Visa (V) & Tencent Financial Technology Team up for Remittances

Zacks Equity Research

20 November 2023 at 11:31 am·3-min read

Visa Inc. V collaborated with Tencent Financial Technology, enabling inbound remittance to digital wallets in China. Tencent will leverage the Visa Direct network and enhance offerings for Weixin users. Visa’s shares gained 0.4% on Nov 17, implying investors’ confidence in the company’s prospects.

This move will expand Visa Direct’s reach to one billion plus Weixin users in China. With Wallets being one of the fastest-growing financial instruments, Visa’s continued efforts in this business should bode well in the future. Users of digital wallets will be able to receive funds without providing card or account details. This would make way for secure and reliable payments for businesses domestically as well as across borders.

This move bodes well with Visa’s aim to solidify Visa Direct’s presence in the Asia Pacific region. Cross-border transfers are increasing via digital wallets and increased by 48% in 2021. Visa will be able to promote financial inclusion for populations not having access to conventional banking services. This partnership builds on Visa’s previous collaborations with TerraPay and Thunes, highlighting its continued efforts to expand Visa Direct’s reach to new regions. Visa will now be able to cover 8.5 billion endpoints, 3 billion cards and 2.5 billion wallets.

Visa Direct’s transactions grew 19% year over year in the fourth fiscal quarter of 2023 and cross-border Peer to Peer transactions saw a whopping increase of 65% year over year. With cross-border payments being the most significant use case for Visa Direct, this new partnership should help Visa grow its network. Visa is also focusing on experimenting with new use cases to drive growth like bill payments, earned wage access and insurance disbursements.

Zacks Rank and Price Performance

Visa currently carries a Zacks Rank #3 (Hold).

The stock has gained 7.9% in the past six months compared with the industry’s 3.5% growth.

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Stocks to Consider

Some better-ranked stocks in the broader Business Services space are FirstCash Holdings, Inc. FCFS, OppFi Inc. OPFI and Fiserv, Inc. FI. First Cash and OppFi each sport a Zacks Rank #1 (Strong Buy), and Fiserv carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FirstCash’s current-year earnings indicates a 13.1% year-over-year increase. Fort Worth, TX-based FCFS beat earnings estimates in all the past four quarters, the average surprise being 7.9%.

The Zacks Consensus Estimate for OppFi’s 2023 top line implies year-over-year growth of 12.5%. Headquartered in Chicago, OPFI beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 383.3%.

The Zacks Consensus Estimate for Fiserv’s current-year bottom line implies a year-over-year increase of 15.4%. Headquartered in Brookfield, FI beat earnings estimates in two of the past four quarters and matched twice, an average surprise being 0.6%.

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Visa Inc. (V) : Free Stock Analysis Report

FirstCash Holdings, Inc. (FCFS) : Free Stock Analysis Report

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OppFi Inc. (OPFI) : Free Stock Analysis Report

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