The Merchants Who Pay and Buy NothingThin moat
Visa (V) — moat facet
175 million locations, no contract, no negotiation, and the only lever they have ever had is a lawyer.
More than 175 million merchant locations accept Visa1 and almost none of them is a Visa customer. They contract with acquirers, pay a fee Visa sets, and operate under rules Visa writes. There is no account manager, no negotiation, and — for anyone below the very largest scale — no alternative that their own customers would tolerate.
What they have instead is lawyers and legislators, and they have used both continuously since the 1980s. The results are cumulative and real: surcharging rights in more jurisdictions, looser anti-steering rules, interchange capped outright in Europe and on American debit, and a routing mandate that now sends about a fifth of Visa-branded traffic across other networks2.
The relationship is changing at the top end. The largest merchants are now big enough to be courted directly, and Visa's incentive payments explicitly extend to sellers as well as issuers3. That is the network beginning to pay the party that used to simply pay it.
It is rated thin because from Visa's side this is not a customer relationship at all — it is a revenue source with a permanent grievance and a forty-year record of gradually winning concessions. Nothing about it is stable except the direction.
The party with no contract keeps winning concessions — surcharging, steering, routing — and the largest of them are now large enough to be paid directly.
Largely what merchants' suits have won and Visa has not yet paid. A rising balance means new claims are outrunning settlements.
Source: Visa Form 10-Q, quarter to 30 June 2026 ↗- ReportedMore than 175 million merchant locations accept VisaVisa Inc. Form 10-K for the fiscal year ended September 30, 2025 (CIK 1403161), Item 1 Business — the network reaches approximately 12 billion cards, bank accounts and digital wallets and more than 175 million merchant locations across more than 200 countries and territories; nearly five billion payment credentials; clients comprise nearly 14,500 financial institutions; Tap to Pay provisioning is live for more than 1.4 billion Visa credit and debit cards with more than 600 participating issuers; Visa Direct processed more than 12.5 billion transactions for more than 650 partners and can reach approximately 12 billion endpoints through more than 90 domestic payment schemes and more than 60 card and wallet networks; during fiscal 2025, 329 billion payments and cash transactions carried the Visa brand, an average of 901 million a day, of which 258 billion were processed by Visa; the Visa as a Service stack's access layer includes on-demand APIs and an MCP server enabling AI systems to interface with Visa Intelligent Commerce APIs; stablecoins, generative AI and agentic commerce are named as next-generation technologies under investment — FY2025 (year ended 30 September 2025) · publ. 6 November 2025 · source ↗
- ReportedThe results are cumulative and real: surcharging rights in more jurisdictions, looser anti-steering rules, interchange capped outright in Europe and oVisa Inc. Form 10-K for the fiscal year ended September 30, 2025 (CIK 1403161), Item 1 Business — the network reaches approximately 12 billion cards, bank accounts and digital wallets and more than 175 million merchant locations across more than 200 countries and territories; nearly five billion payment credentials; clients comprise nearly 14,500 financial institutions; Tap to Pay provisioning is live for more than 1.4 billion Visa credit and debit cards with more than 600 participating issuers; Visa Direct processed more than 12.5 billion transactions for more than 650 partners and can reach approximately 12 billion endpoints through more than 90 domestic payment schemes and more than 60 card and wallet networks; during fiscal 2025, 329 billion payments and cash transactions carried the Visa brand, an average of 901 million a day, of which 258 billion were processed by Visa; the Visa as a Service stack's access layer includes on-demand APIs and an MCP server enabling AI systems to interface with Visa Intelligent Commerce APIs; stablecoins, generative AI and agentic commerce are named as next-generation technologies under investment — FY2025 (year ended 30 September 2025) · publ. 6 November 2025 · source ↗
- ReportedThe largest merchants are now big enough to be courted directly, and Visa's incentive payments explicitly extend to sellers as well as issuersVisa Inc. Form 10-K for the fiscal year ended September 30, 2025 (CIK 1403161), Item 1 Business — the network reaches approximately 12 billion cards, bank accounts and digital wallets and more than 175 million merchant locations across more than 200 countries and territories; nearly five billion payment credentials; clients comprise nearly 14,500 financial institutions; Tap to Pay provisioning is live for more than 1.4 billion Visa credit and debit cards with more than 600 participating issuers; Visa Direct processed more than 12.5 billion transactions for more than 650 partners and can reach approximately 12 billion endpoints through more than 90 domestic payment schemes and more than 60 card and wallet networks; during fiscal 2025, 329 billion payments and cash transactions carried the Visa brand, an average of 901 million a day, of which 258 billion were processed by Visa; the Visa as a Service stack's access layer includes on-demand APIs and an MCP server enabling AI systems to interface with Visa Intelligent Commerce APIs; stablecoins, generative AI and agentic commerce are named as next-generation technologies under investment — FY2025 (year ended 30 September 2025) · publ. 6 November 2025 · source ↗