Understanding Visa’s Service Revenue and Visa Direct



Service and client incentive revenue

In fiscal Q3 2018, Visa’s (V) service revenue could rise YoY (year-over-year) due to its payment volumes rising YoY in fiscal Q2 2018. Additionally, payment volumes for Visa and peers (IYF) Mastercard (MA), American Express (AXP), and Capital One Financial (COF) could rise sequentially due to a stronger economy and higher spending. In fiscal Q2 2018, Visa’s data processing revenue rose 15% YoY, supported by US payment volumes and cross-border transactions. Its client incentive revenue fell significantly due to delays in signing European contracts.

Visa Direct

Visa is optimistic on Visa Direct. According to the company, several peer-to-peer transactions are being executed through Visa Direct, and Visa Direct has been adopted by several consumers. With the help of Visa Direct, small businesses can receive payments quickly, improving their cash flow. Therefore, adoption of Visa Direct is expected to increase, which could expand Visa’s market share.

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