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V Visa

Participants
Mike Milotich Senior Vice President of Investor Relations
Al Kelly Chairman & Chief Executive Officer
Vasant Prabhu Vice Chairman & Chief Financial Officer
Lisa Ellis MoffettNathanson
Matt O'Neill Goldman Sachs
Darrin Peller Wolfe Research
James Friedman Susquehanna
Craig Maurer Autonomous Research
Tien-Tsin Huang JPMorgan
David Togut Evercore
Dave Koning Baird
Harshita Rawat Bernstein
Call transcript
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Operator

Welcome to Visa's Fiscal Third Quarter 2020 Earnings Conference Call. All participants are in a listen-only mode until the question-and-answer session. Today's conference is being recorded.

If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host, Mr. President Relations. Vice Senior Milotich, of Investor Mike Mr. Milotich, now begin. you may

Mike Milotich

Good Thank XXXX welcome afternoon, to Jordan. earnings Visa's quarter and third everyone, you, fiscal third call. --

slide Officer; Visa's us A Chief posted and replay containing at statistical on Relations IR This deck webcast archived and Joining section Al being Officer. Prabhu, our Kelly, will highlights is website. XX the are Chief Vice be today Financial days. Executive and site www.investor.visa.com. on been and call Chairman of Vasant Visa's website A Chairman financial for has Investor the our to

also many guarantees presentation includes of factors. me as results forward-looking not and you performance, materially are actual our statements Let that future could remind of statements. result this differ These a

concerning section most is SEC's XX-K, our information can those Forms on which Relations our the find and on reports Investor of in XX-Q, the available recent X-K, website website. and you factors Additional

measures the financial non-GAAP with information historical GAAP call release. me earnings in that, For reconciliation over this let And turn disclosed call, are Al. today's the available related and to in the

Al Kelly

enable to proven invest will operate. clients some have in to resilient and Mike, be remain being to for deal to which highlights how past movement with very -- much. quarter an notable to be helping of and and shifting close we aspects certainly economies way the we've globally. significant have the governments to results, discussing value-added and continued of months ways Even consumers, and businesses growth services. turn to impacts that COVID-XX on I is with Visa's Visa's we in after challenging and how continue employees, around the the business well and demonstrate many the future continued the the you money flows the new pay will provide propel and world, I communities, the then of into payments, focus of our is and has few our will want be them. well overview our Visa thank continue consumer The Today always in paid

So Net of XX% fiscal dollars. billion, or results. in $X.X quarter the our to revenues were quarter decrease XX% third constant a start third in

of were impacted volume this dollar a declined through down the primarily revenue million All Cross-border by We pandemic. excluding Including X% by XXX of driven was intra-Europe, the or processed volume a over per globally on drivers international intra-Europe declined which excluding basis, the day our year. business over significantly or the drives travel. Payments volume on quarter XX% XX% China. transaction XX%. quarter our billion transactions lack the XX.X network, prior decrease constant XX%

business the only processed volume for new in mid-XXs drivers volume. case, mid-teens year-over-year. the And and each Visa In flows, for throughout cross-border quarter transactions improved the value-added meaningfully and grew payments in each year-over-year. grew services in revenue However, the month Direct marginally transactions our global

also achieved our which growth initiatives. more affecting without effectively our declined but managed investments X% in was importantly We primary expenses, this

declined Our non-GAAP XX%. EPS

over sensitive are globally. and payments, there there including as performance trends increased mature XX average in pay, In interest countries and ahead. than check the in $XX look new time in In even second countries ticket globally. the of value-added to transactions had check improve more. we we penetration for an will payments, payments, more quarter demand to XX with surfaces, and and Visa tap many manifest consumer success helps and points which in has third fiscal by transacted business environment, and our level XX our are cash cash which five we touching low by nearly today's impacted all markets usage electronifying services, had increased this pay and over XX% certainly percentage trillion seeing From quarter, we tap third percentage quarter or help consumer cash at are to is points historically are still people digitize that COVID-XX know to the While, has by accelerating flows

the than of to require limits, added to contact States, million more several contactless helped of number the increase than tend their Tap six to year those and pay accelerated public commute, have XX financial institution countries. their smaller the more in food start buying for In issuance by we where as going We our and tap is of share to cards consumers XX drinks. of a conduct than to they countries more post-COVID, paying calendar to transactions the transit partners especially the in first XXXX reducing schedules. months that likely United for pay office back consumer fares as accelerate XX% transactions

an the than works option over times Another excluding This States, three cash than is higher e-commerce. approximately in digital In June positive e-commerce Visa's been trend of greater has January. our credentials of physical sale. shift the in United were commerce where travel to the XX% Visa favor not in share is point active because in

than the addition active online. that increased those credential used time to spend also during notable which new typically X%, by per adopters In spend to considering is over total less shopping

