Yesterday in class, Jake Levine proposed to add Visa to the Information Technology sector. Visa is the largest payment transaction company in North America. The company offers their transaction services to Financial Institutions. Jake went to great lengths to explain Visa’s business structure, noting how it is fundamentally different from competitors such as Discover and American Express. These firms, unlike Visa, offer credit. Visa is strictly a transaction technology.
Jake believes Visa is positioned strategically for the future, as he expects gains from Mobile Payment to drive domestic revenue. Currently mobile payment only accounts for 5% of US spending; however this figure is expected to grow to $3 Trillion by the year 2021. Furthermore, Jake believes that with millennial gaining purchasing power, the use of cash payments will fall relative to card payments, in which Visa takes a cut. Jake ultimately motioned to purchase 250 shares of Visa by through a mix of cash and shares of XLP Consumer Staples ETF. The motion passed unanimously.