Visa International

Electronic payments are made through the global processing system VisaNet, which is capable of processing more than 20,000 transactions per second (May 2012), providing fraud protection for consumers and guarantees of payments for trade and service enterprises.

Visa solutions allow financial institutions to offer their customers a wide range of financial instruments, including debit, prepaid and credit card products.

Performance indicators

2022

UnionPay overtakes Visa in share of debit card transactions

China's UnionPay overtook Visa in the share of debit card transactions - 40.03% against 38.78% in 2022. In 2011, Visa's share was more than 80%.

Tether payment network for the first time bypassed Visa and Mastercard in terms of transaction volume

Stablecoin USDT (Tether) at the end of 2022 for the first time bypassed Visa and Mastercard in terms of transactions. The stablecoin payment network processed payments of $18.2 trillion for the year. This is more than Mastercard, which processed $14.1 trillion and Visa with an annual volume of $7.7 trillion.

2021: Revenue - $24.11 billion, profit - $12.31 billion

In fiscal 2021, Visa raised $24.11 billion against $21.85 billion a year earlier. The company linked this rise to an increase in payments, including cross-border, as well as the number of transactions.

Processing revenue (Data Processing Revenue) rose 17% to $12.8 billion. Revenues from cross-border operations increased by 4% to $6.5 billion. Annual revenue from transactions within one country (Service revenue) turned out to be $11.5 billion, surpassing the result of 2020 of the reporting year by 17%.

Other sources of earnings, which include services, including the provision of analytical data for customers, added about $1.7 billion to Visa's turnover (an increase of 17%). The so-called retro bonuses (Client incentives) remained at the level of $8.4 billion, forming 25.8% of gross revenue against 22.15% a year earlier.

Visa's net profit in fiscal 2021 increased by 13%

Visa's net profit in fiscal 2021 increased by 13% compared to 2020 and amounted to $12.31 billion. The growth occurred despite the negative consequences of the COVID-19 coronavirus pandemic - quarantine measures negatively affected cross-border operations.

Over the past three to four quarters, our business has been on the mend. However, we have not yet returned to normal on a global scale, "says Chief Financial Officer Vasant Prabhu, commenting on the results of the year. - Opening times in key countries, Asia both within countries and for cross-border travel, are a key variable.

For the 12-month reporting period, closed at the end of September 2021 calendar year, Visa processed 164.7 billion transactions on cards, which is 17% higher than a year ago. The volume of payments increased by 16% excluding changes in exchange rates.

The volume of cross-border payments excluding currency fluctuations jumped by 9%. The indicator excluding transactions made within Europe rose by 1%.^[1]

2019:17% increase in net income to $12.08 billion

The net profit of the American Visa Inc., one of the two largest bank card service companies in the world, according to the results of the 2018-2019 financial year ended September 30, increased by 17% in annual terms and amounted to $12.08 billion.

In terms of one ordinary share, the company's diluted profit amounted to $5.32 against $4.42 in the past to the financial year. Revenue grew by 11% in annual terms - to $22.977 billion.

According to the results of the IV quarter, Visa's net profit increased in annual terms by 6% - to $3.025 billion. Diluted earnings per share for the three months amounted to $1.34 against $1.23 in the same period last financial year. Adjusted earnings per share were $1.47, with a forecast of $1.43. Revenue for the three reporting months rose 13% to $6.137 billion.

The increase in revenue in the company was explained by an increase in the volume of payments, which amounted to 9%, and the number of transactions (an increase of 11%). At the end of the year, the company expects revenue growth of at least 10% compared to last year.^[2]

Company structure

• Visa Foundation

Activities in Russia

Main article: Visa in Russia

History

2023: $1 billion purchase of cloud banking platform operator Pismo

Visa buys the operator of the cloud banking platform Pismo for $1 billion. The platform operates in Latin America, Asia-Pacific and Europe.

The deal requires regulatory approval and is expected to close before the end of 2023, Visa said in a press release in June 2023.

2022: Visa and Mastercard become unnecessary due to new digital services

On November 21, 2022, an article on the transformation of the global payment market appeared on the pages of the Financial Times business newspaper. Experts say Visa and Mastercard are under increasing pressure from new digital services and are essentially becoming more unnecessary.

Fintech Labs estimates that 332 fintech services operate globally. The top ten includes giants such as PayPal, Ant, Stripe, Shopify, Adyen, Block (formerly Square), Checkout.com and Afterpay. At the same time, there has been a steady decline in cash in all major economies of the world and the accompanying expansion of the digital payment ecosystem. According to Merchant Machine, the most digitalized countries, including Sweden, Singapore, Britain and Denmark, make only about 1% of payments in cash.

Payment systems Visa and Mastercard are losing popularity

Experts name the five main reasons for the decline in popularity of Visa and Mastercard. One of them is the upcoming transformation of the microblogging service, Twitter which (Elon Musk Elon Musk) acquired for $44 billion. As one of the founders of PayPal, he has long sought to shake up the world of payments and revealed plans to turn Twitter into a payment platform.

