Visa at Bernstein Conference: Strategic Innovations and Outlook

On Wednesday, 28 May 2025, Visa Inc. (NYSE:V) participated in the Bernstein 41st Annual Strategic Decisions Conference 2025. The conference highlighted Visa’s robust financial standing and strategic innovations despite macroeconomic uncertainties. Visa’s Chief Financial Officer, Chris, discussed the company’s resilience, diversification, and future growth strategies, while also addressing potential challenges in cross-border transactions.

Key Takeaways

• Visa is focusing on product innovation with AI and crypto partnerships.
• Cross-border transactions are slightly below last year’s performance but remain stable.
• Visa Direct is expanding beyond person-to-person transfers, tapping into new use cases.
• The company is optimistic about the growth potential in Europe and value-added services.

Financial Results

Visa’s financial performance reflects a stable spending environment:

• Consumer sentiment shows resilience with stable employment and wage growth.
• Payments volume in the US and major global markets remains stable, slightly better than Q2.
• Cross-border transactions are slightly below April but align with expectations due to seasonal factors.
• Crypto transactions saw $95 billion in purchase volume on Visa-linked crypto cards, with $225 million in stablecoin settlements.
• Value Added Services (VAS) generated $8.8 billion in revenue, with 20% growth.

Operational Updates

Visa is advancing its operational capabilities through several initiatives:

• Intelligent Commerce launched with AI cards, partnering with companies like OpenAI and Microsoft.
• A stablecoin partnership with Stripe aims to enhance card and settlement processes.
• Flex Credential is expanding globally, with significant growth in Japan and new partnerships in Europe.
• Visa A2A Protect is piloting in the UK and Latin America, showing promising fraud detection rates.
• Visa has expanded its European presence, adding six offices and 10 million merchant locations.

Future Outlook

Visa is optimistic about its future growth:

• Cross-border performance may remain slightly below last year, but the company is prepared for variability.
• Digital growth is expected to outpace underlying consumer spending.
• New VAS strategies focus on enhancing transactions and expanding advisory services.

Q&A Highlights

During the Q&A session, several key points were discussed:

• Visa’s diversification across regions and segments is a significant strength.
• The potential of stablecoins to revolutionize money movement was emphasized.
• Visa’s leadership in the commercial card space, with a 40% market share, was highlighted.

In conclusion, Visa’s participation in the Bernstein conference showcased its strategic positioning and innovative approaches in the evolving payments landscape. For more detailed insights, readers are encouraged to refer to the full transcript below.

Full transcript - Bernstein 41st Annual Strategic Decisions Conference 2025:

Harshita Rawat, Senior Analyst, Bernstein: Good morning again, everyone. I am Harshita Rawat, Bernstein, senior analyst covering payments processors and IT services, and I’m delighted to be joined today by Chris, v Visa’s CFO at Bernstein forty first Annual Strategic Decisions Conference.

Chris, thank you for joining us today.

Chris, CFO, Visa: Thank you for having me. This is a a really great conference.

Harshita Rawat, Senior Analyst, Bernstein: So let’s get the macro question out of the way. Let’s, let’s talk about the overall spending environment. What are you seeing in terms of current spending trends both domestically and in cross border?

Chris, CFO, Visa: Yeah. Again, thanks for thanks for having me. It’s good to see everyone. Yeah. I mean, there is a lot to process.

Right? And consumers have been processing that. We could see, like all of you can, there’s a more uncertainty, certainly in the sentiment. It’s it reflects in the consumer sentiment. It certainly reflects in headlines.

And so when, you know, there is a little bit of noise in the system as we see today, we always do what we always do, which which is really rely on facts and data. And so what are the facts as we see them? The facts as we see them is that employment numbers look pretty good, Wage growth, remains relatively stable. Inflation has moderated relatively, and that’s translated, to a relatively resilient consumer. Those are the facts.

The data, as we see it, has also been relatively stable. And this is what we talked about in our earnings call. So our earnings call was at the April, April ’20 ninth. And as we shared really through the April, payments volume, transactions in The US, and abroad, even coming off of a relatively strong quarter that we saw in December, had remained relatively stable. And so that was all a good thing, and we shared all that on April 29.

Now we’re what are we? About a month later. If I could share a little bit of an update, with what we’ve seen effectively through the month of May, which is, in The US, payments volume data, primarily has remained in line with what we’re seeing, in April, what we saw in the month of April, which means for the quarter, it’s actually tracking a little bit better than than q two, again, reflecting the resilience in consumers. So that’s the The US, and and we’re seeing, similar trends in most major markets around the world as well. So, again, general stability to what we saw, in q two through the first almost two three weeks of in fact, that’s actually data through the twenty first of of May.

Now cross border, I wanna spend a minute maybe on cross border and unpack that a little bit. There’s a there’s been more moving parts as you know, cross border pre COVID, COVID, post COVID, recovery that differed in different parts of the world. We saw, if you go back a couple of quarters previous to the December, the last two quarters of our fiscal years had reached a sort of a stable sort of level, and then we saw an acceleration in the December, particularly in travel cross border. And then we saw it moderate back in, in our fiscal first quarter, the March, back to the kind of the levels that we had seen in the two quarters prior to December. That’s that’s kind of the fourth quarter trend that we saw.

