Mexico Regulators Slam the Brakes on Visa's Prosa Acquisition

Visa Inc.’s V attempt to secure a controlling stake in Mexican payment processor Prosa has hit a regulatory roadblock. Mexico’s National Antitrust Commission (CNA) rejected the proposed 51% acquisition, marking the first significant decision by the country’s newly formed competition authority, according to Bloomberg.

First unveiled in December 2023, the transaction was designed to deepen Visa’s footprint in Mexico’s payments ecosystem. By taking majority control of Prosa, Visa aimed to broaden the processor’s digital capabilities while strengthening its own presence in brand licensing and transaction processing. The deal also would have provided visibility into card payment flows handled by Prosa.

Regulators, however, concluded that the transaction could materially alter competitive dynamics. The CNA indicated that combining Visa’s network with Prosa’s Carnet brand would effectively position Visa alongside two of Mexico’s three major card issuers. Concerns were also raised about the competitive implications of access to sensitive transaction-level information.

The arrangement would have given Visa influence over two of Mexico’s four clearinghouses — Prosa and Visa — alongside Mastercard Incorporated MA and E-Global. Regulatory scrutiny is not confined to Mexico. In the United States, the Department of Justice has alleged that Visa and Mastercard have used their scale to sustain elevated merchant fees, with ongoing litigation creating uncertainty around long-term pricing dynamics. Potential revival of the Credit Card Competition Act could also reshape routing frameworks.

In the United Kingdom, tribunal decisions and discussions around fee limitations add pressure, while banking leaders are reportedly exploring a domestic card network alternative to reduce dependence on U.S.-based payment giants. If they move forward with an alternative, it would be a bigger competitive threat to Visa and Mastercard than to American Express Company AXP due to its closed-loop model, though any systemic pressure on interchange or merchant fees could still create headline and sentiment risk for AmEx.

Visa is currently reviewing the ruling from CNA, and it is expected to evaluate all options.

Visa’s Price Performance, Valuation and Estimates

Shares of Visa have declined 8.3% in the past year, shedding less value than the broader industry but underperforming the S&P 500 Index.

Visa 1-Year Price Performance

From a valuation standpoint, Visa trades at a forward price-to-earnings ratio of 23.73X, up from the industry average of 18.51X. Visa carries a Value Score of D.

The Zacks Consensus Estimate for Visa’s fiscal 2026 earnings implies an 11.9% rise year over year, followed by 13.3% growth next year.

The 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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