⚠ The Bidding War Has No Ceiling Visa ControlsModerate threat

Visa (V) — threat to the moat

Two bidders who can both afford to lose, a handful of enormous portfolios, and a renewal calendar the banks set.

The largest card portfolios in the world sit with a small number of institutions, and each renewal is a two-horse auction in which both horses can afford to lose money on the deal for years. The economics of a single mega-portfolio justify a great deal of incentive spending, because the alternative is watching the volume move to the other network entirely.

Client incentives ($bn)$12.30bnFY2023$13.76bnFY2024$15.75bnFY2025$13.19bn9M FY2026Visa Form 10-K FY2025 and Visa Form 10-Q, quarter to 30 June 2026; nine months up 15%, June quarter up 18%
Faster than net revenue in FY2024 and FY2025, slower over nine months of FY2026, faster again in the June quarter.

Nothing about Visa's scale limits what it has to bid. If anything scale raises the stakes, because losing a portfolio of that size is visible in the reported numbers and winning one is the cheapest growth available. The bidder with the most to lose is not obviously in the stronger position.

The measure is incentives as a percentage of gross revenue — 28.3% in fiscal 2025, on payments that grew 14% against 11% net revenue growth1. If that keeps climbing, the network is paying more each year to stand still, and the reported net revenue growth is flattering a weaker underlying position.

References
  1. ReportedThe measure is incentives as a percentage of gross revenue — 28.3% in fiscal 2025, on payments that grew 14% against 11% net revenue growth
    Visa Inc. Form 10-K for FY2025, Item 7 Management's Discussion and Analysis — net revenue of $40,000 million, up 11%, comprising service revenue $17,539 million (+9%), data processing revenue $19,993 million (+13%), international transaction revenue $14,166 million (+12%) and other revenue $4,053 million (+27%), less client incentives of $15,751 million (+14%); operating expenses of $16,006 million (+30%) and operating income of $23,994 million; nominal payments volume of $13,894 billion and total nominal volume including cash of $16,383 billion for the twelve months ended 30 June 2025; 257,545 million processed transactions, up 10%; payments volume growth of 7% and cash volume growth of (1)%; cross-border volume growth of 13%; diluted earnings per share of $10.20 — FY2025 · publ. 6 November 2025 · source ↗
Sources
Generated September 23, 2026