Now there was some noise in the system too that we talked about with timing of Easter, timing of Ramadan that impacted March in the month of April. And so we tried to distill all that, and there was obviously some currency things happening as well, putting aside sort of sentiment. We tried to distill all that, and we said, okay. What we expect for the rest of the year is to just sort of cut through the noise and say, if you take the average of March and April, which normalizes for some of these timing things, as well as takes into account some of the currency things that that would be what we would expect to see, for the rest of the year. And through the month of March or at least through the three weeks of March, the quarter to date, it’s it’s playing out generally as we had anticipated, which also means that the the three weeks in May is a little bit below the month of April.

That that was anticipated, and that’s playing out the way that we thought for the quarter. If, you know, if things stay on track, obviously, we’re gonna finish the quarter a little before below ’4 last year. So that’s I know there’s a lot of math camp in that, but but net net, it’s kinda playing out as anticipated. Obviously, a month still to go. As I said, you know, we’re seeing these trends sort of, move around a bit, but but largely as anticipated, and, and we’ll see how the rest of the quarter plays out here in about a month and a half when we report out.

Harshita Rawat, Senior Analyst, Bernstein: So, Chris, staying on this kind of macro topic for just a bit. So I know I know you noted on the earnings call that you’re quite diversified in your cross border business, and no single corridor is more than 25% of your cross border volumes. Taking a step back, how should we think about the recession sensitivity, on cross border? I know travel is 60%, TCOM is 40%. Arguably, both have a little bit of sensitivity to macro.

Chris, CFO, Visa: Yeah. It is really one of the great strengths of the Visa business is the diversification that you talked about. It applies broadly across the business. We have more exposure to different spend categories, geographical exposure, everyday spend, discretionary spend, high, low ticket, credit, debit, the breadth of the business. And that applies as you put it to our cross border business.

The cross border business, as most of you know, is an important business for us for a bunch of reasons, including it has premium economics attached to it. As I just talked about, we you know, cross border also has been one of the most variable numbers where payment volume and transactions have have a consistency that’s very that’s really, you know, a great part of the business. Because of all the you know, what’s gone on in the world over the last five years, we’ve seen more variability in cross border. One of the differences is ecommerce is a bigger part of the business as you talked about. Pre pandemic, it was, it was lower than it is today.

Now it’s about 40% of the business. And so when you talk about sort of the diversification and the the macro sensitivity to cross border, there’s a couple things that I point out. One is, again, that 40% ecommerce is more associated with everyday spend than travel, hotels, lodging, etcetera etcetera. Ecommerce has cross border ecommerce has more everyday spend categories in there. But not only is it just like ecommerce is only retail type goods, ecommerce even within the categories of ecommerce, there’s quite a bit of diversification.

So it it is your retail goods. You might be buying a pair of shoes from Europe. You might be buying, sunscreen from Asia, for example, but you also might be buying retail services. You may be moving money cross border via remittances. You might be paying off a BNPL loan cross border.

There’s also b two b in there, like advertising, for example. And then there’s even, like, crypto purchase cross border. So even within the categories of ecommerce, there’s a lot of variety and diversification, putting aside the fact that, you know, the ecommerce itself is is more, resilient. Now none of this means we’re immune, of course, to macro sensitivity and but as you pointed out, we have great geo diversification with both issuing, you know, you mentioned the the the the reference to the 25%. None of none of our we have five regions that we, categorize our business by, and none of those regions no single region is more than 25%.

And, that’s on the issuing side both for ecommerce and for travel. And also important to note, even on the acquiring sites, on the inbound travel side, there we have great diversification as well. And I know there’s, you know, a lot of questions about The US. And The US is actually one of the smaller from, an acquired, inbound, travel volume standpoint as well. And so there’s great diversification of the business.

That volume diversification also applies on cross border revenue, and so we have great, you know, distribution and diversification on the revenue side of the business. So, again, not immune, but, there’s attributes to the business, natural diversification, and things that we’ve done to drive things like ecommerce that really helps on the sensitivity side.

Harshita Rawat, Senior Analyst, Bernstein: Chris, there’s a lot of exciting things happening at Veeva. It’s been a very busy time for you. We heard from you at the Investor Day, which is great. Since then, you’ve had a lot of partnership announcements. And a few weeks ago, you had your 2025 product drop.

And there are a bunch of announcements that came out of it that I want to ask you about. So starting with the AgenTek commerce. So you introduced Visa Intelligent Commerce for developers building AI agent payments. You have an impressive very impressive partner live there. Tell us about how Visa sees the future of commerce and why it will be a preferred way to pay as agents make purchases.

Chris, CFO, Visa: Yeah. We held our first ever Visa product drop event. It was on April 30. It was a terrific event. You heard from Ryan McInerney, our CEO, Jack Forstel, chief product officer, Oliver, Jenkins, who runs our global markets, and we had a special guest, Sarah Fryer, for OpenAI attend.

It’s all available online. If you have not had a chance to look at it, it’s a compact ninety minute presentation. Please go out and take a look. There’s some exciting stuff, there. It was a great event for me for a couple reasons.

