VALUATION HIGHLIGHTS

1. Transaction Fees constitute 35% of the Trefis price estimate for Visa's stock.
2. Assessment Fees constitute 31% of the Trefis price estimate for Visa's stock.
3. International Fees constitute 26% of the Trefis price estimate for Visa's stock.

WHAT HAS CHANGED?

Latest Earnings

Visa posted better-than-expected Q4 FY'25 results as consumer spending proved more resilient than anticipated. Revenue rose nearly 12% year-over-year to $10.7 billion, while adjusted net income reached $5.8 billion, with earnings per share coming in at $2.98.

Note: Visa's FY'25 ended on September 30, 2025.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below, we look at the key drivers for Visa, which present upside or downside to our price estimate for the company's stock.

• Transaction Volumes:
  Payment volumes have risen from about $10,401 billion in 2021 to $14,217 billion in 2025, driven by stronger consumer spending and the economic recovery post Covid-19. Besides this, emerging markets like India have seen considerable growth in cashless payments over the past few years. We expect the metric to grow to about $22,350 billion by 2032. However, if volumes actually grow to about 25,000 billion, there could be a 10% upside to our price estimate.


• Total Number of Cards In Circulation: In the past few years, the total number of cards in circulation has grown at an average annual rate of 5.5% in recent years. We forecast the growth rate to decline marginally over the Trefis forecast period to about 3%. If the growth rate exceeds our expectations and instead comes in at over 6%, there could be a 15% upside to our stock price. However, if it goes down below that and is 2% instead, there could be a roughly 6% downside to our stock price.
  

BUSINESS SUMMARY

Visa is the largest global electronic payment solutions company in the world. It provides a wide range of products and services to support credit, debit, and related card solutions for institutions in over 200 countries. The company generates revenue by charging fees on transactions and payment volume. Visa processed over $15 trillion of payment volume in FY'25.

SOURCES OF VALUE

Visa charges its customers for providing transaction processing and other services, generally on a per-transaction or percentage-of-transaction basis. Accordingly, the company's revenues are primarily impacted by the number of transactions it processes and the gross dollar volume of purchases made using its cards.

Visa's revenues primarily come from the following sources:

Transaction Processing Fees (Data processing fees)

Data processing revenues are earned for authorizing, clearing, settling, processing transactions, and other maintenance and support services that facilitate transactions between Visa's customers. Data processing revenues are based on information gathered from VisaNet, its global processing platform, which provides transaction processing services by linking issuers and acquirers.

International Transaction Fees

International transaction fees are assessed to customers on transactions where the cardholder's country differs from the merchant's. International transaction revenues are generally driven by cross-border payment volumes, which include single-currency transactions and currency conversion activities for transactions involving more than one currency.

Assessment Fees

Assessment revenues are earned from customers for their participation in card programs carrying the Visa brand. Service revenues are assessed based on a pricing methodology applied to the payment volume.

Other Fees

Other revenues consist primarily of optional services or product enhancements, such as extended cardholder protection, concierge services, cardholder services, and fees for licensing.

KEY TRENDS

Rapid growth in electronic, cashless payment solutions

The global market for cashless payment solutions, such as credit and debit card transactions, has grown rapidly, particularly in emerging markets. Africa has the largest percentage of people using mobile banking. Similarly, Americans have the highest number of non-cash users. This indicates that consumers spend a significant amount through cards rather than cash or checks. The trend is only expected to continue. Outside the U.S., non-cash penetration is much lower, but the use of cards is expected to increase at a higher rate in emerging markets than in mature markets.

Opportunity in mobile payments

Visa has begun offering more services that will enable the payment of bills from mobile devices. Mobile phone payments are gaining rapid popularity, coinciding with the surge in smartphone sales. An increasing number of smartphones manufactured now utilize near-field communication (NFC) chips, which facilitate mobile payments.