About the company Visa:
As you might know, Visa is a company that commercialize banking cards of the same name in France and everywhere around the world. However, its activity is divided into two major sectors, the first of course concerns the sale of payment methods such as credit cards, debit cards or online payment cards, and the second gathers all the services such as support, assistance or management of partner networks.
This American company generates most of its turnover in the United States.
Visa’s main competitors:
The group Visa does not have many competitors in the highly regulated and closed sector of banking cards. However, it is interesting to know more about its two main competitors which are American Express and Mastercard.
American Express is currently the leader banking cards supplier from an international point of view. This American company specializes in providing methods of payment such as credit cards or traveler’s checks, and is the leader in the organization of business trips in the world.
The group Mastercard is listed in the NYSE and is also an American company specialized in payment and withdrawal systems based in New York. It is Visa’s main competitor on the European market. It offers credit cards and debit cards under the brand of Mastercard but also Maestro and Cirrus cards. Paying with these cards is accepted in more than 32 million stores around the world, which give us an idea of its notoriety.
Visa’s main partners:
The group Visa has established over time several strategic partnerships with other important companies. We invite you to find out some of these partnerships here:
- This is the case for example of its strategic partnership created with PayPal in 2016.
- Always in 2016, Visa associated to the car manufacturer Honda in order to create a payment system integrated in vehicles.
- In 2015, Visa also associated to the company Orange in order to participate in the creation of the Orange Cash system integrated to the smartphones, now named “smartshopping”.
- Finally, Visa is also a partner of the group Publicis which is in charge of promoting the group’s sportive partnerships around the world.
Analysis of Visa’s shares price:
Visa, is listed on the market NYSE and is part of the calculation of the Dow Jones index, it has numerous advantages for trading online. To carry out a good analysis of its course, it is enough to base yourself on its technical analysis.
The turnover of this company is constantly growing, capital gains are extremely significant even in the long term.
Important stock market data about Visa:
While it is of course very important to know the fundamental data that influence the value of Visa’s shares as well as the main lines of the technical analysis of this title, you also need to know the basic data concerning the quotation of this title in the stock market and here is:
- In 2017, the total market capitalization of Visa was of 212 001.64 MUSD
- Visa share price is currently listed on the NYSE Main Market in the United States.
- Visa is also part of the composition of the Dow Jones Industrial Average Index.
- Visa’s shareholding is made up of 5.81% of shares from the Vanguard group, 4.94% of shares from Fidelity Management and 3.67% shares from Research company.
Visa’s economic and financial history:
In order to anticipate the future movements of the title Visa, it is necessary to delve into a historical analysis of the significant events that have strongly influenced the course of this title in the stock market over the last years.
In 2004, the group Visa Europe was made an autonomous company directly managed by the network of bank members.
- In 2006, Visa announced the consolidation of all its operations within a public traded company, Visa Inc. This company regrouped Visa Canada, Visa International and Visa USA. Only Visa Europe remained an individual entity.
- In 2007, Visa completed its restructuring and the establishment of Visa Inc and Visa Europe became autonomous with an exclusive, irrevocable and perpetual license. The group engaged once again in sports sponsoring by becoming the official partner of the FIFA world cup 2010, a commitment that will last until 2022.
- In 2008, visa was listed for the first time in the stock market with a value of 43.5 dollars. More than 19.9 billion titles were then bought by subscribers. Visa Europe received Visa Inc shares after an agreement.
- In 2010, Visa Europe created Visa PayWave, a service based on NFC (New field communication) technology also known as “contactless” a service that allows you to pay for your purchases by credit card without entering your credit card code for amounts inferiors to 20 €.
- In 2013, Visa Europe launched V.me by Visa, a secure online payment service with a digital portfolio of multiple credit cards.
- In 2015, Visa Inc announced the reacquisition of Visa Europe for nearly 21.2 billion euros. Since then, only one title; Visa Inc. is available in the stock market.