One, it really gave us a chance to tell our story around everything that we’ve been doing in the company around product innovation and thought leadership. And so it’s a great platform for us to go do that. And one of the most exciting advancements is, of course, we talked about as you called it, Egenetic AI or what we call intelligent commerce. So Visa has been in the AI game for a long long time. We’ve talked about it in the context of fraud prevention, detection, scoring.

We were one of the first to bring this to market with a number of our services decades ago using sort of the traditional forms of AI to really provide that fraud scoring. So so the purpose of that generation of AI was really around protecting the consumer. And our vision for the future with generative AI is that we can really bring to bear services and innovation that really empowers the consumer. And so we announced a number of services in our enabled to that enables us to go do that, and we’re really excited about that. So how do we empower consumers in a world where where commerce continues to evolve?

Much like, you know, I think that generative AI has the ability to transform commerce, much in the same way that ecommerce transform the purchasing experience from face to face. I mean, I we think it’s that significant. So we announced, as you called it, AgenTek Commerce, as we call it, Intelligent Commerce. What is Intelligent Commerce? The set of services that really empowers consumers to be able to buy, enable an agent to buy on their behalf in a safe and secure way.

It’s a number of services that allow developers then to provide services that enable that experience as well. A handful of services that we announced that that enabled to us to go do that. One is one are, AI cards. And so the cards obviously need to be, advanced and involved in order to support this new experience. And it really takes advantage of tokenization technology, which is, the the modern night modern credentials.

It takes your traditional card credentials, digitizes it in in a form that’s more safe and secure, and authentication. So your agent has to be able to obviously be granted permission for you for to transact on your behalf, authenticated securely, in that in that manner. Secondly, it’s the evolution of our data tokens to have a very personalized experience. And so the AI agent, with your permission, with consent, is enabled to then, personalize that experience for you. So, you know, at our product drop event, you saw Jack give a really great example.

And so his example, of course, was, you know, he’s a he’s a traveler that’s going to Florida, and he has certain likes. And now most travelers, if you just go do a a standard search, you might find the beach and you might find things like this. But Jack maybe Jack likes to hike or maybe he likes to fish. The data the technology really, the personalization aspect of it really understands who he is and says, hey, if I’m planning a trip to Miami, here’s the things Jack know likes to do. Here’s the things that, you know, we know will, the types of hotels he likes to stay at, the types of restaurants, the airlines he likes to fly at, and serves it all up for you.

Now where that breaks down though in the commerce world is that, you know, once you get to that point, even using platforms like OpenAI, what happens next? Well, then you say, okay. I wanna transact. Well, then it sends you to five different websites. You have to enter you have to authenticate.

You have to log in. You have to enter your credit card information. There might be, like, a a thing that gets sent to your phone to authenticate that to make sure it knows who you are, then you have to enter a shipping address and a billing address and a PIN and or a code. I mean, it’s a very sort of traditional experience. And so none of that there’s a lot of friction in that today.

And, of course, the vision for intelligent commerce is is all of that is authenticated in the back end. And so that experience can just continue by saying, you know, the agent could tell you, okay. Here’s the things that we think you’ll let like. Would you like to proceed? Hit yes.

And then if you hit yes, then it it all gets done sort of on your behalf. And so imagine, you know, how much friction gets removed from that process. And so that’s what intelligent commerce, you know, it’s obviously early days. It’ll enable that whole process to work. We had great partners as you pointed out, OpenAI, Perplexity, Anthropic, Mistral, Microsoft, Stripe lined up.

They all share this vision. It’s gonna be super exciting to see how it evolves.

Harshita Rawat, Senior Analyst, Bernstein: Fantastic. And, Chris, a couple of weeks ago, you also announced a partnership with Stripe’s stablecoin infrastructure firm, Bridge. Given that this is a very topical topic, how

Chris, CFO, Visa: do

Harshita Rawat, Senior Analyst, Bernstein: you see the path for stablecoin adoption, for example, for cross border payments, and what role can Visa play here?

Chris, CFO, Visa: Yeah. We view, the advancement of crypto, especially in the form of stablecoin, as a as a really, interesting and, large opportunity for, for Visa. We’ve been in the stable or in the crypto business, if you could call it that, for some time, in sort of multiple ways. I would I would categorize in three sort of categories, cards, settlement, and, programmable money. Those are the three opportunities as as we see it.

We think stablecoins in particular are interesting. It can, you know, revolutionize or can advance, the way money moves around the world, the infrastructure for money movement. And then, of course, the the unlocking the promise of programmable money, I think, is super interesting. So what have we been doing historically? So historically, we’ve done a lot in the first two of the three that I mentioned, which is cards.

And so we worked with, going back, you know, sort of pre stable coin even. We worked with crypto.com and Coinbase to allow, Visa linked, cards, crypto linked cards to be able to spend their their crypto. And and since we’ve launched that several years ago, we’ve done roughly 95,000,000,000 of volume purchased, purchase volume, and we’ve enabled the cards to be able to spend that about 25,000,000,000 in in spending on those cards. Now most of that volume was actually just buying and selling crypto. And so with stablecoin, obviously, creates a whole new set of use cases.