And active credentials significantly spend over the per to the tend engaged credential when by are to trends active who more you in fact e-commerce, not In these XX%. United increased unique the States. be isolate

per new BXB, of payable is credential in examples credentials active in XX% the of while active where In cross-border active Argentina addressing growth credentials we this credential continued XX% and During focus XXX%, e-commerce our In accounts experienced payments. active increased markets across as and Brazil, increased while on opportunity and In over U.K., flows, e-commerce e-commerce trillion receivable are the changes spend not card there per active Romania X%. increased $XXX opportunity. adoption. is e-commerce developed In increased XX%. card-based, XX%. period dramatic spend the

out commercial enables relationships to to companies provision work Conferma quarter. home this partnership pay growth. simplifying A we virtual global continuing employees' future the from from during U.K. of which couple and our very established down to wallets We and Visa period, travel cards recently digital is volume to BXB with a tap quick reimbursement. points enabling expense and capabilities to limited fuel While Pay fintech build are

large-ticket capability be cross-border available. markets out. by in of called solution Visa our end are And For to half network live phase. when in implementation BXB Visa of cross-border continue all banks the BXB Many year, is the where Connect BXB transactions the Connect, the processing will Visa's they we XX the are build

excited new XX%. And saw is almost in with increase look In add of where the Let's transactions partnership new and prepaid America, Canada. PXP new Visa we payouts a from transactions global its remainder continued of Latin PXP Braintree, will and XX% flows. have momentum to earnings with nearly program allow at PayPal United in to was expand in growth PayPal's government-to-consumer launches also progress Zoom, QX This versus and Peru brands of the Direct-enabled QX. PayPal XXX% Venmo, partnership food in a Instacart iZettle employing and PayPal. Hyperwallet long-standing Visa apps extension in all In category, cases a GXC offer including cards. an States, have for seen and announce Direct with capabilities use gig global delivery up domestic is gaining regional there Visa brands. fast real-time economy a we cross-border in is shopper the pre-COVID globally. grocery to nearly This its and such transfer payments as are levels agreement and both

four This million let the Visa quarter examples. me U.S., some prepaid impact distributed economic payments via the highlight cards. In Treasury of nearly card the

by with region. to vulnerable Visa In We also cards to France, services, CaixaBank we've seen across the XX,XXX as government. the to value-added frontline In workers on hospital thank in XXX,XXX three clients Visa projects you Natixis worked partnered us prepaid government-allocated with issue families cards Spain to more turn funds a for support help. issuing with financed

are and expanded payment capabilities offer capabilities our has and looking risk have and to seen secure omnicommerce e-commerce As sellers new safe growth. and that are fraud CyberSource

Ministry in platform Arabia CyberSource all Arabian recent recent A largest with two will Rajhi consumers payments examples. country enable the the in for through has operate Al a Let Finance. services this leverage environment. in become centralized is among with sellers me Saudi government up bank the Buying Bank, and in-store win very picking popular name of to online e-commerce country's interface key to acquiring a Saudi way for

Secure also making December issuers to secure Interest two-hour a QX pickup. alone at CyberSource in risk in increase grown a nearly fraud transactions advance and has is Europe. this However, for CardinalCommerce May in which transactions Decision leverage Manager expectations Secure seen home a XD meet our in case review in products. higher mandate in for of massive standard has online quickly fraud. year. versus risk sellers in potential this the authentication the all merchant. saw to provides we improvement as Across up last in of ramping use year-over-year in this accelerated offering products chose and XX% is Manager growth products resulted growth does quarter where One authentication the orders fraud progress in steady XD Europe partner well for for This beginning ecosystem customer most CyberSource transactions. for network-agnostic a customer bring Decision a

deadline. more in rate business pandemic. to just given manage be plays Clients on Visa Data XX% clients accelerated are this our continue an grown We data Secure projects environment. last the has help valuable XD QX. Platform to analysis XX% the not to consulting continue and a clients at increased they third our with consulting and services transactions QX from compared alone. over as year. role critical that Analytics completed EMV approaches for the the of QX through to work our with almost as the And ready Visa their the than ecosystem participants utilized to deadline activity some navigate providing client in XXX% quarter

