Visa’s Monopoly Inhibits Retailer Profit Margins (Bloomberg)
In what can only be described as a battle of heavyweights, Wal-Mart Stores Inc. (WMT) has sued Visa (V) Inc. for $5 billion in damages caused by rate manipulation. The world’s largest retailer claims that its largest card issuer is colluding with banks to fix transaction fees. Wal-Mart is claiming Visa holds a practical monopoly on credit card use because it requires retailers to accept all issuers’ Visa-branded cards, thereby eliminating any benefits the company might receive from competitive pricing. So how does this affect you as an investor? Well, if you’re paying more for every Visa transaction, you have less to invest. More directly, if Wal-Mart wins the law suit, Visa shareholders could see an effect on the company’s bottom line and ultimately its share price. And for a company that’s witnessed 27 percent appreciation in its shares over the last year, the loss of the lawsuit could hurt. In pre-market trading, Visa was down 1.22 percent. Paul Cohen, a spokesman for Visa, declined to comment on the Wal-Mart complaint.
There is a famous saying that has been floating around the internet regarding the “Five…
Today is May 1, a day that’s also known as “May Day” in many countries…
Ten reasons to day-trade with mentors in a virtual room highlight why now is a…
Last year’s fourth-quarter downtrend for inflation looks to have bottomed out at just under the…
The intrinsic and extrinsic value of an option make up the total value of the…
Picture this: You've diligently saved for retirement your whole career, dutifully contributing to your 401(k),…