We’ve also been working with it in settlement in our own operations. You know, settlement, hasn’t really been modernized for some time. With stablecoin, we have the opportunity to potentially even do seven day settlement, which I think is really interesting. We’ve done about 225,000,000 of settlement, using stablecoin, and it really was generated by by our clients who had asked us, gosh, we have we you know, we operate our business using stable coin. We have a lot of our clients who like to spend stable coin.

Can we just think of stable coin as another form of currency that, that we can then settle in because you use a settles in, you know, multiple currencies, dozens of currencies today. And so we said, okay. That seems pretty reasonable. Let’s try that out. It continues to grow.

It’s relatively small today, but we think we’ll do over a billion dollars, in settlement over the next, you know, twelve to eighteen months. And then the third, of course, is is programmable money. Now so with stablecoin, one of the really interesting things is that, you know, it is digital currency. It is digital money. It’s gonna you know, we have we would launch a service called Visa token asset token asset VTAP.

I can’t remember the exact acronym right off the top of my head. Sorry about that. But there’s a we have a service that allows, issuers to to burn to burn their own stablecoin. And what’s programmable money? Well, programmable money is is like code.

It turns money into code. And so as code, you can, financials, you know, service a financial, institution can design and create very specific, use cases. So for example, you can create a loan that automatically disperses itself if certain criteria is met, and you could do that within the code of the money itself. And we think it’s exciting. We think, there’s some early days and a bunch of use cases that are in process.

We’re launching this summer, with BBVA as the first to to to try, you know, try out this sort of programmable money, opportunity pilot, and so I think it’s it’s super interesting. So I do think that there’s a bunch of use cases. Like I said, you you talked about, the Bridge Stripe announcement. Announcement. I think that’s another interesting one that with Stablecoin, it’s really tapping into the acceptance footprint.

Right? So a 50,000,000 merchant locations around the globe that will be enabled. Bridge will be another one of our partners that enables their customers to be able to tap into that acceptance network. So I think there’s a lot of interesting use cases that are that are you know, we’re still in early days, but a lot of interesting use cases to come around cards, settlement, and programmable money.

Harshita Rawat, Senior Analyst, Bernstein: It’s so interesting because crypto and stablecoins are often perceived as risk to Visa. And, you know, here, we are kind of talking about the opportunities, that it’s creating for you.

Chris, CFO, Visa: Definitely see it.

Harshita Rawat, Senior Analyst, Bernstein: So let’s talk about how Visa is changing. So almost a year ago, you announced a number of changes to the Visa card

Chris, CFO, Visa: Mhmm.

Harshita Rawat, Senior Analyst, Bernstein: Including flex credentials and tap to everything. We talked about the AI ready cards already, but tell us about how the Visa card is changing and how how that’s resonating with your partners. Mhmm.

Chris, CFO, Visa: Yep. The flexible credential, it there’s been incredible reception, to the flexible credential. What is the flexible credential? It is a single Visa credential, that enables the consumer to basically toggle between funding sources, whether that’s credit or initially launching of credit, debit, and, buy now, pay later. It we’ve seen a lot of interesting it’s only been, you know, basically out in the market for, like, two years now, but already there’s a lot of very interesting, ideas and innovation that’s coming up.

We launched initially in early twenty twenty three with SMBC in Japan, something they called Olive. They’ve grown very rapidly. They have millions of of consumers now on their Olive card, their flex credential card. They saw in 2024 a 50% plus growth in, in their, credential holders for the flex credential. And what’s even more interesting is that flexible credential holders for, spend more.

They spend 40% more than than, their cardholders that don’t have the the flex credential. And so I think we sort of hit a nerve, in the industry of of, you know, companies that are interested. So once we started with SMBC and Olive, it’s expanded. So we launched with a firm in The US, with their 1,700,000 cardholders, about six months ago. We we announced, a launch with Liv in The UAE, and and Liv is the first that’s in multicurrency.

So I talked about debit and credit, and with Liv, you could actually switch between currencies. And so that gives users ultimate flexibility. And so there’s been sort of an explosion of ideas not coming from us per se, but coming from the industry, which has also been, like, the super exciting part of it. There’s over 200 use cases now that are in pilot, for different ways to use flexible credentials. We think that, we’re very, very excited about that.

At our product drop event, we announced a a more expansion. Klarna is is gonna be a new partner for Flex, Credential. They’re bringing they’re gonna be the first to bring it to Europe. That’s that’ll be exciting. There’s a number of processors that are on board as well.

FIS and Fiserv are two that come to mind. And so, again, sort of early days, initially, like, two years ago with a single client, expanding, getting people excited, getting, participants excited, really in leading with our innovation and, and one that we’re excited to, to to see continue to grow.

Harshita Rawat, Senior Analyst, Bernstein: I wanna go back to your recent Investor Day, and revisit the Visa as a service construct. Remind us about what the unbundled Visa capabilities unlock for you in terms of different payment types, for example, account to account. Similar to crypto, interestingly, account to account is often kind of viewed as a risk to Visa, and Visa as a service kind of turns that into an opportunity. Yeah.

Chris, CFO, Visa: This is a a good one that we could talk a lot about, you know, Visa as a service and the evolution of our network strategy in a to a. So let’s try to tackle both of those. One of the really interesting parts about, you know, our industry, of course, that you all know, everyone in this room knows really really well is that payments at its core is a digital transaction, always has been. Even when, you know, digital was much more rudimentary than it is today. You know, even at our founding, D Hawk, who’s our founder, you know, referred to payments as as digital, you know, as data moving across the world at the speed of light.

