Author Topic: V - Visa  (Read 86788 times)

Spekulatius

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Re: V - Visa
« Reply #260 on: October 24, 2019, 03:22:28 PM »
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.
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mjs111

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Re: V - Visa
« Reply #261 on: October 25, 2019, 01:13:27 PM »
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


gary17

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Re: V - Visa
« Reply #263 on: November 05, 2019, 02:30:30 PM »
is this good news or bad news for V and MA?

Liberty

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Re: V - Visa
« Reply #264 on: November 06, 2019, 07:42:11 AM »
is this good news or bad news for V and MA?

Good news. Potential for more (still limited) access in China.

In other news:

Quote
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.

chesko182

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Re: V - Visa
« Reply #265 on: December 03, 2019, 01:21:46 PM »
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)
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Liberty

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Re: V - Visa
« Reply #266 on: December 03, 2019, 01:48:47 PM »
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.

Quote
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.
« Last Edit: December 03, 2019, 01:57:23 PM by Liberty »

Jurgis

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Re: V - Visa
« Reply #267 on: December 04, 2019, 06:00:06 AM »
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 ;) )
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Liberty

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Re: V - Visa
« Reply #268 on: December 04, 2019, 06:40:01 AM »
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.

fareastwarriors

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Re: V - Visa
« Reply #269 on: January 13, 2020, 02:04:31 PM »
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