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Time to Buy Visa Before Its Stablecoin Strategy Redefines Payments?
Read MoreHide Full Article
Key Takeaways
Businesses can pre-fund Visa Direct with stablecoins, improving remittance timing.
Shares are up 11.2% YTD, trading at 27.27X forward earnings, reflecting confidence in growth.
Strong cash flow and global expansion support innovation and shareholder-friendly returns.
Investors once feared that Visa Inc. (V - Free Report) could stumble as digital currencies and agile fintechs threatened to rewrite the payments playbook. The fear was simple but real: what if stablecoins — digital tokens pegged to fiat currencies — started eating into Visa’s core transaction volumes, the lifeblood of its business? Yet the company’s latest strategic pivot has flipped that narrative on its head. Instead of resisting disruption, Visa is building the rails for it.
By building the infrastructure for stablecoin-powered payments, the company is positioning itself at the center of the next great shift in global commerce, one that could redefine how businesses move and manage money across borders.
Visa’s Countermove: Building the On-Ramp
The big question was never whether stablecoins would disrupt global payments — it was who would control the disruption. Visa’s answer is clear: it plans to own the infrastructure layer. Instead of resisting the rise of digital currencies, Visa is now enabling it. Its stablecoin initiative, slated for limited availability in April 2026, enables businesses to prefund Visa Direct using stablecoins, treated as equivalent to cash reserves by Visa.
When a payment is initiated, Visa taps into its massive global banking and payout network to ensure the recipient still receives money in local fiat currency. In essence, stablecoins power the transaction under the hood, while end-users continue to interact with traditional money. The key clients here include banks, remittance providers, fintechs and global enterprises handling frequent disbursements.
Traditionally, companies with high cross-border payment volumes have been required to lock up capital in multiple jurisdictions, tying down assets and increasing inefficiencies. Visa’s stablecoin-backed system unlocks that capital, offering a faster, cheaper and more flexible solution that could dramatically improve global liquidity management. For corporations and fintechs, that agility translates to stronger working capital management and faster settlement cycles.
The recent passage of the GENIUS Act provides clear regulatory guidelines around digital assets, something the industry has long needed. This clarity benefits Visa immensely, as it integrates stablecoins into its settlement network with reduced legal uncertainty.
By contrast, traditional banks, particularly smaller regional ones, may not share that advantage. Many face limited digital infrastructure and growing compliance costs. Being part of Visa’s ecosystem could now mean survival for these institutions.
Rising Competitive Threats
Competition, however, is not sitting idle. According to The Wall Street Journal, as cited in an MSN article, retail giants Walmart and Amazon are reportedly exploring their own USD-pegged stablecoins. The goal is clear: control their payment ecosystems and cut billions in interchange fees that currently flow to networks like Visa and Mastercard Incorporated (MA - Free Report) .
Visa’s counterstrategy is to double down on innovation. It is expanding its stablecoin settlement capabilities through partnerships with blockchain infrastructure firm Paxos. The company has already added support for USD-backed stablecoins such as Global Dollar (USDG) and PayPal USD (PYUSD), integrated the euro-backed EURC, and extended blockchain compatibility to Stellar and Avalanche, alongside existing integrations with Ethereum and Solana.
With four stablecoins and four blockchains now supported, Visa’s network is becoming a multi-asset settlement engine, designed to stay ahead of the competitive curve.
Valuation Reflects Investor Confidence
Visa’s ability to innovate consistently explains why investors continue to assign it a premium valuation. Shares trade at 27.27X forward 12-month earnings, well above the financial transaction industry average of 22.01X. Meanwhile, Mastercard trades at 31.34X, while American Express Company (AXP - Free Report) sits lower at 19.14X.
Such multiples suggest the market is willing to pay up for Visa’s combination of scale, resilience and adaptability. Investors see the company as both a defensive play and a growth story, an increasingly rare blend in today’s uncertain macro environment.
Image Source: Zacks Investment Research
Visa’s Price Performance
Visa shares are up 11.2% year to date, outpacing a 3.2% decline across the broader industry. While the S&P 500 Index has done slightly better, Visa’s consistent upward trend underscores investor confidence in its long-term fundamentals. By comparison, Mastercard has gained 9.5% and American Express has returned 9.1% over the same period, solid performances, but still trailing Visa’s momentum.
YTD Price Performance: V, MA, AXP, Industry & S&P 500
Image Source: Zacks Investment Research
Regulatory Clouds Still Linger
Despite its progress, Visa isn’t immune to legal and regulatory headwinds. The U.S. Department of Justice’s ongoing antitrust lawsuit remains a key overhang, alongside potential legislative changes such as the proposed Credit Card Competition Act. Overseas, the company and Mastercard face additional legal battles in the U.K., where the London Competition Appeal Tribunal ruled that their multilateral interchange fees violated European competition law.
