Visa Electronic (Essay Sample)

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VISA CORPORATION
History
Visa Inc. ("Visa" or the "Company") is a payments technology company that unites consumers, banks and governments in countries that exceed 200 around the globe. This enables them to use digital currency instead of cash and checks. This company works effectively by managing and promoting a portfolio of globally accepted payment brands like Visa, Interlink, Visa Electron and PLUS. This achieved by licensing our clients to use this payment brands in their payment programs. This shows that this company has a range of branded payments product policy that clients can use in a financial institution. This enables them to offer credit, debit and cash access programs for individuals and government entities that are their main customers. Visa does not issue cards to the customers. They instead extend their credit rates through transaction processing and value-added services like Visa Net, Visa Processing services and Visa Debit services. Hence, all issues that regard cardholder and merchant relationships dealt with by our proper network of financial institution clients. In addition, this company derives revenues from fees paid by our customers when they make voluminous transactions and payments in the services that we offer. The revenues can also be derived from related services such as Initial public offer (IPO) offered in the stock exchange. This is evident from the announcement that Visa Inc Company made on February 25, 2008 of giving the public an IPO. This company offered an IPO to the public on March 18, 2008 through offering half of its shares to the public. Visa sold 406 million shares to the public priced at US$44 per share. The prices were $2 above the high end of the expected $37–42 pricing range. That is why we managed to raise US$17.9 billion making the IPO be listed among the largest initial public offering in U.S. history (Schinkel and Peter, 34).
Competition
Visa International’s main competitors are MasterCard American express and Discover. These competitors came to the market to counter the monopoly that Visa was enjoying around the business world. Therefore, the competitive advantage that Visa has over the other companies is brand recognition (Wonglimpiyarat, 85).
Brand Recognition
Visa enjoys the most definitive competitive advantages possible over MasterCard. Visa International is globally accepted rather than MasterCard that is still striving hard to be accepted around the globe. That is why it’s believed to be a long-time sponsor of Olympic Games that take place around the globe.
Switching Cost
Visa Inc. Company holds a strong business that has high switching costs. This implies that it is costly to change brands. For instance, it would be difficult for someone to switch from using a cable TV to a satellite TV because of the expenses of changing switch box installation that come with the switching. That is the same thing that applies to banks that use Visa. The banks incur difficulties in switching card brands because of the expenses behind...