(Bloomberg) -- The biggest U.S. banks used to own Visa Inc. Now if only they could keep up with it.
The payments network rose to a market of $348 billion on Wednesday, surpassing that of JPMorgan Chase & Co. for the first time. That makes Visa the world’s most highly-d financial firm outside of Berkshire Hathaway Inc.
JPMorgan jointly owned Visa with other banks before they cashed out in a March 2008 initial public offering that was among the biggest in history. Since then, Visa’s stock has soared almost 1,500%, while the KBW Bank Index has risen 15%.
Ken Chenault, a former chief executive officer for American Express Co., in 2017 called the banks’ decision to break off card networks “one of the biggest strategic blunders of the last 20 years. They gave it up on the cheap, and now the roles are totally reversed.”
Visa was intrinsically poised for success, said David Ritter, a Bloomberg Intelligence payments analyst. The network offered the infrastructure for electronic payments just as digital commerce began to spark, and its middleman role in transactions gives high profit margins with low costs and risks.
“The big tailwind at its back is commerce going electronic,” Ritter said. “They’re just in a great business and very enviable position.”
©2019 Bloomberg L.P.
RECOMMENDED FOR YOU
POPULAR