| Ticker | V |
| Company Name | Visa Inc. |
| Shariah Compliance | Compliant |
| DP Ratio | 0% |
Business Sector Screening:
Visa Inc. is an American multinational financial services corporation that serves individual and commercial clients, financial institutions, government entities, and merchants. It facilitates global e-commerce through digital payments and information. Visa’s transaction processing network, VisaNet, conducts clearing, authorization, and settlement of payment transactions. The company also routes payment information and related data. Its portfolio of offerings consists of mobile payments, payment cards, commercial payments, transaction processing services, merchant solutions, and other digital services.
The company derives its major revenue from:
1. Service revenues: consisting mainly of revenues earned for services provided in support of client usage of Visa payment services.
2. Data processing revenues: Consisting of revenues earned for authorization, clearing, settlement, value added services, network access and other maintenance and support services that facilitate transaction and information processing among the Company’s clients globally.
3. International transaction revenues: consisting of revenue from cross-border transaction processing and currency conversion activities.
4. Other revenues: mainly of value-added services, license fees for use of the Visa brand or technology and fees for account holder services, certification and licensing.
Let’s have a look at the segments from which the company derives its revenue from and apply the Shariah screens on them:
Operating Revenue (In millions of USD)
for year ended 30th September 2022
| Segment Description | Revenue | Non-Permissible Revenue | % Non-Permissible Revenue | Non-Permissibility Classification | Comments |
| Service revenues | $13,361 | – | – | – | No NPI found |
| Data processing revenues | $14,438 | – | – | – | No NPI found |
| International transaction revenues | $9,815 | – | – | – | No NPI found |
| Other revenues | $1,991 | – | – | – | No NPI found |
| Client incentives | $(10,295) | – | – | – | – |
| Total | $ 29,310 | $0 | – | 0% | – |
Areas of Concern from Shariah Perspective
Primary Service Revenues: The Company has partnered with various financial institutions in order to facilitate the payment processing service all over the world, which may also include financial services such as provision of credit/lending, or any other conventional financing.
Shariah Sensitivity: It has been very clearly stated in the Annual report, that “Visa is not a financial institution. We do not issue cards, extend credit or set rates and fees for account holders of Visa products nor do we earn revenues from, or bear credit risk with respect to, any of these activities.”
Based on this we can safely assume that Visa Inc. has no such involvement in such businesses.
Sector Compliance Calculation (In millions of USD)
For year ended 30th September 2022
| Total Revenue | $29,310 |
| Non-permissible operating revenue | $0 |
| % of non-permissible revenue | 0% |
| Sector Compliance | Pass |
Since there isn’t any Non-operating income found in the report, we can consider the same ratio for Dividend purification.
The second level of screening is to ensure that the company passes the Shariah Financial Ratio screens.
Shariah Financial Ratio Screening:
(All figures in millions of USD for the Quarter ended 30th June 2023)
| Particulars | Amount | Remarks |
| 3 years Average Market | 450,766.597 | – |
| Total Debt | 20,560 | – |
| Islamic Debt | 0 | – |
| Adjusted Debts | 20,560 | – |
| Debt Ratio | 4.56% | – |
Source: All the above information is based on the website of the company and the annual report for the year 2022.
Conclusion
Given the above information, we at Islamicly believe that Visa Inc. is a Shariah-compliant company as per the Shariah screening criteria.
