Visa (NYSE:V) will release its quarterly report tomorrow, and anticipating continued strong growth, investors haven't hesitated to pile into the stock. Because of the company's position atop the credit card network industry, Visa earnings have been growing at a breakneck pace in recent years, and at least for now, that dominance appears likely to continue.

Despite its current leadership position, though, Visa's future is by no means assured in the long run. The transition from physical cards to mobile payments could pass the card giant by if it isn't careful to defend its turf and innovate along with its competitors. Can the company manage to thread the needle between keeping up with technological advances while not cannibalizing its own business? Let's take an early look at what's been happening with Visa over the past quarter and what we're likely to see in its quarterly report.

Stats on Visa

Analyst EPS Estimate

$1.80

Change From Year-Ago EPS

15.4%

Revenue Estimate

$2.89 billion

Change From Year-Ago Revenue

12.9%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

How can Visa earnings continue to grow?
In recent months, analysts have boosted their views on Visa earnings, raising their June-quarter estimates by $0.02 per share but making bigger increases in the $0.15 to $0.25 per share range for this fiscal year and next. The stock has kept rising to record highs, with gains of more than 18% since mid-April.

The scope of Visa's business is truly astonishing. In the first quarter, Visa topped the $1.6 trillion mark in total dollar volume, staying ahead of the surging MasterCard (NYSE:MA) with its faster 12% dollar-volume growth rate bringing it to almost $950 billion. That keeps the pair comfortably ahead of American Express (NYSE:AXP), which gets a big portion of its revenue not from payment processing but from taking on credit risk associated with actually issuing its own cards. Visa had 2.1 billion cards with its logo as of the end of 2012, beating out its rivals on that score as well.

But Visa faces two major threats. One comes from electronic payments, as eBay's (NASDAQ:EBAY) PayPal division has done an excellent job of boosting its volumes not just from online payments but also by tapping the rapidly growing mobile space. PayPal's success has spurred many other companies to follow suit, ranging from major tech companies like Google and Amazon to tiny upstarts like Square. Visa has taken steps to defend its traditional payment-processing territory, but even the credit card industry's joint efforts might not be enough to hold off PayPal in the long run.

The other threat comes from regulation. Earlier this month, the European Commission proposed caps on interchange fees at 0.2% for debit cards and 0.3% for credit cards. Although Visa and MasterCard have already capped their fees in Europe, the EC's move shows that the prevailing sentiment is against high card fees, and copycat regulatory moves by other countries could hamper Visa's growth prospects as it seeks to expand its global reach.

In the Visa earnings report, watch for new CEO Charles Scharf to keep elaborating on his long-term vision for Visa to go beyond its traditional card business to embrace electronic payments and other innovative methods. In the meantime, plastic isn't going away anytime soon, and as long as the global economy doesn't slow much more dramatically, worldwide opportunities should help Visa's earnings keep growing.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends American Express, eBay, MasterCard, and Visa. The Motley Fool owns shares of eBay and MasterCard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.