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Why Visa (V) & WU's Growing Alliance is Vital in Remittance

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Visa Inc. (V - Free Report) recently struck an extended partnership with The Western Union Company (WU - Free Report) , spanning seven years. The deal is expected to be a major step in enhancing cross-border money transfer and financial services accessibility globally.

Per the agreement, customers of Western Union in 40 countries will have the ability to send money to eligible Visa cards and bank accounts of their friends and family, using Visa Direct capabilities, across five major regions. The regions include countries like Brazil, Canada, Colombia, Costa Rica, Egypt, Hong Kong, India, Indonesia, Kenya, Mexico, Pakistan, Peru, Philippines, Poland, Romania, Sri Lanka, Tanzania, Thailand, Turkey, Uganda, United Kingdom, United States and Vietnam.

The partnership aims to provide fast and efficient cross-border payment solutions, leveraging Visa's global scale and the digital capabilities of Western Union. The latest agreement further develops the collaboration established in 2022 and 2019 between Western Union and Visa Direct. Providing this expanded reach to their customers is expected to boost both the companies’ transaction volumes and revenue streams.

The expanded alliance has the potential to increase efficiency and innovation in the delivery of financial services, which could lead to improved customer satisfaction and market competitiveness. The collaboration involves the issuance of Western Union/Visa Debit Cards and prepaid cards in select markets. Government and NGO customers are expected to benefit from the prepaid cards while delivering critical humanitarian relief.

This diversification of offerings is expected to attract new customers and alternative revenue sources, contributing to the growth of both companies. The growing collaboration between the two companies is expected to strengthen their position in the global remittance space, which is rapidly expanding.

Price Performance

Shares of Visa have gained 23.2% in the past year compared with the industry’s 19.8% jump.

Zacks Investment Research
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Zacks Rank & Key Picks

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

Some better-ranked stocks in the broader Business Services space are Fidelity National Information Services, Inc. (FIS - Free Report) and Flywire Corporation (FLYW - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Fidelity National’s current-year bottom line indicates 38% year-over-year growth. FIS beat earnings estimates in two of the past four quarters and missed twice. The consensus estimate for the current-year top line is pegged at $10.1 billion.

The Zacks Consensus Estimate for Flywire’s current year earnings is pegged at 4 cents per share, which indicates 157.1% year-over-year growth. FLYW beat earnings estimates in two of the past four quarters, met once and missed on the other occasion, with an average surprise of 33.1%. The consensus estimate for current-year revenues suggests 30.8% year-over-year growth.

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