Dan Dolev, Mizuho senior analyst, joins 'The Exchange' to discuss Stablecoin threats, credit card rewards and his bullish case for payments stocks. ...

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive has bureaus and studios in key finance and investing hubs including London, New York, Toronto, Vancouver, Sydney, and Perth [2][3] Group 2 - The company is a forward-looking technology adopter, utilizing various technologies to enhance workflows [4] - Proactive employs automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Financial Data and Key Metrics Changes - Mastercard reported strong financial performance with a 25% adjusted EPS CAGR on a currency neutral basis for the three years ending 2024 [46] - The company achieved an 18% currency neutral adjusted net revenue CAGR for the same period [46] - In 2024, Mastercard returned $13.5 billion to shareholders through buybacks and dividends, totaling over $90 billion since its IPO in 2006 [47] Business Line Data and Key Metrics Changes - Services accounted for close to 40% of net revenue in 2022, reflecting a healthy growth pace [37] - The company processed over 159 billion transactions, growing both volumes and transactions by 11% on a local currency basis [45] - Mastercard issued over 3.5 billion cards and had approximately 150 million acceptance points globally [45] Market Data and Key Metrics Changes - Mastercard generates around 70% of its net revenue outside the United States, indicating strong international presence [33] - The company is expanding its domestic switching capabilities across China, enhancing its global acceptance [33] Company Strategy and Development Direction - Mastercard's strategy focuses on three key areas: consumer payments, commercial new payment flows, and value-added services and solutions, which are expected to drive growth [62] - The company emphasizes innovation and trust as core components of its competitive differentiation in the digital economy [38][42] - Mastercard is investing in stablecoin integration and partnerships to enhance its offerings in the digital asset space [56][57] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of adapting to geopolitical and macroeconomic changes while maintaining a diversified business model [62] - The company is optimistic about the growth potential in digital payments and the integration of stablecoins into mainstream finance [53][59] Other Important Information - The stockholder proposals for a racial equity audit report and a report on affirmative action risks were not approved [24] - Mastercard has been recognized as one of the most trusted companies in America by Forbes and Newsweek for 2025 [44] Q&A Session Summary Question: How does Mastercard approach executive compensation? - The primary objective of the compensation program is to attract, motivate, and retain executives, ensuring alignment with business strategy and performance metrics [51][52] Question: What are the opportunities and risks associated with stablecoins? - Stablecoins present exciting growth opportunities, and Mastercard is integrating them into its network to provide secure and reliable payment experiences [53][54][56] Question: Is Mastercard ready to adapt to a changing political environment? - Mastercard does not take political stances but operates to serve all geographies, respecting a range of political views grounded in goodwill and tolerance [60][61] Question: What will be the main growth drivers in the coming year? - Key growth drivers include consumer payments, commercial new payment flows, and value-added services, which are expected to fuel long-term growth [62]

Core Viewpoint - New stablecoin legislation is causing concern among investors regarding Visa's business, leading to a nearly 10% decline from its all-time highs, as merchants and fintech companies are increasingly accepting stablecoins for transactions [1][5]. Group 1: Stablecoins and Legislation - Stablecoins are cryptocurrencies pegged to fiat currencies, such as the U.S. dollar, providing more reliability than traditional cryptocurrencies like Bitcoin [3]. - Recent legislation passed by the U.S. Senate aims to regulate stablecoins, ensuring issuers maintain proper reserves and undergo regular audits [4]. - The acceptance of stablecoins by merchants is expected to increase, potentially allowing them to bypass Visa's payment processing [5]. Group 2: Competitive Landscape - Merchants are motivated to adopt stablecoins to avoid the 2%-3% transaction fees charged by Visa, which could save them billions annually [6][14]. - Despite the push for stablecoins, Visa maintains a significant competitive advantage due to its extensive global acceptance, with 150 million merchants and 4.8 billion cards in circulation [10]. - Consumers are unlikely to abandon Visa due to the cash-back rewards and perks associated with using Visa cards, which stablecoins do not currently offer [11][14]. Group 3: Investment Perspective - Although Visa's stock has declined, it is not expected to plummet to zero, and the company is considered a high-quality business [15][16]. - The current price-to-earnings ratio of 34 suggests that Visa may not be a solid buy at this time, as it is a mature company with stable but slow growth prospects [15].

Acquisitions - Corpay signed a definitive agreement to acquire GPS Capital Markets LLC for $725 million[5, 16] - The GPS acquisition is expected to close on January 1, 2025[6, 16] - Corpay expects to close the Paymerang acquisition on July 1, 2024, for approximately $475 million[9, 16] - These acquisitions are expected to increase existing Corporate Payments revenue by approximately 15%[12] Financial Performance and Projections - GPS Capital Markets LLC has experienced approximately 19% revenue CAGR since 2016 and has a mid 40% EBITDA margin[6, 7] - Paymerang has experienced over 20% annual revenue growth and is profitable[10] - Corpay anticipates Corporate Payments revenue to be between $1.325 billion and $1.425 billion[13] - With the acquisitions of GPS and Paymerang, Corporate Payments revenue is projected to increase by 15%, reaching between $1.525 billion and $1.625 billion[13] - Corpay expects its Corporate Payments business to approach approximately $2 billion in revenue in 2026[14] Capital Allocation - Corpay expects to deploy approximately $2.1 billion in capital[16] - Approximately $900 million is allocated for share repurchases year-to-date[16]

