Visa (V) Completes the Buyout of LatAm-Based YellowPepper

Visa Inc (NYSE:V). V recently completed the pending acquisition of fintech pioneer YellowPepper. The acquired company comes with proprietary technology and tie-ups supporting various financial organizations and start-ups across Latin America and the Caribbean. However, financial terms of the deal were kept under wraps.

The buyout contract is in line with Visa’s commitment to “network of networks” strategy to become a single point of access for initiating multiple transaction types and enabling a secure flow of funds.

YellowPepper’s proven brand-agnostic platform allows users, processors and governments to access various payment rails for different payment flows through a single connection via a rich set of APIs (application programming interface).

Visa is expected to be able to host an array of better products in these areas with this deal. These products will be related to tokenisation, multi-rail integration, identity validation, authentication and risk.

This initiative also focuses on reducing the time to market. It is expected to lower expenses for issuers and processors to access interoperable solutions. The deal will boost Visa Direct, a real-time push payments platform and Visa B2B Connect, its non-card-based payment for businesses to network cross-border.

Earlier in 2020, the two companies forged a partnership on real-time P2P (peer-to-peer) payments system in Peru on behalf of Scotiabank, BBVA (MC:BBVA) and Interbank.

Back in 2018, Visa entered into an agreement with YellowPepper to tap the growing opportunities for tokenized payments, increasing the access to Visa APIs and expanding the usage of push payments via Visa Direct. Visa took part in YellowPepper’s $12.5 million worth Series D funding round back in 2018.

Recently, Visa acquired Earthport, Payworks, Verifi, and the ticketing and token services business of Rambus (NASDAQ:RMBS). These acquisitions and investments will accelerate its progress and extend the boundaries of its capabilities and network. The company is on track to acquire Plaid, which will be closed by the end of 2020.

Zacks Rank and Price Performance

Shares of this currently Zacks Rank #4 (Sell) company have gained 15% in a year’s time, outperforming its industry’s growth of 7.1%.

Other companies in the same space, such as American Express Company (NYSE:AXP) AXP, Synchrony Financial (NYSE:SYF) SYF and Discover Financial Services (NYSE:DFS) DFS have lost 3.7%, 18% and 8.3%, respectively, in the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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