Visa dominates the credit card industry maintaining nearly a 70% market share of all U.S. credit cards that are in circulation. Despite their dominance, Visa’s role is usually not well understood by merchants or consumers.
Visa is now a publicly held company primarily owned by 13,000 U.S. financial institution. Visa provides much of the necessary infrastructure to support financial institutions in issuing and processing debit and credit cards. Financial institutions like Capital One and your local bank issue credit and debit cards because it makes them money.
Visa does not issue plastic, set fees or determine the interest rates that will be charged on a Visa branded card. The issuing members have the latitude to determine those fees.
Visa USA makes most of their $2.9 billion in revenue two ways. First, they get a fixed .0925 basis points on all money that is spent using their co-branded cards (that’s $.095 cents on a $100 transaction). Their second stream of revenue is from Data Processing, which means facilitating the transaction and settlement of transactions.
Here are some statistics to put their U.S. operations in perspective:
- 6.3 million businesses accept Visa
- $1.3 trillion dollars of goods were purchased with Visa branded cards, up 17% from last year
- Visa processes on average 100 million transactions per day
- Consumer credit cards – $588MM in sales volume, 282MM cards, 10% growth
- Debit and prepaid cards – $574MM in sales volume, 192MM cards, 23% growth
- Commercial – $159MM in sales volume, 26MM cards, 26% growth