Visa has a sustainable competitive advantage due to the near impossibility of replicating its network. It would require significant backing and regulatory expertise for new entrants to compete with Visa. Additionally, Visa’s products add value for customers, as shown by the willingness of merchants and issuers to pay for them.
Visa recently made moves to calm the situation with Visa Europe, which is fully owned by a consortium of banks. Visa Europe currently operates at a below-market level and could potentially be acquired by Visa Inc. Regulatory pressure and higher capital requirements make the transaction appealing to current ownership.
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