Liberty Posted July 24, 2019 Share Posted July 24, 2019 https://minesafetydisclosures.com/blog/2019/7/23/part-ll-an-overview-of-visa Thank you Link to comment Share on other sites More sharing options...
SlowAppreciation Posted August 5, 2019 Share Posted August 5, 2019 https://www.wsj.com/articles/fed-to-create-payments-system-to-speed-money-transfers-11565026200?mod=hp_lead_pos4 Link to comment Share on other sites More sharing options...
nspo Posted August 21, 2019 Share Posted August 21, 2019 I'm seeing overall market share in credit cards/payments changing hands at about 1.5% a year. V has a foothold on 50-55% of this market and growing (Mauboussin's CAP is expanding). To simplify the CAP equation I used (market share/change in total market share). Intuitively, this is why companies like KO sell at such high multiples... the product is used more frequently and is less likely to experience change. Using this exercise on V we find the width of the MOAT being 30+ years. I think this is better used for illustrative purposes rather than absolute. Nonetheless, 10+ years of earning 4x your cost of capital sounds good to me :) BTW.. my forward yield calculation for V is roughly 13% Link to comment Share on other sites More sharing options...
orthopa Posted August 23, 2019 Share Posted August 23, 2019 https://www.wsj.com/articles/fed-to-create-payments-system-to-speed-money-transfers-11565026200?mod=hp_lead_pos4 Anyone seeing this as a long term problem? This seems to be on the other side of the consumer ie the consumer getting paid not paying. May compete with Visa Direct eventually? Link to comment Share on other sites More sharing options...
Liberty Posted September 18, 2019 Share Posted September 18, 2019 Thread on the history of the credit card networks: Link to comment Share on other sites More sharing options...
gurpaul88 Posted September 19, 2019 Share Posted September 19, 2019 Nice. Thanks Liberty Link to comment Share on other sites More sharing options...
samwise Posted September 20, 2019 Share Posted September 20, 2019 I'm seeing overall market share in credit cards/payments changing hands at about 1.5% a year. V has a foothold on 50-55% of this market and growing Which competitors are losing share to Visa? MasterCard seems to be doing well, so I don’t think it’s them. Or do you mean Visa is taking share from cash and checks? Link to comment Share on other sites More sharing options...
UK Posted September 24, 2019 Share Posted September 24, 2019 https://www.wsj.com/articles/the-coming-currency-war-digital-money-vs-the-dollar-11569204540?mod=rsswn "A national digital currency managed on a single network could allow money to change hands almost instantly. Most bitcoin transactions, for instance, settle within 10 minutes. With a digital currency, transactions could happen in real time, and fees would be lower or nonexistent." "The one that might beat them all to the punch is the People’s Bank of China. The PBOC is expected to launch a digital version of China’s national currency, the yuan, later this year or early in 2020. If it does, it would be the first major global currency to become digitized.The benefits of digitization could be myriad. In addition to faster and cheaper money transfers across borders, a survey conducted by the International Monetary Fund found that central banks are looking at benefits like lower costs, more efficient monetary policy, blunting competition from bitcoin and its peers, and offering a risk-free payment network to the public." Could such things somehow change situation for V/MA in the future? Link to comment Share on other sites More sharing options...
Liberty Posted October 10, 2019 Share Posted October 10, 2019 New post on Visa and Mastercard (part 3 of a series), subscription required: https://www.scuttleblurb.com/vma3/ Link to comment Share on other sites More sharing options...
Liberty Posted October 24, 2019 Share Posted October 24, 2019 Visa Q3: https://s1.q4cdn.com/050606653/files/doc_financials/2019/q4/Visa-Inc.-Q4-2019-Financial-Results-Presentation.pdf Link to comment Share on other sites More sharing options...
Spekulatius Posted October 24, 2019 Share Posted October 24, 2019 Visa Q3: https://s1.q4cdn.com/050606653/files/doc_financials/2019/q4/Visa-Inc.-Q4-2019-Financial-Results-Presentation.pdf Interesting - their revenue grew faster (13%) than transaction volume (11%) and payment volume (7%). So it seems that average transaction size is down, but they still are able to charge more for each. Link to comment Share on other sites More sharing options...
mjs111 Posted October 25, 2019 Share Posted October 25, 2019 About 40% of revenue is service revenue and that's based on payments volume of the previous quarter (Q3 in this case) and growth for that quarter was up 9%, so that can also explain how revenue in the current quarter can outpace payments volume in the current quarter (without charging more). The 41% of revenue that was service revenue this quarter was up 9%, matching the payments volume growth from last quarter. Second, a new revenue accounting standard (ASC 606) boosted reported revenue by 3.2 percentage points. Backing that out revenue would have been up 9.8%. I don't know if ASC 606 would also have affected the transaction volume or payment volume stats, management didn't detail that out. Adding back in the 2 percentage point headwind from forex (since payment volume is always reported in constant dollars), adjusted, constant dollar revenue growth was more like 11.8% and not 13%. Last, there's a revenue segment called "Other Revenues." While it only consists of about 5.6% of revenue, it was up 35% year over year. Other revenue is "license fees for use of the Visa brand, fees for account holder services, certification and licensing, and other activities related to our acquired entities," according to the 10-K. So this is revenue that wouldn't be tied strictly to individual transactions. Management said this segment was heavily impacted positively by ASC 606 changes. These things could explain a good chunk of the difference between revenue growth and payments volume growth (without having to charge more per transaction). Next quarter we'll have lapped the transition to ASC 606 so hopefully things will be more clear. Mike Link to comment Share on other sites More sharing options...
