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Visa to Float on the Stock Market

Following close on the heels of its archrival, Mastercard, the credit card company, Visa, has announced that it is to begin floating its shares on the stock market, essentially ending three decades of being a private organization. The company was founded in 1970 under the name National Bank Americard but changed its name to Visa six years later. Approximately $4 trillion is charged to Visa cards every year by its 1.4 billion cardholders around the globe.

In recent years, however, Visa has come under fire by rivals, retailers and customers who claim that they being ripped off by unrealistic transaction costs. Rival companies, such as American Express, have charged Visa for discouraging its 20,000 member banks from issuing cards by other payment processors. As such, there are several lawsuits pending against Visa and the company obviously felt that it was time to take the necessary steps to improve its image in the public?s eye.

When Mastercard recently began floating its shares on the market in May, stock values skyrocketed by 84%. 750 million people worldwide hold Mastercards, less than half of those who use Visa cards. Visa is hoping to share in Mastercard?s success story and will make the critical move from private to public early next year. Member bank?s shareholding will amount to less than 50%, which would essentially lower the legal risks for these institutions.