Visa Goes All In on New Technologies, Strategic Acquisitions

FacebookTwitterLinkedIn

In business for 60 years, Visa Inc. is global leader in digital payments with a market capitalization of $250 billion.

As the world moves toward a cashless society, the VisaNet payment network handles more than 65,000 transaction messages a second.

During the past year, Visa’s payment volume increased by 11%, revenue went up by 15%, and there are now almost 3.3 billion Visa-branded credit and debit cards in existence, 4% more than a year ago.

The not-so-secret elixir of Visa’s success is evolution, and the payment-processing giant’s continual development of new payment methods and technological advancement through partnerships.

Acquisitions and Investments

Visa consistently invests in fintech companies and partners include Behalf, Marqeta, Payworks, Klarna, LoopPay, Square and Stripe, among others.

A recent acquisition is fintech startup Paidy, currently serving more than 1.5 million users with unique payment mechanics. Users can shop online without creating an account or using a credit card; make payments by entering a mobile phone number and email addresses; receive payment authentication via a four-digit code sent through SMS or voice. Monthly, customers pay one bill, which includes all transactions, at a convenience store or through bank transfers or auto-debits.

Earlier this year Visa acquired Fraedom, a Software-as-a-Service technology company providing payments and transaction management solutions for financial institutions and their corporate customers including expense management and accounts payable solutions.

Digital Technologies

“Increasingly, businesses are replacing inefficient paper-based payment systems with digital tools,” said Vicky Bindra, global head of products and solutions, Visa. “This strategic acquisition allows Visa to offer a more comprehensive business solution to our corporate clients that is innovative, global, highly configurable and intuitive for their employees.”

Visa is trialing in the US and Europe a new dual-interface (chip- and contactless-enabled) biometric payment card with Mountain America Credit Union and Bank of Cyprus. This will be the first pilot in the US to test an on-card biometric sensor for contactless payments. The card uses fingerprint recognition as an alternative to PIN or signature authentication of a cardholder during a transaction.

“The world is quickly moving toward a future that will be free of passwords, as consumers realize how biometric technologies can make their lives easier,” said Jack Forestell, head of global merchant solutions, Visa Inc.

Juniper Research predicts biometrics will be used for more than 18 billion transactions by 2021, with the value of biometrically verified smartphone payment transactions globally expected to exceed $210 billion in 2021.

International Growth 

Visa has a huge opportunity for international growth, particularly in Asia and Latin America.

Over the next number of years, reports CEO Al Kelly, “the bulk of our growth is going to come from overseas. It’s something we’re putting a lot of time and attention to.”

Visa was the Official Payment Services Partner of FIFA, and released data on foreign travelers’ spending during opening days of 2018 FIFA World Cup. In the 11 Russian host cities, approximately one in every five (17%) purchases was with Visa contactless payment technology, including smartphones, bracelets and rings. In the stadiums themselves, the share of contactless payments was 54%, including purchases made by fans from Russia and abroad.

Looking Ahead

Analysts project Visa’s earnings to nearly double by 2021, driven by strong revenue growth.

As Motley Fool reports, “Visa has now been a public company for over 10 years. In that time, its shares have returned over an astounding 800%, almost six times what the S&P 500 index has returned in the same period.”

The article noted that “Visa remains one of the most obvious players to benefit from the world’s shift to digital and electronic payments, and judging by Visa’s third-quarter results, that trend seems to have a long runway of growth ahead still.”

FacebookTwitterLinkedIn