TLDR
- Visa shares plummeted 4.5% Monday following a Citrini Research analysis suggesting AI could bypass card networks and slash transaction fees.
- Shares settled at $306.52, significantly down from the day’s opening price of $319.04.
- Rival payment processors Mastercard and American Express suffered declines of 5.7% and 7.2% respectively.
- Tuesday premarket trading showed Visa gaining 0.2%, representing a modest rebound attempt.
- The company’s $38 billion merchant swipe fee settlement remains pending judicial approval.
Visa finished Monday’s trading session at $306.52, marking a 4.5% decline after an analytical piece raised concerns that artificial intelligence technology might eventually disrupt the fee structure central to its revenue model.
The analysis originated from Citrini Research, an independent research organization. Released via Substack over the weekend, the piece explicitly characterized itself as “a scenario, not a prediction” — presenting a speculative financial review supposedly written from June 30, 2028.
The hypothetical projection painted a dire economic picture: U.S. unemployment exceeding 10% and the S&P 500 down 38% from record highs. The imagined catalyst? AI technology eliminating white-collar positions across industries.
Visa featured prominently in the scenario. Citrini’s analysis suggested that AI-powered agents representing consumers might identify and utilize less expensive payment channels, threatening the 2%-3% network and transaction fees that form Visa’s revenue foundation. The report cited stablecoins as one possible substitute for conventional card infrastructure.
Shares began the session at $319.04, declined to an intraday low of $304.71, and finished near the lower end of the daily range.
Payment Sector Sold Off Broadly
The downturn wasn’t isolated to Visa. Mastercard declined 5.7% while American Express registered a 7.2% loss during the same trading period. Both Visa and American Express appeared among the Dow’s heaviest detractors, according to MarketWatch tracking data.
Tom Hainlin, national investment strategist at U.S. Bank Wealth Management, described the mood plainly: “You’ve seen the market react to headlines, it’s ‘sell first, assess later.'”
The widespread decline prompted analysts to reconsider business models dependent on collecting modest fees from each transaction — the “toll booth” approach that characterizes payment network economics.
Swipe Fee Settlement Still Unresolved
Visa faces an additional regulatory challenge. Last November, both Visa and Mastercard proposed a restructured $38 billion settlement addressing merchant complaints about swipe fees. Judicial approval remains outstanding.
Merchant groups say the deal doesn’t do enough. Stephanie Martz, general counsel for the National Retail Federation, said: “You can’t just suddenly tell more than 80% of your card customers you’re not going to take their cards.”
It bears mentioning that Visa doesn’t directly collect interchange fees — card-issuing banks receive those payments. Visa generates revenue through network and processing charges, which rely on sustained transaction volumes and robust cross-border payment activity.
What’s Next for Visa
Visa climbed 0.2% during Tuesday’s premarket session, touching $307.09 — a slight rebound following Monday’s sharp retreat.
Two corporate presentations are scheduled. Jack Forestell, Chief Product and Strategy Officer, will participate in Morgan Stanley’s Technology, Media & Telecom Conference on March 3. Chris Newkirk, President of Commercial & Money Movement Solutions, is slated for the Wolfe Research FinTech Forum on March 11.
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