Visa Value-Added Services Become Core Growth Engine, Valuation is Attractive

Overview

This report is based on Bernstein's fireside chat with Visa CEO Ryan McInerney, delving into the company's strategy and opportunities in Value-Added Services (VAS), AI agent payments (Agentic Commerce), stablecoin applications, and core payment business. The report argues that traditional concerns about Visa (such as disruption by AI and stablecoins) are exaggerated; instead, these trends are becoming new growth catalysts. By accelerating product innovation, leveraging existing issuer and acquirer ecosystems, and using tokens as distribution platforms, Visa is transforming VAS into a growth engine larger than traditional consumer payments.

Core views

Value-Added Services (VAS) are the core driver of Visa's future. This segment now contributes approximately 30% of revenue and achieved 27% year-over-year growth in the recent quarter. VAS is subdivided into four main areas: issuing services (about 40% of VAS), such as the cloud-native issuer processor Pismo; merchant acquiring services (28%), like CyberSource's white-label technology for acquirers; risk and security services (17%), such as Visa’s Authorization Score using over 400 data elements; and consulting and marketing services (15%). Visa's strength lies in selling its products to existing, highly trusted banking and fintech partners, and rapidly complementing capabilities through acquisitions (e.g., Pismo, Featurespace). AI agent payments (Agentic Commerce) are seen as a major opportunity, not a risk. In an agent-driven world where trust is scarce, Visa is an ideal payment solution due to its 5 billion+ credentials, over 200 million merchant acceptance, mature dispute resolution process, and consumer protection mechanisms. Visa is actively developing capabilities to enable agents to autonomously conduct micro-transactions (e.g., purchasing compute power, images) and will flexibly adjust pricing models for new scenarios. In the stablecoin space, Visa has found clear product-market fit. One approach involves issuing Visa cards linked to stablecoin accounts in countries like Argentina where consumers seek dollar exposure, providing daily payment convenience. These programs have reached 150-160 projects with strong transaction growth. The second approach involves leveraging stablecoins as B2B cross-border settlement infrastructure enabling 24/7 settlement operations—while still small, it shows rapid growth. Visa is also actively participating in emerging blockchain ecosystems like Tempo and Canton. Additionally, Visa still has significant room to grow in traditional sectors. Within a global $20 trillion consumer payment market, about $11 trillion remains in cash/checks. Even in countries with low cash usage such as Canada and Korea, Visa's growth consistently outpaces overall consumer spending. The European market also holds substantial potential, where the company has increased investment and gained market share.

Analysis framework

Bernstein's analysis focuses on how Visa transforms potentially disruptive technologies into growth opportunities. First, they recognize that the market's core question about Visa has shifted from 'whether it will be disrupted' to 'how long VAS growth runway is'. Second, through the CEO conversation, analysts validated positive changes in Visa's organizational structure (restructuring product teams around three pillars), speed of product development (using AI tools to accelerate go-to-market), and business models (flexible pricing). Finally, they assessed the concrete impacts of emerging trends (AI agents, stablecoins) on Visa, concluding that these trends—by increasing transaction volume, creating new flows, and expanding VAS distribution channels—actually strengthen its moat. Valuation-wise, using a PE multiple approach, they derived a $450 target price based on 2027 EPS of $15.16 and a 30x P/E multiple, noting that the current valuation is historically low.

Methodology notes

• Industry Analysis FrameworkSupply and Demand Framework

  The value of a payment network is driven jointly by supply and demand

  The research examines how Visa simultaneously strengthens the supply side (enhancing capabilities of issuers and acquirers through VAS) and demand side (attracting consumers and merchants through products like stablecoin cards and agent payments), creating a stronger two-sided network effect.

• Competition and Strategy FrameworkMoat / competitive advantage

  Trust is the core moat in the digital payment era

  The report emphasizes that, in new scenarios like AI agent payments, Visa's existing advantages—broad merchant acceptance, mature dispute resolution process, and consumer protections—constitute a trust barrier that decentralized schemes (e.g., direct stablecoin payments) cannot easily replicate.

• Valuation ApproachPE/PEG valuation

  Combining absolute and relative valuation, with reference to historical percentiles

  The report employs a PE multiple approach, considering both relative valuation against the S&P 500 and highlighting that the current valuation is at its own historical bottom 5%, suggesting substantial safety margin and upside potential.

• Corporate Fundamentals and Financial FrameworkLinkage of Financial Statements

  High margins and strong cash flows support consistent capital returns

  Though not detailed in the report, its financial projections indicate Visa maintains operating margins around 68% and generates significant operating cash flow, providing a solid foundation for stock buybacks and dividends (current dividend yield 0.8%), which serve as crucial valuation support.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• VISA INC (V.US)

  Core covered security, directly benefiting from trends in VAS, AI agent payments, stablecoins

  Strengths

  Strong global network, deep banking partnerships, exceptional product innovation capabilities, robust financial position

  Risks

  Competition from international and domestic networks; regulatory caps on interchange fees; macroeconomic slowdown affecting consumer spending

Key data

• Value-Added Services (VAS) Revenue Share~30%27% YoY growth in the recent quarter
• Number of Stablecoin-linked Card Programs150-160200% YoY growth in transaction volume
• Total Tokens17.5 billion+Significant increase from 2 billion five years ago
• 2027 Estimated EPS$15.16Target price calculation based on this
• Current Stock Price$322.77As of June 1, 2026

Impact & implications

Bernstein believes Visa is at a critical transition point, evolving its growth story from pure transaction volume drivers to high-margin, high-growth Value-Added Services. Trends that appear disruptive, such as AI agents and stablecoins, are creating new transaction flows and VAS distribution conduits for Visa, further strengthening its network effects. Combined with an attractive valuation at historical lows, Visa's investment value is substantially elevated.

Risks

• Heightened competition from international and domestic payment networks (e.g., UnionPay, ACH)
• Regulatory bodies imposing caps on credit/debit card interchange fees
• Global payment volume growth slowing due to macroeconomic deceleration
• Operational disruptions from cyberattacks or network technical failures