Why Visa Stock Is Down By 5% Today

Visa Stock Falls As Amazon Will Stop Accepting Company’s Credit Cards That Were Issued In The UK

Shares of Visa found themselves under pressure after a Bloomberg report indicated that Amazon will not accept purchases made with Visa credit cards that were issued in the UK from January 19, 2022.

According to the report, Visa credit cards that were issued in other countries will be accepted by Amazon. High fees were the reason for Amazon’s decision.

Visa stock made an attempt to settle above the $250 level back in July but lost momentum and moved closer to the $200 level. Other payment stocks like PayPal and Mastercard have also found themselves under pressure in recent months as competition in the payments space intensified and investors have started to question whether rich valuations of payments companies were justified.

What’s Next For Visa Stock?

Amazon’s decision dealt a material blow to Visa stock as traders fear that it may be the beginning of a trend. Today’s performance of Mastercard and PayPal stocks shows that the market views Amazon’s move as an industry-wide problem.

Analyst estimates for Visa have been moving lower in recent months. Currently, analysts expect that Visa will report earnings of $7.05 per share in the current fiscal year. In the next fiscal year, Visa is projected to report earnings of $8.41 per share, so the stock is trading at 24 forward P/E.

Visa has already lost about 20% of its market capitalization since July while its valuation moved towards more normal levels, so the stock may soon attract speculative traders and investors who are willing to bet that fears are overblown.

However, traders should closely monitor the developments in the industry. Big retailers are unhappy with high fees, and Amazon’s move may be replicated by others. It remains to be seen whether companies like Visa will have enough bargaining power in such negotiations as competition in the payments space is intensifying.

For a look at all of today’s economic events, check out our economic calendar.