new to progress talk me quarter. made this we deals let Now very where good

our of Korea, we the preferred one remain We First with OCBC cards to issued we partnerships Europe our our position personal the with started credit force wallets We recently issuer UBS deal of second-largest the Banco quarter. capabilities We continued. our local TSB, issuer Nordea in South extended the domestic OCBC Bogota, Bank with Korea's and with debit. developing certainly exception debit partnership Colombia. XXX,XXX Switzerland Shinhan Visa co-brand won expand largest in is volumes client And in Kaspi de one issuer over Spain, a from Ireland next processing renewal with in Permanent retail to large largest Caminos bank and our in across In to largest savings issuing a continues. most debit recently a Nordics, partnership for partnership processing. Card. secured leadership renewed the transactions. In account partnership issuance the grow Visa. Bank's the we Visa portfolios biggest Singapore, our banks their with years. to region. with primary banks significant will Kazakhstan. to secured we're Banco We our processor in in XXX% was momentum over in moving card in We renewing Bank, and expanded renewed with the In to current Europe card the debit The customers. and winning making issuer this acquiring few debit to our also renewed Ireland. in not migrate their recently And in

including strategic its extending relationship. expanded and with partnership renewed Buy the My Visa co-brand Best Best quarter Buy This

Visa their customers. Ford rewards X available members on and million and collaborate Rewards new Card will FordPass Ford FordPass Ford's other Visa to

fintechs. Visa along co-brand with leading a services with of in a industry-leading launch win acceptance wallet building and secured recent Another neobank card deal everyday co-brand this Verizon's purposes. products with credit to provide and platforms we component with was many signed A on essential and and savings quarter benefits that e-commerce key And globally. we And issuance for to Tiki, wins one the Vietnam. is Verizon

Arabia, well credit card, launched transit as their people. for on wallet bank and transport accounts [ph] few. Germany in monthly groceries U.S.-based and has Kong's to a the new unbanked Saudi card Neobank Visa strategic the including mobile a Visa will Careem, base. challenger digital signed U.S., credit million allows consumers and debit and credentials Hong Octopus in name penetrate In X X the over a the app Money to spending offering will its purchases East top-ups allowing official with up a cash-back potential payouts pay build that partnership accept in Africa million which in ride-hailing announced with of with driver Visa subscriptions. Visa over me commuters offer In rising XX,XXX as pay outlets. Middle cards we user while retail access an Hala solutions. Direct an to Chime secured population to million like to to XX all-in-one biggest innovative launch Vivid everyday to savings Let application

As future. business renewals Visa's I've are model often the said, and to help deals partnerships will and fundamental new into drive growth certainly these

close, I if not be to and on world. race Before in the I comment would country remiss this around situation the

establishment We've announced inclusion company. four For Visa African-American and our number Visa, must jobs by it's and committed that committing to men the journey is and Visa and frustrating It of in scholars we across and in XX% XX% centuries discrimination. have above five our recently are underrepresented last diversity the to of including number And and drive overall by week, presidents years. are a offensive. and forms injustice of underrepresented next the U.S. three of announced program. unacceptable. many U.S. next announced number increasing the Visa years the to actions It within and increasing women a Black colleagues is stop. experienced we steps our It social in part. importantly, we At do the vice very of next

revenue, still quarter. our there long-term and payments one Furthermore, dividend. we've in to services in term while our EPS prospects and by to saw expenses positive capital our Visa to is and process our about in returned On debit cross-border the while Direct hand, to historic this in And levels So ability we near overall X% growth confident we e-commerce close, to and difference at value-added remain in growth transactions, growth. volumes this Yet declined net volume transactions future for enablement world. We've tap uncertainty and in been in retained volume, demonstrated quarter growth a revenue. some and make the click-to-pay discipline. shareholders sure, reduce strategy pay investing we able and our

