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Visa: The Empire Strikes Back

May 02, 2022 7:00 AM ETVisa Inc. (V)MA, PYPL, SQ23 Comments


  • Many called for the disruption of Visa's business model.
  • But Visa is actually growing faster than many fintech companies, including PayPal.
  • Visa is outperforming expectations and remains a great long-term investment.
  • Looking for a helping hand in the market? Members of Cash Flow Kingdom get exclusive ideas and guidance to navigate any climate. Learn More »

VISA Kreditkarte Brieftasche

FinkAvenue/iStock Editorial via Getty Images

Article Thesis

According to what some investment gurus, analysts, and investors stated, fintech and buy-now-pay-later players were about to disrupt the legacy payment platforms such as Visa (NYSE:V) and Mastercard (MA

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This article was written by

Jonathan Weber profile picture

Jonathan Weber holds an engineering degree and has been active in the stock market and as a freelance analyst for many years. He has been sharing his research on Seeking Alpha since 2014. Jonathan’s primary focus is on value and income stocks but he covers growth occasionally.

He is a contributing author for the investing group Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of V, MA 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (23)

No Guilt profile picture
Three top topics

1. Travel increase
2. Recession
3. Maybe the best inflation hedge out there as they charge a % not a flat $ price and can easily expand.

#2 is the most important short term. Crypto, competition and gov regulation most important long term.

This company prints money and has insane margins. It’s a racket. It’s growing and it even pays a growing dividend.
@No Guilt hard to argue.
SuperPac profile picture
@No Guilt
Good points. It's a pillar of the governing oligarchy. Partake of it and benefit.
During the pandemic CC balances were paid down at a record rate. Well, guess what, Americans love their debt and as their savings go back down, inflation increases, most will still want their stuff. Therefore, the good ole CC we get swiped more and more. Growing v balances mean more interest earnings.
Enjoyed your article. Agree that V is a solid business. There really aren't that many companies to buy that are as good as Visa. One has to put their money somewhere and I think that in the next 2 quarters at least , V's earnings will bring around 20% in growth at a minimum - just for these 2 quarters. The last earnings call was very encouraging.
Thanks. Good points concerning a great stock. Especially like ‘Visa throws off large amounts of cash, and since no huge investments are needed, most of that ends up as free cash flow that can be paid out to the company's owners.’ Too Real!
Jonathan, PYPL is not a VISA business disruptor. It uses V and MA rails for their transaction processing....People mistakenly thought BNPL companies are V and MA disruptors.
@t0587kn Every payment company uses Visa or Mastercard as their processor. Even the crypto cards out there are still issued by Visa or Mastercard. People don't really realize how big of a moth those two have.
Jonathan Weber profile picture
@t0587kn Many thought PYPL and other fintechs would be disruptors, but they are not. All the best
Very interesting, thank you… I realize this is an article about V, but you did mention MasterCard, but did not mention AMX… do you feel it is not a competitor? Too small? Doesn’t it fit into the discussion?

I have no position (nor have I ever had) in any of the three… although I use them all… for payments only have never carried over a balance.
Jonathan Weber profile picture
@Spanishmoss Glad you liked it! AXP is a different type of company as it is not a technology provider primarily, it does lend out money unlike V for example. AXP is a good company nevertheless. All the best
SuperPac profile picture
V and MA do not take on credit risk on their credit card products. The credit risk sits on issuer banks' books. OTOH, Amex contracts credit risk on its card issuances directly. V and MA are not comparable to AmEx credit cards.
@SuperPac thank you… I did not know that; although, now that you mention it, I believe V and MA applications go to financial institutions whereas AMX apps go to… AMX! Thanks again for the important clarification.
Been dead money for 2 years. Why should that change going into a recession?
@The Cardinal
Agree. And while Russia was no bonanza for Visa, ceasing operations there will certainly have a negitive effect on earnings going forward.
Jorel Boston profile picture
@The Cardinal Disagree
@Jorel Boston OH, I see - V is going to fly into a recession. Sure.
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