Liberty Posted November 5, 2019 Share Posted November 5, 2019 https://investor.visa.com/news/news-details/2019/Visa-Statement-on-Tencents-Intent-to-Support-International-Card-Schemes-into-Mobile-Wallet/default.aspx Link to comment Share on other sites More sharing options...
gary17 Posted November 5, 2019 Share Posted November 5, 2019 is this good news or bad news for V and MA? Link to comment Share on other sites More sharing options...
Liberty Posted November 6, 2019 Share Posted November 6, 2019 is this good news or bad news for V and MA? Good news. Potential for more (still limited) access in China. In other news: NEW YORK (AP) -- New York City's police commissioner will be going to work for Visa Inc. on Dec. 2. The company said in a statement Wednesday that James O'Neill will be a senior vice president and global head of physical security. Link to comment Share on other sites More sharing options...
chesko182 Posted December 3, 2019 Share Posted December 3, 2019 https://theweek.com/articles/850232/why-are-all-paying-tax-credit-card-companies no opinions on this, but thought I would share to get some of yours (who follow this closer than I do) Link to comment Share on other sites More sharing options...
Liberty Posted December 3, 2019 Share Posted December 3, 2019 https://theweek.com/articles/850232/why-are-all-paying-tax-credit-card-companies no opinions on this, but thought I would share to get some of yours (who follow this closer than I do) Don't have time to read all that right now, but after a bit of skimming, sounds like anti-capitalist/zero-sum fallacy to me. There is no reason whatsoever why credit cards should not be regulated like debit cards — their obscene profit margins are evidence enough of that. Perhaps the Fed might grant them a slightly higher rate on account of larger and more complicated networks. Whatever the case, simply studying their books and mandating fee schedules that would cut card company profits by 95 percent, and bring card-issuing bank returns in line with regular banks, could be done easily, with an enormous net benefit. Some big spenders would lose out on cheap vacation flights, but the entire population (aside from a few investors and executives) would enjoy a substantial bump in their real income. Or, the networks could simply be nationalized. The Fed already has its hands deep in every aspect of American payments systems, or is running them outright. It would be a trivial matter for it to take on credit card operations, setting the fees at whatever it takes to cover the system's operational costs and no more. Basically you can apply that argument to Microsoft or Facebook or Google or Apple or whatever successful company out there, right? Why do they have these "obscene" margins? Must be because they're doing something bad, must be by taking something away from customers.. let's regulate them to hell and everybody will be better off, right? Or nationalize them, because government-run things are great. Meanwhile, Visa and Mastercard provide near-instant, secure ways to pay and move money around the world for trillions of dollars while fighting a deluge of fraud, and for their trouble they take in the 0.x% range, often a lower cost than cash (security costs, theft, employee time to count and store it, etc). Clearly a win-win proposition. And they keep improving their rails, allowing new businesses to be built on top and new capabilities to make life better for their customers (contactless, 2-way, APIs, tokens, NFC, etc). I'm sure a nationalized network would do that just as well... ugh. Link to comment Share on other sites More sharing options...
Jurgis Posted December 4, 2019 Share Posted December 4, 2019 Removing most of the politics from article and Liberty's post, it is quite possible IMO that CC fees might be capped the same way debit card fees were. V/MA did not exit debit card business when fees were capped and they won't exit CC business if governments cap CC fees. V/MA and banks will definitely lobby like crazy against the cap. I just did money transfer to Lithuania using Western Union. Using debit card the transfer costs 0.23%. Using credit card it costs ~3.7%. Yeah, (big) part of that is bank fees, so maybe that's what might be capped first. (And I am aware of all the benefits of V/MA rails ;) ) Link to comment Share on other sites More sharing options...
Liberty Posted December 4, 2019 Share Posted December 4, 2019 If something gets haircut, it's going to be the bank's cut. Capping V/MA take rate would be barely noticeable to consumers. They take very little, it just happens to be very high margin because it's mostly a fixed cost network. But if you regulate what banks can take, there's going to be a lot of complaints from people who like their rewards and such... There's no free lunch. Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 13, 2020 Share Posted January 13, 2020 Visa to acquire Plaid, the fintech powering Venmo and other banking apps, for $5.3 billion https://www.cnbc.com/2020/01/13/visa-to-acquire-plaid-the-fintech-powering-venmo-and-other-banking-apps-for-5point3-billion.html Link to comment Share on other sites More sharing options...
LC Posted January 13, 2020 Share Posted January 13, 2020 I like it. Happier that Visa got it vs. MC. https://blog.plaid.com/plaid-and-visa/ Link to comment Share on other sites More sharing options...
Liberty Posted January 14, 2020 Share Posted January 14, 2020 https://stratechery.com/2020/visa-plaid-networks-and-jobs/ Link to comment Share on other sites More sharing options...
WneverLOSE Posted January 14, 2020 Share Posted January 14, 2020 If someone is familiar with what Plaid does I would really appreciate it if you can explain it to a layman like me. I am interested to know why visa needed to buy it and couldn't build something to compete, do they have a network effect going on or is it already profitable enough to justify a 5B$ price tag. Link to comment Share on other sites More sharing options...
LC Posted January 14, 2020 Share Posted January 14, 2020 If someone is familiar with what Plaid does I would really appreciate it if you can explain it to a layman like me. I am interested to know why visa needed to buy it and couldn't build something to compete, do they have a network effect going on or is it already profitable enough to justify a 5B$ price tag. The link Liberty posted directly above is a good primer. Link to comment Share on other sites More sharing options...
LC Posted January 14, 2020 Share Posted January 14, 2020 https://www.forbes.com/sites/antoinegara/2019/12/17/the-forbes-investigation-inside-the-secret-bank-behind-the-fintech-boom/#43a0c7f63c10 Link to comment Share on other sites More sharing options...
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