Visa

“I'm pretty sure that this has never been disclosed, and I haven't asked anyone about it, but if you sort of read trade publications, people seem pretty convinced that Costco is making money, which of course they are, on the deal that they cut with Citi and Vis…”

“Visa builds an automated clearinghouse for themselves to do settlement electronically over the network. They end up calling this project base two after base one, which was the first thing doing authorizations. This happens at the exact same Time and place as w…”

“This business is probably the greatest masterclass in the entire world on incentive alignment.”

“Even large retailers that run at pretty thin margins, it is often the case that their EBITDA is the same size as their card processing fees.”

“JPMorgan Chase is the merchant bank and JPMorgan Chase is one of the largest issuing banks for cards in the world, and so the Amazon Chase credit card that I have and I do all my shopping on Amazon with and all my shopping at Whole Foods with is able to give m…”

“There's a myth out there that Visa was originally a non-profit and then was converted to a for-profit before the IPO in 2008. That's not true. It was always for-profit. It was just a non-stock membership corporation.”

“It ends up saving about fifteen million dollars in labor and postage costs to the banks by automating this. Just in year one.”

“This information network that doesn't have to take on any of the risk of any of these transactions. It's purely about connecting buyers to sellers and moving information back and forth has proven to be maybe the best business model ever”

“So on a Apple Pay transaction, I'm pretty sure Apple makes about as much as Visa does, because they stack an extra 15 basis points on top of the other three fees that we talked about.”

“The most shocking thing about the business is they have 50% net income margins. So of the thirty-ish billion that they made in revenue, Their net income was 15.”

“Without a new paradigm emerging, this is the system. I'd say a new paradigm or the government intervention, this kind of is the system that we've made our bed and we're stuck with.”

“It has now been 37 years that Visa is the exclusive payments global sponsor of the Olympics. They're contracted through 2032. So it will be at least 46 years where Visa Is the only card accepted at the Olympics.”

“This network is actually a five-sided system. There's the consumer, That is buying something. There's the merchant that is selling that something to them. There's the Visa network in the middle, that's the third party, but then there also are the fourth and th…”

“That eighteen billion dollars was secondary selling to the banks that owned the company, which I think for many of them proved to be a total lifeline through the financial crisis that helped them survive.”

“Over 50% of consumer payments to merchants go on cards now.”

“There's been downward pressure on interchange for a long time. I think industry average right now is down around 2.24, which is, you know, compelling considering we started at seven percent.”

“Their gross margins are 98%.”

“He didn't go to a four-year college. He only has an associate's degree. He bounced around in a bunch of random consumer finance jobs on the West Coast, all of which he got fired from because he's too insubordinate.”

“Visa ends up renting CompuServe network capacity to send their digital transactions from merchant point of sale terminals.”

“But in 1976, Master Charge was actually bigger. They had 7400 banks. And at this point in history, Visa had about 7000 banks. Master Charge also had more cardholders. Thirty seven million versus Bank AmeriCard's thirty one million before they changed to Visa.”

“The financial profile of Visa's business is more tech than any of the tech companies. It is what they all wish they could have.”

“Singapore and India have already linked theirs up. And so, that is a method of transferring money between countries that has nothing to do with Visa.”

“Visa does not extend credit. They do not issue cards. They do not work directly with merchants. They do not work directly with consumers. They are not a bank or a financial institution. They don't ever bear any risk. They are merely a network connecting banks …”

“Probably a good time to introduce that six billion that Visa's doing in value-added services. That is all brand new high margin products that they've sort of invented in the last 10 years or so that they're trying to sell to merchants.”

“They now have more digital tokens than card credentials. That's been growing really fast. It doubled last year, their sort of tokens on their network.”

“The American Express merchant network at the time was about 25% the size of Visas.”

“The growth in payment volume on the network since then has been 17.3% compounded annually for 51 years.”

“That is sort of the playbook that Visa runs, is they figure out what is something that we can sort of advertise as a benefit to you that also helps us either increase number of transactions, margin, or lock-in.”

“Anytime that you have something that's more distributed, you're going to be compromising a little bit on the user experience because you can't sort of rule by fiat when you want to make a change, but it does potentially come with much better scalability, which…”

“The first one is, this business is a toll booth, and toll booths make for great businesses, especially when everyone has to drive on your road or the road next to yours, and both of them charge the same toll.”

“It's like one of the only essential pieces of financial infrastructure in the United States that has not run out of New York.”

“At the end of the day, Visa and MasterCard have basically no sustainable competitive advantage over each other.”

“Payments, all of payments, is about 200 trillion dollars of volume, and cards are only 20 trillion dollars.”

“This is a bear case on Visa is, are they ever going to participate in real estate or cars or, no, not at these interchange rates. Why would anyone Ever buckle to pay these sorts of things for things that cost a thousand dollars or more.”

“Once base two is done, and again, it also happens in less than a year that it's live and up and running, average settlement time for transactions on the Visa network go from taking a week on average to happening in batch overnight every single night.”

“Dee maintained that if you give computer people more time, they will just consume it. So he always insisted. So it's so true. So he always insisted On shorter projects with uncompromising deadlines.”

“On the other hand, I don't think e-commerce really would have happened, you know, alone. There's plenty of other value creation out there too. Lots and lots and lots, but let's just take e-commerce. I feel like this is Passover. Like, you know, that would have…”

“It is the 11th most valuable company in the world. It is worth more than any bank in the world, including every bank involved in creating it.”

“Almost nothing has changed since the eighties to today on how the transactions work. So the authorization flow is exactly the same as it was, where all the auth flows upstream.”

“After Amex declines, John and the team get in touch with the IOC, the price tag has gone up to seventeen million dollars just for the rights. That's before any media buys. No advertising, there's just for the right to be a global sponsor of the Olympics. They …”

“It becomes the largest U.S. IPO in history. Up to that point, they raised eighteen billion dollars at a ninety billion dollar initial market cap”

“I think Visa was our best episode.”

“It was not North Dakota, but South Dakota that first changed their usury laws to support credit cards, which is why all of your credit cards, or so many of them, are mailed from there today.”

“I mean, they have over 50% net income margins.”

“They raise sixteen billion dollars at a one hundred and four billion dollar market cap, making it, I think, the third largest IPO of all time at that point behind Visa and, ironically, General Motors coming out of the bankruptcy during 2008.”