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Mizuho Offers Mobile Payments Insight on First Data, Visa

December 10, 2018         By: Steven Anderson

With the mobile payments market—and plenty of other markets—in a general end-of-year tumult, there’s a lot of room for opportunity and disaster alike. Insight, therefore, becomes the only possible key to success, and Mizuho recently dropped word our way about its own insights on two fronts in the mobile payments field: Visa and First Data Corporation (FDC). The news might well surprise even some long-term market watchers out there.

First, the word about FDC starts off with a protest. The company came out once again to assert that its belief it can bring in revenue growth still stands. FDC asserts it can bring in “mid-single digit revenue growth”, special the fact that what it calls the JV channel isn’t delivering much recovery. Non-JV channels, as it describes, are showing growth enough to make up for the lag. Throw in value-added services from Clover, where FDC has put substantial investment, as well as continued growth from Argentina and an actually-spending United States customer and First Data’s projection seems sound.

Meanwhile, the word on Visa proved just as noteworthy. Reports of new cross-border resolutions are expected to leave network economics untouched. If there is any impact in interchange, that can be made up for readily with a slight hike to cardholder fees, a measure that has worked well in the past when regulators stepped in to cap some other form of potential revenue generation. Mizuho also expects contactless mobile payments adoption in the United States to rise steadily, which will help maintain revenue.

So we see here that FDC and Visa have a fairly stable outlook. Single-digit growth may not be an eye-catching sexy headline, but it keeps the lights on and the salaries paid. Visa’s potential cross-border troubles could be troublesome, sure, but everything we’ve seen so far suggests that it will keep chugging along thanks to its own diversity of revenue streams.

If we take nothing else away from this, let us take away the value of diversity as far as revenue goes. Putting all your eggs in one basket is all fine and well if you plan to watch that basket closely. But the potential for disaster is still too large for most reasonable people. Thus, income diversity proves the most resilient of platforms.