capitalization is USD 404,885 million.
It is interesting to know how the capital of the Visa company is distributed among the various private shareholders. The Vanguard group holds 8.49%, Fidelity Management & Research 5.07%, T Rowe Price Associates IM 4.67%, SSgA Funds Management 4.52%, BlackRock Fund Advisors 2.57%, Massachussetts Financial Services 1.57%, Capital Research & Management WI 1.56%, Geode Capital Management 1.55%, Capital Research & Management 1.24% and Northern Trust Investments IM 1.21%.
In order to trade the Visa share in the most efficient way possible, you must first of all carry out a good fundamental analysis of this value, but also a technical analysis which will help you to validate or invalidate the signals obtained and to know whether or not the market has already anticipated the effects of the news.
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