Visa triumphs

Which is bigger – Visa or MasterCard? Some years back I heard an interesting talk in the local train between 2 persons.

While one was referring to the Visa credit card being supposedly more popular in many countries, the other mistook his saying for travel visa to other countries.

Perhaps he, the other person, could be pardoned for his ignorance if only for the reason that Visa is relatively less known in the country.

Thus while MasterCard has been going house to house with its sweet campaign on the idiot box that says “There are some things money can’t buy. For everything else there’s MasterCard”, Visa keeps a low profile.

Maybe it suits them. Maybe Visa wants MasterCard to expand the market so that it can come later to exploit the spoils.

The reason may be anything, but the fact is Visa is bigger than MasterCard globally in terms of both number and amount of transactions.

The 2006 figures in today’s ET put Visa processing 44 billion transactions amounting to $3.2 trillion as against MasterCard’s 23.4 billion totaling $1.9 trillion.

Visa’s strength is seen in US on Tuesday when its IPO garnered $18 billion selling 406 million shares at $44 each. It’s singularly striking because the same day saw the investment bank Bear Stearns going kaput.

Interestingly, the IPO proceeds Visa will use to buy back shares will likely include that by JP Morgan Chase, its largest customer and shareholder. The part sale of about $1.25 billion is said to be 5 times more than what JP Morgan wishes to buy Bear Stearns for.

All these may just be Greek and Latin for many of us. What is however noteworthy is that a good company never looses investment interest even in the toughest of times.

That may be a lesson for small stock buyers in India. In turbulent times such as now, we can certainly look for excellent bargains for the long term.