💳 The card game of the giants: Visa, Amex, Mastercard - Who will win the payment poker game? 🃏
Company portraits
$V (-0.14%) was founded in 1958 and is headquartered in San Francisco, California. The company operates one of the largest electronic payment networks in the world and is particularly well known for its credit, debit and prepaid cards.
$MA (-0.34%) The company was founded in 1966, is headquartered in New York and is one of the leading global payment providers alongside Visa. It enables payments with debit, credit and prepaid cards via its own network.
$AXP (+0.33%) (Amex), founded in 1850, is a renowned financial services provider headquartered in New York. In addition to payment cards, Amex also offers extensive travel services and is known for its exclusive products, which appeal primarily to affluent customers.
Historical development
Visa emerged from the BankAmericard, a credit card originally issued by the $BAC (+1.1%) was issued. The company was renamed Visa in 1976. The company has been listed on the stock exchange since its IPO in 2008.
Mastercard was created in response to the success of BankAmericard. It was originally a merger of regional bank card networks. The company was listed on the New York Stock Exchange in 2006.
American Express began as an express delivery service and later expanded its offering to include financial and travel services. In 1958, the company introduced its first store card and has since developed a range of exclusive card products, including the famous Centurion card, which was launched in 1999.
Business model
Visa and Mastercard operate as pure payment networks that facilitate transactions between banks, merchants and cardholders. They charge fees for each transaction, but do not bear any credit risk.
American Express acts as both a payment network and a card issuer. As a result, Amex benefits not only from transaction fees, but also from annual fees and interest on outstanding balances. Unlike Visa and Mastercard, Amex bears the credit risk of its cards.
Core competencies and future prospects
Visa and Mastercard stand out for their global reach, technological innovation and strong brand presence. Both companies are investing heavily in digital payment technologies and security systems to consolidate their market position.
American Express, on the other hand, is focusing on its particular strength in the premium segment, with first-class customer service and an attractive bonus program. Amex is also increasingly investing in digital solutions and expanding its offering for business customers.
Strategic initiatives
1. expansion of its presence in emerging markets
2. further development of innovative payment technologies such as contactless payment and blockchain
3. cooperation with fintech companies
4. strengthening cyber security
Market position and competition
Visa leads the market as the largest global payment network, followed by Mastercard. Together, these two companies dominate the market for payment networks.
American Express holds a strong position in the premium segment, but is facing challenges, particularly due to the comparatively lower acceptance among merchants, which is attributable to Amex's higher fees.
All three providers are facing increasing competition from new digital payment services such as PayPal, Apple Pay and innovative fintech start-ups.
Total Addressable Market (TAM)
The market for digital payments is growing steadily. Ongoing digitalization and the global trend towards cashless transactions offer Visa, Mastercard and American Express considerable growth potential, particularly in emerging markets, making it almost the global payment market.
Share performance
Over the past few years, all three companies have shown impressive stock performance, with Visa and Mastercard generally outperforming American Express. Visa TR over 10 years is 454%, Mastercard TR over 10 years is 612% and Amex is at a 10 year TR of 259%.
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Conclusion
With Mastercard and Visa, there is actually a duopoly in the market, which is why it is difficult to choose between the two. In terms of performance, Mastercard has done better, but is also more highly valued. If you can get hold of the shares at a good price, you should go for it; there is not much more you can say.
The situation with American Express is more complex. Although Amex has a network, the company operates somewhat differently and has different risks. Things are going well at the moment, but we have also seen less good times in the past. I therefore consider Amex to be an interesting investment, but less so for me personally. Amex seems too much like a bank in payment transactions, and there are other options that are more attractive to me. There would be $AFRM (+3.63%) Paypal, Klarna or Co would be more interesting.
