Australian banks big winner in Visa move

Australian banks big winner in Visa move

27 February 2008

Australian banks are likely to pick up a combined $330 million dollars from the sale of Visa shares announced recently.

Credit card company Visa is an unexpectedly stable company in the current credit crisis, as its revenue is generated by transactions, not through lending. This means that with the number of global credit card transactions expected to continue to rise, that the big Australian banks with interests in Visa will not need to worry about any credit risk from Visa.

The banks, however, do need to remain wary of defaulting credit card customers, as Visa does not extend credit to its customers, rather the banks that issue their cards provide the credit.

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