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Investment Thesis
In today’s note, we’ll explore the card networks, specifically through the lens of Visa (V), and how it started in the 1950s to create one of the most immense network moats
Affirm: Reorienting The Payment Rails
Summary
- U.S. consumers spend $8 trillion on credit cards while the credit cards themselves haven’t seen much innovation in the past 50 years.
- Visa was originally started by Bank of America to serve a network of issuing banks to enable them to offer credit products.
- Yet, 50 years into its existence, Visa went public and is now worth over $450 billion, meaning it's surpassed the value of Bank of America which is worth $400 billion.
- Today's note illustrates that Affirm has engineered more effective payment rails that reorient the consumer credit ecosystem.
Jared brings a Peter-Peter approach to his role as Equity Analyst at Porter & Co. That’s to say he takes what he’s learned from studying Peter Lynch and Peter Thiel and uses those insights to identify disruptive innovators – with a special focus on companies that are democratizing financial services. Prior to joining Porter & Co, Jared was the Lead Analyst at L.A. Stevens Investments and the ‘Beating the Market’ service on Seeking Alpha. Jared graduated from the University of Florida, Warrington College of Business with a Finance degree. Jared enjoys studying investor psychology and the history of capital markets, and when he doesn’t have his face in a book, you can usually find him on a golf course.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of AFRM, SQ, MQ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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