⚠ Diversification Away from the Toll Is Also Away from the MoatModerate threat

Visa (V) — threat to the moat

Nobody will build a competing card network; a great many firms will build a competing fraud model.

The strategic case for value-added services is that it reduces dependence on a politically exposed toll, and it is a good case. The cost is that it substitutes a contested revenue line for a defended one.

What one multiple is being applied to+36%Value-added services growth+14%Net revenue growth31xTrailing P/EAbout a third of the June quarter’s $11.6bn net revenue
Nobody will build a competing card network; a great many firms will build a competing fraud model.

Nobody is going to build a competing global card network. A great many firms will build a competing fraud model. So a Visa in which services are a third of revenue is a Visa with a lower blended margin, a larger cost base, and a narrower moat around a growing share of its business — even if every decision along the way was individually correct.

That is not an argument against doing it; the alternative is depending entirely on a toll that four decades of regulation have been steadily reducing. It is an argument for valuing the two revenue streams differently, which the market currently does not — the whole company trades on one multiple1.

References
  1. ReportedIt is an argument for valuing the two revenue streams differently, which the market currently does not — the whole company trades on one multiple
    Visa 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 ↗
Sources
Generated September 23, 2026