Can Visa Sustain Global Partnerships Through Renewals & Incentives?

In addition to handling millions of transactions every day, Visa Inc.’s V business also depends significantly on building solid, long-term partnerships with banks, merchants and fintech companies all around the world. The company’s ability to handle renewals and structure incentives is essential to maintain its growth.

Renewals play a crucial role in maintaining long-term brand visibility by securing contracts with issuers and financial institutions, which helps keep Visa cards in the hands of consumers. Similarly, incentives serve as a powerful growth engine, inspiring banks, retailers and fintech companies to further integrate with V’s network. The company offers specific incentives to merchants, acquirers, e-commerce platforms and payment processors to boost card acceptance and encourage routing preference.

Additionally, V is actively involved in co-branding card partnerships with merchants, providing incentives that drive adoption and enhance long-term collaboration. These arrangements fuel both market penetration and transaction growth and help drive net revenue growth. In the third quarter of fiscal 2025, the company reported 14% year-over-year growth in net revenues.

In the third quarter of fiscal 2025, Visa renewed its key partnerships, including its multi-country agreement with Absa in Africa and secured consumer credit deals with HDFC Bank and Axis Bank in India. It also renewed its agreement with ShopeePay.

However, increasing incentive costs can squeeze margins, especially as competition from digital wallets and real-time payment systems intensifies. If executed well, this dual strategy could strengthen its position, even as the payments landscape continues to change.

How Are Competitors Faring?

Some of V’s competitors in the payments space include Mastercard Incorporated MA and Affirm Holdings, Inc. AFRM.

In Argentina, Mastercard has renewed its consumer prepaid agreement with Mercado Libre, an e-commerce and fintech platform. They are also teaming up to launch new credit card programs in the market. Mastercard also expanded its partnership with Sicoob, one of Brazil’s largest credit unions, across credit, debit and commercial.

Affirm extended its exclusive multi-year partnership with Boot Barn. This renewed agreement allows shoppers to continue accessing Affirm’s flexible pay-over-time options both online and in-store. It also renewed its deal with DICK’S Sporting Goods.

Visa’s Price Performance, Valuation & Estimates

Shares of Visa have jumped 8.3% in the year-to-date period compared with the 2.9% rise of the industry.

From a valuation standpoint, V trades at a forward price-to-earnings ratio of 26.83, above the industry average of 21.74. V carries a Value Score of D.

The Zacks Consensus Estimate for Visa’s fiscal 2025 earnings implies a 13.7% jump from the year-ago period.

Visa stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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