netrashetty
Netra Shetty
Visa Inc. (pronunciation: /ˈviːzə/; NYSE: V) is a global payments technology company headquartered in 595 Market Street in San Francisco, California. It facilitates electronic funds transfers throughout the world, most commonly through Visa-branded credit card and debit cards.[3] Visa does not issue cards, extend credit or set rates and fees for consumers; rather, Visa provides financial institutions with Visa-branded payment products that they then use to offer credit, debit, prepaid and cash-access programs to their customers. In 2008, according to The Nilson Report, Visa held a 38.3% market share of the credit card marketplace and 60.7% of the debit card marketplace in the United States.[4] In 2009, Visa’s global network (known as VisaNet) processed 62 billion transactions with a total volume of $4.4 trillion.[5][6]
Visa has operations across Asia-Pacific, North America, Central and South America, Caribbean, Central and Eastern Europe, Africa and Middle East. Visa Europe is a separate membership entity that is an exclusive licensee of Visa Inc.'s trademarks and technology in the European region, issuing cards such as Visa Debit.
Visa (NYSE: V) operates the largest retail electronic payment network in the world, and has the largest Credit Card Network in terms of branded credit and debit cards in circulation, transactions, and total volume.[1] Visa earns its revenues by providing the information and resources to complete transactions amongst the customer, the merchant and their respective banks, collecting a fee based on the number and dollar value of transactions that it processes. Visa does not actually extend credit to its customers; rather, its member banks such as Capital One Financial (COF), Bank of America (BAC), or Wells Fargo (WFC) extend the credit. As of July 30, 2009 there were more than 1.7 billion Visa branded cards in the global market.[2]
As a large player in the credit card industry, Visa is subject to extensive regulation by national governments, especially in the United States. For instance, Visa was forced to pay American Express Company (AXP) $2.25 billion in a settlement over anti-trust infringement in late 2007.[3] In October 2008, Visa agreed to settle a similar $6.0 billion suit with Discover Financial Services (DFS).[4] Moreover, American Express also gained the right to provide transaction services to banks that were previously locked into exclusive agreements with Visa and Mastercard. In addition to the Credit Card Reform Bill that was passed in May of 2009, it may be subject to further government regulation. On October 8, 2009, Congress heard testimony regarding interchange fees, which would potentially move forward legislation to make these fees more transparent.[5]
Contents
1 Company Overview
1.1 Business and Financial Metrics
1.2 Business Segments
1.2.1 Service Revenue (45.9% of 2009 total revenues)
1.2.2 Data Processing Revenue (35.2%)
1.2.3 International Transaction Revenue (27.7%)
1.2.4 Other Revenues (9.0%)
1.2.5 Volume and Support Incentives (-17.9%)
2 Key Trends and Forces
2.1 Visa has teamed up with Wells Fargo (WFC) to pilot test mobile payments system
2.2 Potential Regulation Limiting Debit Interchange Fees
2.3 Impact of credit card reform bill
2.4 Credit Cards replace paper transactions, and are used more frequently and for smaller purchases
3 Competition
4 Notes
Beginning February 22, 2010, the Credit Card Accountability, Responsibility and Disclosure Act will take full effect. The bill was signed into law on May 22, 2009 by Obama, and made sweeping reforms to the credit card industry. Included in the bill are requirements for more disclosure about interest rates, the inability of most people under the age of 21 to obtain cards, caps on service fees within the first year, and well defined grace periods.[6] How these changes affect the current credit card landscape and which companies are able to better adapt to the new rules remains to be seen.
For the fourth quarter of 2010 (Visa's fiscal year ends September 30 of each year), Visa posted a total net income of $774 million, a significant improvement from its 2009 fourth quarter income of $514 million.[7] Visa also announced that it authorized a share repurchase plan of up to $1 billion.
Company Overview
Headquartered in San Francisco, Visa operates the world's largest retail electronic payments network. In particular, Visa provides financial institutions with a platform to process consumer credit cards, debit cards, prepaid cards, and other forms of electronic payment methods.
Visa makes money from card service fees, data processing fees, and international transaction fees. Visa operates a four-party payment system consisting of a card-holder who purchases a good or service from a merchant using one of Visa's cards. The merchant is paid the value of the good, minus the cost of the transaction by the merchant's bank (the acquiring bank). The merchant's bank is then paid back by the card-holder's bank (or the issuing bank), which in turn charges the customer the cost of the good. [8] Visa does not earn revenues from interest charged on balances, late fees, or other fees.