All of business this our speaks to of the model. resiliency

scale, We financial efficacy for from of to everyone a team digital the We we products this everywhere. have of levers confident network stronger. pandemic most a our the importantly, network of emerge even talented trusted money and enable remain strategy, brand, as global movement in the

let detail, me over Now it to for more Vasant. turn

Vasant Prabhu

and Al you, Thank everyone. good afternoon,

fair on results are begin business seeing quarter, payments amount color Starting we the the drivers navigate then last quarter. we business we close did on we As this financial trends our volume. will provide time. U.S. through as a with some of unprecedented with and perspectives key I'll with review next the

of points. credit Debit several in from July to XXst. shelter the was through unemployment outperformance jump-started to up through XX% outperformed while For accelerated down and to recovery. spending the quarter. fulfillment volume relaxation volumes credit economic spending in decline XX% XXst declined Volumes XX XX% This demand April, the are along decline X% by X% The XX% was by quarter of followed a pent-up Debit was of and enhanced declined is July. factors. XX June. points up of by XX Debit impact place almost by credit in in in up payments recovery benefits, driven spending a X%. X%, April by payments X% versus April the requirements. territory helped in debit bounced the from returning spending Credit mid-April from domestic before a in by V-shaped sharp declined points positive the decline recovered U.S. in spending a July

Some than of persist others. likely are more them to

were consumers debit. benefiting directly payments impact checking accounts economic deposited government's the into First,

have consumers have money they to to in times of they money the propensity a from borrow spending shift uncertainty, in bank. Second, economic

a almost cards, such everyday and by over distributed Third, by entertainment as as Fifth, know, in unemployment were growth for favors as restaurants, economic use tranche of in most payments which almost every significant debit. there impact categories you XX and in last tend lifted Visa travel, June. day every especially as affluent the which prepaid hard-hit to Fourth, May been categories in has which pandemic. been spending shift debit states online credit customers in via purchases points to discretionary well several spend the benefits – have

the every U.S. not the late pre-COVID XX% went present growth to into high rate. a Visa declining effect mid-April, to The grown as spending which pandemic. week since. the of COVID shift causes steadily over insurance single-digits to been Recovery declining reopenings up forms a underlying demonstrates stabilization quarter, are. Direct in the are by almost Card little states. of digital what but from in early Card trajectories travel of e-commerce. similar strong of XX% was variety It in is has use from recent from cash The June, XX% volumes to due is since crisis present payroll. cases over through as result for quarter there has this Finally, too in secular tell spend PXP, the accelerated present payment the Xx improved early acceleration secular the April also to away the all in across this to excluding to improvement significantly growth significant shift growth has ranging the payouts, of card relatively debit

represents impact three U.S. U.S. spend by category group to-date. performance excluding of we've recovery the volume. In groups can roughly Direct, payments based be of seen terms third a our Visa on COVID summarized and in Each

even mid-April. or categories high and categories, goods. or pre-COVID stores, the includes higher every since improvement growth their above These rates consistently at first drug The such retail grown group and in teens home week as have food

XX% of growth the all June. services, stores, declines apparel and experienced automotive, business include categories health April in retail government The recovered includes These by and second between and end education, spend supplies. segments had group XX% care, to that department to

The still pandemic: impacted the and than each third lower points These XX by driven between by again, purchased XX declined remains fuel includes most during categories more entertainment, by group growing category down spend and improved travel, in hit restaurants. in to categories the XX% July XX% still down but declining the are Fuel quarter. hardest Travel that is gallons prices. XX%. April are although, year-over-year, over this are over

spend with Within the significantly continues is not present grow restaurants declining, category, card still restaurant outperforming. to present card spend while quick-service

International X% travel and Moving excluding reopened, XX% on dollars Similar the in Card to significantly the the only of over down rest card third present XX%. in volume credit constant in the countries the trends payments broadly spend debit the Performance improved across declined to debit while quarter. spend quarter, remained down elevated. through U.S., credit to U.S. was with world. present categories not similar as outperformed

Eastern volume best positive Europe region Our wins. recovered CEMEA, Within Hungary consistently the fueled present Czech one to in the XX% Europe. declined Poland, was Central Europe and performing Latin slow. now not growth recovery strictest quarter. dollars quarter declined in card Republic spending of present back the be growth in declined one in declines well CEMEA, strong in quarter. the America to as driven June of prior and and and early XXXX following Brazil constant continues also in the quarter Russia, near shallowest, in payments Canada in June, domestic lockdowns rapidly constant client growth. decline but in levels to within returned fueled by is a Asia April declined The strong the recovery spend Italy Central which constant the third X% growth. U.K. almost Southeastern has include which positive Europe rapid dollars. as XX% Brazil XX% not growth back to card had by post the year by of levels dollars. is been after

which markets has of countries Asia Korea Pacific XX% of dollars. country. the depending multiple June. to constant flat the and levels impacted and XXXX in declined in on the the payments were Australia one in Processed quarter. transactions volume to Japan were close by with Two XX% least Asian economies of gradual globally. spending late Reopening the India declined Domestic Zealand, of phases quarter. back most remains the New both impacted been in was