Thanks to these important dates and to the analysis of their influence on the price of visa shares, you will be able to determine how this title reacts to the data of the fundamental analysis and thus put in place efficient strategies.
Important innovations and partnerships that have marked Visa:
Among the major innovations made by Visa we can mention among others the E-Carte Bleue created in 2002 for online payments.
- In 2010, Visa Europe also launched Visa PayWave, a service that uses NFC or contactless technology, a service that allows you to pay for your purchases without entering your credit card code for amounts under 20 €.
- Finally, in 2013, Visa Europe launched V.me by Visa, a service of secure online payments that puts together several payment cards into a single digital wallet.
- Among Visa’s important partnerships, we can mention particularly the agreement with the IOC which made Visa the main sponsor of the Olympic games in 1986. This partnership started with the games in Seoul in 1988 and ended in 2012 under the terms of the contract originally signed.
- We noticed however that there was a controversy that took place during the Olympic Games of the summer of 2004 in Athens due to a restriction on the automated teller machines (ATM) which only accepted visa cards, just as the ATMs of the Olympic games of summer of 2012.
- In 2002, Visa was also a partner of the Paralympic Games.
- Finally, in 2007, Visa continued its engagement as a sponsor by becoming partner of FIFA 2010 World Cup with a contract that will last until 2022.
Visa Europe and its specificities:
- In 2004, Visa established the autonomous company Visa Europe which was owned and managed exclusively by nearly 4000-banks members of the European network.
- In 2007, the company Visa Europe became independent from the company Visa Inc by obtaining an exclusive irrevocable and perpetual license.
- In 2015, Visa Inc. announced however the reacquisition of Visa Europe for an amount close to 21.2 billion euros.
- Concerning the positioning and the history of Visa Europe in France, it is known that the Carte Bleue regrouping partnered with the American company Bank of America and that one of its division “costs” then became Visa in 1976.
- In 1984, After a request filed by the authorities of regulation and the Ministry of Finance, the banks that were part of the Carte Bleue group created in 1967 founded, with “Crédit Agricole” and “Crédit Mutuel” the group of Credit Cards CB.
- In 2010, The brand Carte Bleue was acquired by Visa Europe in order to merge the two activities and thus give birth to the company Visa Europe France.
- In 2013, the group had a great success in France since more than 22% of its credit cards payments and withdrawals were done with a visa card and 39 million cards were in circulation.
- In 2016, this number increase to 43 million of cards in circulation and the group Visa Europe became the leader in credit cards and debit card network in France. In that same year and as a comparison, the number of American Express cards in circulation in France was around 1.1 million.
The strong points and advantages of Visa as a stock market asset:
Taking a position on the long term and when it is going upwards on the value of visa shares with CDFs or the integration of some of its shares in your stock portfolio requires the possibility that this title is likely to earn points in the months and years to come. But for that, you must of course be aware about the advantages of this asset for investors and the strengths of this company. This is what we propose you to find out here more in detail thanks to some information about the advantages of Visa.
One of Visa’s greatest strengths is of course its very strong popularity in the whole world. In fact, when we think about credit cards, the three big names that automatically come to mind are Visa, Mastercard and American Express and not the names of the banks that provides the credit card. This notoriety is in fact a pledge of trust by users and future clients.
Visa also has a very interesting positioning on the market of credit cards with extremely low competition. In fact, the current situation is that of a duopoly and two main players in this market remains Visa and Mastercard which are the only ones targeting the mass market at the moment. The operation of their branch of credit cards makes them particularly attractive to customers who carry out small repetitive transactions. One might think that the group American Express is also a direct competitor of Visa but in reality, Visa’s positioning is much more selective and sharp than that of the other two groups. Visa targets the mass market with a very large volume of transactions every second, which offers potential recurring and repetitive sales potential which is the major strength of this company. The use of a credit card on a daily basis has in fact become a real reflex for consumers.