Visa grew tremendously between 2005 and 2009, as its net income grew from $360 million in 2005 to $2.35 billion in 2009.[9] Since Visa does not actually lend money to its customers, it was not as directly impacted by the credit crunch and 2008 Financial Crisis as holding and lending banks. Instead, it acts as an intermediary between the customer and merchant and their respective banks, giving Visa some protection against credit default. However, the company's earnings still depend heavily on the both the number and value of transactions conducted by consumers, and as such is still vulnerable to falling consumer spending.
Business and Financial Metrics
In 2009, Visa's operating revenue increased to $6.91 billion from its 2008 level of $6.26 billion, while its operating income increased from $1.23 billion to $3.54 billion.[9] The 10% increase in operating revenues are mainly due to higher prices that Visa its customers for services and data processing.[10] However, the main reason Visa was able to increase its operating income by such a large amount was because it was able to reduce its operating expenses from $5.03 billion in 2008 to only $3.37 billion in 2009.[11] The company attributed this large decline in expenses to the lack of litigation, reduction in workforce, and decreased advertising expenses.[11] As a result of slight revenue growth and significant declines in expenses, Visa's net income in 2009 was $2.35 billion, nearly three times higher than its 2008 net income of $804 million.[9]
For the fourth quarter of Visa's fiscal 2009 (ended September 30, 2009) Visa reported a net income of $514 million, a large turnaround from its 2008 net loss of $356 million for the same period.[12] Visa also announced a share repurchase plan of $1 billion, showing signs that declining credit and debit card use trends are stabling.[13]
For the first quarter of Visa's fiscal 2010 (Visa's fiscal year ends on September 30), Visa reported a net income of $763 million, up from its year ago earnings of only $574 million.[14] They built their net income on net revenues of $2 billion while decreasing their operating expenses by 4%.
For the third quarter of 2010 (Visa's fiscal year ends September 30 of each year), Visa posted a total net income of $716 million, a slight decline from its year ago earnings of $729 million.[15]
Visa Financials (In Millions) 2005[9] 2006[9] 2007[9] 2008[9] 2009[9]
Total Operating Revenue 2,665 2,948 3,590 6,263 6,911
Total Operating Expense 2,212 2,218 5,039 5,031 3,373
Operating Income 453 730 -1,449 1,232 3538
Net Income 360 455 -1,076 804 2353
Note: Visa's fiscal year ends September 30 of each year.
Visa's Revenue Breakdown by Fees.[10]
Business Segments
Visa earns its revenues from a number of sources: i) Service Revenue, ii) Data Processing Revenue, iii) International Transaction Revenue, iv) Other Revenues, and v) Volume and Support Incentives.
Service Revenue (45.9% of 2009 total revenues)
Visa's Service Revenue segment makes up the largest proportion of Visa's revenue, and are earned from customers for their participation in card programs that carry the Visa brand.[16] The primary fees generated from this segment would come from banks and other financial institutions that use Visa's mark and brand. In 2009, Visa earned $3.17 billion from this segment.[10]
Data Processing Revenue (35.2%)
Visa controls a large data base of information and passes information from a merchants bank to a customers bank. This information transaction includes when the merchant requests approval from the customers bank, transferring the value of the transaction between the banks, fees for using debit services, and other similar data processing.[17] In other words, Visa earns a fee for providing authorization, clearing, settlement, transaction processing services or any other service that helps the transaction go through.[16] Visa earned $2.43 billion in revenues from this segment in 2009, making it the second largest source of revenues for Visa.[10]
International Transaction Revenue (27.7%)
International transaction revenues are earned on transactions where the cardholder's issuing bank resides in one country, but the merchant's bank is in another. Obviously, this occurs most commonly when citizens from one country visit another and make purchases or withdraws funds while abroad. These revenues are generally driven by cross border transaction volume in which a currency conversion must be made.[16] For 2009, Visa earned $1.9 billion in revenues from international transactions.[10]
Other Revenues (9.0%)
Other revenues come from extra services customers can purchase or use at an extra charge. Included within other revenues are extended cardholder protection, concierge services, and exclusive services in Visa Europe as well as fees for licensing and registration.[16] Other revenues make up the smallest portion of Visa's revenues, as it earned just $625 million from this segment in 2009.[10]
Volume and Support Incentives (-17.9%)
Volume and support incentives are programs that are designed to increase payments volume by, among other strategies, increasing general acceptance of Visa products.[16] Visa has contracts with financial institutions, merchants, and other business partners with respect to these incentives, and it accounts for these as reductions of operating revenues. Because they are accounted for as reductions in revenue rather than an expense, this segment will always earn a negative revenue. In 2009, these incentives cost Visa $1.2 billion.[10]
Key Trends and Forces
Visa has teamed up with Wells Fargo (WFC) to pilot test mobile payments system
Visa announced on December of 2010 that it has teamed up with Wells Fargo to pilot test a mobile payments system using smartphones such as the iPhone and Blackberry. The pilot will be conducted by 200 employees of Wells Fargo in San Francisco, where both Visa and Wells Fargo are headquartered.[18] This announcement came shortly after three of the largest telecom carriers (AT&T (T), Verizon Communications (VZ), and T-Mobile announced a joint venture for mobile payments. The upcoming struggle for mobile payments dominance between credit card companies and telecom companies may have huge implications for future earnings as this market begins to develop.
