Visa's Stablecoin Play Intensifies: Can it Future-Proof Its Network?

Visa Inc.’s V latest move into stablecoins signals how the payments giant is preparing for a future where digital currencies could reshape global transactions. In early March, Visa and Bridge, which is a stablecoin infrastructure platform owned by Stripe, announced a major expansion of their global card issuance partnership. The initiative allows fintech developers to issue stablecoin-linked Visa cards, meaning crypto wallets can still rely on Visa’s network to spend funds.

Examples include crypto platforms like Phantom and MetaMask, enabling users to spend stablecoins via cards. The collaboration plans to expand stablecoin-linked cards from 18 countries to more than 100 countries and grow its footprint in Europe, Asia Pacific, Africa and the Middle East by 2026-end. This deal ensures that stablecoins don’t replace Visa; they run on Visa.

At first glance, the collaboration may look like another crypto expansion, but strategically, it seems more about defense and control of payment flows. Stablecoins allow people to send money directly on blockchain networks without intermediaries. If that model scales, transactions could bypass traditional payment networks like Visa and Mastercard Incorporated MA. By integrating stablecoin capabilities with its card infrastructure, Visa is positioning its network to support these emerging payment flows rather than remain separate from them, which expands Visa’s addressable ecosystem.

The partnership also broadens the range of companies that can build payment products on Visa’s network. In addition to banks, fintech developers and digital wallet providers will be able to launch card programs that connect stablecoin balances to Visa’s merchant acceptance network. That network remains one of Visa’s strongest advantages, with more than 175 million merchant locations worldwide. It is far easier for a wallet or fintech to issue a Visa-linked card than to convince millions of merchants to accept a new payment method.

Moreover, cross-border payments are one of Visa’s most profitable segments. Stablecoins are widely used for remittances, international transfers and cross-border commerce. By integrating them into its infrastructure, Visa is expected to accelerate settlement, reduce FX friction and keep cross-border transactions on its network instead of losing that flow to blockchain-only payment rails. This converts stablecoins from a competitive threat into a new transaction rail for Visa. This way, Visa is future-proofing its operations.

Other Growth Drivers

The continued expansion of Visa’s Value-Added Services (VAS) segment remains a major tailwind. VAS revenues surged 28% in constant dollars to $3.2 billion in the fiscal first quarter of 2026, driven by rising demand for advisory, fraud prevention, risk management and marketing solutions. With the FIFA World Cup and the Olympic Games approaching, marketing and analytics services are positioned for further acceleration, helping the company diversify its revenues and lift margin quality.

Visa’s transaction-based model continues to insulate results from fluctuations in specific spending categories. Whether consumers spend on travel, retail, dining or digital services, Visa’s network captures value across the spectrum. This structural advantage provides earnings stability even amid shifting economic conditions. In the fiscal first quarter, processed transactions grew 9% year over year to 69.4 billion.

Visa continues to pair growth with capital returns. During the quarter, the company returned $5.1 billion to shareholders, including $3.8 billion in buybacks and $1.3 billion in dividends. As of Dec. 31, $21.1 billion remained under its repurchase authorization. Its dividend yield of 0.87% exceeds Mastercard’s 0.69% and the industry average of 0.81%. Meanwhile, another peer, American Express Company AXP, boasts a dividend yield of 1.07%.

Zacks Estimates Signal Steady Growth

The Zacks Consensus Estimate for Visa’s fiscal 2026 and fiscal 2027 EPS implies an 11.9% and 13.3% uptick, respectively, on a year-over-year basis. Similarly, the consensus mark for fiscal 2026 and fiscal 2027 revenues suggests an 11.3% and 10.3% increase, respectively.

The company beat earnings estimates in each of the past four quarters, with an average surprise of 2.1%.

Visa Inc. Price, Consensus and EPS Surprise

Visa Inc. price-consensus-eps-surprise-chart | Visa Inc. Quote

Price Performance & Valuation

Over the year-to-date period, Visa shares declined 11.9%, underperforming the industry’s 10.6% drop and the S&P 500’s 1.1% fall. Meanwhile, Mastercard slipped 11.7%, while American Express fell 17.3%.

YTD Price Performance - V, MA, AXP, Industry & S&P 500

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Visa’s valuation remains above the industry average, but that has been the case for the most part of recent history. The stock is trading at 22.71X forward price/earnings versus its five-year median of 26.26X and the industry average of 18.12X.

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Meanwhile, Mastercard and American Express are currently trading at 25.23X and 17X, respectively.

Key Risks to Monitor

Despite its strengths, Visa faces a number of challenges. One potential risk stems from the possibility that large retailers or technology companies could introduce their own stablecoins. Firms such as Walmart and Amazon are reportedly experimenting with such alternative payment ecosystems, which over time could redirect a portion of transaction flows away from traditional card networks. While such developments remain uncertain, the rapid pace of innovation in digital payments makes this an area worth watching.

Regulatory scrutiny also remains a key concern. In the United States, the Department of Justice has accused Visa and Mastercard of using their market dominance to sustain elevated merchant fees. Ongoing litigation and settlement discussions continue to create uncertainty around long-term pricing power. Meanwhile, the proposed Credit Card Competition Act could alter card-routing rules, potentially affecting payment network economics.

Regulatory developments in Europe add another layer of pressure. In June 2025, the Competition Appeal Tribunal in London ruled that Visa and Mastercard’s multilateral interchange fees breached European competition law. The U.K. Payment Systems Regulator is expected to introduce fee caps, which could limit revenue growth in the region. Moreover, several U.K. banks are exploring a domestic payment alternative to reduce reliance on U.S. card networks.

Bottom Line

While Visa continues to benefit from strong network economics, expanding value-added services and steady transaction growth, evolving competitive dynamics and regulatory scrutiny warrant a balanced view. The company’s push into stablecoin-linked cards highlights its efforts to adapt to emerging payment technologies while protecting its core network advantage.

However, uncertainties around regulation and potential alternative payment systems may weigh on sentiment. With solid fundamentals but a few risks to monitor, Visa currently carries a Zacks Rank #3 (Hold), suggesting investors may await clearer catalysts. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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