Visa Inc.

The stable outlook on Visa reflects S&P Global Ratings' expectation that--despite pressure on earnings and operating cash flow associated with the pandemic--the company will maintain low leverage and robust liquidity without any major disruption at least in the next two years from technological advancement, litigation, or regulation. More specifically, we expect Visa to operate with debt to EBITDA around or below 1x, as we measure it, and with EBITDA margins near 70%. We also expect it to close its $5 billion acquisition of Plaid this calendar year. We could lower our ratings on Visa if: Its leverage rises significantly, particularly if debt to EBITDA approaches or exceeds 1.5x without a plan to materially reduce it; It suffers losses on its

...Visa Inc. is the operator of the largest retail payment network outside of China. Its ubiquity among consumers, merchants, and banks helps protect its market position. The company has consistently reported robust profitability. The pandemic is pressuring profitability, but we still expect the company to report good earnings in the next two years, benefiting from consumers' increasing use of electronic payments. Visa has low leverage and generates strong cash flow. Its debt to EBITDA, on a trailing 12-month basis, was about 0.7x as of June 30, 2020, and should remain around or below 1x on a weighted average basis in the next two years. Its high market share in electronic payments exposes it to regulatory and legal risks. Lawsuits and regulatory changes have repeatedly challenged the card networks, their rules, and the fees associated with payment processing over several years. Visa also has material operational risk as well as large unsecured exposures to financial institutions stemming...

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