Visa to Power Rappi’s Credit Cards in Brazil – Report

According to a Reuters report, Visa (V) and delivery app Rappi have deepened their ties in Latin America. As part of the latest collaboration, the Softbank-backed app will launch Visa-powered credit cards for users in Brazil.

Rappi has turned to Visa as it looks to shrug off competition in the payment sector while also boosting its delivery app usage. According to Reuters, users of the Visa-powered Rappi credit cards stand to enjoy at least 3% cashback on purchases on Rappi and a minimum of 1% elsewhere.

The collaboration in Brazil marks the fourth time that the two have come together following similar launches in Mexico, Colombia, and Peru. Rappi has also reiterated plans to expand its financial products offering to its five remaining markets. (See Visa stock chart on TipRanks)

Last month, Piper Sandler analyst Jason Deleeuw upgraded Visa to a Buy from a Hold. The analyst also increased his price target to $260 from $234, implying 9% upside potential to current levels. The analyst remains confident about Visa’s prospects amid the vaccine-driven U.S. recovery.

Deleeuw stated, “Visa generated 45% of its pre-pandemic revenue from the United States, compared to only 32% for Mastercard. We believe higher vaccine rates in the United States are already driving higher domestic activity, which we view as a prerequisite to future cross-border travel. We think faster growth in cross-border revenue should help Visa close its 6 turn valuation discount to MA.”

Consensus among analysts is a Strong Buy based on 19 Buys and 2 Holds. The average Visa price target of $269.16 implies 12.79% upside potential to current levels.

V scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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