And so, obviously, that started very small, you know, sort of rudimentary data moving across, you know, what banks, across a single bank. Today, in, you know, the number of decades that we’ve been, around, 14,500 financial institutions, 4,800,000,000.0 traditional card, credentials, a 50,000,000 merchants, around the world, ten ten billion plus 13,000,000,000 tokenized credentials, out there in the world, all moving data around at the speed of, you know, in milliseconds around the world every day. And so, like, there’s the inherent digital nature of the industry makes it right for innovation, makes it right for, you know, all the sort of great ideas from all the participants who can plug in. And I think that’s, you know, what makes Visa so special actually is that early on, we viewed ourselves as a very open platform. We were the first to open up this platform.

We were the first to open it up for other participants, to other banks six decades ago. We were the first to open it up for developers and really become, a network of networks. And so as a platform, it’s always been the source of, you know, whether you’re a fintech, whether you’re a crypto player or a wallet today, you know, you know that you can rely on Visa to enable the network, the the benefits of the network. And and so that’s what makes sort of Visa again special. It’s the network.

It’s the safety, the security, the reliability, but also the advanced features, tokenization, chargeback, fraud dispute, like, all those things that sort of take place. And so what is Visa as a service? So it’s really the evolution of that network strategy. It’s our open platform. It’s our infrastructure layer.

It’s our developer platform. It’s a set of services that are on top of that. That’s really been the secret sauce for VisaNet and the success of Visa for so many years. With the explosion of players in the ecosystem, what we really recognize also is that there’s an opportunity now to unbundle the stack and make the componentized parts of the Visa stack or the Visa as a service stack available to participants of all flavors, whether they’re you’re running in the Visa network or you’re running outside the Visa network. You brought up a to a.

I think that’s a great example of of of what’s happening with a to a. You know, this question that you posed, is it a opportunity or is it a threat? Well, I think there’s elements of so much of our business that where we do compete and we do, see opportunities to to sort of grow alongside of. I think it’s also maybe helpful just to refresh on a to a. You know, we have sort of a three pronged approach.

We compete with our card products. We offer a to a type services through Tank and Visa Direct for use cases that that makes sense. And then third, we’ll continue to grow with value added services on top of eight a. So what’s the v so if I sort of combine the Visa stack strategy with what’s happening with eight a, think there’s a really great example. So we have a service called, Visa Advanced Authorization.

It’s it’s it’s been in existence since the nineties. It was sort of the early, version of AI. It really took all that, you know, payment intelligence that we have across our system and gave, our, you know, our clients the ability to score fraud, assign a score to fraud risk and and provide that score to the to the, issuer in sort of milliseconds, and then they could determine whether they wanna take that risk or not. That was, uniquely VisaNet. It’s been very successful.

Over its time, it’s it’s stopped. You know, today, we have great sort of, adoption from our clients. We estimate that it stops about 30,000,000,000 of fraud annually. Sort of a two step approach to to Visa service. One, we said, okay.

Well, you know, can we benefit from can the industry, the ecosystem, even if it’s not on a Visa transaction, can it benefit from VAA? And we said, yeah. I think that’s a logical thing. I think we’ve got a lot of value. And so we in 2024, we launched in 2023, we launched a network agnostic VAA service.

And in 2024, it it it, you know, it scored over 250,000,000 transactions already. And so, you know, again, great great sort of progress. We took that one step further with our Visa as a service, strategy and said, okay. In the a to a world, we know that a to a is growing in many parts of the world. We also know that fraud is a problem in the a to a, world, where a to a transactions are very simple one way, transactions that are permanent.

So, we said, you know, of course, we think Visa we want Visa. We think Visa is the best way to pay and be paid, but we also acknowledged and recognized that there’s, you know, payments that are happening in a day networks, and so we think we could add a tremendous amount of value there. And so we launched a Visa a day protect, and we’re we’re, you know, piloting it in The UK. We’re working with, eight banks, I believe, that represent about 50% of the r p RTP networks there in, with over a 50% fraud detection rate. In Argentina, now we’ve scored, 8,000,000,000 transactions already, and and with a 70% plus fraud protection rate.

And we’re piloting with 10 other, banks now including a handful in Brazil that represent about 20% of the PIX volume as well. And so, again, we could compete with card. We could we can certainly, sell our own a to a services, but I think the vast opportunity across a to a in different markets around the world is an interesting one, and that’s a great example of the Visa stack, and how we will continue to to drive success, alongside of other competing networks as well.

Harshita Rawat, Senior Analyst, Bernstein: Let’s switch gears and, talk about the core of Visa, consumer payments. So we historically grown several percentage points faster than addressable consumer spend. I know in some markets such as The US that delta relative to consumer spend has narrowed, and I know we’ve talked about it. Some of that is kind of cyclical, you know, depending on goods versus services spend. Can you expand upon this?

How do you see Visa’s consumer volume growth prospects relative to addressable spend growth?

