Sign up for our free daily newsletter
Get the latest news and some fun stuff
in your inbox every day
In the travel and tourism space we hold Booking.com shares. What many people do not realise is that Visa is also well poised to benefit from this growing trend . I mean, the name "Visa" should be a big enough clue.
To put things into perspective cross-border (when an account holder in one country swipes in a different country) transactions accounted for 28% of Visa's revenues in 2018 .
They consider growth in this area a key driver to its business.
The margins are also very good because they make a currency switch. Such a vital service must be paid for by a currency spread, shared with the bank. Remember, when people travel, they spend big. Booking your hotel in New York City via Booking.com, using your credit card is a big ticket purchase. Visa will process that for you, make the currency switch and ensure the hotel gets paid in USD.
It is a great business model and has to be done almost entirely electronically. You cannot post cash to the hotel on the other side of the world. This concept also applies to travelling with your credit card. Very convenient, but that convenience comes at a price; Visa is reaping the rewards. Travellers Checks, never heard of those.