To The Moon

$Visa(V)$ $MasterCard(MA)$ $PayPal(PYPL)$ $American Express(AXP)$ $Alibaba(BABA)$ 

💳 💰💥 How the Big 4 Make Cash Flow Like a River! 💥💳💰

Kia ora Tiger traders!

Ready for a deep dive into how the financial heavyweights make their sweet, sweet cash? We’re talking Visa, Mastercard, American Express, and PayPal. These giants have cash flows that make Niagara Falls look like a leaky tap. 🌊

💳💳 Visa: Swipe, Profit, Repeat!💳💳

Visa’s business model? Swipe, then thrive! 💸 With Net Revenue sitting at a hefty $6.8B, Visa has become the ultimate transaction middleman. Every time you swipe your card, Visa’s making money from Service Fees, Data Processing, and International Transactions. 🌍

🟢 Net Profit: $4.5B

🔵 Operating Margin: 67.4%

🔴 Client Incentives: -$3.3B (Those rewards don’t come for free!)

Fun Fact:

Visa’s name comes from the Latin word “vis,” meaning force or power. 🚀 Sounds about right for a powerhouse in payments!

Visa has faced recent scrutiny. Paul Pelosi, husband of Nancy Pelosi, sold more than $500K of Visa stock just before the Department of Justice filed a major antitrust lawsuit accusing Visa of monopolising the debit card market . The timing? Some say it’s more than a little suspicious. Visa’s stock dipped after the announcement, but the company remains strong. Hedge funds are still pouring in, with a $1.8B capital inflow this quarter. 💪

Latest Developments

• AI Fraud Prevention: Visa has launched new AI-powered fraud detection tools to enhance security across digital payments. This investment in advanced technology underscores Visa’s commitment to remaining a leader in the fintech space .

• Account-to-Account Payments: Visa will introduce A2A payment capabilities in Europe by 2025, allowing consumers to pay directly from their bank accounts. This move is set to revolutionise payments in the UK and across Europe .

• Swipe Fee Reduction: Visa and Mastercard have agreed to lower swipe fees for U.S. merchants, reducing credit card interchange fees by 4 basis points and capping these fees until 2030 .

💥 Mastercard: Everywhere You Want to Be (Collecting Fees)

Mastercard isn’t far behind, raking in Assessments and Transaction Fees like a pro. 💼 With Net Revenue at $6.6B, Mastercard is stacking profits and posting an Operating Profit of $3.9B.

🟢 Net Profit: $2.9B

🟡 Operating Margin: 58.6%

🔴 Rebates and Incentives: -$2B

Latest Developments

• Cybersecurity Expansion: Mastercard recently acquired Recorded Future, one of the largest threat intelligence companies globally, for $2.65 billion. This acquisition strengthens Mastercard’s cybersecurity and fraud prevention capabilities .

• Global Partnerships: Mastercard has partnered with Alibaba to launch a co-branded credit card, the Alibaba Business Edge Credit Card, designed for B2B merchants and offering up to 3% cashback .

💸 American Express: VIPs, Step Right Up!

Unlike Visa and Mastercard, AmEx goes the extra mile, focusing on premium Consumer Services and Global Merchant Services. 💼 With Net Income of $2.2B, AmEx shows that exclusivity really does pay off.

🟢 Revenue: $15.2B

🟡 Net Income: $2.2B

🔵 Loan Provision: $1.1B (A bit risky!)

Latest Developments

• Pilot Technology for Payments: AmEx has launched a new feature in collaboration with fintech company Knot, designed to simplify the way card-on-file payments are managed at select merchants like Hilton and Macy’s .

💰 PayPal: Digital Dynamo

PayPal doesn’t just collect Transaction Fees. They’ve also mastered Value-Added Services ~ think BNPL (Buy Now Pay Later) and crypto trades! 💻 With Net Revenue of $6B, PayPal isn’t just processing payments, it’s pushing the boundaries of digital finance.

🟢 Gross Profit: $3.9B

🔴 Active Accounts: 426M (That’s a lot of shopping carts filled! 🛒)

Latest Developments

• Partnership with Shopify: PayPal has teamed up with Shopify to integrate its wallet services directly into Shopify Payments, streamlining transactions for merchants .

• Simplified Crypto Payments: PayPal continues to simplify crypto payments, now supporting Ethereum Name Service (ENS), making it easier to send crypto without complex wallet addresses.

💰 PayPal: Digital Dynamo Expands Crypto and Global Reach

PayPal has stepped up its game once again, leaning into the surging cryptocurrency trend and extending its digital dominance into cross-border payments. 🌍

Crypto Integration for U.S. Merchants

In a major announcement on 25 September, PayPal revealed that U.S. merchants can now buy, hold, and sell cryptocurrency directly from their business accounts. This move is a huge leap forward in integrating digital assets into everyday commerce. 💸

🟢 José Fernández da Ponte, PayPal’s Senior Vice President of Blockchain, commented, “We’ve learned that business owners are keen to engage with cryptocurrency in the same way consumers do. This new offering enables them to embrace digital currencies easily.” While the service isn’t available yet for New York merchants, PayPal is optimistic about expanding access.

