In an effort to provide its cardholders the convenience of
secure and fast access to funds during their travel to Canada, Visa
Canada, a division of
Visa, Inc.
(
V
), entered into a strategic alliance with DirectCash, a provider of
white label ATMs in Canada. The services will be effective this
year onwards.
The aim of the alliance is to make ATM transactions more
accessible to visitors travelling to Canada, as according to a
research conducted, travelers depend on ATMs to obtain local
currency primarily because it allows them to do away with the
hassles of carrying large amount of cash.
Sealing the deal between the companies, DirectCash will accept
all types of cards that come under the purview of the Visa brand
through 7,600 operating of its ATMs that are situated at prime
locations for the convenience of travellers. It is expected that
this alliance will prove to be beneficial for both the companies
given Visa's wide market presence and DirectCash's expansive ATM
network.
We believe that since its inception, Visa has been growing
strongly through a healthy array of products and a huge network
expanse. The company remains focused on the needs of its customers
and continues to add value amid a challenging economic environment
through its products that are user-friendly and flexible.
Moreover, the cross-border transactions are gaining traction in
the non-U.S. regions, given the increased cross-border travelling
and spending on Visa-branded products that are further aided by
favorable geopolitical, economic and other circumstances.
Consequently, travel-spend from countries like Canada have
witnessed a substantial surge in the past year, thereby enhancing
operating leverage. Hence, going forward, Visa strives to realign
itself to enhance its competitive position and capitalize on the
most promising growth opportunities from the standpoint of both a
geographic and product development.
We retain our long-term Neutral recommendation on Visa. The
company currently retains a Zacks #2 Rank, which translates into a
short-term Buy rating. Its closest competitor
MasterCard Inc.
(
MA
) is equally proactive on the growth front both organically and
inorganically. Within the same time frame, MasterCard too has made
some significant acquisitions and product diversifications to
maintain its competitive edge in the industry. It currently retains
a Zacks #3 Rank, which translates into a short-term Hold
rating.
MASTERCARD INC (MA): Free Stock Analysis Report
VISA INC-A (V): Free Stock Analysis Report
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