Chris, CFO, Visa: So, you know, we we we spent a good time amount of time at our investor day that you you referenced earlier in our in our conversation. Again, that’s all available online as well. Jack Forstell does a does a much thorough job that I’m gonna do here in the next, ninety seconds talking about, consumer payments because it is at the heart of of Visa’s business. It’s the business that that we built our, you know, business on, for many decades. Is excited that we are about BaaS and new flows and and CMS growth.

We still think that there’s tremendous runway in front of us, in our consumer payments business. We sized it, $23,000,000,000,000 of volume around the world that moves in less effective means that we think would be better served running on a Visa network. Now comparatively, Visa’s consumer payments volume last year was about 11 and a half trillion. And so that’s, you know, the addressable opportunity still in front is more than two x the size of our of our business today as successful as we’ve been. There’s lots of ways that we’re going after that.

That 23,000,000,000,000 is comprised of cash and and check. It’s comprised of ACH and other forms of electronic payment that we think are less effective and less modern, volume that runs on domestic schemes around the globe. And so, you know, we have a real opportunity to go after that to continue our growth. As you pointed out, we’ve historically grown a lot faster than underlying PCE. It’s about six points.

If you go back to 2018 to 2023, we grew underlying PC grew about four. We grew about 10 in payment volume, so that’s a six point delta. That was about seven outside The US, about five in The US, and so averaging to to about six. That has shrunk. That gap has shrunk over the last, x number of years as you pointed out.

But I also point out the revenue growth has been very, very stable through that, and healthy through that time period as well, reflecting the, you know, again, the strength of our business. We spend a lot of time on this, and so let me just sort of dissect that a little bit further. There’s a bunch of markets where there’s the digital penetration is very, high. Norway, Netherlands, Denmark, New Zealand, Canada, Korea. We continue to grow really healthy in those markets, well above underlying PCE.

In places like New Zealand, Netherlands, and and, and Norway, we’re growing nine points above, underlying, you know, the addressable spend. How we continue to do that? Well, we continue to do that through, advancements in our technology like tap to pay. Tap to pay is a phenomenal like, tap to pay, as you all know it, you know, it took a it’s it’s you all, I’m sure, tap every single day, but the underlying, infrastructure and the underlying effort, it actually was a heavy lift to get there because you have to have NFC enabled cards that which means, you know, we have 4,800,000,000 cards in the world today. Think about all the issuers having to modernize those cards, replace them with chip enabled NFC cards or in your phone.

You had to we had to we have a 50,000,000 merchants around the world. You had to get point of sale terminals that accept NFC cards. And so that was a heavy lift. But once you got there, what happened is that it’s become habit. And the great thing about habit so, know, there are certain habits that are daily like transit.

So transit was a was sort of a Trojan horse into tap to pay. As people tapped for transit for the, you know, billions of people around the world to take transit. They also then would tap at the grocery store, at the restaurant, and etcetera etcetera. And the halo effect of all that is that once you start tapping, you actually spend more. And so we find that payment volume is 15% higher for people that tap because of all not just because of the one transaction, but because they tap and there’s no friction and it’s a smoother, easier process at all the places they shop and, and conduct commerce at.

There’s more volume. There’s 18% more transactions. And so places like Norway, Netherlands, New Zealand, tapping has been a a great tapping and innovation has been a great, you know, leading, indicator of of success. We’re also gaining share from domestic schemes. In many markets, the domestic schemes are are you know, they served a purpose.

They’ve been quite successful. We just think that we have a better value proposition, international acceptance, authentication, again, our advancements with our network strategy around fraud detection and AI. We think we have a a very, you know, a good good solution there. And we continue to win share against competitors as well. And so again, we’ll continue to to win even in markets that have high digital penetration or low cash.

In our Investor Day, presentation, Jack then went through a number of reasons why consumer payments will continue to grow, putting aside even the Norway example here for a second. He actually went through in detail six of them. A lot of them was based on our technology. We talked about flex credential. We talked about a to a as an example.

He he went through, you know, three or four of these examples. Tap to everything, which I just talked about, is another unlock for that. We talked about our focus on cross border and affluent and a to a. And so there’s six very distinct strategies that we’re going after to continue to to, win in consumer payments. Add that all up.

I know it’s a very long answer to a very simple what seems like a very simple question, but when you add that all up, it gives us great confidence to say we’re gonna continue to grow our consumer payments business faster than the underlying spend. You add in, you know, the the great momentum that we have with value added services and with CMS, and I think, you see, you know, why we’re so confident.

Harshita Rawat, Senior Analyst, Bernstein: And I I know some of the stats you gave around share gains versus domestic schemes, for example, in Continental Europe, Germany, France were really, really interesting, also at the Investor Day.

Chris, CFO, Visa: Yeah. I mean, Europe for us, if could just sidebar for a minute on Europe. I mean, Europe is one of our most interesting and exciting opportunities for us. We we we classify that as a high potential market, in in in sort of our go to market approach. And by by that, we mean it’s got mature, sophisticated digital infrastructure and penetration and still a high level of cash.

There’s 2,000,000,000,000 of available cash in in Europe today, which is about 20% of the available cash in the world. So you have this sort of juxtaposition, really, you know, sort of exciting juxtaposition of sophisticated, mature, advanced, mature markets, mature economies, and high cash. And so, we continue to go after that, you know, in a significant way. And as well as that’s just the cash part, then the thing that you just talked about, which is, you know, in France I was just in France last week and and, you know, how we’re competing against the the local domestic scheme, very exciting. In Germany, in Italy, there’s significant share held by domestic schemes.

