One of the highest net margin of all listed companies and still underperforming Dow Jones in the last years.
So basically, they charge a lot of money, then give some of it away (client incentives), pay their staff (personnel), and finally tax the remaining gross profit.
So you could double the pay of the employees and slash prices and still break even? No wonder our society is falling apart. The rent seeking is obscene.
I think it’s insane that they can keep charging such high fees (they are HIGH, as illustrated by the 54% profit margin (!!) or 39% if you count incentives as a cost)
This show that the justification of high fees due to eg. fraud is way overplayed.
According to [1] an average American family spends $1.1k in fees per year. (note that part of this ends up in the customer’s bank, not visa/mastercard IIUC)
Could of course be that they are just very good at what they do and the competition runs a much lower margin, but I really doubt that.
![[OC] How Visa makes its $$$ (latest earnings)](https://www.europesays.com/wp-content/uploads/2024/07/6xwks9pmeued1-1920x1024.png)
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Source: Visa investor relations: [https://s1.q4cdn.com/050606653/files/doc_financials/2024/q3/Q3-2024-Earnings-Release_vF.pdf](https://s1.q4cdn.com/050606653/files/doc_financials/2024/q3/Q3-2024-Earnings-Release_vF.pdf)
Tool: [SankeyArt](http://sankeyart.com) Sankey diagram maker
One of the highest net margin of all listed companies and still underperforming Dow Jones in the last years.
So basically, they charge a lot of money, then give some of it away (client incentives), pay their staff (personnel), and finally tax the remaining gross profit.
So you could double the pay of the employees and slash prices and still break even? No wonder our society is falling apart. The rent seeking is obscene.
I think it’s insane that they can keep charging such high fees (they are HIGH, as illustrated by the 54% profit margin (!!) or 39% if you count incentives as a cost)
This show that the justification of high fees due to eg. fraud is way overplayed.
According to [1] an average American family spends $1.1k in fees per year. (note that part of this ends up in the customer’s bank, not visa/mastercard IIUC)
Could of course be that they are just very good at what they do and the competition runs a much lower margin, but I really doubt that.
[1] [https://www.fool.com/the-ascent/research/average-credit-card-processing-fees-costs-america/](https://www.fool.com/the-ascent/research/average-credit-card-processing-fees-costs-america/)
Erm and where are the fraud payouts?
Which category does interest charged to credit card balance holders fall into? Or does that go to the banking partner?
Sorry but the quarter ending June 30 2024 is Q2, not Q3….
What am I missing?