Visa termination has "minimal impact" on ComfortDelGro taxi biz

Can shrug off payment mode's discontinuation.

According to Maybank Kim Eng, cashless transactions only contribute a small portion of CDG's Taxi business in Singapore. Visa also constitutes a minority portion of the said contributions due to low Visa card penetration in the country.

Here's more from Maybank:

No more Visa on SG Cabs. According to a channelnewsasia report, commuters will not be able to pay for their cab fares using Visa cards from July 15. Commuters are currently charged an extra 10% administrative fee for the use of credit card payments, which is a breach of contract terms.

Minimal contributions from Visa transaction. Our analysis showed that cashless transactions contribute approximately 6% of profits for CDG’s Taxi business in Singapore. However, our discussion with management suggests that majority of the contributions from cashless transactions are due to other payment modes, such as NETS, and market penetration for the use of Visa cards had been low. Hence, the termination of this payment mode would have minimal impact on the profits for its taxi business in Singapore.

No earnings revision, Maintain Buy. We made no revision to our estimates and reiterate our positive view on the stock. ComfortDelGro offers a defensive business exposure and currently trades below its historical valuation levels at only 15X FY14E P/E (long term average: 16X).

Also Read

ESR-LOGOS secures $225m and JPY15.5b sustainability-linked term loans

Singapore leads SEA in FinTech funding

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit