Mastercard

BofA sees a potentially more volatile regulatory landscape as well as limited valuation upside Shares of Visa Inc. and Mastercard Inc. mostly draw buy ratings from Wall Street analysts. But BofA Global Research’s Jason Kupferberg broke from the pack on Wednesday as he downgraded both payment-technology stocks to neutral. He noted an “arguably … more volatile and unpredictable” regulatory landscape in the wake of a judge’s “unexpected” decision to reject the companies’ landmark deal in a long-running merchant suit. “Historically, we (and the investment community in general, based on investors with whom we’ve spoken) have largely treated [Visa and Mastercard] regulatory developments as no more than modest headline risk,” he wrote. But Visa and Mastercard now must contend with dynamics such as revising or going to trial over the merchant agreement and fending off the proposed Credit Card Competition Act with this new, unpredictable backdrop. Additionally, regulatory developments could make […]

Visa (V) and Mastercard (MA) could face elevated regulatory activity that could limit multiple expansion, BofA Securities said in a Wednesday note as it downgraded the credit-card companies to neutral from buy. “Historically, we have largely treated [Visa and Mastercard] regulatory developments as no more than modest headline risk,” the firm said. “However, as the recent unexpected rejection of the proposed merchant litigation settlement illustrates, the regulatory environment has arguably become more volatile and unpredictable.” BofA said that some of the regulatory items to monitor include next steps in merchant litigation, the proposed Credit Card Competition Act and the Fed’s final decision on lower regulated debit interchange rates. The firm added that the two companies remain relatively “crowded” longs for long-only and hedge-fund investors. BofA said it continues to have a favorable view on the companies’ “premier business model and competitive moat.” Shares of Visa were down 1.5% and shares

Visa (V) and Mastercard (MA) voluntarily agreed to extend maximum swipe fees on non-EU credit and debit card transactions in Europe until 2029, the European Union’s main antitrust regulator said Friday. Visa and Mastercard opted to continue to maintain a 0.2% fee cap on non-EU debit card payments and 0.3% on credit card payments within the 27-member states of the European Union, the European Commission said. For online or telephone transactions, the caps will remain at 1.15% for debit cards and 1.5% for credit cards, the European Commission

Visa (V) and Mastercard (MA) are expected to continue benefiting from a positive outlook on international travel, with international departures from the US climbing above pre-pandemic levels, analysts at Morgan Stanley wrote in a note Monday. Citing data from the US International Trade Administration and Department of Homeland Security as well as anecdotal information from airlines, Morgan Stanley analysts said international travel likely will stay healthy through 2024 while supporting “higher-yielding cross-border volume growth at Visa and Mastercard.” Total card spending, as recently reported by the larger banks, similarly continued to edge higher during the first three months of 2024 compared with the prior quarter, they said. The analysts also expect the credit card companies to drive increased revenue over time through a variety of value-added services for merchants and financial institutions, including new customer identification, cybersecurity and open banking applications. Overall, Visa and Mastercard should produce “consistent” double-digit growth

Visa (V) and Mastercard’s (MA) settlement with US merchants to lower credit card fees may “weigh a bit” on net revenue and yield in the medium term, Macquarie said Tuesday in a report. The payment processors agreed to reduce credit card fees and not increase them five years as part of a settlement of a long-running case between the companies and US merchants. “While this may weigh a bit on net revenue and yield in the medium term, both [Visa] and [Mastercard] had accrued legal reserves in preceding years,” Macquarie said. Shares of both companies were little changed as transaction fee pressure has been “a longstanding theme, well understood,” the brokerage said. Visa closed down 0.2% Tuesday, and Mastercard rose 0.2%.

Visa is one of the most mentioned companies in the U.S. across all news items in the last 12 hours, according to Factiva data. Along with Mastercard and the big credit-card-issuing banks, Visa agreed Tuesday to lower the credit card swipe fees that merchants pay to accept credit cards, as well as a host of other concessions in a settlement of long-running litigation with the merchants. The settlement also bars Visa, Mastercard and the banks from raising those rates for five years and gives merchants more flexibility at the point-of-sale, the companies said. Dow Jones & Co. owns Factiva.