Amazon (AMZN US) just told some customers that, from 19 Jan onward, it would no longer accept Visa credit cards issued in the UK, citing high fees. Amazon’s move hurt investors’ already bruised sentiment toward the payment company. Visa’s management recently projected earnings and revenue for FY2022 that fell short of expectations. Its stock has been a laggard this year.
We see Visa’s share price weakness as an opportunity to buy growth at a reasonable price. Pressure from retailers to reduce fees is not new to Visa. We expect the company to resolve its differences with Amazon. Visa will continue to benefit from the growth in digital payments, a trend that will persist for many years. Visa is already handling more transactions than before the pandemic, but it is not yet firing on all cylinders. A recovery in international travel spending, could give the stock the tailwind it needs to become an investor favorite again.