Is Visa Direct the Catalyst for a Cashless Tipping Revolution?

In a bold move toward reshaping how tipped employees are paid, Visa Inc. V has teamed up with StopOn, along with Astra, which provides the payment technology infrastructure to power real-time, cashless payouts. By integrating Visa Direct into SpotOn Teamwork and DayCheck, the system allows employers to send tip earnings straight to employees’ bank accounts instantly and securely.

This collaboration aims to tackle a persistent challenge in the service industry — the delayed and manual process of distributing tips. By introducing real-time, cashless payouts, the system eliminates cash-handling hassle and ensures that employees can access their hard-earned money immediately, which can help boost employee satisfaction, gain better financial control and improve retention.

For restaurant owners, this innovation brings greater efficiency, enhanced payroll accuracy and reduced administrative tasks. Additionally, DayCheck’s no-prefunding requirement for qualified merchants not only boosts cash flow but also speeds up tip distribution, making it more straightforward and transparent.

By bringing together V’s extensive global payment network, SpotOn’s deep understanding of the service industry and Astra’s cutting-edge technology, this partnership sets an example for the future of digital tipping, making it faster, smarter and more empowering for today’s workforce. For Visa, this move expands the adoption of Visa Direct and also reinforces its position as a crucial player in facilitating real-time payments within the ever-changing economy, which in turn improves payment volume. In the third quarter of fiscal 2025, the company’s payment volume rose 8% year over year.

How Are Competitors Faring?

Some of V’s competitors in the payments space include Mastercard Incorporated MA and American Express Company AXP.

Mastercard is stepping up its game in the world of instant tip payments by teaming up with various platforms to provide real-time, digital payouts. Mastercard’s payment network net revenues increased 13% year over year in the first half of 2025, along with 16% growth in net revenues.

By collaborating with various platforms, such as eTip, American Express offers digital tipping and reviews for hospitality businesses. Its total revenues (net of interest expense) rose 8% year over year in the first half of 2025. American Express reported 6% year-over-year growth in its network volumes in the same period.

Visa’s Price Performance, Valuation & Estimates

Over the past year, shares of Visa have jumped 19% against the 0.4% fall of the industry.

From a valuation standpoint, V trades at a forward price-to-earnings ratio of 26.76, above the industry average of 21.52. 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research