How Do They Make Money?

Visa is the ultimate "toll-moat" company. They have a duopoly with Mastercard in payments infrastructure

Visa primarily generates revenue through three streams:

• Service Revenue

• Fees charged to banks based on payment volume.

Typically calculated as a small percentage of the total transaction value (2-3%)

• Data Processing Revenue

  Fees for authorization, clearing, settlement, fraud detection, and security.

  • Charged per transaction, regardless of amount.

• International Transaction Revenue

  • Fees applied when transactions cross borders or involve currency conversion.

  • Usually higher margin due to added complexity.