The CEO of payments processing giant
“She said to me ‘I cannot believe I wasn’t doing this before the pandemic,’” Kelly said in an interview with The Associated Press.
Kelly is more than five years into his tenure as the head of one of the world’s largest payments companies and arguably, one of the world’s best-known brands. Since he took over, the company’s stock has tripled in value as more of us pay with Visa’s credit and debit cards — a trend bolstered by the pandemic, as once cash-only establishments started accepting plastic and shoppers did more transactions online.
But while the shift to online shopping is helping Visa’s bottom line, the company is facing new forms of competition, particularly from
The company has also gotten pushback from
During the pandemic, more consumers became comfortable purchasing routine items online or with their smart phones to avoid risky in-person interactions. This was particularly seen in parts of the economy that have traditionally been cash-heavy such as grocery stores, coffee shops and bars.
Kelly pointed to the growth in debit card usage in the pandemic as an example. Debit cards are typically thought of as equivalent to cash in the payments industry — they can be used to buy items, but also to withdraw cash at an ATM. In the past year, debit card purchasing volumes on Visa’s network rose 23% from a year ago, while cash withdrawals were only up 4%.
“People are choosing not to get cash to shop but actually using their debit cards to shop now,” he said.
Any shift away from cash and digital payments will ultimately be good for Visa’s bottom line. Even a shift of 1% or 2% of consumers’ payments away from cash and onto credit and debit cards could result in tens of billions of dollars of additional transactions crossing over Visa’s network.
To talk about the size and scope of
For decades,
In short, how one pays for goods and services is not as simple as “cash or credit” — with the credit choices being
Kelly sees Visa’s ubiquity as one of its strongest selling points as more competition arises. True to its old advertising slogan, “it’s everywhere you want to be,”
“There will always be new forms to pay, but they will still need an infrastructure that creates utility and security that they need,” he said.
But the increased competitive space for payments has made some merchants start questioning whether Visa’s armor may be weakened. Merchants have long been upset with the fees they pay to the processors to accept credit cards — which typically range from 1% to 3%. It’s often a retailer’s largest expense after payroll and the cost of buying goods. Merchants have previously used their collective power in
Amazon has said it will stop accepting
“Consumers should be able to use their
Industry analysts and investors have taken the Amazon spat as a sign that
This story has been corrected to say that Amazon has said it will stop accepting
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