There is a lot of opinion that suggests the emergence of mobile payments will start to be the beginning of the decline for Visa. I would suggest that in fact the reverse is true.
Visa (V) is at the centre of a mobile payments explosion which is taking place around it. Rather than being negatively exposed to disruption from mobile payment trends, it is my view that Visa will be a long-term beneficiary of these moves. This will help drive additional payment volume, revenue, and growth not currently captured in the stock price.
The growth in mobile payment volumes will have two discrete components. The first and more important of these is the increasing acceleration of Mobile Point of Sale (MPOS) deployment. The second component is the deployment of mobile payment solutions and mobile wallets.
I have published a full explanation of these trends and how they affect the credit card networks of Visa and Mastercard in an article in Seeking Alpha which you can refer to for additional detail.
Mobile payment methods will still require a payment processor. Assuming that Visa doesn’t sit on it’s laurels and let the mobile world pass it by, I can’t see why it wouldn’t be in an excellent position to expand into that market.
My FI,
You are spot on. Its amazing the many people dont get this point and assume that the networks will be put out of business by these trends. Nothing could be further from the truth. Its no simple matter to create a new processing infrastructure or payment rail.