Visa, Inc. (NYSE:V) has one of the best business models out there. Unlike some of their competitors they have no risk of default from the consumers that use the Visa branded cards. Rather, they take a small percentage of every transaction that runs across their network.
The business model has served them well over time and Visa is able to generate plenty of excess cash. Even better is that Visa's capital expenses are essentially the same whether they add 10 new merchants or 10,000 to their network. The cost to Visa doesn't really change meaning almost every dollar that they generate flows straight to the bottom line.
Let's take a deeper look at Visa the business to see what makes it such a great company and then look to see if there's a 1-foot bar to step over or if you're having to jump over a 10-foot bar with an investment in Visa.