Brisk Growth In Payment Volumes Increases Visa’s Share Of U.S. Credit Card Market To Over 52% For Q1

by Trefis Team
-23.72%
Downside
110
Market
83.77
Trefis
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Visa
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Visa captured 52.5% of credit card purchases volumes in the U.S. over Q1 2017, as the payment processing giant continued to process more credit card payments than its three rivals combined.

Card_QA_Payment_Company_17Q1

The payments industry is seasonal, with purchase volumes peaking in the fourth quarter of the year due to the impact of holiday season shopping, before falling sharply in the first quarter. This trend is seen clearly in the table below which, captures the changes in credit card purchase volumes for these companies over the last five quarters.

Card_QA_Payment_Company_Change_17Q1

Visa’s dominance in the industry is also evident from the table above. Notably, Visa has roughly 340 million credit cards in circulation in the U.S., as opposed to just over 200 million cards for MasterCard and 48 million cards for American Express. This allows Visa to capture a major chunk of the card purchase volume for any given period. The sizable decline in card purchase volume for American Express since Q3 2016 was a result of the sale of its Costco and Jetblue co-branded card portfolio.

You can see how changes to Visa’s total cards in circulation (credit as well as debit cards) affects our estimate for the company’s share price by modifying the chart below.

Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment/ ask questions on the comment section
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to the full Trefis analysis for Visa | MasterCard | American Express | Discover

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