Another factor is the development of the cryptocurrency market: blockchain can be used to safely process cross-border payments for bank customers. The pressure on Visa and Mastercard is also exerted by the Chinese Alipay, one of the largest payment systems included in the Alibaba Group. This platform is used in the conduct of business by tens of thousands of companies of various sizes.

Payment services are actively developing. Apple In addition to the service, the Cupertino-based Apple Pay company is offering a credit card in conjunction with. Goldman Sachs Apple has not disclosed plans for the future, but experts believe the company intends to create a competitor. Alipay In addition, the payment business is expanding - JPMorgan American a transnational financial conglomerate and one of the largest banks in the world: we are talking, in particular, about micropayments in the metaverse.^[3]

2021

The start of providing advice on cryptocurrency

On December 8, 2021, it became known that the global payment system Visa began providing cryptocurrency consultations for its customers.

According to the report, CNBC the company offers its consulting services financial to institutions retailers and other firms on all issues, including the study of non-replaceable tokens (). NFT Visa called UMB American bank a client who already uses the company's consulting services.

From October 1, 2020 to September 30, 2021, the company processed cryptocurrency transactions worth more than $3.5 billion. This was announced by the head of the cryptocurrency business Visa in Europe Nicola Plekas.

The company hopes its cryptocurrency advice will help drive further adoption of bitcoin and other digital currencies. Visa sees the space as a key growth opportunity that "goes beyond card payments."^[4]

Buying fintech firm Currencycloud

On July 22, 2021, Visa signed a final agreement to acquire Currencycloud, a global platform that allows banks and fintech companies to provide currency exchange services for cross-border payments. Read more here.

Purchase of open banking technology developer Tink for 1.8 billion euros

On June 24, 2021, Visa announced the purchase of Tink for 1.8 billion euros. After the deal closes, the Tink brand will remain on the market, and the company's management team and its headquarters in Stockholm will also remain. Read more here.

Refusal to buy fintech company Plaid

On January 12, 2021, it became known about Visa's final refusal to buy the fintech company Plaid for $5.3 billion due to an antitrust lawsuit by the US Department of Justice. The agency asked the court to block the deal, because it, according to the authorities, will help the buyer illegally maintain a monopoly in the field of online debit payments. Read more here.

2020: Plans to buy fintech firm Plaid for $5.3 billion

On January 13, 2020, Visa announced the acquisition of fintech company Plaid for $5.3 billion, double the company's valuation two years earlier. The deal is scheduled to close 3-6 months after receiving approval from regulators. Read more here.

2019

Visa is the world's most expensive financial company

On August 7, 2019, Visa became the most expensive financial company in the world. Its market capitalization that day reached $348 billion, and two days later it rose to $390.9 billion, according to data from the New York Stock Exchange.

According to Bloomberg, for the first time Visa bypassed the capitalization of JPMorgan Chase, which at one time owned the payment system together with Goldman Sachs, Bank of America Securities, Citi, HSBC, Merrill Lynch, UBS and Wachovia Securities. These financial institutions bought a large number of Visa shares at the time of going public in March 2008, which allowed the company to hold the largest IPO in the United States at that time. In total, Visa then placed 406 million securities and sold shares for $17.9 billion.

Dynamics of the change in the stock price of Visa and JPMorgan, data from Bloomberg

Since listing by August 7, 2019, Visa has jumped nearly 1,500%, while the KBW Bank index has risen 15%.

According to Bloomberg Intelligence analyst David Ritter, who specializes in the payment services market, Visa initially took a position on the path to success. The company offered an infrastructure for electronic payments just as e-commerce began to develop. Visa's role as an intermediary in financial transactions provided the payment system with high margins, low costs and small risks.

The favorable factors pushing in the back are commerce, which becomes electronic. They just have a great business and a very enviable position, - the expert believes.

Former American Express CEO Ken Chenault previously called the decision of banks to leave the shareholders of payment systems used in bank cards "one of the largest strategic mistakes in the last 20 years."

Visa first stood as the most expensive financial company in the world

They sold [shares] cheaply, but now their [payment systems] roles have completely changed, "Shenault is sure.[5]

New way to steal money from Visa contactless cards discovered

Main article: Contactless NFC payments

Cybersecurity experts from Positive Technologies spoke in July 2019 about a vulnerability that allows attackers to bypass the restriction on writing off large amounts in a contactless way from Visa cards.

Usually contactless cards do not allow you to pay a large amount without a PIN. For example, users in the UK need to enter a PIN when buying from £30 (approximately 2300 rubles). If criminals steal a card and try to conduct several transactions for large amounts, then the bank will block the card.

