3 ms·
Visa doesn't actually make a ton of money off each transaction, if you divide out their revenue against their payment volume (napkin math)... They processed $1
by arcticbull 2y ago
Visa doesn't actually make a ton of money off each transaction, if you divide out their revenue against their payment volume (napkin math)...
They processed $12T in payments last year (almost a billion payments per day), with a net revenue of $32B. That's a gross transaction margin of 0.26% and their GAAP net income was half that, about 0.14%. [1]
They're just a transaction network, unlike say Amex which is both an issuer and a network. Being just the network is more operationally efficient.
[1] https://annualreport.visa.com/financials/default.aspx https://annualreport.visa.com/financials/default.aspx
- oivey 2y agoThat’s a weird way to account for their business size. There isn’t a significant marginal cost per transaction. They didn’t sell $12T in products. They facilitated that much in payments. Their profits are fantastic.
- imtringued 2y agoIf you have no clue how profit margins are calculated then you're better off staying quiet. It's quite simple. Divide revenue minus costs by revenue. Transaction volume isn't revenue. Visa only gets the transaction fee. Even if I give you the benefit of the doubt and do a proper interpretation of the number you've arrived at, its meaning is quite different and quite off topic from this discussion. What you have calculated is the total share of costs that Visa represents in that 12 trillion dollar part of the economy. It is like saying Visa's share of GDP is 0.1%.
- arcticbull 2y agoI didn't say that was their profit margin, that's their transaction margin. As my mother used to say if you have nothing nice to say you're better off staying quiet ;)