Mastercard Inc (MA): Is Visa Inc (V) Winning the Battle?

Page 1 of 2

Visa Inc (NYSE:V)During the recent Investor Day conference hosted by Visa Inc (NYSE:V) , the company’s management shed some light on its emerging and developed market strategies. Also, some time was dedicated to its upcoming mobile and innovative strategies. Management once again demonstrated its resolve on building stronger relationships with its customers to help drive sales volume. Therefore, I am bullish on the stock.

Growing the pie

Visa Inc (NYSE:V) is already considered to be the market leader in the global payments industry, but that’s not enough for its management. To further grow its market share, management is coming up with significant investment plans which include products and strategies including loyalty programs and security solutions. Visa also indicated that is willing to provide higher partner incentives to increase volumes.

Developed market strategy

The developed markets still present tremendous growth potential for Visa Inc (NYSE:V). While the personal consumption expenditure (PCE) pie is itself growing, Visa also has the opportunities in the government expenditures and commercial expenditure markets.

Within the developed markets, cross-border transactions remain the highest yielding in terms of revenue, due to the conversation fees and because all transactions run over the Visa network. In contrast, domestic transactions tend to bring down yield.

Emerging markets

The emerging markets are marked with higher rates of cash and check transactions, leaving room for Visa Inc (NYSE:V) to convert these into electronic payments. However, within these markets, debit is growing faster than credit, mostly due to strict credit regulations. Therefore, fast growing debit in the emerging markets presents the company with an excellent growth opportunity.

Winning the innovation battle

Visa Inc (NYSE:V) is the pioneer in innovation of the payment solutions. Currently, its mobile wallet, which went live in November 2012, is in the early stages of development and I believe this will materially grow the company’s market share. The product’s ease of use, strength of network, and distribution will appeal to customers in the coming future.

Besides creating innovating payment solutions, Visa Inc (NYSE:V) is busy personalizing data of its customers to increase sales and manage frauds. This will enable Visa to provide tailored offers to customers through analytics of enormous amounts of transaction data.

Financials

Given the strong revenue trajectory due to the aforementioned strategies, Visa Inc (NYSE:V) is expected to report a low double-digit revenue growth for the fiscal year 2014. According to the company’s early guidance, the company is expected to generate EPS growth in the late teens.

The company’s May U.S. payment volume growth of 12% was flat compared to the April volume. To further grow its revenue, the company announced that client incentives will continue to grow both as an absolute dollar amount and as a percentage of gross revenue.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!