Marketing for the new Apple card in the US seems to have ramped up, as there appears to be a lot more advertising on Twitter. With this level of marketing activity is it a concern for our positions in Visa and Mastercard? We are considering this, and coming in the same week as Visa paid $5.3 billion for fintech firm Plaid1, it’s always worth running through the investment case for the card networks and trying to get a feel for the size of their competitive “moat”.
A couple of recent pieces on the tech website Stratechery do a great job of explaining just how powerful the network effect of Visa and Mastercard are, how they have evolved differently from the payment systems in China and why they’re likely to co-exist going forward. As our payments analyst Chris Vandergrift has explained to our global equities team, the Plaid deal could be a really important moment for fintech in general, as access to underlying account information will be safely accessible by third parties via APIs. The commoditisation of banks, in our view, is going to keep on keeping on.
News bytes
An inspiring read this week was the 2019 letter from technology research analyst Dan Wang. He talks about a saying in California that “knowledge travels at the speed of beer”. I’m not sure if this is true or not, but we certainly like to share ideas quickly, not least with our colleagues in Boston, New York, Portland and Singapore.
The best news I have heard so far in 2020? Former colleague Scott Meech – a great man and a great investor – is in remission from cancer. It turns out that he was treated with a drug by Genmab, the Danish biotech, in which he is a long-term investor. On the global equities desk we do not have a position in the company, but I hope to not have to test my investments to a similar degree.
Finally, if we needed a further reminder as to the impact of climate change, the bush fires in Australia have impacted our friend and colleague Glen Giddings. So a big shout out to him and his family. ESG is definitely the key theme for the 2020s.
