Management also mentioned travel into Asia being stronger than pre-pandemic levels. The company is primarily a mutual fund and ETF management company with about $8 trillion in global AUM. The Vanguard Dividend Appreciation ETF (VIG) tracks a market-cap-weighted index of U.S. companies that have increased their annual dividends for at least 10 consecutive years and it owns Visa. The company is the fourth-largest holding and represents about 2.4% of the fund’s portfolio. The rate used isn’t transparent, because you only ever see the cost in your home currency — and that can mean that the markup is pretty high. All in all, you’re worse off — and the ATM provider or other intermediary makes a tidy profit.
Instead, they choose their own exchange rate, which they might call a day rate or a tourist rate. Unfortunately, the day rate offered by many providers is inflated, and doesn’t represent a good deal for the customer. However, if you’re using your card to pay in a foreign currency, there may be costs you need to consider. It’s a smart idea to read your bank account’s small print and find out the Visa exchange rate to figure out exactly how much your purchase will cost you.
Institutional investors hold the majority of Visa shares at 92.51% of total shares outstanding as of Aug. 2, 2024. He held senior positions at companies including American Express Company (AXP) before he arrived at Visa. He held roles as chief risk officer and chief operating officer for the bank’s consumer lending business and later became chief executive officer. Visa’s trailing-12-month (TTM) revenue was $34.91 billion and TTM net income was $23.37 billion as of Aug. 2, 2024. The company had a market capitalization of $518.73 billion at that time.
Doing a bit of homework in advance can make sure you don’t run into any unexpected costs when you’re using your Visa credit or debit card abroad. Visa Inc is not a card issuer; it does not extend credit to consumers and does not set rates or fees for consumers. It is in business to provide electronic funds transfers services or EFT to financial institutions, banks, government and businesses. Entities needing financial payment processing infrastructure can enroll in VisaNet and issue Visa-branded cards and services to their clients and customers.
The charges vary quite widely and can include both fixed charges, and a percentage fee which is added to the transaction. Even if the costs don’t look too high, they can quickly mount up if you use your card abroad often. You might have noticed that sometimes credit and debit card payments appear on your bank statement a day or two after you actually made the purchase or withdrawal.
Financials
Activities that keep creditors up at night — setting credit limits, collecting monthly payments, calculating interest for those who aren’t quick to pay — are not Visa’s concern. But it’s also worth mentioning that Visa is way more expensive than the overall S&P 500. And the stock is trading at a sizable premium to where it was at just eight months ago. Investors know this is a quality business, so its shares rarely go on sale at a discount. There’s no denying that Visa is a wonderful business, but investors should also take a closer look at the valuation to determine if the stock is a buy. Right now, shares trade at a trailing price-to-earnings (P/E) ratio of 30.4.
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- The company is only the operator of the network that processes transactions on its cards.
- Services are provided under the Visa, Visa Electron, Interlink, VPAY, and PLUS brands.
- The data centers are hardened against internal and external attacks, both physical and digital, and can operate independently of each, providing ample redundancy for the system.
- The company’s biggest shareholders are institutions like Vanguard and BlackRock which hold Visa stock on behalf of their clients and investors.
How would anyone be able to build a competing platform like this from scratch? Visa is one of the world’s largest credit card payment and processing networks with customers and clients worldwide. The company’s biggest shareholders are institutions like Vanguard and BlackRock which hold Visa stock on behalf of their clients and investors. As Visa points out, DCC can leave you exposed to hidden fees and unnecessary costs, because a service fee is typically rolled into the exchange rate used to calculate your transaction cost. So now we know that the mid-market rate is the best benchmark to use to compare the exchange rate you get from Visa and check if it’s fair. You might well be asking yourself, what is a mid-market rate, then?
About Visa Stock (NYSE:V)
Think of millions more consumers doing that at the same time all over the world, and you’ve got some serious scale. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Visa has been a winning investment throughout the years, and it’s difficult to see that great track record ending anytime soon. That means Visa has the makings of being a long-term holding in one’s portfolio.
That’s below Visa’s trailing five-year average P/E multiple of 35.6, and it’s meaningfully below Mastercard’s P/E of 37. As travel picks up again, following a period of pressured demand from the pandemic, Visa is benefiting. Cross-border payment volume was up 24% year over year, faster growth than overall payments volume.
Is Visa Stock a Buy?
Nobody wants to be ripped off, or pay more than they need to while they’re travelling. Remember to compare the Visa exchange rate with the mid-market exchange rate, to make sure you’re getting the most for your money. And if you find that the deal on offer from your Visa credit or debit card provider isn’t great — then check out other options, like Wise.
Read our helpful guide to Gatwick Airport ATMs, including locations, fees, withdrawal limits and tips to save money. Read our helpful guide to Heathrow Airport ATMs, including locations, fees, withdrawal limits and tips to save money. However, if you get caught out by dynamic currency conversion (or DCC for short), the exchange forex trading manual rate used might not be the one Visa sets. Firstly, the rate that Visa provides will correspond to the date you enter into the calculator.
A broad secular trend toward digital payments and away from cash is also a vital part of the investment thesis for this business. Visa employs more than 26,500 individuals globally and brought in roughly $15 billion in revenue for fiscal 2021. The company has more than 3.9 billion active cards out globally; it has processed more than 255 billion transactions and is used by more than 80 million merchant locations. As a forward-thinking company, Visa is also engaged to some degree with the cryptocurrency markets and has partnerships with Coinbase and Crypto.com, among others. Foreign exchange (Forex) trading is the trading of one currency for another on financial markets.
These markets determine the exchange rates between currencies and often involve complex derivatives such as swaps. Going from the world of stock trading to that of https://forexanalytics.info/ Forex trading requires learning a whole new set of skills. Read our essential guide to Euronet ATMs, including fees, exchange rates, locations and tips for avoiding foreign ATM fees. DCC is where you’re asked if you’d like to pay for your transaction in your home currency instead of the local currency. If you say “Yes,” it’s the ATM provider, merchant, or an intermediary bank who decide the exchange rate which is used.