And, again, I just think we have a stronger value proposition, and we’re gonna continue to win share from them. We’ve invested a ton in Europe. We’ve, over the last five years, we’ve opened six new offices, doubled the amount of employees that we have there. We’ve added 10,000,000 merchant locations. It’s it’s been a, you know, sort of a fantastic week one share as you pointed out, you know, the share references.

We’ve taken share from both the domestic schemes and from our global competitors. Europe is is an exciting market for us.

Harshita Rawat, Senior Analyst, Bernstein: So, Chris, let’s switch gears and talk about a growing contributor to Visa’s growth algorithm value added services. So at the Investor Day, you laid out the addressable market for VAS at $520,000,000,000. How did you size that? And looking forward, how should we think about the VAS growth algorithm with respect to new services, penetration of existing services, and geo expansion?

Chris, CFO, Visa: We’re incredibly excited and happy and, just pleased with the progress that we’ve made with our value added services. The the execution, the market momentum, really the commercialization, the professionalization of the business within Visa. I I think, we’re very proud of proud of all of that. It’s $8,800,000,000 in f y twenty four, which is about twenty five percent of our business and it grew at 20%. So anytime we have a quarter of our business growing 20%, I think, as a CFO, it, brings a smile to my face, I will say.

One of the things that we did at Investor Day and and we’ve talked about this business for a a while, but, you know, one of the things that the feedback we got from, yourselves and your colleagues is that, gosh, it’s exciting to see that revenue growth, but we don’t really understand what it is. You know, you talked about many many services in there, but can you give us a little bit more disclosure and color about, you know, what what constitutes a value added service? And so that’s one of the important things that we did in our February, Analyst Day. We decomposed the $8,800,000,000 into four portfolios. We called them issuing solutions, which is services for our issuer clients, acceptance solutions, services for our acceptance clients, risk and security, services, which is a little bit, cart you know, sort of Visa agnostic, but security services like VAA that I just talked about, and the fourth being advisory and other, which is consulting, advisory, marketing services, and open banking.

Not only did we do that, we gave you the revenue sizing. So issuing solutions are the largest at three over $3,000,000,000, growing in the mid teens, and the smallest is advisory and other at $1,300,000,000 growing 30% plus. And so, again, four portfolios all over a billion each, all growing in the mid teens or even in some cases up to the thirties. And so, a really sort of diverse business within itself. VAS isn’t a single service clearly.

And then Anthony Cahill, runs that business or at least ran that business until some announcements this week, will, shared with you sort of the strategies by which we’re going after each of them. And important to that was the addressable opportunity that that you started the question with, which is the $500,000,000,000 plus. In each of those four categories, I think the smallest TAM that we see is 95, billion, and then the each of the other three portfolios goes after somewhere between a hundred and 25 to a hundred and 50,000,000,000 of opportunity. So enormous numbers. Enormous numbers relative to the you know, as as big as the 8,800,000,000.0 is, it’s an enormous market opportunity.

It’s it’s the revenue opportunity, right, for all the participants that play across the two two hundred services that constitutes these 40 these four portfolios. We’re gonna compete hard to to go after all of those. We’re very excited about that. We think about you asked about the growth algorithm. I think the growth algorithm, aside looking at all the, you know, sort of individual products and the TAMs that they participate in and will they you know, can we take share?

Can we win? Can we execute? Another sort of simplifying construct to think about our growth algorithm is around, you know, sort of three three levers, three sort of categories if you will. One is around, enhancing Visa transactions or Visa payments. And so a significant portion of the business, more than 50%, depending on, you know, how you think about it, is is close to associated with the Visa transaction, and our ability to excel and consistently sell with that with an ever expanding geo footprint and ever expanding, you know, sort of product footprint.

Two is our ability to sell, across all networks, whether it’s Visa or other networks, and you think about some of the examples I was giving around, fraud detection and, you know, network agnostic fraud detection or, or a to a. And then the third one, of course, is the the the value that comes from advisory and marketing services. And we have this great stable of assets around our sponsorships with NFL, with FIFA, with f one, with Olympics that enable us to curate a very specific set of marketing services as well. We have great intelligence in our advisory, business as well that’s driven, you know, the 30% growth that you’ve seen in, the advisory and other category. So think about the growth algorithm as as tied to those three buckets, with the huge TAM in front of us, the innovation cadence, the strong execution.

We haven’t even really touched on, go to market and execution, but we’ve done, I think, a terrific job of really bringing, specialized sellers. Anthony talked about that at investor day as well. We have nearly 500 specialists in our regions now that co locate, work with clients every day to to really bring this to life, to you know, the the purpose of that at the end of the day is to help our clients succeed. And when they’re successful, that’s good for Visa in the you know, this it’s a very it’s a very virtuous cycle that way. It deepens our engagements.

It helps them succeed. It drives more volume. And so that’s why value added services exist, and I’m really, really proud of the team for what we’ve been able to do.

Harshita Rawat, Senior Analyst, Bernstein: There is so much to discuss there, Chris.

