I'm not sure about what percentage exactly goes to Visa or the bank processing, but my merchant account charges

1.5% for Visa
2.95% for Amex

so obviously Visa saves me a little money, is more widely used and then there's a swipe fee too which varies by merchants based on volume from .15-.25 per swipe. So My businesses grossed nearly $20M last year with $16M or so on CC that means close to $200-250k in CC fees, yes Visa makes $20k/month from me without doing any work.....the majority of credit cards are Visa since it's much more popular than Amex due to Amex being tougher to get, having to pay in full, and credit checks required.

So when the price of gas goes up, when the price of groceries goes up, when the price of your vet goes up, that 1.5% visa charges is slightly higher. Combine that with the fact they dont issue credit like Amex and you have basically a toll way, if you have a visa card and default on the payment, that's the issuing banks problem, not visa's. American Express though if you default, it's American Express' issue to deal with. That is another big reason I like Visa, along with the massive dividend growth percentage wise the last 2 years.

Also as I mentioned earlier, I read their annual report, the adult industry is huge, they're basically the only player along with mastercard, they charge every porn site $750/year to process CC and then via Epoch and CCbill they charge 14.5% per transaction due to the high chargeback volume. I would go under if I had 14.5% CC fees, but porn sites operate on such a high margin it doesn't hurt them. Mastercard initiated a $500/year annual fee now, and porn sites are dropping it in droves bc they're not gonna pay $750 to visa and $500 to mastercard, so Visa is slowly monopolizing the adult industry.

As I said, Ive done my homework, I see how much visa makes off me, and I see the overall shift towards credit cards, my business is over 80% CC today. Could an economic slowdown affect Visa? Sure, but at the same time 80% of the world doesn't even use cards yet, when will they? Who knows but you get new users everyday, not less. I love it, I love it alot,I wish the yield were higher today, bc it would be my #1 slot, but by the time whatever I could buy today would yield 5-6% will be 15 years at the earliest even with 12-15% annual dividend growth. For young people with 30-40 years, it's a home run with a very big moat, a key thing warren buffett seeks......o and by the way he owns over 1 million shares himself.

As someone who watches it alot, I'd wait and buy under $180 if you like it. PM is at $86 which is 10% off its 52 week high of $96.50. Visa is literally at its 52 week high, granted its up like 70% this year, will a few bucks matter in the long run? no, but if you're the type that watches day to day, it probably will pull back. PM though I feel is pretty much at its low for the time being and will be closer to $95 after the dividend increase in september.

This post was edited on 6/30/13 at 10:13 pm