Visa thwarts $350 million in scams with new division

SAN FRANCISCO - Visa Inc. (NYSE:V), a prominent player in the financial services industry with a market capitalization of $667 billion, has reported significant strides in its fight against fraud with the establishment of its Scam Disruption department, a specialized unit within the Visa Payment Ecosystem Risk and Control (PERC). According to the company’s recent announcement, this new department played a pivotal role in preventing over $350 million in scam attempts in 2024. InvestingPro analysis indicates the company maintains excellent financial health with an overall score of "GREAT."

The Scam Disruption department’s success adds to the wider efforts of PERC, which blocked $40 billion in attempted fraud across the Visa network last year. Visa has invested heavily in technology to bolster its anti-fraud capabilities, with expenditures surpassing $12 billion over the past five years. This investment, supported by the company’s robust 97.82% gross profit margin and strong revenue growth of 10.35% over the last twelve months, has been directed not only towards technological advancements but also towards recruiting a diverse team of professionals, including former law enforcement and military personnel, to enhance the human element in scam detection and prevention.

Visa’s Scam Disruption (VSD) leverages the company’s extensive data, advanced technologies, and partnerships to protect all stakeholders in the payment ecosystem. The VSD team employs Generative AI tools for sophisticated analysis, enabling them to uncover complex scam networks. One notable success involved disrupting nearly 12,000 fraudulent merchants tied to identity verification scams, which prevented potential losses of more than $37 million. For investors seeking deeper insights into Visa’s technological capabilities and financial metrics, InvestingPro offers comprehensive analysis through its Pro Research Report, available among 1,400+ top US stocks.

The company’s proactive approach includes scam intelligence gathering, in-depth investigations, and collaborative efforts with financial institutions, law enforcement, and third parties to dismantle scam operations. Michael Jabbara, SVP and Global Head of PERC at Visa, emphasized the personal impact of scams on victims and the importance of a collective effort to combat such fraudulent activities.

Visa’s commitment to security extends to sharing knowledge and strategies with others in the industry to foster a more secure payment environment. For more information on Visa’s security measures, the company directs interested parties to its website.

This announcement is based on a press release statement from Visa Inc.

In other recent news, Visa’s financial outlook has been updated by TD Cowen, which increased the company’s price target to $382, maintaining a Buy rating. This revision follows Visa’s Investor Day, where the company showcased its strategies and financial model, emphasizing its shift towards unbundled solutions and the development of Visa-as-a-Service. UBS also reiterated its Buy rating with a $400 price target, suggesting that Visa’s strategic initiatives, including its "network of networks" approach, will support sustained revenue growth. BMO Capital Markets maintained an Outperform rating with a $370 price target, highlighting Visa’s potential in digital commercial payments and its value-added services, which have shown high-teen growth rates.

Keefe, Bruyette & Woods echoed this sentiment, reaffirming an Outperform rating and a $400 price target, citing Visa’s innovation and expansion as key growth drivers. Meanwhile, Visa and Mastercard are reportedly considering a return to the Russian market after suspending operations in March 2022 due to geopolitical tensions. This potential re-entry is complicated by the development of Russia’s own payment system, Mir, and alternative solutions like China’s Unionpay. The market dynamics in Russia have shifted significantly, posing challenges for Visa and Mastercard as they navigate regulatory and competitive landscapes.

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