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Visa’s Strategic Initiatives for Future Growth

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Visa and e-commerce

Visa (V) is thriving in the e-commerce space. Its growth continues to be in the mid-teens compared to single-digit growth in the physical world. The company saw 25% of its spending occur through online transactions in 2Q16.

Visa is investing more resources in technology upgrades to support increased spending through online transactions. In fiscal 3Q16, the number is expected to rise further as online spending increases globally.

In fiscal 3Q16, Visa (V) also announced its Digital Commerce Application to grow the mobile capabilities of US financial institutions, reflecting the company’s strong presence in the banking and financial services segment.

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China, South America, and India

Visa (V) signed a memorandum of understanding with China UnionPay, where the companies would collaborate on payment security, innovation, and financial inclusion.

The company is also helping the Chinese government in its efforts to reduce poverty and promote financial inclusiveness. Visa announced a partnership with the China Foundation for Development of Financial Education and the China Foundation for Poverty Alleviation. Visa also signed a cooperation plan with the China National Tourism Administration.

Internationally, Banco do Brasil, the oldest and largest bank in South America, renewed a multiyear credit agreement with the company. In India, SBI Card, the State Bank of India’s credit card venture, renewed a multiyear credit card agreement.

Domestic push

Navy Federal Credit Union, the world’s largest credit union and one of Visa’s most important clients in the US, renewed a multiyear credit and debit agreement with Visa. Starting in June 2016, Visa cards will be exclusively accepted at Costco US and Puerto Rico warehouse locations and fuel stations.

Visa and Walmart (WMT) have announced an acceptance agreement with Sam’s Club. According to the agreement, more than 650 Sam’s Clubs across the US and Puerto Rico will begin accepting Visa credit cards in-store. Walmart.com and SamsClub.com will also begin supporting Visa Checkout this year.

Among Visa’s competitors, American Express (AXP) and Mastercard (MA) are vying for more partnerships in order to achieve higher revenues and visibility. Together, these companies account for 2.0% of the SPDR Dow Jones Industrial Average ETF (DIA).

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