Potential Regulation Limiting Debit Interchange Fees
The Federal Reserve, under orders from Congress released a set of proposed rules that would limit debit card interchange fees at just 12 cents per transaction, significantly lower than the average 44 cents the card companies are currently charging.[19] At 12 cents per transactions, it is expected that the banks and issues will not be able to cover their costs of operations, which could significantly hurt their profitability. Both Visa and its top competitor Mastercard (MA) would be significantly hurt by this regulation, as they would not only lose control over their ability to set their price for interchange fees, but would also have their fee revenue capped at 12 cents per dollar of transaction. Whether these proposed rules ultimately get passed into law or are amended remains to be seen.
Impact of credit card reform bill
On May 22, 2009, President Obama signed into law a wide the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, a wide ranging credit card reform bill set to fully take effect in February 2010.[20] However, the first stages of the reform take effect as early as August 20, 2009.[21] Included in this bill are restrictions on interest rate increases, a 45 day notice before changing interest rates, restrictions on fees that can be charged, requirements for more disclosure, and limits on ability of those under the age of 21 to obtain cards, among others.[22] Banks have warned that the new legislation will increase rates, decrease credit extended, and increase the use of annual fees for cards.[23] Less credit likely means less transactions, transaction amounts, and thus a negative impact on earnings.
Credit Cards replace paper transactions, and are used more frequently and for smaller purchases
The consumer sector is moving away from paper-based approaches towards electronic payments. There is little doubt that the use of payment cards has risen drastically in the United States and internationally. U.S. consumers spent more using their credit cards than with either cash or checks for the first time in 2006, and this trend has continued. This provides Visa with a strong continued growth in volume of transactions. Its total number of transactions rose from 44.0 billion in 2007 to 50.3 billion in 2008 to 56.7 billion in 2009.[24][25][26] In 2007, credit and debit card payments made up 56% of all purchases, as many small transactions around $5 are also now done with credit cards.[27] Further facilitating this shift, many stores no longer require a signature for purchases under a certain amount, such as $20.
Competition
Visa dominates the Credit Card market share among the top four largest companies.[28]
Visa competes against companies in the general purpose payment card industry, as well as against all other forms of payment. As the largest processor of retail payments the world, Visa is the largest by far compared to its rivals. It accounts for 60% of the debit-card transactions in the U.S. market - a four-to-one advantage over rival Mastercard (MA). Visa also has 41.7% more total volume than its closest competitor, 47.3% more in total transactions, and 736 million more cards than its closest competitor.[24]
Visa has significantly more in total transactions than its competitors.[24]
Visa not only dominates the market in terms of total transactions, but it also has a large advantage in terms of total volume.[24]
Mastercard (MA): Mastercard has a strong brand loyalty and name recognition through its "Priceless®” marketing campaign. It has also experienced rapid growth as it has pushed to switch from paper to a fully electronic system.[29] Visa also competes against Mastercard's Maestro - a global online debit card service.[30] Mastercard has pushed to advertise and replaced Visa as the Rugby World Cup sponsor in 2011.[31]
American Express Company (AXP): American Express focuses on being the credit and debit cards for small business and merchants. It has also filed legal suits against Visa and Mastercard for violating anti-trust laws. Visa settled the suit for $2.1B.[32]
Discover Financial Services (DFS): Discover is substantially smaller than Visa and competes with it almost exclusively in the US. Visa also competes against Discover's PULSE, a network that increases the compatibility of debit cards and ATMs in the network.[33]
Visa has operations across Asia-Pacific, North America, Central and South America, Caribbean, Central and Eastern Europe, Africa and Middle East. Visa Europe is a separate membership entity that is an exclusive licensee of Visa Inc.'s trademarks and technology in the European region, issuing cards such as Visa Debit.