Long-Term Tailwinds Remain Intact
Even with these challenges, Visa’s long-term growth story remains solid. Its powerful network effects, where every new user and merchant amplifies its value, continue to reinforce its dominance. The company’s strong cash flows enable heavy reinvestment in infrastructure, innovation and marketing, which further widens its moat.Its market cap currently sits at $645.9 billion.
International expansion remains a key growth lever as digital payment adoption accelerates worldwide. In the fiscal third quarter, Visa’s value-added services, including fraud prevention, analytics, and advisory, generated $2.8 billion in revenues, up 26% year over year in constant currency.
Capital returns also remain robust. During the latest reported quarter, Visa returned $6 billion to shareholders, $4.8 billion via buybacks and $1.2 billion in dividends. As of June 30, 2025, $29.8 billion remained authorized for repurchases. The dividend yield of 0.67% slightly tops the industry average of 0.62%, supported by a long history of consistent hikes.
Meanwhile, expected interest rate cuts by the Federal Reserve could serve as another tailwind, spurring transaction growth across Visa’s payment networks.
Favorable Estimates for Visa
Analyst sentiment remained stable over the past week. The Zacks Consensus Estimate for Visa’s fiscal 2025 and fiscal 2026 EPS implies a 13.7% and 12.3% uptick, respectively, on a year-over-year basis. Similarly, the consensus mark for fiscal 2025 and fiscal 2026 revenues suggests a 10.9% and 10.8% increase, respectively.
The company beat earnings estimates in each of the past four quarters, with an average surprise of 3.9%.
Visa trades below its average analyst price target of $398.16, implying a potential 13% upside from current levels. The highest target of $430 and the lowest of $327 illustrate differing risk perspectives, but the consensus direction remains clearly positive.
Image Source: Zacks Investment Research
Conclusion
Visa’s proactive embrace of stablecoin infrastructure, strong liquidity management solutions and expanding global reach reinforce its long-term growth trajectory. Despite regulatory headwinds, its innovation pipeline, consistent earnings beats and shareholder-friendly capital returns highlight enduring strength.
With robust fundamentals and continuous valuation support, Visa remains well-positioned to protect its throne in the evolving payments landscape. A Zacks Rank #2 (Buy) reflects this favorable outlook. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Time to Buy Visa Before Its Stablecoin Strategy Redefines Payments?
Key Takeaways
Investors once feared that Visa Inc. (V - Free Report) could stumble as digital currencies and agile fintechs threatened to rewrite the payments playbook. The fear was simple but real: what if stablecoins — digital tokens pegged to fiat currencies — started eating into Visa’s core transaction volumes, the lifeblood of its business? Yet the company’s latest strategic pivot has flipped that narrative on its head. Instead of resisting disruption, Visa is building the rails for it.
By building the infrastructure for stablecoin-powered payments, the company is positioning itself at the center of the next great shift in global commerce, one that could redefine how businesses move and manage money across borders.
Visa’s Countermove: Building the On-Ramp
The big question was never whether stablecoins would disrupt global payments — it was who would control the disruption. Visa’s answer is clear: it plans to own the infrastructure layer. Instead of resisting the rise of digital currencies, Visa is now enabling it. Its stablecoin initiative, slated for limited availability in April 2026, enables businesses to prefund Visa Direct using stablecoins, treated as equivalent to cash reserves by Visa.
When a payment is initiated, Visa taps into its massive global banking and payout network to ensure the recipient still receives money in local fiat currency. In essence, stablecoins power the transaction under the hood, while end-users continue to interact with traditional money. The key clients here include banks, remittance providers, fintechs and global enterprises handling frequent disbursements.
Traditionally, companies with high cross-border payment volumes have been required to lock up capital in multiple jurisdictions, tying down assets and increasing inefficiencies. Visa’s stablecoin-backed system unlocks that capital, offering a faster, cheaper and more flexible solution that could dramatically improve global liquidity management. For corporations and fintechs, that agility translates to stronger working capital management and faster settlement cycles.
The recent passage of the GENIUS Act provides clear regulatory guidelines around digital assets, something the industry has long needed. This clarity benefits Visa immensely, as it integrates stablecoins into its settlement network with reduced legal uncertainty.
By contrast, traditional banks, particularly smaller regional ones, may not share that advantage. Many face limited digital infrastructure and growing compliance costs. Being part of Visa’s ecosystem could now mean survival for these institutions.
