Visa is the global leader in electronic payments, accounting for half of all credit card transactions and roughly 75% of debit card transactions in recent years. Visa generates revenue by charging fees to its customers based on both the dollar volume of card activity and the number of transactions processed through its network.
Impacts and Opportunities for Information Technology Service Companies
A 2014 report on consumer payment choices reveals that cash makes up the single largest share of consumer transaction activity; however, cash accounts for a small portion of the total value of payments. The findings suggest that consumers don’t use electronic methods of payment as often as cash, but when they do, they tend to be for higher-value transactions. ((Bennett, Conover, O’Brien and Advincula. “Cash Continues to Play a Key Role in Consumer Spending: Evidence from the Diary of Consumer Payment Choice.” April 2014. Accessed May 22, 2014. http://www.frbsf.org/cash/files/FedNotes_Evidence_from_DCPC.pdf))
Low Impact Service Company
Portfolio 21 considers Visa to be a low impact service company. As a service business, this company’s environmental footprint is minimal due to its business model and structure. It does not produce consumable products, operate manufacturing facilities, utilize outsourced production facilities, or operate retail storefronts.
Visa’s direct environmental impact stems primarily from its data centers, which handle Visa’s data traffic and transaction processing. While the energy required to power the company’s data centers is small compared to companies in manufacturing industries, it is still an important impact area for the company. According to Visa’s Carbon Disclosure Project questionnaire response, the company has reduced its carbon dioxide intensity 15% from 2012 to 2013.
Areas for Improvement
Portfolio 21 encourages Visa to set energy efficiency targets for its data centers.
Industry: Information Technology
Country: United States
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 5/31/14 and may not reflect current opinions or subsequent events.