There’s a massive opportunity on the table for payment tech companies such as Visa Inc (NYSE:V), and that’s partially what’s behind the company’s latest acquisition. Visa acquired software-as-a-service company Fraedom last month, and that could lead to a big move into the B2B space.
Motley Fool has additional insight on Visa’s acquisition.
In early February, Visa (NYSE:V) announced it would be acquiring Fraedom, a software-as-a-service company that provides businesses and financial institutions with transaction and expense management solutions. Many of the products Fraedom offers concern expense management and accounts payable, providing organizational, mobile, and technological answers for companies struggling to keep up with technology in today’s business world.
Upon the announcement of the acquisition, Visa’s global head of products and solutions, Vicky Bindra, stated: “Increasingly, businesses are replacing inefficient paper-based payment systems with digital tools. This strategic acquisition allows Visa to offer a more comprehensive business solution to our corporate clients that is innovative, global, highly configurable, and intuitive for their employees.”
In 2017, Mastercard CFO Martina Hund-Mejean placed the massive size of the global B2B payments market into perspective. She estimated that it’s a roughly $124 trillion market, and that just $20 trillion of that is transacted at point-of-sale. That means the remaining $104 trillion is transacted via ACH transfers, cash, and checks.
Visa is clearly on top of this opportunity with its latest purchase, as well as via its Visa Ready Program for Business Solutions which launched last June.
Visa Inc shares were trading at $121.86 per share on Wednesday afternoon, up $0.80 (+0.66%). Year-to-date, V has gained 7.06%, versus a 2.15% rise in the benchmark S&P 500 index during the same period.