Visa (NYSE: V) operates the largest retail electronic payment network in the world, and has the largest Credit Card Network in terms of branded credit and debit cards in circulation, transactions, and total volume.[1] Visa earns its revenues by providing the information and resources to complete transactions amongst the customer, the merchant and their respective banks, collecting a fee based on the number and dollar value of transactions that it processes. Visa does not actually extend credit to its customers; rather, its member banks such as Capital One Financial (COF), Bank of America (BAC), or Wells Fargo (WFC) extend the credit. As of July 30, 2009 there were more than 1.7 billion Visa branded cards in the global market.[2]
As a large player in the credit card industry, Visa is subject to extensive regulation by national governments, especially in the United States. For instance, Visa was forced to pay American Express Company (AXP) $2.25 billion in a settlement over anti-trust infringement in late 2007.[3] In October 2008, Visa agreed to settle a similar $6.0 billion suit with Discover Financial Services (DFS).[4] Moreover, American Express also gained the right to provide transaction services to banks that were previously locked into exclusive agreements with Visa and Mastercard. In addition to the Credit Card Reform Bill that was passed in May of 2009, it may be subject to further government regulation. On October 8, 2009, Congress heard testimony regarding interchange fees, which would potentially move forward legislation to make these fees more transparent.[5]
Contents
1 Company Overview
1.1 Business and Financial Metrics
1.2 Business Segments
1.2.1 Service Revenue (45.9% of 2009 total revenues)
1.2.2 Data Processing Revenue (35.2%)
1.2.3 International Transaction Revenue (27.7%)
1.2.4 Other Revenues (9.0%)
1.2.5 Volume and Support Incentives (-17.9%)
2 Key Trends and Forces
2.1 Visa has teamed up with Wells Fargo (WFC) to pilot test mobile payments system
2.2 Potential Regulation Limiting Debit Interchange Fees
2.3 Impact of credit card reform bill
2.4 Credit Cards replace paper transactions, and are used more frequently and for smaller purchases
3 Competition
4 Notes
Beginning February 22, 2010, the Credit Card Accountability, Responsibility and Disclosure Act will take full effect. The bill was signed into law on May 22, 2009 by Obama, and made sweeping reforms to the credit card industry. Included in the bill are requirements for more disclosure about interest rates, the inability of most people under the age of 21 to obtain cards, caps on service fees within the first year, and well defined grace periods.[6] How these changes affect the current credit card landscape and which companies are able to better adapt to the new rules remains to be seen.
For the fourth quarter of 2010 (Visa's fiscal year ends September 30 of each year), Visa posted a total net income of $774 million, a significant improvement from its 2009 fourth quarter income of $514 million.[7] Visa also announced that it authorized a share repurchase plan of up to $1 billion.
Company Overview
Headquartered in San Francisco, Visa operates the world's largest retail electronic payments network. In particular, Visa provides financial institutions with a platform to process consumer credit cards, debit cards, prepaid cards, and other forms of electronic payment methods.
Visa makes money from card service fees, data processing fees, and international transaction fees. Visa operates a four-party payment system consisting of a card-holder who purchases a good or service from a merchant using one of Visa's cards. The merchant is paid the value of the good, minus the cost of the transaction by the merchant's bank (the acquiring bank). The merchant's bank is then paid back by the card-holder's bank (or the issuing bank), which in turn charges the customer the cost of the good. [8] Visa does not earn revenues from interest charged on balances, late fees, or other fees.
