⚠ Tokens Cut Both WaysModerate threat

Visa (V) — threat to the moat

A wallet that can hold a tokenised Visa card can hold three cheaper things beside it, and the platform decides which one appears first.

Tokenisation makes Visa's credential portable across devices and merchants. It makes every other credential portable across the same devices and merchants too. A wallet that can hold a tokenised Visa card can hold an account-to-account mandate, a domestic scheme or a stablecoin balance next to it, and the consumer picks from a list at the moment of payment.

Credentials tokenised, and what Visa pays for position1.4bn+Visa cards live for provisioning600+Issuers participating$15.8bnClient incentives,FY2025 ($100m units)What Visa pays wallet platforms sits inside the incentive line
The same portability that protects Visa's credential makes every cheaper alternative equally portable, and the platform sets the order.

Deciding what appears first on that list is the wallet operator's leverage, not Visa's. The platforms that control the default position have every commercial reason to charge for it, and Visa has every reason to pay — which is the same dynamic as the issuer incentive line, arriving from a different direction and against counterparties with far more concentrated power than any individual bank.

What Visa pays those parties does not appear as its own line item; it sits inside the $15.8 billion of client incentives1, which is one reason that number is worth more attention than the margin it is deducted from.

References
  1. ReportedWhat Visa pays those parties does not appear as its own line item; it sits inside the $15.8 billion of client incentives
    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