Visa’s Strategic Push into the Chinese Payments Arena

Visa is intensifying its global expansion efforts with a clear focus on capturing a larger share of the Chinese market. A newly announced partnership with UnionPay International aims to dramatically streamline cross-border payments for the vast majority of China's cardholders. This move raises questions about its potential to significantly boost the company's transaction fee revenue.

The strategic announcement follows a strong set of financial results for the first quarter of 2026. The payment network benefited from sustained consumer spending during the recent holiday season, reporting key figures that underscore its operational strength:

• Net Revenue: $10.9 billion, representing a 15% year-over-year increase.
• Earnings Per Share (EPS): $3.17, also up 15%.
• Total Payment Volume: Reached $4 trillion, growing by 8%.

Cross-border transaction volume, a critical growth metric, surged by 11%. Furthermore, the company's value-added services segment saw impressive currency-adjusted growth of 28%.

Tapping a Multi-Billion Dollar Corridor

The centerpiece of Visa's new initiative is the integration of its "Visa Direct" platform into UnionPay's extensive network. The objective is to enable international payment capabilities for approximately 95% of UnionPay debit cardholders in mainland China by mid-2026. For Visa, this collaboration represents direct access to one of the highest-volume payment corridors in the Asia-Pacific region.

Should investors sell immediately? Or is it worth buying Visa?

Company leadership anticipates that this deeper integration with the world's largest card network will not only create more efficient processes but, more importantly, drive a substantial increase in cross-border transaction volumes. This expansion is part of a broader corporate strategy to modernize payment settlement systems, which also includes exploring new collaborations in the digital currency space.

Shareholder Returns and Market Sentiment

Despite the positive operational performance, Visa's shares have declined approximately 5.8% since the start of the year. Currently trading at €278.55, technical indicators suggest the stock may be overbought in the near term, with its Relative Strength Index (RSI) registering a notably high reading of 83.7.

The company maintains its reliable approach to shareholder returns. The board has declared a quarterly cash dividend of $0.67 per share, payable on March 2, 2026, to shareholders of record as of February 10. Visa is also continuing its substantial share repurchase program, allocating $3.8 billion to buybacks in the first quarter alone. The remaining authorized budget for further repurchases exceeds $21 billion. Recent shareholder support for management's direction was further evidenced at the latest annual meeting, where investors rejected several activist proposals.