Visa grew tremendously between 2005 and 2009, as its net income grew from $360 million in 2005 to $2.35 billion in 2009.[9] Since Visa does not actually lend money to its customers, it was not as directly impacted by the credit crunch and 2008 Financial Crisis as holding and lending banks. Instead, it acts as an intermediary between the customer and merchant and their respective banks, giving Visa some protection against credit default. However, the company's earnings still depend heavily on the both the number and value of transactions conducted by consumers, and as such is still vulnerable to falling consumer spending.
Business and Financial Metrics
In 2009, Visa's operating revenue increased to $6.91 billion from its 2008 level of $6.26 billion, while its operating income increased from $1.23 billion to $3.54 billion.[9] The 10% increase in operating revenues are mainly due to higher prices that Visa its customers for services and data processing.[10] However, the main reason Visa was able to increase its operating income by such a large amount was because it was able to reduce its operating expenses from $5.03 billion in 2008 to only $3.37 billion in 2009.[11] The company attributed this large decline in expenses to the lack of litigation, reduction in workforce, and decreased advertising expenses.[11] As a result of slight revenue growth and significant declines in expenses, Visa's net income in 2009 was $2.35 billion, nearly three times higher than its 2008 net income of $804 million.[9]
For the fourth quarter of Visa's fiscal 2009 (ended September 30, 2009) Visa reported a net income of $514 million, a large turnaround from its 2008 net loss of $356 million for the same period.[12] Visa also announced a share repurchase plan of $1 billion, showing signs that declining credit and debit card use trends are stabling.[13]
For the first quarter of Visa's fiscal 2010 (Visa's fiscal year ends on September 30), Visa reported a net income of $763 million, up from its year ago earnings of only $574 million.[14] They built their net income on net revenues of $2 billion while decreasing their operating expenses by 4%.
For the third quarter of 2010 (Visa's fiscal year ends September 30 of each year), Visa posted a total net income of $716 million, a slight decline from its year ago earnings of $729 million.[15]
Visa Financials (In Millions) 2005[9] 2006[9] 2007[9] 2008[9] 2009[9]
Total Operating Revenue 2,665 2,948 3,590 6,263 6,911
Total Operating Expense 2,212 2,218 5,039 5,031 3,373
Operating Income 453 730 -1,449 1,232 3538
Net Income 360 455 -1,076 804 2353
Note: Visa's fiscal year ends September 30 of each year.
Visa's Revenue Breakdown by Fees.[10]
Business Segments
Visa earns its revenues from a number of sources: i) Service Revenue, ii) Data Processing Revenue, iii) International Transaction Revenue, iv) Other Revenues, and v) Volume and Support Incentives.
Service Revenue (45.9% of 2009 total revenues)
Visa's Service Revenue segment makes up the largest proportion of Visa's revenue, and are earned from customers for their participation in card programs that carry the Visa brand.[16] The primary fees generated from this segment would come from banks and other financial institutions that use Visa's mark and brand. In 2009, Visa earned $3.17 billion from this segment.[10]
Data Processing Revenue (35.2%)
Visa controls a large data base of information and passes information from a merchants bank to a customers bank. This information transaction includes when the merchant requests approval from the customers bank, transferring the value of the transaction between the banks, fees for using debit services, and other similar data processing.[17] In other words, Visa earns a fee for providing authorization, clearing, settlement, transaction processing services or any other service that helps the transaction go through.[16] Visa earned $2.43 billion in revenues from this segment in 2009, making it the second largest source of revenues for Visa.[10]
International Transaction Revenue (27.7%)
International transaction revenues are earned on transactions where the cardholder's issuing bank resides in one country, but the merchant's bank is in another. Obviously, this occurs most commonly when citizens from one country visit another and make purchases or withdraws funds while abroad. These revenues are generally driven by cross border transaction volume in which a currency conversion must be made.[16] For 2009, Visa earned $1.9 billion in revenues from international transactions.[10]
Other Revenues (9.0%)
Other revenues come from extra services customers can purchase or use at an extra charge. Included within other revenues are extended cardholder protection, concierge services, and exclusive services in Visa Europe as well as fees for licensing and registration.[16] Other revenues make up the smallest portion of Visa's revenues, as it earned just $625 million from this segment in 2009.[10]
Volume and Support Incentives (-17.9%)
Volume and support incentives are programs that are designed to increase payments volume by, among other strategies, increasing general acceptance of Visa products.[16] Visa has contracts with financial institutions, merchants, and other business partners with respect to these incentives, and it accounts for these as reductions of operating revenues. Because they are accounted for as reductions in revenue rather than an expense, this segment will always earn a negative revenue. In 2009, these incentives cost Visa $1.2 billion.[10]
Key Trends and Forces
Visa has teamed up with Wells Fargo (WFC) to pilot test mobile payments system
Visa announced on December of 2010 that it has teamed up with Wells Fargo to pilot test a mobile payments system using smartphones such as the iPhone and Blackberry. The pilot will be conducted by 200 employees of Wells Fargo in San Francisco, where both Visa and Wells Fargo are headquartered.[18] This announcement came shortly after three of the largest telecom carriers (AT&T (T), Verizon Communications (VZ), and T-Mobile announced a joint venture for mobile payments. The upcoming struggle for mobile payments dominance between credit card companies and telecom companies may have huge implications for future earnings as this market begins to develop.
