The Intrinsic Value Podcast - The Investor’s Podcast Network TIVP020: Visa (V): Is Visa still the Card to Hold? w/ Daniel Mahncke & Shawn O’Malley
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May 18, 2025 Discover how Visa operates as the invisible backbone of global payments, linking consumers, banks, and merchants in a vast network. Learn about its evolution from a bank consortium to a market leader and explore strategies for future growth in emerging markets. The discussion also dives into Visa's unique value-added services and examines its strong competitive moat against rivals like MasterCard, alongside the impact of fintech innovations on its dominance.
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How Visa’s Payment Network Works
- Visa operates a four-party payment network connecting cardholders, merchants, issuers, and acquirers.
- Visa earns money primarily through network fees and processing fees, taking a small slice of huge transaction volumes.
Why Banks Need Visa's Network
- Issuer banks partner with Visa for global acceptance, trusted brand, and advanced technology.
- Building a new payment network is prohibitively expensive and inefficient compared to using Visa.
Merchant Benefits Outweigh Payment Fees
- Merchants pay fees ranging from 1.5% to 3.5% per transaction but benefit from higher customer spend.
- Accepting Visa reduces cash handling costs and increases sales despite fees.