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Visa Collaborates with EMQ, Expands Cross Border Business

Zacks Equity Research

Visa Inc. V has entered into partnership with EMQ, a leading cross-border settlement network in Asia, to offer cross-border remittances across Asia Pacific.

 

With this deal, Visa and EMQ will offer their customers superior cross-border solutions with greater choice, transparency, and flexibility. This will be achieved by integrating EMQ’s extensive network with Visa's real-timepush payments platform, Visa Direct. Notably, Visa Direct  allows companies to leverage its global reach and scale to transform domestic and cross-border payments for businesses and consumers.

 

Visa is eying the Asia-Pacific remittance market given the rising demand by businesses and tech-savvy individuals as these increasingly require a versatile global money movement network which can make cross-border remittances streamlined, low-cost and secure in real-time. Moreover, the remittance market in the region is fragmented which offers ample scope for growth for an established player like Visa.

 

For Visa, the acquisition of EMQ is perfect as it will aid the company in strengthening presence in mainland China, Hong Kong, Singapore, India, Indonesia, Japan, Vietnam, Cambodia, Thailand, Taiwan and Philippines. EMQ is also expanding in Asia, Europe, North America and the Middle East, and holds remittance licenses in Hong Kong, Indonesia, and Singapore as well as PCI DSS certification. Consequently, EMQ’s vast presence will help Visa in capturing the market instantly.

 

This deal will increase Visa’s cross border business volumes, which in turn will aid International transaction revenues, which has already been on the ascent for the past several quarters. For fiscal year 2018 (ended Sep 31, 2018), Visa’s cross-border volume growth, on a constant dollar basis, was more than 10%. Though medium-to-long term cross border performance is likely to be good, near-to-medium term remains concerning. In the United States, the inbound commerce growth rate has been negative of late, owing to strengthening of dollar. 

 

In a year’s time, the stock has gained 25.5% compared with the industry’s growth of 17%.

 

 

 

Visa carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Virtu Financial, Inc. VIRT, Fidelity National Information Services, Inc. FIS and Euronet Worldwide, Inc. EEFT. 

 

Virtu Financial provides market making and liquidity services to the financial markets worldwide. The company sports a Zacks Rank #1 (Strong Buy).  The company delivered average trailing four-quarter positive surprise of 0.63%. You can see  the complete list of today’s Zacks #1 Rank stocks here

 

Fidelity National Information works as a financial services technology company globally. It has a Zacks Rank of 1. The company managed to deliver earnings surprise in the trailing four quarters, average being 2.72%.

 

Euronet provides payment and transaction processing and distribution solutions worldwide. It carries a Zacks Rank #2 (Buy). The stock pulled off average four-quarter beat of 2.68%.

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