How Visa Makes Money

Visa Inc. (V) is a digital payments brand globally, providing services to individual consumers, merchants, financial institutions, and governments. The company offers authorization, clearing, and settlement services for financial institutions and merchants. Visa does not issue credit or debit cards, instead, it provides card services to consumers and businesses which issue the cards.

Visa's Industry

Visa's rivals include Mastercard Inc. (MA) and American Express Co. (AXP), as well as digital payments companies like PayPal Holdings Inc. (PYPL). Visa reaches over 200 countries and territories, 14,500 financial institutions, and over 130 million merchant locations.Visa offers services such as credit, debit, prepaid, tap-to-pay, click-to-pay, and tokenization through four segments:

• Service: Provides services to support client usage of Visa's payment services.
• Data Processing: Includes clearing, settlement, authorization, value-added, network access, and similar services.
• International Transaction Processing: Provides cross-border transaction processing and currency conversion.
• Other: Includes license fees, value-added services, account holder services, and certification.

Visa's Financials

For fiscal year (FY) 2023, Visa reported revenues of $32.7 billion, a gain of 11% year over year (YOY). Visa posted a loss of $12.3 billion in client incentives, paid to financial institution clients, merchants, and business partners to grow payment volume, entice new routing transactions, and drive innovation.

Service revenues contributed $14.8 billion to overall performance, Data Processing added $16 billion, and International Transactions brought in $11.6 billion. Revenue for other services like licensing fees and marketing was $2.5 billion.

History and Leadership

As of 2024, Ryan McInerney is the Chief Executive Officer (CEO) of Visa, Inc. Bank of America launched BankAmericard, the first card with a “revolving credit” feature in 1958. By 1976, BankAmericard became Visa. In 2024, Visa completed 283.2 billion transactions valued at $15.1 trillion.

Recent Developments

In 2022, Visa acquired Tink, a Europe-based open banking platform that enables banks, financial technology companies (fintechs), and startups to develop data-driven financial services. In FY 2023, Visa signed an agreement to acquire Pismo, a cloud-native issuer processing and core banking platform with operations in Latin America, Asia Pacific, and Europe. 

The Bottom Line

In 2023, Visa reported fiscal year revenues of $32.7 billion. The company's data processing operations generate the largest proportion of its revenue. Data processing provides clearing, settlement, authorization, value-added, network access, and similar services.