How to Trade Visa's 27% Surge on 'Buy Now, Pay Later' Boom

January 04, 2022 18:12

The digital global payment sector is set to increase exponentially in 2022 as more companies offer online payment solutions. One of the hottest trends in this sector is the ‘Buy Now, Pay Later’ (BNPL) boom which has already seen rapid growth in the US, Japan, China and India.  

This has led Visa to expand its Visa Instalments Solution package globally in-store and through e-commerce channels to more and more of its customers such as Klarna, Global Payments, ANZ, HSBC and others.  

Even though the stock has dropped more than 24% from its record high due to its payment war with Amazon, analysts are still overwhelmingly bullish on the global digital payment sector.  

This is also why the recent drop in Visa stock could be interesting to long-term investors. Learn more about it further below.  

Stock: Visa Inc
Exchange: NYSE
Symbol for Invest.MT5 Account: V
Date of Idea: 5 January 2022
Time Line: 1 - 6 months
Entry Level: $222.00
Target Level: $271.14
Position Size for Invest.MT5 Account: Max 7%
Risk: High
  • The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing. 

Why Trade Visa Stock Price 

According to Visa’s latest annual report, it is forecasted to turn $17 trillion in consumer spending via cash and checks into cards and digital format. That’s already a huge untapped revenue stream for the company.  

Let’s take a look at a few more of the reasons why some analysts’ Visa stock forecast is for new record highs this year.   

Reason 1: Visa is helping to fuel BNPL growth globally

Visa have a good track record of innovation ever since it pioneered credit, debit and prepaid cards many years ago. This is why the global head of payment and platform products for Visa, Mary Kay Bowman, is offering BNPL fintech solutions to its customers through its Visa Installments Solution.  

The company has announced a global brand deal with Klarna to expand and scale its offering in several markets around the world. Visa is already working with CIBC, Commerce Bank, Equinox Payments, Versapay and many others in North America to rollout BNPL solutions, as well as HSBC, ANZ and GHL Systems Malaysia in the Asia regions.  

As the BNPL solution is still relatively new, there is a lot of potential untapped growth yet to come over the next year which Visa seems well-positioned to capitalise on.  

Reason 2: Visa partners with Facebook and crypto platforms

Last year, Visa announced a partnership with Meta (previously Facebook) on delivering WhatsApp payments in Brazil. With more than 120 million users there is potential for significant growth in this field that could be rolled out in other countries.  

Visa has partnered with more than 60 crypto platforms to support spending in digital currency. It is currently piloting a solution with to offer settlements in stablecoins such as USD Coin. This is on top of the Visa card program.  

The company has also partnered with BlockFi to launch a Bitcoin rewards credit card and crypto lender Cred to send interest payments.  

Visa seems well-positioned to capitalise on cryptocurrency growth too.  

Reason 3: The recent drop in Visa’s stock price could be overdone

Last year, Amazon announced plans to ban payments using Visa credit cards in the UK from 19 January, citing high transaction fees. Visa has responded with surprise as the fees are regulated in the UK.  

The spat between Amazon and Visa was one of the reasons behind the recent 24% drop in Visa’s stock price. However, with the move potentially costing Amazon UK £1.4 billion, there is potential for it to be resolved.  

The stock has already bounced 15% higher from the end of the recent drop as investors look towards the future.  

What are the Analysts’ Visa Stock Forecasts? 

According to analysts polled by the Wall Street Journal for a long-term forecast on Visa stock price, there are currently a higher amount of buy ratings than there are sell or hold ratings, albeit zero strong buy ratings.  

The number of buy ratings has held steady over the past several months and actually increased in the last month of 2021.    

Source: MarketBeat, 4 January 2022

An Example Trading Idea for Visa Stock Price 

An example trading idea for Visa stock price could be as follows:  

  • Buy the stock on a break above $222.00 
  • Target the median analyst price target of $271.14.    
  • Keep your risk small at a maximum of 7% of your total account.   
  • Time Line = 1 – 6 months  
  • If you buy 10 Visa shares:  
    • If target is reached = $491.40 potential profit ($222.00 - $271.14 *10 shares).   

It’s important to remember that the share price is unlikely to go up in a straight line and it may even go much further down before it rises. Therefore, be sure to exercise good risk management which is one of the most important aspects of trading successfully. You should always know how much you could potentially lose on a trade and the risks involved.  

Another factor to consider is the commission as these can eat into your profits. With the Admirals Invest.MT5 account you can buy US stocks from $0.02 per share. This means buying 10 shares in Visa stock would result in a commission of $0.20 ($0.02 * 10 shares).  

There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall! 

How to Buy Visa Stock Price in 4 Steps  

With Admirals, you can buy shares in US companies like Visa with a low commission of just $0.02 per share and a low minimum commission of just $1. 

  1. Open an account with Admirals to access the Trader’s Room.   
  2. Click on Trade on one of your live or demo accounts to open the web platform.   
  3. Search for Visa at the bottom of the Market Watch window and drag the symbol onto the chart.   
  4. Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.   

Source: Admirals MetaTrader 5 Web. Past performance is not a reliable indicator of future results, or future performance. 

Click on the banner below to buy Visa stock today! ▼▼▼ 

Do You See the Visa Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.  

If you believe there is a higher chance Visa's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.  

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.  

This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article. 


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Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.