Originally Posted by SweetT

Here is my take on the industry as a whole. As long as the market does not crash altogether then I think V will be OK. If the entire market crashes, so too will Visa....but if we end up in a full blown recession or even a depression, Visa and MC should be alive and kicking. The worse the economy is, the more people will rely on CCs and the more they use their CCs the more money V makes.

What most people do not realize is that Visa has no risk. They do not loan any money and they have no incentive to collect any bad debts. The funny thing is they get paid no matter what. When you buy something on Visa, they get a cut. When you pay your bill, they get a cut. If you pay your bill late, they get a bigger cut. If you get an over-the-limit fee, they get a cut of that, too. Hell, if you file bankruptcy and only pay PART of the bill, they still get a cut. Everything to them is a transaction. No matter what, Visa gets a cut of the money. You gotta love a great business model. ;)


--T