Potential Regulation Limiting Debit Interchange Fees
The Federal Reserve, under orders from Congress released a set of proposed rules that would limit debit card interchange fees at just 12 cents per transaction, significantly lower than the average 44 cents the card companies are currently charging.[19] At 12 cents per transactions, it is expected that the banks and issues will not be able to cover their costs of operations, which could significantly hurt their profitability. Both Visa and its top competitor Mastercard (MA) would be significantly hurt by this regulation, as they would not only lose control over their ability to set their price for interchange fees, but would also have their fee revenue capped at 12 cents per dollar of transaction. Whether these proposed rules ultimately get passed into law or are amended remains to be seen.
Impact of credit card reform bill
On May 22, 2009, President Obama signed into law a wide the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, a wide ranging credit card reform bill set to fully take effect in February 2010.[20] However, the first stages of the reform take effect as early as August 20, 2009.[21] Included in this bill are restrictions on interest rate increases, a 45 day notice before changing interest rates, restrictions on fees that can be charged, requirements for more disclosure, and limits on ability of those under the age of 21 to obtain cards, among others.[22] Banks have warned that the new legislation will increase rates, decrease credit extended, and increase the use of annual fees for cards.[23] Less credit likely means less transactions, transaction amounts, and thus a negative impact on earnings.
Credit Cards replace paper transactions, and are used more frequently and for smaller purchases
The consumer sector is moving away from paper-based approaches towards electronic payments. There is little doubt that the use of payment cards has risen drastically in the United States and internationally. U.S. consumers spent more using their credit cards than with either cash or checks for the first time in 2006, and this trend has continued. This provides Visa with a strong continued growth in volume of transactions. Its total number of transactions rose from 44.0 billion in 2007 to 50.3 billion in 2008 to 56.7 billion in 2009.[24][25][26] In 2007, credit and debit card payments made up 56% of all purchases, as many small transactions around $5 are also now done with credit cards.[27] Further facilitating this shift, many stores no longer require a signature for purchases under a certain amount, such as $20.
Competition
Visa dominates the Credit Card market share among the top four largest companies.[28]
Visa competes against companies in the general purpose payment card industry, as well as against all other forms of payment. As the largest processor of retail payments the world, Visa is the largest by far compared to its rivals. It accounts for 60% of the debit-card transactions in the U.S. market - a four-to-one advantage over rival Mastercard (MA). Visa also has 41.7% more total volume than its closest competitor, 47.3% more in total transactions, and 736 million more cards than its closest competitor.[24]
Visa has significantly more in total transactions than its competitors.[24]
Visa not only dominates the market in terms of total transactions, but it also has a large advantage in terms of total volume.[24]
Mastercard (MA): Mastercard has a strong brand loyalty and name recognition through its "Priceless®” marketing campaign. It has also experienced rapid growth as it has pushed to switch from paper to a fully electronic system.[29] Visa also competes against Mastercard's Maestro - a global online debit card service.[30] Mastercard has pushed to advertise and replaced Visa as the Rugby World Cup sponsor in 2011.[31]
American Express Company (AXP): American Express focuses on being the credit and debit cards for small business and merchants. It has also filed legal suits against Visa and Mastercard for violating anti-trust laws. Visa settled the suit for $2.1B.[32]
Discover Financial Services (DFS): Discover is substantially smaller than Visa and competes with it almost exclusively in the US. Visa also competes against Discover's PULSE, a network that increases the compatibility of debit cards and ATMs in the network.[33]
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