Visa Inc. V recently inked a deal to acquire Featurespace, an AI-driven payments protection firm. Featurespace has made waves in the payments industry with its advanced algorithmic solutions capable of analyzing transaction data and identifying even the most elusive forms of fraud. This acquisition would enhance Visa’s risk-scoring and fraud-detection solutions for clients globally.
This move bodes well for Visa as it will be able to better cater to its client’s complex challenges, leveraging Featurespace’s strong AI foundation. The evolving landscape and more sophisticated types of payment fraud have made fraud prevention inevitable in today's time. In September 2024, V’s peer, Mastercard Incorporated MA, agreed to acquire Recorded Future to enhance its cybersecurity capabilities.
Enhanced AI-fueled fraud prevention tools will help Visa’s clients save money on financial losses related to fraudulent transactions. This would help with client retention and even attract new clients. In the past five years, Visa invested billions of dollars in technology, also including investments to enhance fraud prevention capabilities.
The acquisition of Featurespace further diversifies Visa’s value-added service offerings, beyond merchant and processing solutions. Investments on this front are a time-opportune move as value-added service revenues have been growing more than 20% organically. It also accounted for 25% of fiscal third-quarter net revenues.
The acquisition is expected to close by fiscal 2025, subject to closing conditions and regulatory approvals. Financial terms of the deal were not disclosed. Moves like this are expected to aid Visa in reinforcing its position as a leader in the payments network space.
Visa's Price Performance
Shares of Visa have gained 18.9% in the past year compared with the industry’s 23.4% growth.
Image Source: Zacks Investment Research
V’s Zacks Rank & Other Key Picks
Visa currently carries a Zacks Rank #2 (Buy).
Investors can look at some other top-ranked stocks from the broader Business Services space, like Fidelity National Information Services, Inc. FIS and Paysign, Inc. PAYS. Fidelity National sports a Zacks Rank #1 (Strong Buy), while Paysign carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Fidelity National’s current-year earnings indicates a 50.5% year-over-year jump. FIS beat earnings estimates in two of the trailing four quarters and missed twice. The consensus estimate for current-year revenues is pegged at $10.2 billion.
The Zacks Consensus Estimate for Paysign’s current-year bottom line indicates 75% year-over-year growth. The consensus estimate for PAYS’ current-year top line is pegged at $58 million, indicating 22.6% year-over-year growth.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>Mastercard Incorporated (MA) : Free Stock Analysis Report
Visa Inc. (V) : Free Stock Analysis Report
Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report
Paysign, Inc. (PAYS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
