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Visa's (V) Digital Initiatives Gain on Checkout Expansion

Zacks Equity Research

Visa Inc. V recently announced that it has reached a milestone by expanding Visa Checkout to more than 20 million enrolled accounts.

This achievement comes on the back of the company’s continued endeavor to further its digital capabilities, which has enabled it to remain at the forefront in a rapidly transforming industry. Its efforts are reflected in its share price which gained 35.3% over the past two years, significantly outperforming the Zacks Categorized Financial Transaction Services industry’s gain of 26.5%.

Visa Checkout offers consumers an expedited and secure payment experience for online transactions wherever this service is enabled. It helps merchants convert higher numbers of consumers to sale, a particularly important issue, as digital commerce shift from desktop to mobile devices has lower conversion rates.

At the end of fiscal 2016, Visa Checkout had over 15 million consumer accounts in 21 countries, seven languages and over 1,400 financial institution partners across the globe. More than 300,000 merchants, including some of the largest global retailers accept Visa Checkout. The expansion to 20 million enrolled accounts must have been driven by higher acceptance from the rollout of a redesigned Visa Checkout service in Oct 2016.

The latest version made it easier for consumers to enroll and complete purchases on mobile devices. The company recently announced the opening of the Visa Checkout platform to clients and partners, allowing them to integrate their digital wallets into Visa Checkout for streamlined authentication and checkout.

Visa Checkout is also gaining increased acceptance from merchants. The company’s merchant list already has 300,000 names on it and is continuously growing. Some of the big brand names that recently adopted this service are HSN, Alaska Airlines, Avis Budget, Cole Haan, Emirates Airline, FIFA, Marriott, Sam’s Club and Wal-Mart Stores, Inc. WMT.

The company doesn’t seem to be resting here. It is eyeing further expansion of Visa Checkout in 2017. Some of its targeted markets are Kuwait, Qatar, Saudi Arabia and Ukraine. This service is already or very soon going to be present in the regions of Argentina, Australia, Brazil, Canada, Chile, China1, Colombia, France, Hong Kong, India, Ireland, Malaysia, Mexico, New Zealand, Peru, Poland, Singapore, Spain, South Africa, United Arab Emirates, United Kingdom and the United States.

To make things all the more easier for its consumers and merchants, the company recently joined forces with Samsung Pay. The pact will allow Samsung Pay users in the U.S. to link their Samsung Pay account with a Visa Checkout account. This will give them a seamless way to pay for shopping at more than 300,000 merchants that accept Visa Checkout.

Last year, another industry player, MasterCard Inc. MA, announced an agreement with Samsung to enable Samsung Pay users to shop online at hundreds of thousands of merchants around the world where Masterpass is accepted.

Visa however remains a forerunner in the digital payments market. Other than Visa Checkout, Visa Direct and Visa Token Service are some its popular payment platforms. Visa Direct is a push payment product platform that facilitates payer-initiated transactions sent directly to the Visa account of the recipient. Its Visa Token Service replaces the card account numbers from the transaction with a token. Tokenization helps to protect consumer financial information and lessen the risk of stolen card credentials.

The stock carries a Zacks Rank #2 (Buy). It witnessed an upward revision in fiscal 2017 earnings estimates over the past 90 days.  Another stock with the same Zacks Rank as Visa is Fiserv, Inc. FISV. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fiserv beat estimates in two of the last four reported quarters, with an average positive surprise of 1.2%.

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Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report
 
Mastercard Incorporated (MA): Free Stock Analysis Report
 
Visa Inc. (V): Free Stock Analysis Report
 
Fiserv, Inc. (FISV): Free Stock Analysis Report
 
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