There are two ways around this restriction, according to experts at Positive Technologies. In the first case, they used the device to intercept and replace messages in the communication channel between the card and the reader. With its help, a false signal was sent to the card to write off an amount of less than £30, and to the terminal - a message about verification carried out in another way. This vulnerability affects only Visa cards, since in other payment systems large transactions are confirmed only by a PIN code.

In the second variant, the researchers used two mobile phones. One phone collected a so-called payment cryptogram from the card, guaranteeing the authenticity of future transactions. The second - took a cryptogram and imitated a map.

Visa does not plan to take measures to curb these types of fraud. According to the company, in order to carry out fraud, attackers need to have a card in their hands, and this rarely happens. However, researchers do not agree that the card must be stolen. As the results of the experiment showed, it is enough for an attacker to get close to the victim's card for a while and count the payment.

Buying a technology developer that reduces Verifi chargebacks

On June 28, 2019, Visa announced the acquisition of Verifi, a developer of technology that reduces chargebacks. Read more here.

2018

MasterCard and Visa agreed to pay $6.2 billion for price collusion

On September 18, 2018, Visa and MasterCard agreed to pay a $6.2 billion fine to settle a class action lawsuit accusing the companies of price conspiracy.

The lawsuit against Visa and Mastercard was filed in 2005 on behalf of 12 million retailers at once, including the National Association of Grocery Stores, the National Association of Grocers, the Rite Aid pharmacy chain, the American Bookstore Association and a number of large companies. In addition to the world's largest payment systems, the largest American banks issuing plastic cards, including JPMorgan Chase, Bank of America and Citibank, became defendants.

Visa and MasterCard colluded in price when setting the amount of fees charged to retail companies when customers use plastic cards

MasterCard and Visa were accused of collusion in setting the amount of fees charged to retail companies when customers use plastic cards. In 2012, the companies agreed to pay compensation in the amount of $7.25 billion, but in 2016 this agreement was canceled by the Court of Appeal, and the US Supreme Court in 2017 refused to resume this case. On September 18, 2018, the final point was set in this case.

After several years of meaningful negotiations, we are pleased to finally reach an agreement and move forward in partnerships with sellers to provide consumers with convenient, reliable and safe payment methods, Visa said in a statement, which accounted for $4.1 billion in fines.

MasterCard and Visa have already paid $5.3 billion and will have to transfer another $900 million. Additionally, Mastercard will give away $108 million of cash reserved for the second quarter of 2018.

The settlement agreement and the decision of Visa and MasterCard to voluntarily pay the fine became the largest in US antitrust practice, although the amount of recovery decreased slightly after the withdrawal of claims from 8 thousand retailers.^[6]

Release of cards with fingerprint scanner

In January 2018, Visa launched a pilot project to use fingerprint sensors in payment cards. MasterCard began testing the same technology earlier.

Visa offers biometric payment cards with two different interfaces: contactless and with a chip. They were issued in conjunction with the financial institutions Mountain America Credit Union and Bank of Cyprus. The latter will use Gemalto technology, and Mountain America Credit Union has secured the support of Fingerprint Cards and Kona-I.

Visa Biometric Payment Card

The principle of operation is as follows. The user registers fingerprints that are securely stored on the card. When paying, the card holder applies a finger to the sensor, which then matches the sample with the stored data. In case of a match, the green indicator lights up, and in case of unsuccessful authentication - red.

Biometric technology, as conceived by Visa, will become an alternative to traditional methods of confirming the owner of a bank card, such as a PIN code or signature on a check. 

The card itself does not require a built-in battery and is capable of charging from a payment terminal. To obtain a biometric card, you need to visit a bank branch to go through the process of registering fingerprints through a special terminal that will save the encrypted fingerprint on the card itself in a single copy.

Visa conducted a survey among 1,000 Americans that found consumers wanted to use fingerprint scanning to pay for online and offline shopping.^[7]

The world is rapidly moving towards a future where there are no passwords, as consumers understand how biometric technologies can make their lives easier, said Jack Forestell, head of global trade solutions at Visa.

In 2017, MasterCard introduced a similar bank card with a fingerprint scanner and began distributing it in test mode in South Africa.

2013: Earnings for 9 months - $3.78 billion

Visa Inc., the operator of the international payment system Visa, reported that its net profit for the nine months of the 2012-2013 financial year (ended June 30, 2013) amounted to $3.78 billion. US, which is 7.8 times more than in the same period last fiscal year.

It is also reported that in terms of one ordinary share, the company's profit in October 2012 - June 2013 amounted to $5.76 against $0.71 a financial year earlier. The company's revenue rose 14% to $ US8.8 billion.

At the same time, Visa's net profit in the third quarter of the current financial year amounted to $ 1.22 billion. US vs. $ 1.84 billion loss in April-June 2012. In terms of per share, profit reached 1.89 dollar vs. a loss of $ 2.74 for the third quarter of last fiscal year (forecast - $ 1.79). At the same time, quarterly revenue increased by 17% - to $3 billion.