Fintech Giant Hiding In Plain Sight

&l;p&g;&l;img class=&q;dam-image getty size-large wp-image-906250454&q; src=&q;×0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g; (Photo by Dave Kotinsky/Getty Images for Visa)

&l;strong&g;By Jon Friar&l;/strong&g;

While startups get most of the attention in fintech, the monumental task of converting the $17 trillion of global cash and check transactions into digital payments remains one of the most persistent opportunities in finance.

Owning &l;strong&g;Visa&l;/strong&g; (V), which began life as BankAmericard in 1958, is a great way to play this trend. In addition to the movement away from cash and checks, the Foster City, California, company also benefits as retail spending moves online. In fact, Visa&s;s share of all payments roughly doubles when consumers start buying digitally.

There is also a new Venmo-esque P2P payment service called Visa Direct, which facilitates money transfers among 3 billion-plus card accounts. High incremental margins and steady share buybacks should allow the company to sustain mid-teens or better EPS growth for many years. On a cash-flow basis, Visa&s;s stock trades for only a modest premium to the market.

&l;i&g;Jon Friar is sector portfolio manager at &l;a href=&q;; target=&q;_blank&q;&g;T. Rowe Price&l;/a&g;. &l;/i&g;&l;/p&g;

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