Visa Reaches Out to Small Traders - Analyst Blog

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Yesterday, Visa Inc. ( V ) came out with another innovative online payment management tool for small businesses as it unveiled Visa Payment Controls.

The new service is aimed at replacing old and inefficient modes of payments, which include checks, ACH and international wire, with the transactions made on employee's business cards, thereby helping effective cash flow management in small businesses.

Accordingly, this service will not only offer flexibility to the employees of these businesses but will also aid the management in keeping a check on excess cash outflow. These checks and controls range from travel blocking, purchase limits and ATM withdrawal or excess-cash limits to restrictions on merchant category or transaction form.

Such a control tool will help small business owners, for instance, to restrict their drivers or managers to use only their business cards to purchase fuel or raw materials, respectively. Hence, through such transparent, secure, reliable and convenient employee cards, business owners can spontaneously have better control over the business operation and help reduce wastage of resources since the employees will now be accountable for every penny spent from the firm's account.

Acing Growth Through Diversified Dynamics

Visa's innovative payment solutions are also aimed at increasing the company's brand loyalty while adding an incremental revenue stream, particularly, given the regulatory cloud that burst over Visa's primary debit interchange fee in mid-2011.

The regulatory challenges has diverted Visa's synergies to the rapidly growing prepaid cards, money transfer services, eCommerce and mobile banking so as to reach out even to the small businesses, thereby helping them in increasing profitability and cash flow by initiating controlled spending with convenience.

The Visa Payment Controls initiative is also in sync with the company's strategy of driving growth through increased payment volumes along with consistent increase in processed transactions. The company aims to retain its strength by exploring newer growth avenues, besides expanding into emerging international markets to support growth. The company is also generating strong cash flow and maintains a healthy capital position.

Overall, Visa is making vigorous attempts to augment its core processing capabilities and maintain its competitive position, primarily against its arch rivals, MasterCard Inc. ( MA ) and American Express Co. ( AXP ), in an increasingly complex payments environment, primarily through the strategic technology acquisitions and product innovations.

Earlier this week, American Express also launched a new corporate payment solution - PAYVE - for the middle- and high-dimensional companies in order to assimilate different modes of payment in one digital platform.

Visa currently retains a Zacks #2 Rank, which translates into a short-term Buy rating, while the long-term recommendation remains Neutral.


 
AMER EXPRESS CO (AXP): Free Stock Analysis Report
 
MASTERCARD INC (MA): Free Stock Analysis Report
 
VISA INC-A (V): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AXP , MA , V

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