Rising Competitive Threats
Competition, however, is not sitting idle. According to The Wall Street Journal, as cited in an MSN article, retail giants Walmart and Amazon are reportedly exploring their own USD-pegged stablecoins. The goal is clear: control their payment ecosystems and cut billions in interchange fees that currently flow to networks like Visa and Mastercard Incorporated (MA - Free Report) .
Visa’s counterstrategy is to double down on innovation. It is expanding its stablecoin settlement capabilities through partnerships with blockchain infrastructure firm Paxos. The company has already added support for USD-backed stablecoins such as Global Dollar (USDG) and PayPal USD (PYUSD), integrated the euro-backed EURC, and extended blockchain compatibility to Stellar and Avalanche, alongside existing integrations with Ethereum and Solana.
With four stablecoins and four blockchains now supported, Visa’s network is becoming a multi-asset settlement engine, designed to stay ahead of the competitive curve.
Valuation Reflects Investor Confidence
Visa’s ability to innovate consistently explains why investors continue to assign it a premium valuation. Shares trade at 27.27X forward 12-month earnings, well above the financial transaction industry average of 22.01X. Meanwhile, Mastercard trades at 31.34X, while American Express Company (AXP - Free Report) sits lower at 19.14X.
Such multiples suggest the market is willing to pay up for Visa’s combination of scale, resilience and adaptability. Investors see the company as both a defensive play and a growth story, an increasingly rare blend in today’s uncertain macro environment.
Visa’s Price Performance
Visa shares are up 11.2% year to date, outpacing a 3.2% decline across the broader industry. While the S&P 500 Index has done slightly better, Visa’s consistent upward trend underscores investor confidence in its long-term fundamentals. By comparison, Mastercard has gained 9.5% and American Express has returned 9.1% over the same period, solid performances, but still trailing Visa’s momentum.
YTD Price Performance: V, MA, AXP, Industry & S&P 500
Regulatory Clouds Still Linger
Despite its progress, Visa isn’t immune to legal and regulatory headwinds. The U.S. Department of Justice’s ongoing antitrust lawsuit remains a key overhang, alongside potential legislative changes such as the proposed Credit Card Competition Act. Overseas, the company and Mastercard face additional legal battles in the U.K., where the London Competition Appeal Tribunal ruled that their multilateral interchange fees violated European competition law.
Long-Term Tailwinds Remain Intact
Even with these challenges, Visa’s long-term growth story remains solid. Its powerful network effects, where every new user and merchant amplifies its value, continue to reinforce its dominance. The company’s strong cash flows enable heavy reinvestment in infrastructure, innovation and marketing, which further widens its moat.Its market cap currently sits at $645.9 billion.
International expansion remains a key growth lever as digital payment adoption accelerates worldwide. In the fiscal third quarter, Visa’s value-added services, including fraud prevention, analytics, and advisory, generated $2.8 billion in revenues, up 26% year over year in constant currency.
Capital returns also remain robust. During the latest reported quarter, Visa returned $6 billion to shareholders, $4.8 billion via buybacks and $1.2 billion in dividends. As of June 30, 2025, $29.8 billion remained authorized for repurchases. The dividend yield of 0.67% slightly tops the industry average of 0.62%, supported by a long history of consistent hikes.
Meanwhile, expected interest rate cuts by the Federal Reserve could serve as another tailwind, spurring transaction growth across Visa’s payment networks.
Favorable Estimates for Visa
Analyst sentiment remained stable over the past week. The Zacks Consensus Estimate for Visa’s fiscal 2025 and fiscal 2026 EPS implies a 13.7% and 12.3% uptick, respectively, on a year-over-year basis. Similarly, the consensus mark for fiscal 2025 and fiscal 2026 revenues suggests a 10.9% and 10.8% increase, respectively.
The company beat earnings estimates in each of the past four quarters, with an average surprise of 3.9%.
Visa Inc. Price, Consensus and EPS Surprise
Visa Inc. price-consensus-eps-surprise-chart | Visa Inc. Quote
Visa’s Price Target Signals Upside
Visa trades below its average analyst price target of $398.16, implying a potential 13% upside from current levels. The highest target of $430 and the lowest of $327 illustrate differing risk perspectives, but the consensus direction remains clearly positive.
Conclusion
Visa’s proactive embrace of stablecoin infrastructure, strong liquidity management solutions and expanding global reach reinforce its long-term growth trajectory. Despite regulatory headwinds, its innovation pipeline, consistent earnings beats and shareholder-friendly capital returns highlight enduring strength.
With robust fundamentals and continuous valuation support, Visa remains well-positioned to protect its throne in the evolving payments landscape. A Zacks Rank #2 (Buy) reflects this favorable outlook. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.