Visa earnings preview: Moving further beyond credit cards

Visa Inc.’s Thursday afternoon earnings report will cap off a fiscal year in which the payments giant branched further beyond traditional credit and debit cards.

Among Visa’s big areas of focus in fiscal 2019 were Visa Direct, a function that lets users get paid using the card infrastructure, and B2B Connect, a cross-border commercial platform. The company expects both of these to be growth drivers in future, as Visa Direct benefits from trends such as the rise of gig-economy businesses that are looking to pay workers more quickly than every two weeks. B2B Connect allows Visa to tap into a lucrative new market for the company where credit cards don’t get much play.

The company turned to acquisitions as well as it broadened its capabilities. In the June quarter alone, the company made four deals, which Chief Financial Officer Vasant Prabhu said were meant to help Visa extend its reach.

“A lot of what goes on in our industry is you partner with [companies offering new capabilities] because that’s how you extend your network and add more services and all that,” Prabhu told MarketWatch in a mid-September interview. But in the case of its Earthport deal, Visa saw an opportunity to double the amount of bank accounts it could reach, to 99% of those in major countries, by buying the company outright. With its deal for processing company Payworks, Visa pulled the trigger only after first partnering with the German company.

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Cantor Fitzgerald analyst Joseph Foresi wrote in a recent note to clients that “the card network’s ability to expand its addressable market is a key opportunity and area of focus.”

Expect more talk of activity beyond traditional card swipes, dips, and taps when Visa begins discussion of fiscal 2020 on its

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