If you were to scan through the various debit and credit cards in your wallet or purse, there is a high probability that Visa will be facilitating the transactions you make using one of your cards. Visa is capable of processing around 65,000 transactions per second across the world1. This number is only set to grow as Visa innovates and its reach across the globe continues to expand.
Our Ethical Investment Plans include Visa Inc, which is held in the Hermes Global ESG shares fund.
The finance stuff 📈
Company value: £298bn
Share price: £153.27
2019 Profits: £9.7bn
What does Visa do? 🤷
Visa is one of the world leaders in digital payments. Using their proprietary VisaNet system which handles electronic payments 24/7, Visa is enabling merchants to connect with customers by providing a safe and secure way of transacting. For a successful transaction to take place, Visa must first have an agreement with the merchant to accept payments through its system. Visa has over 46 million merchant locations spanning across more than 200 countries1. Next, you will need an acquirer - an acquirer is a bank or financial institution that creates and maintains the merchant’s bank account. Put simply, it’s the merchant’s banking provider, which must be an approved institution by Visa to enable the retailer to get paid.
So, we have the merchant, and their bank, both ready to accept payments. What we need now is a financial institution that will allow the consumer to buy products or services using what is often through a durable plastic card. This card issuer is often the consumer’s bank, but card issuers can be credit card institutions whose sole aim is to provide credit to a consumer. Now that you have a method of paying - in the form of a debit or credit card - a merchant who will accept your card, and the merchant’s bank who will facilitate the incoming payment from consumers, the transaction circle is complete.
What positive impact is Visa having? 🌱
Visa owns and operates numerous data centres across the globe to ensure their payment systems are always running smoothly. Its main responsibility is the facilitation of digital payments, and the company can achieve its environmental stewardship by improving the quality and efficiencies of its data centres and office buildings, which generate 75% of its greenhouse gas emissions2. Visa plans to improve its sustainability through the use of more energy efficient lighting and controls, by using environmentally preferable office supplies.
Visa is not just committed to improve its environmental footprint, it also strives for inclusion through diversity. The company believes that more diversity can help create a better workplace and a better business partner for its clients around the world. An inclusive environment enables Visa to fully leverage the contributions of its employees, which enriches the organisation and drives global success. Visa has a leadership development program called Elevate, for high-performing African American/ Black and Hispanic/Latinx employees. Over half of the applicants have received promotions or expanded opportunities since entering the program. Visa is committed to bringing diversity of thought, experience, and backgrounds to the table at every level of the organisation. The company has received the maximum score of 100 for 5 years in a row on the Human Rights Campaign Corporate Equality Index and what better way than celebrating LGBTQ pride month than with a company like Visa!3
There are 2 billion unbanked adults in the world. This means there are 2 billion people who lack access to financial services due to poverty or location, but often both. A typical trait for unbanked populations is the dependence on cash only, which makes saving for the future very difficult. Visa aims to offer universal financial access to 500 million of these people by the end of 2020 with the increased introduction of electronic payments to help local merchants grow.4
What Visa has to say 📣
“At Visa, we work every day to connect the world to enable individuals, businesses and economies to thrive, and we are committed to doing so in a way that supports both inclusive and sustainable growth to improve people’s lives and drive economic and societal progress.
Financial empowerment is an important component of lifting individuals and communities out of poverty, yet access is not always distributed equitably. In response, we are focusing our business and philanthropic efforts on enabling the success of micro and small businesses (MSBs), particularly women-owned businesses. Financial empowerment is also closely tied to education, and financial literacy is essential if individuals and economies are to prosper.
Visa was once again named to the Dow Jones Sustainability North American Index and the FTSE4Good Index in 2018. We also were listed as one of Ethisphere’s World’s Most Ethical Companies for the seventh consecutive year and included as members of the 100 Best Corporate Citizens and 100 Most JUST Companies rankings — among other recognitions.”
Visa 2018 Corporate Responsibility and Sustainability Report
What Hermes think… 🤓
“Visa is at the centre of one of the largest structural growth trends; digital and online payments and has an important role to enable the delivery of several UN SDGs linked to reducing poverty. According to the World bank, 1.7bn people are without a bank account, so Visa has a significant opportunity to advance financial inclusion across the globe. This is important because there is a clear link to stronger and more sustainable economic growth.
Through commercial and philanthropic partnerships, Visa is on track to deliver on its commitment to provide access to 500 million previously unbanked or underserved people by 2020. It is also providing access to business and financial education and support networks for micro and small businesses, which should help drive economic growth and improve the livelihoods of potentially millions of people.”
To wrap up 🎁
There are many strings to Visa’s ethical bow, from helping some of the most remote businesses become successful, to actively supporting diversity in the workplace. Visa has structured its organisation so people come first. As a world leader in digital payments, so many people are counting on the company to help them through the day, from buyers to sellers and every financial institution in between. Visa has set itself a high ethical bar to beat in the years to come, but the company’s ability to innovate will surely help make the world a more connected and sustainable place.
Please remember the value of your investments can go down as well as up, and you could get back less than invested.