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Visa Inks Deal With Goldman for Global Corporate Payments

Visa will enable Goldman to help its clients 'simplify complexities and costs associated with existing systems,' the companies said.

Visa  (V) - Get Report shares rose Monday as the credit-card giant announced a deal with Goldman Sachs GS that will allow the banking titan’s corporate customers to use Visa to make global payments.

“Through its implementation of Visa B2B Connect and Visa Direct Payouts solutions, Goldman Sachs will help its commercial and corporate banking clients simplify complexities and costs associated with existing systems and inefficient processes,” the companies said in a press release.

“These solutions will enhance Goldman’s cross-border business-to-business (B2B) and business-to-consumer (B2C) payments program for high and low value payments," the release noted. "Goldman Sachs’s corporate clients can move funds quickly and securely, have near real-time visibility into their payment status, obtain necessary reconciliation and compliance data, ultimately helping improve organizations’ cash flow."

Visa traded at $232.66, up 1.11%, in pre-market trading Monday. It has gained 8% over the past six months, compared to 14.4% for the S&P 500. Goldman Sachs shares were up 0.4% to $393 in pre-market trading. 

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Visa also benefited Monday from an upgrade by Piper Sandler analyst Christopher Donat to overweight from neutral. He boosted his price target to $260 from $234.

Visa has “too wide” a valuation discount to Mastercard  (MA) - Get Report, he said, according to Bloomberg.

And Visa will probably benefit more from the vaccine-generated U.S. economic recovery than its rival, Donat said. That’s because prior to the pandemic, Visa received 45% of its revenue in the U.S., compared to 32% for Mastercard.

Last week, Visa reported a 32% increase in U.S. payments volume for May compared to the same month in 2019. Debit payments rose 51% over that time.

In April, Visa reported stronger-than-expected earnings for its latest quarter, helped by an 11% increase in payments volume during the period.