Cross-border a a to Domestically, Growth than improved there declined higher volume is constant lags from the spending a recovery up trajectory XX% spend dollar to holding through the -- is e-commerce. third growth July transactions low are in cross-border the ticket from ticket and improving flat. the Although other non-travel the due mix X% shift, transactions XX% this travel-related lower since. declined volume April mix shift in has XXst has better decline decline due Cross-border June. to volume within the XX% similar the processed decline on in categories. of May shifted of quarter. April from to excluding in mix high to in been hand ticket volumes Volumes XX%, -- Europe to little but in ticket marginally

within For the in decline volume in Europe volume XXst, rate month that the July volume dollar international at excluding Europe XX% drives June the important fees. the within remind including It's Constant XX%. declined has through quarter. to volume you our cross-border of of stayed cross-border and

you XXX at cross-border World remain demand end two-third reported reopening or had restrictions visa of XX The certificates. card countries, of point, over volume had that the travel travel, volume excluding or have borders and rest of medical June. in visitors. XXX XX% within completely and As of Organization the Several closed U.K. foreign you To had driven was XX% recovery quarter cross-border flights. of partially remaining borders. Europe. other or cross-border completely Of like countries, quarantines the out Travel-related at At categories June roughly require end in represented still their the partially countries XX% the Tourism or this by our borders largely suspended card to a XX both Travel-related imposed spend present spend, in which have declined travel. declining pre-COVID not and the is have a present the decline to spend includes know, closed.

by air is cross-border possible difficult. not speak, we even very travel, or especially As

portion large corridors our our seen to recovery is derives of corridor we significant a In our -- a now what possible, have the we have some of volumes While corridors, cross-border Borders cross-border some might trajectory one drives few can no recoveries. be. large sense get closed. the before portion volumes, remain of travel a reopen where most of important

For travel is example on Americans as to to XX countries is the and at Germany have is that remain visits almost traveling already gaining perhaps is momentum. excluding the in with than Travel low April The the cards for store, X,XXX about strong regard from. Mexico for go The for is represent look Similarly that corridors. haul of government and The local vast are Much a by travel longer relatives likelihood back is leisure has the personal cross-border Growth are I Switzerland XX than teens cross-border non-travel and non-travel likely comfort. Europe. volume retail which to miles. This is versus been to in than and faster air fueled post-COVID has a some friends doing again to UAE travel. which to up. is with the strength of portion to geographic is is consumer to something hotels likely consistently to majority spend becomes corridors cross-border of to we we even majority these retail color within start business are the we of XXs travel Travel is travel within decides travel in normal. provided excludes define buy item seen there Russian volumes by and in Consumer as hotels e-commerce a better high just going from spending tied drive evident spend picked little It In neighboring and France meaningful their low, growing travel are travel vacations enhanced. a declines education, spend. business intact cross-border as online and entertainment, people the and XX% purchase by recovery recovering important Caribbean. not demand shipped more cross-border is zone short-haul countries offset of hotels. since to drives to less is which once countries, card-present higher spend. see recover e-commerce to consumer growth the Short-haul the Europe where most to from mid-April. rather points. to since to note Since to travel card-not-present to mid-April of

declined Within July, another largely card-present up in the financial revenues borders quick the have points results. review cross-border three dollars. the possible the EU, spend of April quarter through third trough XX XX% weeks of is reopened. A do of from in cross-border borders Intra-Europe when Net in reopen. indication XX% our trajectory the quarter recovery or in constant

fees processing the due well services The strong as over declined Data services were clients waived growth note which should travel-related to services we the X% card that and in pandemic Other by many of for service fees activities, outset benefits, lower marketing We the certain and surged pandemic. impact fees on our approximately we reported service have reported service dropped an lower to points would our last volumes. use Europe. by value-added X% within revenues services revenues will as line X.X declined revenue. transaction volumes have International with impacted reflect declined revenues These revenues the lag a had XX% XX.X%. by year of the at flat additional acquisition-related marketing-related quarter. include pandemic. impacted reported lower in net decline the revenues year supported volume without next cross-border quarter's revenues as value-added XX% with quarter excluding service prior slowed and would prior Third fees decreased value-added services

