Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


The Visa (NYSE: V) Global Payments Empire expands

The best way to think of Visa (NYSE: V) is not as a credit card brand but as a global payments empire. Importantly, the Visa Empire is constantly growing and expanding with the global economy.

For instance, there were 755 million Visa credit cards worldwide in 1st Quarter, 2018, Statista estimates. In addition, Visa (NYSE: V) records a $2.1 trillion payments volume for the fiscal year ending on 30 June 2018, Digital Transactions reports.

Moreover, the Visa Empire’s payment volume is expanding dramatically. For instance; Visa’s payments volume grew by 11.1% between June 2017 and June 2018. In detail, Visa reported a $1.97 trillion payment volume for the June 2016 to 2017 period.

Visa (NYSE: V) experiences dramatic growth in the United States

Plus, Visa (NYSE: V) is seeing a dramatic expansion on its home turf – the United States of America. Visa’s American payment volume grew at a rate of 10.5% over the year that ended on 30 June 2018.

Specifically, Visa’s US payments volume grew from $840 billion in June 2017 to $928 billion in June 2018. Hence, Visa (NYSE: V) did nearly $1 trillion in business in one country, the United States of America.

Interestingly, Visa CEO Alfred F. Kelly Jr. credits Visa Direct for his company’s impressive growth. To clarify, Visa Direct uses the Visa Net to process debit card and other direct payments. Popular uses of Visa Direct include: insurance disbursements, tax refunds, contractor payments, loan payments, and loan distributions.

The Visa (NYSE: VISA) Empire’s Secret Weapon is Visa Direct

Visa Direct is popular because it is a near real-time payment service. Hence, a contractor can receive payment almost immediately through Visa Direct.

A good way to think of Visa Direct is as PayPal for Visa. Furthermore, there are many opportunities to expand Visa Direct.

Remittances; for instance, were a $613 billion a year market that is growing at a rate of 7% a year, The World Bank reports. To clarify, remittances are the payments individuals send to people in other countries. For example, the money a woman working in Tokyo sends to her mother back home in the Philippines.

Beyond remittances there are government benefit payments. For example, 63 million Americans were receiving Social Security payments in June 2018, the Social Security Administration calculates.

Notably, the market for benefit payment distribution is growing. For instance, the number of Americans old enough to receive Social Security (over 65) in the United States will grow by 24% in the next 32 years. Specifically, the number of Americans over 65 will increase from 46 million to 98 million by 2060, the Population Research Bureau estimates.

How the Visa (NYSE: V) Empire could profit from Basic Income

Hence, the market for Visa Direct’s services could explode. Additionally, massive expansions of government benefits are being proposed.

Specifically, U.S. Senator Kamala Harris (D-California) is proposing a $2 trillion basic income scheme. In detail,Harris wants to distribute $250 to $500 a month in tax credits to US households. Notably, many pundits describe Harris as a front-runner for the Democratic nomination to the US presidency in 2020.

Visa (NYSE: V) could profit from plans like Harris’s because Visa Direct can distribute tax credits. Hence, basic income schemes could provide Visa with tens of millions of new customers for Visa Direct.

Will the Visa (NYSE: V) Empire make more money with Virtual Cards?

Moreover, Visa (NYSE: V) is expanding its payments empire beyond Visa Direct with Visa Ready.

In detail, Visa Ready allows companies to send B2B (business-to-business) payments to employees, customers, contractors, partners, and others through the Visa Net. Plus, to expand Visa Ready, Visa is adding the Extend App; which creates virtual credit cards for employees, to its ecosystem.

Importantly, Extend operates a digital credit card distribution platform. Digital credit and debit cards can greatly extend the Visa Payments Empire’s reach. Specifically, an organization could instantly create a digital Visa credit card for each employee using Extend.

In addition, an e-commerce platform could instantly, create virtual Visa gift or debit cards for specific purposes. Those purposes can include refunds, rewards cards payments or prize payments.

Thus a gambling platform or a survey app could instantly pay winners with virtual Visa cards. In addition, an insurer could instantly pay claims with virtual Visa cards using Extend apps.

How the Extend virtual payment cards can expand the Visa (NYSE: V) Empire

Intriguingly, Extend’s technology could create virtual credit cards for remittance payments. 

That could make instant transmit ion and payment of remittances a possibility. Moreover, recipients could spend remittance payments instantly through a Visa virtual card app on their phones. Extend is already promoting such an app at its website.

Notably, today’s remittances can take several days to transmit and are often paid in cash. That makes it difficult for average people to receive remittances.

Beyond those uses, a logical use for virtual cards is dispersing or distributing cryptocurrency. For instance, Ripple’s (XRP) remittance corridors could transmit remittance payments to Visa virtual cards.  Ripple claims its cryptocurrency remittances can reach recipients in 40 countries via its RippleNet.

Therefore, Visa has tremendous opportunities for growth ahead of it. However, we need to ask is Visa (NYSE: V) making money?

Is the Visa (NYSE: V) Empire Making Money?

Investors need to look at the Visa Empire (NYSE: V) because it is making money.

For instance, Visa records $5.434 billion in revenues for 3rd Quarter 2018. Plus those revenues grew at a rate of 11.93% during 3rd Quarter 2018.

More importantly, Visa reports a gross profit of $4.619 billion for 3rd Quarter 2018. Thus, Visa earns roughly $4.60 in gross profit for every $5 in revenue it generates. Hence, Visa achieved a gross margin of 85% for 3rd Quarter 2018.

Not surprisingly, Visa reports a net income of $2.845 billion and an operating income of $3.406 billion for 3rd Quarter 2018. Therefore, we can reasonably expect Visa to generate a lot of money from new initiatives such as Visa Ready and Visa Direct.

The Visa (NYSE: V) Empire is generating a lot of cash

Moreover, the Visa Empire (NYSE: V) is generating a lot of cash from its payments ecosystem.

For instance, Visa records an operating cash flow of $3.494 billion for 3rd Quarter 2018. Additionally, Visa reports a free cash flow of $3.299 billion for 3rd Quarter 2018.

In other words, Visa’s free and operating cash flows equal three-fifths of its revenues. Thus, the Visa Empire is a cash-rich company.

In particular, Visa had $9.653 billion in cash and equivalents on September 30, 2018. Furthermore, Visa recorded $3.457 billion in short-term investments on the same day. Thus, Visa had $13.2 billion in cash at the end of 3rd Quarter 2018.

The Visa (NYSE: V) Empire pays a Dividend

Visa (NYSE: V) is an excellent growth stock that pays a dividend. For instance, Visa shareholders received a payout of 25¢ on 4 December 2018.

Impressively, Visa has achieved nine straight years of dividend growth. Hence, Visa has been paying a dividend since shortly after it went public in 2008.

Notably, Visa investors are being rewarded with yearly dividend growth. For instance, Visa paid a 21¢ dividend in September 2018 that grew to 25¢ in December 2018.

Visa offered an annualized payout of $1, a dividend yield of 0.78%, and a payout ratio of 21.8% on 21 December 2018. Thus I consider Visa a good dividend stock Mr. Market fairly priced at $124.26 on 21 December 2018.

I advise persons seeking a safe growth stock that pays a dividend to investigate the Visa (NYSE: V) Empire.