Visa (NYSE:V) and BMO Financial Group are set to launch a new installment payment service for Canadian cardholders in 2024. The service, known as Visa Installments, will allow BMO credit card holders to split their purchases into smaller, more manageable payments. This move is seen as a complement to BMO's existing PaySmart plan and forms part of a broader budget control initiative.
Simultaneously, BMO has been expanding its digital offerings. In partnership with Mastercard (NYSE:MA) and Extend, BMO introduced a mobile wallet for virtual cards in August 2023. This feature, integrated into the Extend platform for the BMO app, caters primarily to US and Canada-based BMO Commercial Bank clients. The platform enhances payment management functionality and enables the creation of virtual cards for employees' mobile wallets, thereby promoting contactless payments. This move builds on an announcement made in December 2022.
InvestingPro Insights
As Visa and BMO Financial Group prepare to launch their new installment payment service, it's important to consider some key metrics and insights from InvestingPro.
For Visa, the company has a perfect Piotroski Score of 9 and is known for its high earnings quality, with free cash flow exceeding net income. This indicates a strong financial position which can be beneficial for the upcoming installment service. Additionally, Visa's return on assets is impressive at 19.63% as of the last twelve months ending Q4 2023.
InvestingPro Tips for Visa also highlight the company's consistently increasing earnings per share and a notable streak of raising its dividend for 16 consecutive years. These factors may contribute to investor confidence in the company's ability to successfully implement and manage the new service.
On the other hand, BMO Financial Group has maintained dividend payments for 51 consecutive years, indicating a stable financial position. However, it is crucial to note that the company is trading near its 52-week low, according to data from the end of 2023.
InvestingPro Tips for BMO highlight that the company is a prominent player in the Banks industry, yet it has been quickly burning through cash. This may be a point of concern for investors, especially considering the upcoming launch of the installment service.
In conclusion, while both companies are set to launch a promising new service, it's essential to keep an eye on these key metrics and insights. For a deeper dive into these companies, and to access a wealth of additional tips, consider exploring the InvestingPro platform.
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