Visa Inc. (NYSE:V) is one of the world’s most recognizable brands. But its real advantage is much harder to replicate: its network effect. Visa has a network connecting consumers, merchants, banks, and payment providers worldwide. In the third quarter, Visa processed more than $4 trillion in payment volume for the first time, while processed transactions rose 10% year over year to a whopping 72 billion.
Visa’s size gives it a powerful network effect. The more consumers use Visa, the more valuable it is to merchants, and the more merchants accept it, the more useful it becomes to consumers. But the way people pay is changing quickly. Account-to-account payments, stablecoins, digital wallets and AI-powered shopping could all change how money moves. Visa’s response has been to expand beyond its traditional card network and make sure it remains part of the payment system as it evolves.
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Bull Case
Visa’s biggest advantage is how hard it is to recreate its network. The company has relationships with financial institutions, merchants and fintechs across the payments ecosystem, while its brand, security and reliability give customers another reason to stick with its infrastructure. Visa’s latest earnings call showed that this remains important: the company said its client Net Promoter Score was 76 for the third consecutive year, with customers particularly valuing its global network, reliability and innovation.
More importantly, Visa is increasingly making money from services beyond simply processing card transactions. Value-added services revenue grew 34% in constant currency in the third quarter to $3.8 billion, with the company saying revenue from its issuing, acceptance, risk and security businesses has been growing more than 20% year over year.
Visa is also preparing for a world where payments look very different. It launched its Visa Stablecoin Platform and is building infrastructure around stablecoin payments and tokenized deposits. At the same time, it is working with OpenAI on agentic commerce, allowing AI agents to make transactions using Visa’s network and security infrastructure. Visa says that it now has more than 150 AI-powered applications and shipped more than 300 major product releases over the past year.
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Bear Case
The biggest threat to Visa’s moat is that payments can increasingly happen without traditional card networks. Account-to-account payments and real-time payment systems can move money directly between bank accounts, potentially reducing Visa’s role in some transactions. Stablecoins could also make certain forms of cross-border payments faster and cheaper.
Although the company is increasingly building new revenue streams around value-added services and money movement, its traditional payments business still accounts for the overwhelming majority of the revenue it generates before client incentives.
Visa itself recognizes that payments are evolving. While it is responding by building infrastructure for these new methods, there is no guarantee it will capture as much economic value from them as it does from cards.
There is also a risk that Visa’s enormous network becomes less important if consumers increasingly use wallets, alternative payment methods, or AI agents that choose how transactions are completed. Visa Inc. is betting that its security, authentication and global acceptance will remain valuable even when the payment method changes. Its CEO described agentic commerce as being in its early stages and said trust around authorization and security could be crucial to adoption.
That said, the Wall Street consensus is that Visa will continue to grow both its top and bottom line in healthy double-digit figures annually, over the next couple of years, which suggests that the bear case may not play out in the foreseeable future.
Conclusion
Visa’s moat is not really about credit cards. It is the network, trust, and infrastructure sitting behind global commerce. The company is now trying to extend that advantage into stablecoins, AI-driven commerce, and other emerging payment methods. The risk is that some of these technologies eventually reduce the need for Visa’s traditional rails. How well Visa adapts may ultimately matter more than how big its existing network is.
Market Sentiment
According to Insider Monkey’s database, 194 hedge funds held Visa at the end of the latest quarter, up from 181 in the previous quarter. The value of their combined holdings also increased, rising from about $30.3 billion to $35.4 billion.
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This article is originally published at Insider Monkey.
