Visa’s recent acquisitions and investment strategy
By: Utkarsh Prashant
Tags: Entrepreneurship, Startup

Visa’s stock has soared 20% since Oct 2018 even as market indices could only manage single-digit growths. The payment industry’s leader’s rise over recent months could be attributed to the prospects of visa’s revenues improving in the future because of multiple strategic acquisitions by the company.Visa’s revenues are primarily earned from transaction processing.

Before we draw any insights from Visa’s investment strategy let me run you through some important points:

A Quick Look at Visa’s Product Portfolio

Visa’s product portfolio on the whole includes digital products, contactless technology, merchant products, and risk management solutions.

Visa Direct is the digital product that provides access to Visa’s transaction processing platform, VisaNet.

Visa checkout is a dedicated digital product that ensures secure online payments which helps due to the growing popularity of online transactions.

Visa Token Service and Secure Remote are other digital products that help in securing personal account’s information by various encryption techniques.

Visa’s risk management solutions make sure that transactions remain secure and to identify security breaches. Such solutions help in maintaining confidence in digital payments.

Paidy: Paidy service is to make it easier to shop online in Japan, which is the world’s fourth largest e-commerce market .

Earthport: Earthport offers cross-border payment services to banks, money transfer service providers and other businesses through the largest independent ACH network.

Verifi: It is a provider of end-to-end payment protection and management solutions.

Plaid: A network that helps people, connect financial accounts to apps which the people use to manage their financial lives, securely.

Payworks: It is a provider of next-gen payment gateway software for the Point of Sale (POS).

TrueLayer: It has agreed on a strategic and a commercial relationship with Visa as part of its commitment to growing the Fintech industry.

Minna: The leading subscription management provider for retail banks

Solaris bank: The Berlin-based “banking platform”

Gojek: The two companies have agreed to work together to provide consumers of Indonesia and Southeast Asia greater options on cashless payments and a more seamless experience.

Paystack: Paystack, a Stripe-like startup out of Lagos that provides online payment facilities to merchants and others

How Visa’s recent acquisitions improves its capabilities to offer better service :

1. Earthport: Visa to acquired Earthport for $320 million in May 2019.With the acquisition of Earthport, Visa was able to strengthen its international transaction payment capabilities.

2. Verifi: Visa acquired Verifi for an undisclosed sum in September 2019.Verifi offers a faster solution to solve the problems of chargebacks and also reduces costs for merchants and issuers. Visa enhanced its risk and fraud management systems with Verifi by improving the trust among its network participants.

3. Payworks: Visa had already been enhancing its CyberSource platform with Payworks since 2018 which it acquired later in July of 2019.Payworks’ Pulse offers a solution for POS software providers and payment service providers, to be able to accept payments through multiple payment channels by integrating its payment gateway in their software.

Keeping the breaches at bay and to bolster customer confidence in its services is very important to fuel its growth forward. Visa’s investment strategy is not to fuel its revenue numbers immediately, its goal is to improve its long term prospects which in turn will improve Visa’s position and credibility in the market. Its also collaborating with Samsung to deliver mobile payment technologies to cater to the recent revolution in mobile payment.

Well, the basic goal of any business is to be hugely profitable and also to be able to do so for a long period of time. Visa, certainly proves itself here. It has acquired startups and companies which are closely related to its own or provide good solutions to some problems Visa faces. All those numerous investments either strengthens the security wall or increases its area of influence.

What’s more important is that these investments payoff well in the long term. Visa’s total cards in circulation have grown steadily from 2.2 billion in 2013 to 2.72 billion in 2016. It’s closest rival, MasterCard has less than half of number cards than Visa’s. Although we may be tempted to say that Visa has a very secure position in the market but that would very early to say. Visa has certainly strengthened its grip on the market. With strategic investments it has tried to improve its future prospects yet only time will tell whether those investments were worth it or not.