Chris, CFO, Visa: There is a lot. Sorry. You you got me all excited.

Harshita Rawat, Senior Analyst, Bernstein: So in the interest of time, though, I’ll switch gears and ask you about commercial cards. This is an area where you’ve had good growth in in revenue, but the growth kind of fails in comparison to the enormous addressable market you have. There is often a perception that cost of acceptance for cards is often a sticking point, hindering the growth of cards and new payment flows. So tell us about your value proposition, the ROI you bring from businesses perspective, and the resources you’re you’re putting into this business now.

Chris, CFO, Visa: Yes. Yes. An exciting, opportunity. Again, it’s it’s you know, when we talk about our business, it’s our consumer payments, it’s our value added services, and then we talk about CMS. Some of you, remember that.

It’s called Fuflo’s. We rebranded that. It’s called Commercial and Money Movement, Solutions or CMS, so when I refer to CMS. And and and the commercial cards is is the big, you know, sort of the biggest, portfolio within the CMS business. I think of it in two ways.

Certainly, opportunity is enormous. We’ve talked about, you know, a $200,000,000,000,000 payment volume addressable market. A good portion of it is addressable today with the services that we have, and and a good portion of it will be addressable in the future if we continue to innovate and evolve. I could you could think about it as as both a market element and then what we’re doing to sort of outgrow the market. We are the largest player in the beat in the commercial card space.

We have 40% market share, and we’re growing faster than the competitors. And so from on the one hand, you know, the market conditions are what they are and we’re, you know, we’re continuing to grow faster than the market. So we feel, okay about that. Now but still recognizing that we have aspirations for it to grow, a lot more. You know, the commercial card business in many senses has elements that are similar to the consumer card business, meaning its issuance, its acceptance, and its engagement.

So how can we drive all that in, you know, in partnership with our with our partners? You could drive more cards and and win share with issuers. You could drive more acceptance and then customize forms of acceptance that could drive experiences whether that’s virtual cards or vertical solutions. You touched on a very important question that does come up and it’s the cost of acceptance, or at least the perceived cost of acceptance with it, which I think is a mental hurdle out there a little bit. But, you know, we’ve we can we’ve done it.

We’ve done some of this, and I think we could do a better job of educating the the, ecosystem around what the true cost of acceptance is. Because, you know, we’ve done studies on this, you know, while the cost of accepting a card for a merchant might be a supplier might be, you know, let’s say 3%, the benefit from accepting cards unlocks, you know, faster collections, lower, default rates, and it actually unlocks more revenue as you give clients, or your customers, the merchant’s customers, the ability to pay in a way that they wanna be paid with, in the funding source they wanna use. And so the the ROI on accepting cards is much more positive than the 3%. We think probably two x the the cost. And so I think we could as an as a industry, I think we can educate a lot more in addition to continue to advance, you know, the innovation and the use cases and the engagement.

It’s a long play. It’s a huge TAM. We’re excited about it.

Harshita Rawat, Senior Analyst, Bernstein: Chris, we’re running out of time. So my last question for you, Visa Direct, something quite differentiated for Visa. You now have reached to 11,000,000,000 endpoints. You have augmented the value proposition with a number of investments over the years. Tell us about the evolving use cases beyond person to person and also its cross border meaningful portion of Visa Direct today.

Chris, CFO, Visa: That’s a great question. Great question to end on. Visa Direct has been one of our most exciting growth opportunities. You know, I talk about innovation and the and the cadence of innovation. It’s really something that we, you know, we’re leading, the industry on.

And as you pointed out, you know, it took a lot of work to get the infrastructure, all the different participants, as you can imagine, to get to over 11,000,000,000 endpoints, whether that’s cards, wallets, accounts, to be able to move money from any point to any point. I think that’s really, exciting. P to p was the was sort of the use case that was predominant, and and it’s still sort of the the bulk of the the volume, I would say. But we’re seeing great great growth in other use cases, You know, merchant settlement, you know, social media and sort of gig worker payouts is a really interesting one. We think that Visa Direct could become effectively the payroll engine for gig economy workers.

If you think about a Lyft driver or, any sort of, you know, other gig economy worker, it it allows companies to literally daily move money based on the volume that they drive. And so there’s a tremendous amount of use cases. The important thing is we’ve done all the work to build the infrastructure layer. There’s literally, you know, hundreds and hundreds of participants, whether that’s you know, whether you’re a domestic scheme or whether you’re a global network, all the, you know, 11,000,000,000 endpoints that we talked about, all the use cases that, 65 of them today and continues to grow. And so it really is an interesting and fast growth opportunity.

We also shared with, you know, one of the the metric that we share every quarter, of course, is the transaction growth. We think that’s the best metric. We also importantly pointed out at our investor day that those transactions come at a pretty, excuse me, a pretty healthy yield of 9 to 10¢ per transaction. And so even though we talk about the transactions, you could be assured that there’s a good financial, sort of economic, rationale and reasoning behind the volume growth continues to see, you know, the the expansion of use cases. Very excited about it.

Harshita Rawat, Senior Analyst, Bernstein: I really enjoyed the conversation, Chris. This is great. Thank you so much.

Chris, CFO, Visa: Thank you so much.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.