On the other hand, Visa focuses its activities first of all on debit cards rather than on credit cards. The group has thus successfully reduced the risk connected to credit cards.
We should also mention, the quality and selective acquisitions made by Visa which perfectly keep up with its core activities. This avoids a certain dispersion that could be perceive as dangerous or risky.
Finally, one of the main qualities of Visa concerns the quality of its marketing relations and communication with the general public. We notice in particular the efforts made in the sponsoring of big sportive events such as the Olympic Games which allowed it to reach a very large audience despite an important investment. Thus, Visa has succeeded in increasing the power of its brand and its notoriety this way it can face its competence more serenely.
The weak point and disadvantages of Visa as a stock market asset:
In order to carry out a precise analysis of the possibilities of expansion of Visa it is of course recommended to learn about the advantages of this company, but also about its disadvantages. Some weak points in fact could limit its potential to continue developing and make the price of its shares fall on the long term. Here is therefore a summary of the disadvantages of this asset and of this company.
Among the biggest negative points of Visa, we can mention particularly the option established by Visa Europe which was the possibility of asking Visa Inc to redeem its shares. Such a request will of course have very important consequences on the group’s finances with a very large and rapid outflow of funds.
It should also be pointed out that even if the company targets a mass clientele, we regret its limited choice of high end cards on the market where its competitor American Express is particularly well positioned. This specificity could thus influence the group’s results on the long term and slow down its development on certain segments of the population.
Finally, Visa is, like all the other company in this sector of activity, highly exposed to the world of finance and the risks of the banking sector which we know is not very stable in recent years.
How to carry out a good fundamental analysis about the price of Visa shares?
To put in place an efficient trading strategy on the value of Visa shares and take wise positions, it is of course necessary to know how to use the data from the technical analysis correctly, but also that of the fundamental analysis. The group Visa has several opportunities to seize and it also faces some threats that you should be aware of before carrying out this type of analysis. Here are some important factors and elements that you should monitor.
In terms of opportunities, we can point out in particular, those offered by emerging markets. The latter which are not yet fully equipped, represent in fact a very lucrative market for Visa and its direct competitors. The group’s ability to position on these markets is therefore an important issue in the years to come. You should monitor any eventual contracts and news related to these emerging countries.
The strong rise in the use of credit cards to the detriment of other means of payment such as checks, or cash is also a promising phenomenon for Visa, which must seize this opportunity to further develop its clientele. We notice in fact a significant augmentation in credit card and debit card transactions every year.
The use of credit cards has also been boosted by the strong development of online commerce and of internet in general. Thanks to a high level of security, Visa is particularly well positioned on this since you can do secure online transactions with its credit cards. Visa is also surfing the waves of a new fashion, a new advanced payment method which is the payment through smartphones. This new market is booming in several developed, emerging countries and allows you to pay for your purchases contactless with your smartphone.
Finally, since the Basel III (Third Basel Accord), Visa is considered as a bank player but is not influenced by the current regulatory framework in this sector which protects it from certain risks.
Even if the opportunities of development and growth for Visa are promising, there are also certain challenges that should be monitored such as regulatory issues. That concerns specially the market in the United States and that in certain European countries which tend to drastically reduce the cost of transaction charged to the users.
Visa products and services are also threatened since some years by a new form of competition. It is of course, electronic payments methods, which are currently in full bloom. These include digital wallets such as PayPal which is also one of Visa’s customers, but also new methods such as dematerialized currencies like the Bitcoin and the other developing electronic currencies on the online market.
A good fundamental analysis of Visa involves therefore careful monitoring of these factors which will help you outline the possibilities of growth of this title. Of course, you should not forget to compare the signals obtained with those returned by the technical analysis and by the stock market charts since Visa is a highly speculative value and is therefore particularly influenced by the trends of the market. It is only by using these two methods of analysis in parallel that you will obtain reliable signals in the short, medium and long term.