# V: Visa Stock



## MrsPartridge (May 15, 2016)

With Amazon halting Visa transactions, they've pushed this stock way down and it might be time to pick up some on sale.

Visa is also looking into adding bitcoin. Looks appealing to me.

Thoughts?


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## m3s (Apr 3, 2010)

MrsPartridge said:


> Thoughts?


Great moat that everyone is chipping away at now. They are being disrupted from many new tech companies at least in the US

Amazon and many other are shifting to things like Affirm. There's also Square, PayPal, Plaid and all kinds of new efficient digital payment options in the US now. Crypto merchant payments are also available in the US now but not popular when every crypto payment is treated as a taxable event and the legacy banks flag you as a criminal

Imagine getting 3.5% or more on every single Visa transaction. Such as waste when better tech is available today. It's just a matter of habits shifting now. Just look at the Affirm stock recently and other FinTech stocks. It will take years for the dust to settle but imo legacy finance like Visa are overvalued because most don't see it coming yet

Sure Visa bought a CryptoPunk NFT and they will use stablecoins and blockchains. Their cash cow merchant fees will only decline though


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## james4beach (Nov 15, 2012)

MrsPartridge said:


> With Amazon halting Visa transactions, they've pushed this stock way down and it might be time to pick up some on sale.


What the heck? You can no longer buy things on Amazon using a visa card? Looking at the news, no, that's only in the UK.

Amazon still accepts Visa cards.


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## newfoundlander61 (Feb 6, 2011)

Paypal is down and looks good for an entry point.


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## agent99 (Sep 11, 2013)

M3s says CC companies and big banks will soon fail because cryptos are going to take over! Luckily I won't live long enough to see that


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## m3s (Apr 3, 2010)

agent99 said:


> M3s says CC companies and big banks will soon fail because cryptos are going to take over! Luckily I won't live long enough to see that


Well that's hyperbole

Visa +3% merchant fee days are numbered. Affirm and many other solutions are already eating into that market in the US. What the OP was alluding to was amazon adding Affirm not halting Visa as far as I know (I have the USD amazon prime visa card) Affirm uses a debit payment plan with 0% interest and a lower merchant fee

Visa itself is using crypto for a settlement layer. You can already transfer USD and other currencies on it and it settles faster and more secure for large payments. I do many large international transfers and you won't understand unless you do. Wire transfers don't even come close. For small transfers the fees are not worth it on layer 1

Layer 2 are already working for crypto networks that are much faster/cheaper while still secured by layer 1 batched settlements. Visa/Mastercard are basically the layer 2 of the legacy system. You can use USD or any algorithmic backed fiat currency on crypto layer 2. Regulatory clarity and general understanding lags.

Transition won't happen overnight but I can't see this being good for Visa at all. Yes Janet Yellen and the dinosaurs will be underground before they understand any of this


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## agent99 (Sep 11, 2013)

I had no idea what Affirm was. I looked it up. Just seems like a way to encourage buying on credit. Probably why I had never heard of it. Can't see how it would affect normal use of VISA except for those who don't pay off their CC regularly. Maybe that is where VISA et al make their money along with the merchant fees. I suspect VISA and Mastercard will continue to thrive. They have the resources to adapt to competition.









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.


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## m3s (Apr 3, 2010)

agent99 said:


> I had no idea what Affirm was. I looked it up. Just seems like a way to encourage buying on credit. Probably why I had never heard of it.


It's getting big in the US but I don't think Canada has it. I see it as an option everywhere online. Stock like doubled in the past few months

I used it for a big purchase just to try it. I'm like a 20 year old in terms of US credit history so my Visa limits were very low compared to what I'm used to. Basically it debits my bank directly with 0% interest. I suppose it cost me the x% in Visa rewards

The point was americans are using more than just Visa now and better solutions are definitely coming.


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## james4beach (Nov 15, 2012)

agent99 said:


> I had no idea what Affirm was. I looked it up. Just seems like a way to encourage buying on credit.


There apparently is a big movement (resurgence of an old thing) to buy goods, appliances etc on credit and finance them over time. To avoid the sticker shock of prices of items, things are increasingly being quoted in terms of "monthly payments"

I wonder if it's an indication of growing poverty in US & Canada, or maybe a shift in thinking with rock bottom interest rates after COVID.


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## m3s (Apr 3, 2010)

james4beach said:


> I wonder if it's an indication of growing poverty in US & Canada, or maybe a shift in thinking with rock bottom interest rates after COVID.


I read credit balances are way down since the pandemic. Many are sitting on more savings now from staying home

When I was young I used one of those 0% buy-now-pay-later for furniture. When I saw it on my credit report I never used those again

Affirm doesn't go on your credit report. It's just as easy as using a Visa online. It's billed monthly like a debit. Sounds like they are relying on their own history and a soft credit check

I just ordered some cyber Monday car parts and Affirm was also on the random car parts checkout. I think Visa will have more and more competition soon


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## james4beach (Nov 15, 2012)

m3s said:


> Affirm doesn't go on your credit report. It's just as easy as using a Visa online. It's billed monthly like a debit. Sounds like they are relying on their own history and a soft credit check


Yeah, so they extend credit in a different way. Maybe it's super popular because it doesn't touch the credit bureaus and so doesn't impact credit scores.

A parallel system for credit, but still buying on credit.

Actually the fact it doesn't go on your credit report, or impact the credit score, might be the key to why this is so popular. Imagine suddenly letting everyone buy on credit without the penalties for doing so.


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## m3s (Apr 3, 2010)

PayPal is chomping into Visa and probably more so this year

Cash app is the number 1 finance app in the US now. Never used it myself. Not sure where Square and Stripe fit in as they all kind of complement Visa

Crazy new stuff coming like Strike. Seems like there are new fintechs coming from everywhere

Eventually 100 monkeys will realize Visa merchant fees are pointless


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## m3s (Apr 3, 2010)

james4beach said:


> Yeah, so they extend credit in a different way. Maybe it's super popular because it doesn't touch the credit bureaus and so doesn't impact credit scores.


I think it's more the interest free payments

When you see your friends and taxi driver are multiplying money on Robinhood there's an opportunity cost these days

Credit score doesn't seem to be an issue. The fresh college grads all seem to have the top Visas already


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