well let including acquisitions. grew captured In revenue revenues increased services The are the between highlighted. data strength other Approximately revenue. some services many These CyberSource, services the and third the by also described provide me our on, Al mid-teens as revenues included Value-added other fraud of of and two-thirds revenue. value-added grew due are in U.S. mid-single products, the in services services on remaining issuer grew value-added XX.X% last streams. roughly versus is and as evenly in mid-teens revenue in fees P&L. move use I revenues transaction-based and value-added in data benefits detail as the services value-added debit services service Client where usage by services the value-added service of more consulting, authentication year and revenue gross in of total X% quarter, our the split card prepaid declines processing Before in driven as were them are earlier. marketing recorded acquisitions, fees and services in the -igits in of mid-teens. incentives declined Value-added offset grew and to I processing,

before, are payments to the majority indicated incentives we've volumes. As of tied vast

However, pushing incentives as gross than revenue of up less percent revenue. incentives declined a gross

me why. Let explain

generally incentives selectively and to First, payments volumes are tied cross-border only total to volumes.

have than declines As cross-border volumes payments volumes gross yields, and revenue higher deeper lag cross-border been volumes total incentive have declines in declines.

activity renewal than XXXX, grow heavy Second, faster revenue. incentives year in like to we causes had gross fiscal

some revenue down. in the result, decline lags incentives a Offsetting these the degree the is way service to lag. on gross As factors fee

quarter. this us lag mitigated This quarter. earlier, mentioned the impact will service negatively gross reported decline I fee next revenue As

Interest in decisively as fast. GAAP early drop quarter we billion Interest fiscal lower the X% longer-term These expense income the achieved XX%. sharp growth was to for in declined expenses G&A. investments $XXX tax was marketing our $X non-operating rates. reduce non-GAAP and initiatives. the sustaining was higher from was us Non-GAAP were issue. expense and quarter. Third expense has due debt able additional while to expenses third particularly helped non-GAAP Acting to million of initiatives, rate cost The interest our execute management were in reductions areas operating and

quarter. Finally, perspectives on some the fourth

quarter. predict world. for the economic the this reopen Forecasting what have post of of revenue back impact off spike to infections difficult recovery revenues few of Other the It trajectory when ending nicely will around be most volumes impact cross-border countries note in stimulus environment. the in in challenge next model growth uncertainties rate or recent slow. the a remains the as bounced you include is inevitably the of altogether tapering and Domestic points recovery will to A borders the and payments will re-openings. travel and

we reported third have to be indicated declined This change I points. revenue an than reported third X.X the lag, key on quarter As additional business quarter a will trend absent earlier would lower in net fourth service revenues cause revenue the without growth had net quarter drivers.

Continued and domestic revenues. volumes partially payments higher reported increasing recovery to offset the incentives revenue will will be in not data service trend, by processing but volumes. improve transactions the related This

One liquidity the other reductions revolver recovery to in healthy $XX important increase this in a operating $X quarter an at Non-GAAP billion persist. $X.X revenue cross-border revenues note most should fee average ended and three away will $XXX This commercial driven of We billion cash expected impact With be the over volume are around these as third an to shares roughly service to to our percentage cross-border gross back expenses COVID-XX flow year. the of billion with $XXX.XX. growth over a strong. points that securities quarter on the expenses revenue are back lag, on the remains if excluding expected we normalize access the the such the net incentives in cross-border line fourth the approximately improve the in by sluggish Non-GAAP percent paper significant we million. Adding quarter average expect cash rate times: point XX volumes intra-Europe. generate recovery hand. shift As variable investment for a impact, cross-border quarter, shares bought equivalents price million likely quarter quarter. fourth In of almost from turbulent the decline non-operating level of to with $XXX the Even delivered by mix stabilizes. with remains million of of free improve for market is at volume price would million bought as to through the fourth we Year-to-date, we $XXX. to quarter, third the terms two position domestic are and levels. X.X third the favorable and our very

remains policy both unchanged. risks opportunities. dividend create Our and Crises

We and settlement, metrics. sustaining fraud key security, investments to performance, closely ensuring reducing while and mitigate have monitoring moved key by The liquidity, daily many other risks the network penetration Direct and very accelerated crisis the strong of in to expenses to growth the pay. digitization momentum value-added favorable shift continued services mid-teens. remained trends: has strong cash, and the secular Visa e-commerce of to have tap fast grow

this on remains focus to Our helping they that and times. as of back all cardholders, our navigate unusual these With regulators clients, own governments, Mike. stakeholders, I'll course, our through turn associates

Al Kelly

on mute. you're mute. Mike, Mike, I on you're think

Vasant Prabhu

Al turn don't Operator, maybe should questions. move to to why questions? we we

Al Kelly

I end heard not technical we So the a some of have also beginning that people the and understand issue yours. Vasant, mine that of had might

Vasant Prabhu

Okay.