Core Viewpoint - dLocal Limited has appointed Will Pruett as an Independent Board Member and member of the Audit Committee, effective July 1, 2025, to enhance the Board's guidance on growth and scalability [1][2][3] Group 1: Appointment Details - Will Pruett brings extensive expertise in capital markets and emerging markets, which will be crucial for dLocal's expansion and stakeholder value delivery [2][3] - Pruett has a notable background, including 16 years at Fidelity Investments managing various funds focused on Latin America and emerging markets, and prior experience at HSBC [2] - His appointment reflects dLocal's commitment to effective governance and diverse perspectives in driving growth strategies [3] Group 2: Board Changes - Mariam Toulan's term as Independent Director will conclude on June 30, 2025, and the company expresses gratitude for her contributions during her tenure [4] Group 3: Company Overview - dLocal operates a technology-first payments platform that connects global enterprise merchants with consumers in over 40 emerging market countries across Africa, Asia, and Latin America [5] - The "One dLocal" platform allows global companies to manage payments, pay-outs, and fund settlements without the complexity of multiple local entities and payment processors [5]

Core Insights - Visa Inc. is intensifying its focus on blockchain technology to connect traditional finance with decentralized currencies, enhancing its presence in the crypto sector through partnerships and pilot projects [1][10] - The company has launched a stablecoin settlement service operating seven days a week, achieving over $200 million in cumulative settlement volume, and has developed a tokenized asset platform for banks [2][10] - Visa's strategies aim to improve cross-border payments and cater to a new generation of cryptocurrency-savvy consumers, with a reported 13% year-over-year increase in cross-border volume for Q2 of fiscal 2025 [3][10] Competitive Landscape - Competitors such as Mastercard and PayPal are also advancing in the digital assets space, with Mastercard launching Crypto Credential and crypto-linked cards, while PayPal has introduced its own stablecoin, PYUSD [5][6] Financial Performance - Visa's shares have increased by 7.1% year-to-date, outperforming the industry, which has seen a slight decline of 0.1% [9] - The company trades at a forward price-to-earnings ratio of 27.35, higher than the industry average of 21.66 [11] - The Zacks Consensus Estimate for Visa's fiscal 2025 earnings indicates a 12.9% increase compared to the previous year, with 10 upward revisions in the last 60 days [12]

Investor Update Fourth Quarter Fiscal Year 2016 April 2016 Forward Looking Statements Meta Financial Group, Inc.® (the "Company") and its wholly-owned subsidiary, MetaBank® (the "Bank"), may from time to time make written or oral "forward-looking statements," including statements contained in this Investor Update, the Company's filings with the Securities and Exchange Commission ("SEC"), the Company's reports to stockholders, and in other communications by the Company and the Bank, which are made in good fa ...

Group 1 - Visa and Mastercard stocks dropped approximately 5% each due to fears that stablecoins could disrupt traditional payment networks following the U.S. Senate's approval of stablecoin legislation [2] - Stablecoins are cryptocurrencies designed to maintain a stable value against fiat currencies, integrating the U.S. dollar within the blockchain, which may enhance their acceptance as a payment method [3] - The new stablecoin legislation establishes a regulatory framework for dollar-linked digital tokens, requiring complete reserve backing, monthly audits, and compliance with anti-money laundering laws, potentially increasing legitimacy for cryptocurrencies [3] Group 2 - Merchants may prefer stablecoins for their ability to lower processing costs by avoiding traditional payment networks, with stablecoin payments finalizing almost instantly compared to credit card transactions that incur fees and delays [4] - Major retailers like Walmart and Amazon are exploring the issuance of their own stablecoins, which could lead to significant savings in interchange fees and enhance profitability [4] - Cross-border payments, a key revenue source for Visa and Mastercard, are particularly vulnerable to disruption by stablecoins due to their faster and more economical transaction capabilities [4] Group 3 - The transition to stablecoins will not be immediate, as credit cards remain integral to consumer behavior, offering convenience, access to credit, and loyalty rewards that stablecoins currently do not provide [5] - Regulatory uncertainties, user confidence, and infrastructure issues present barriers to the widespread adoption of stablecoins at this time [6] - Visa and Mastercard are actively exploring innovations in the stablecoin space, with Visa testing transactions in USDC and both networks seeking to modernize cross-border payments using blockchain technology [6]

Group 1: Stablecoin Legislation - The United States Senate approved stablecoin legislation known as the GENIUS Act, which aims to regulate stablecoins and require issuers to maintain sufficient reserves and undergo regular audits [1] - This legislation is expected to encourage customer adoption of stablecoins, posing a potential threat to Visa's payment volume [2] Group 2: Merchant Adoption of Stablecoins - Major retailers like Walmart and Amazon are exploring the creation of their own stablecoins to reduce high credit card transaction fees, which range from 2% to 3% [3] - By adopting stablecoins, these retailers could save billions annually in fees currently paid to the financial system [4] Group 3: Challenges for Stablecoins - Replicating Visa's scale and the rewards associated with credit cards presents a significant challenge for stablecoins, as Visa has a vast network accepted by 150 million merchants and processes over $15 trillion in payments annually [8] - The network effect creates a competitive advantage for Visa, making it difficult for stablecoins to achieve similar acceptance and usage [9] Group 4: Visa's Competitive Position - Despite concerns over stablecoins, Visa maintains a strong competitive advantage and scale that stablecoin issuers are unlikely to match in the near future [11] - Visa's earnings per share (EPS) grew 10% year over year, indicating steady growth, although the stock trades at a premium price-to-earnings ratio of 34 [12]