Since launching PayPal USD (PYUSD), its stablecoin pegged to the U.S. dollar, PayPal continues to push the boundaries of cryptocurrency use. PYUSD currently ranks as the sixth-largest stablecoin, with a market cap of over $709 million.

Impact on PayPal Shares

Following the crypto expansion announcement, PayPal shares saw slight fluctuations, closing 1.25% lower at $77.36 on 25 September, but rebounded in after-hours trading with a 1.47% rise. This reflects mixed market reactions as the crypto adoption trend gains momentum .

PayPal’s Global Expansion in China 🇨🇳

PayPal is also expanding its cross-border payment solutions. Recently, the company launched PayPal Complete Payments in China, offering seamless international payment solutions for Chinese merchants. With this platform, merchants can connect with 400 million PayPal users globally, making it easier to tap into international markets.

🟢 Quick Fund Access: PayPal is enabling Chinese merchants to access their funds quickly, supporting rapid settlement times.

🔵 AI-Powered Risk Management: PayPal’s AI-driven tools will allow merchants to better manage risk and protect against disputes .

These developments reflect PayPal’s continued push into cryptocurrency and cross-border payments, solidifying its place as a dominant player in the digital payment space.

🔮 Key Takeaways for Traders:

Visa’s 67.4% operating margin clearly makes it a standout. However, Mastercard’s growing dominance in e-commerce and cybersecurity, alongside PayPal’s crypto advances and AmEx’s high-end services, should not be ignored. The payments space is more competitive than ever! 💥💳

Tiger traders, who do you think will dominate the payment industry in the coming decade—Visa’s global strength, AmEx’s premium services, Mastercard’s scale, or PayPal’s digital edge? 🤔

🏅 The Most Profitable Player 🏅

In terms of sheer profitability, Visa leads the pack with a net profit of $4.5 billion and a dominant operating margin of 67.4%. Every time you swipe a Visa card, they’re raking in serious profits! Mastercard comes in second with a solid net profit of $2.9 billion, but Visa’s global reach gives it a clear edge.

PayPal is carving its niche in the digital space, but its profit is still catching up to the big players. American Express stays profitable with a focus on high-end customers, though its smaller global scale limits its reach.

To sum it up, Visa is the most profitable player by a long shot, thanks to its ability to dominate transactions across the globe.

💼 Visa Bets Big on AI Acquisition 🏅

Visa (NYSE: V) is not only the global leader in digital payments but is also pushing the boundaries of technology to secure its ecosystem. Recently, the U.S. government expressed concern over Visa’s market dominance, especially in payment processing, highlighting the significant power it wields. Despite this scrutiny, Visa has made a bold move by announcing the acquisition of Featurespace, a pioneering developer in real-time AI payments protection technology. This strategic acquisition, set to close in fiscal year 2025, positions Visa to bolster its fraud detection and risk management capabilities.

Founded in 2008 out of Cambridge University, Featurespace has grown into a formidable player in AI-driven fraud detection. The acquisition aligns with Visa’s ongoing investment in technology to combat financial crime, with the company having poured billions into such innovations over the last five years. While the exact financial terms were not disclosed, reports suggest the deal could be valued at £700 million ($860 million).

Visa Stock Gains on Acquisition News:

As soon as the acquisition news broke, Visa’s stock saw a notable uptick, reflecting investor confidence in the company’s forward-looking strategy. At $277.85, up 2.27%, Visa’s market capitalisation reached an impressive $540.663 billion, underscoring its resilience despite regulatory scrutiny. Analysts continue to favour Visa, with many recommending it as a “Strong Buy”.

💼 Analyst Commentary & Scrutiny

Visa has been facing increased scrutiny lately. Paul Pelosi, husband of Nancy Pelosi, recently sold 2,000 Visa shares, worth up to $1 million, just before the Department of Justice filed a major lawsuit against Visa . The lawsuit accuses Visa of monopolising the debit card market, a claim that could have lasting financial and reputational effects. While Pelosi denies any insider knowledge, the timing raised eyebrows, especially as Visa’s stock dipped right after the DOJ’s filing.

Despite the legal pressure, Visa continues to attract significant capital inflows, with hedge funds pouring in $1.8 billion last quarter. Analysts like JP Morgan’s Tien-Tsin Huang remain bullish, maintaining a price target of $320. However, some caution is advised due to the ongoing regulatory challenges.

With a balanced mix of scrutiny and strong capital confidence, Visa remains a stock to watch for long-term growth and profitability.

Happy trading ahead. Cheers, BC 🍀

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