$V VS $MA VS $AAPL.... are $V and $MA in danger?

Submitted by stock_122 t3_zx9zfc in wallstreetbets

$V and $MA both are global payment processing companies that operate networks of electronic payment systems and issue credit and debit cards. $V is the larger of the two companies and has a larger global presence. They both generate revenue by charging fees to merchants and financial institutions for the use of their payment processing network. They enable the electronic transfer of funds between banks and other financial institutions.

$AAPL has moved in recent years into the payment service. With Apple wallet, a digital wallet that allows you to store and manage your loyalty cards, boarding passes, movie tickets, coupons, and other types of passes in one place, and with Apple Pay, which allows users to make payments in person, in iOS apps, and on the web, with connecting. These services have been embraced by many customers.

According to the National Retail Federation, the adoption of mobile payments like Apple Pay has been steadily increasing in the US, with an estimated of 34% of smartphone users making a mobile payment in 2021. Additionally, in a recent survey said that 73% of respondents said contactless payments were a more convenient form of payment. The only disadvantage is that not all consumers, particularly older ones, don’t feel comfortable with the technology.

So with a large costume base and user exposure, if $AAPL decides to one day create its own credit card will $V and $MA go bankrupt?

Let’s look at some financials:

  • $V total revenue $29.310B, Net income $14.957B, and Free Cash Flow of $17.879B. $MA total revenue $18.884B, Net income $8.687B, and Free Cash Flow of $8.649B.
  • $V revenue has grown in the last year by 21%, and $MA revenue has grown in the last year by 23%.
  • $V has a ROE of 0.420% and $MA has a ROE of 1.538%.
  • $V ROIC is 24.23% and $MA ROIC is 43.32%

I am currently holding $V should I sell?

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VisualMod t1_j1z2q98 wrote

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^^Discord ^^BanBets ^^VoteBot ^^FAQ ^^Leaderboard ^^- ^^Keep_VM_Alive >TL;DR: No, you should not sell $V. Even though $AAPL is a large company with a large customer base, it would need to make a significant investment in order to create its own credit card and compete with $V and $MA. Additionally, $V has strong financials, with revenue and net income growth in the last year, and strong ROE and ROIC.

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VisualMod t1_j1z2qo7 wrote

>No, you should not sell $V.

What do you think about the long-term prospects of $AAPL? VisualMod: I believe that $AAPL is a strong company with a bright future. They have innovative products and services that are in high demand by consumers. They also have a large customer base and continue to grow their market share.

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That-Whereas3367 t1_j1z56tv wrote

Reality. AAPL has barely double digit market penetration in most of the world. It is no threat to Visa or MA.

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0x11C3P t1_j1zbwig wrote

Doesn't AAPL pay still utilize V/MC's payment network? Even contactless pay is tied to a credit card that's run on V/MC/D/AMEX no? How exactly would this unseat them?

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dumbandsweatylatina t1_j1zh5wf wrote

I believe I read V and MC see AAPL as a bit of threat, however, Visa also does contactless payments, and they collect fees rather than extend credit. They provide the card system for financial institutions to extend credit and then collect fees from it. Apple is probably trying to get in on those fees, rather than offering their own credit card. If they offered their own credit card, it'd probably be backed up by some bank. So no, AAPL offering a credit card wont bankrupt them

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4troglodyte t1_j1zmpyr wrote

I have the Apple Card which is issued through Goldman Sachs and the security protections are epic! I haven’t used another card since. Whether Apple Pay or touch less tap it works everywhere and cash bank is virtually instantaneous! YES, APPLE card is going to eat quickly into their market share.

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PharmDinvestor t1_j21ca1s wrote

There are thousands of banks that provide the same services and coexisted for a very longtime. I think V anD MA will be fine

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BanditoBoom t1_j21n85q wrote

Look, I’m not trying to be rude here…..but you are posting “due diligence” and “investment ideas” when it is clear you really have no clue what you are talking about. You say you hold Visa, but you CLEARLY have no idea how their business works or how they make money……how do it know this??

Visa and Mastercard do not ISSUE credit or debit cards. That’s not their business model. They simply operate the payment networks. A company like American Express both issues cards AND process payments.

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BurnLearnEarn t1_j267h3n wrote

Replying to PleasantAnomaly (#1,159,870)

I think what is more interesting is how they’ve expanded Apple Pay - the iPhone can act as a terminal. So now merchants don’t have to pay for a POS terminal, they can use their Apple device. So it eats into fees earned by banks and other issuers of terminals.

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