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Does Visa Still Have Room to Grow?

Does Visa Still Have Room to Grow?
Written by publishing team

Visa (NYSE: V) It is a massive payments operation with trillions of dollars flowing through its network every quarter. but in this Lie Live Video, Registered on September 20, Fool.com contributors Matt Frankel, CFP, and Jason Hall discuss why there’s more room for growth at Visa than you think.

Jason Hall: Visa like the original FinTech. You have a visa and Master Card Credit Card (NYSE: MSc) Or maybe you could say American Express (NYSE: AXP) in a way. But I think it’s really interesting work. It is something that needs a little introduction. As one of the largest payment processors in the world. Everyone has a visa in their pockets, so it looks like at least in the West.

What is the growth opportunity here? two things. Number one, cash is still global king, and it still is a right. Cashless transactions for electronic payments are still growing at a very fast pace all over the world. When you’re already a globally recognized brand, you have a secure payments platform, and you have the amazing network effects where all three legs of the seat are, so you’re a shopper, you want access to merchants. Merchants want to reach the shopper, so you go. Then you have the financial services companies, and the banks that want access to both. guess what? The three legs of this stool are highly supported. Every new participant and any one of these has access to all the others. It’s just a really powerful network effect.

There is also the security aspect and as a trader, you will get paid. There is a tremendous amount of value to that. One thing I think the average person doesn’t know with both Visa and Mastercard and we’ll talk about Mastercard later, is that the opportunity for company-to-business payments is huge. A lot of that is still a bill that gets mailed out and then someone cuts a check and after 30 days, the check shows up and a lot of that stuff goes through, with an electronic payment is great. Matt, looks like you have something to add here.

Matt Frankel: Well, you mentioned in the last part that the global payments market is estimated at $185 trillion. The global card payments market is estimated to be around $45 trillion.

lounge: indeed.

Frankel: The rest, $140 trillion or so, is person to person and company to company. Areas where Visa hasn’t really taken advantage. This is where they really see the next stage of growth coming from one business to another and from one person to another.

Jason Hall: Yes, it really is. Again, we were talking about market cap and only talking about opportunity PayPal (NASDAQ: PYPL) And you probably don’t see much opportunity from there. I mean, I think that’s one of the reasons why we see more opportunities even though Visa is a bigger company, because it’s already very dominant on the business side of things. In consumer spending, but that person-to-person and company-to-company is a huge opportunity. I think the business has recovered greatly. We continue to look for a decrease in cross-border transactions as travel remains disrupted. But almost every other metric they measure their coefficients on has essentially recovered or even surpassed pre-COVID levels. right he died?

Frankel: indeed. I actually think cross-border transactions for non-card transactions have rebounded quite well.

lounge: Yes she has. What card is there and it is for travel purposes.

Frankel: right. Because no one is traveling abroad now. Even with the bounce, international travel is at a very small percentage of pre-COVID levels. I mean, they just announced today that they are easing restrictions on people coming into the United States. They just announced that day and we are in the 17th month of the pandemic now. It will take some time to come back. But on the other hand, the pandemic has really accelerated the shift to online payments, especially in international transactions. I’ve seen it happen. I think overall spending volumes are up from pre-COVID levels with Visa and Mastercard. I think they’ve actually been seeing a bit more volume in some recent months.

lounge: In most markets, yes. That was one of the things they last said when they reported in the second quarter that they saw an acceleration. This is unreasonable.

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