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Key Takeaways
- Shares of Visa declined 4.5% Monday following a Citrini Research analysis warning that AI technology might circumvent traditional card networks and challenge fee structures.
- The payment giant closed the session at $306.52, a significant drop from its opening price of $319.04.
- Rival payment processors saw steeper declines: Mastercard slid 5.7% while American Express tumbled 7.2%.
- Tuesday’s premarket session saw Visa recover modestly, gaining 0.2% as investors reassessed the selloff.
- Meanwhile, a proposed $38 billion merchant settlement over swipe fees remains pending judicial approval.
Visa concluded Monday’s trading session at $306.52, experiencing a 4.5% decline following publication of research highlighting potential artificial intelligence threats to its fee-based revenue model.
The analysis originated from Citrini Research, an independent research organization. Released via Substack over the weekend, the piece explicitly positioned itself as “a scenario, not a prediction” — presenting content structured as a hypothetical financial briefing dated June 30, 2028.
Within this speculative framework, American unemployment exceeded 10% while the S&P 500 had retreated 38% from peak levels. The envisioned downturn centered on artificial intelligence displacing traditional white-collar employment.
Visa featured prominently in the scenario. Citrini’s analysis proposed that AI-powered agents representing consumers might identify lower-cost payment alternatives, potentially undermining the 2%-3% network and processing charges that constitute Visa’s core revenue stream. The research cited stablecoins as one possible substitute for conventional card infrastructure.
Shares began Monday at $319.04, touched an intraday low of $304.71, and finished trading near that floor.
Broader Payment Industry Selloff
The downturn extended throughout the payments landscape. Mastercard surrendered 5.7% while American Express lost 7.2% during the same trading day. Both Visa and American Express appeared among the Dow’s heaviest laggards, according to MarketWatch reporting.
Tom Hainlin, national investment strategist at U.S. Bank Wealth Management, characterized the market sentiment bluntly: “You’ve seen the market react to headlines, it’s ‘sell first, assess later.'”
The broad selloff sparked concerns regarding any business framework dependent on extracting marginal fees from high-volume transactions — the fundamental “toll booth” economics that payment networks have traditionally employed.
Pending Merchant Settlement Adds Uncertainty
Visa continues navigating separate legal complications. Last November, Visa and Mastercard jointly proposed a restructured $38 billion settlement agreement with merchants concerning swipe fee disputes. Judicial approval remains outstanding.
Merchant advocacy organizations contend the agreement falls short of necessary reforms. Stephanie Martz, general counsel for the National Retail Federation, stated: “You can’t just suddenly tell more than 80% of your card customers you’re not going to take their cards.”
An important distinction: Visa doesn’t directly receive interchange fees — those payments flow to banks that issue cards. Visa’s actual revenue derives from network access and processing charges, which remain contingent upon maintaining robust transaction volumes and cross-border payment activity.
Looking Ahead for Visa
Visa ticked 0.2% higher during Tuesday’s premarket trading, advancing to $307.09 — representing a tentative rebound following Monday’s substantial losses.
The company has two scheduled investor presentations approaching. Jack Forestell, Chief Product and Strategy Officer, will participate in Morgan Stanley’s Technology, Media & Telecom Conference scheduled for March 3. Chris Newkirk, President of Commercial & Money Movement Solutions, follows with an appearance at the Wolfe Research FinTech Forum on March 11.
