A Visa to Profitland

The world is transitioning away from cash, with Visa (NYSE: V) likely to be a major beneficiary. The company enjoys a host of competitive advantages — such as its scope. According to card payment analyst The Nilson Report, there were nearly 300 billion purchase transactions made on credit cards globally in 2017, and Visa processed more half of them.

Meanwhile, the barrier to entry in the payment processing industry is exceptionally high. Not only does it take a small fortune to set up the infrastructure to process payments, but it also takes a long time for payment facilitators to build rapport with merchants and consumers.

Visa expanded its geographic reach in June 2016 when it acquired Visa Europe. With much of the world’s transactions still conducted in cash, there are great growth opportunities in regions such as Africa, Southeast Asia and the Middle East. In emerging markets such as India, Visa has a head start, with its CEO recently noting that Visa had more than a 50 percent share of debit and credit card spending in the world’s secondmost-populous nation.

Finally, Visa is relatively unaffected by economic swings. Though the company does rely on purchasing to drive the processing fees it collects, it’s not a lender, so it doesn’t have to worry about credit delinquencies. Give it some consideration. (The Motley Fool owns shares of and has recommended Visa.)