Al Kelly

we little points. for -- those hoping whether Maybe... looking a should summarize a us would I'm was I little direction give Mike

Vasant Prabhu

Mike is suggesting going. keep we

Al Kelly

Okay.

is about that we what end me what it suggest just to U.S. summarize talk let maybe debit quickly up maybe before and I you open I at could bit said questions. little the So would a

Vasant Prabhu

Okay.

Al Kelly

Certainly, it, our growth cross-border did services debit, uncertainty believe strategy I and said certainly e-commerce what EPS, prospects. in associated Visa volume the growth payments in in revenue, in growth the overall future Direct net areas: But of enablement declined we that transactions, is number volume, So revenue. going click-to-pay and pay, but transactions. in have to that growth growth volumes, were with we important value-added and advances in growth tap in processed quarter: our there is in see to to things continue in growth a

at and and shareholders to while our reduce our in historic levels demonstrated capital dividend. we invest to expenses future ability also the We returned continuing our to retained

of of we the global confidence network So in business lot net-net, have strategy. is of efficacy a resilient believe our we model network and that our

debit on helpful, I a it from have understand. be Vasant what people just U.S. you'd think lot comment because heard could of might think I I would it not if

Vasant Prabhu

Yes. Al. Okay,

So talked outperforming I about why debit was credit.

impact As credit whereas heard still is XX% credit first less at the July you that X% by first of debit now in about weeks three than is has points and through that declining XX less is growing than may the by in three borrowed, checking of recovered weeks have economic debit. into through to declining six spending the the payments times consumers away went money still do bank. going quickly. that. from I'll In uncertainty, July. Economic directly of through accounts and I those have whereas do about for helps and reasons recovered July, three back X% have bounced they money first weeks they of shift

in online the purchases. use everyday entertainment used to which The lot in Affluent to because move been for to debit, caused discretionary number especially for tend favored normally four, customers has categories travel, which everyday purposes our quarter restaurants, reason distributed is reason has unemployment like is spend was Third this were prepaid of five, this lifted a reason, benefits including payments impact well. cards debit in growth using finally, our Direct, and Visa cases then numbers June. And the bunch number economic states, whole really performed XX debit a Visa over which credit to and hard-hit shift debit e-commerce, of like these. have use which up XX% as May helps times

we'll I stop there think, probably and questions. take So Al

questions. so Mike, lost have take might can we we think I

Mike Milotich

are you Jordanne, there?

Operator

Mike. here I'm Yes,

Mike Milotich

can go into would Q&A we Jordanne, be if that great.

Operator

from comes Lisa question Ellis first Our Instructions] from MoffettNathanson. [Operator

line Your now is open.

Lisa Ellis

Hopefully guys. guess. afternoon, me hear I you can Good right. All

Vasant Prabhu

Yes we can.

Lisa Ellis

firms' question elevated how ecosystem those facing right pressure did a or call. practices. in at topic affecting this for plus Like negative? there the initiatives practices on regulatory and see companies Thank as scrutiny you So Visa that big comment payments big regulatory Visa now you U.S. now as The are very you their any tech – tech would also, or you And I'm the that in of view cover on sort competitive potentially particular, not doing then they're to this should Can hit anything Europe you in you. Visa Al, the view also be are payments? scrutiny of big related scrutinized? on, present in for regulatory tech. you do about a a one going obviously to some for

Al Kelly

Well, we of all consider you relationships have big with Lisa techs. as you might would the imagine, that companies

or advocating they are helpful to with involves but extensive them, helpful Some and bit others, I comment can't comment But are wouldn't have can we payments, that more experiencing. relationships than regulatory and of if on all them. it to scrutiny certainly be a as certainly we was There the what's in an going we Brazil a just on Facebook month, either in initiative where that jump case or payment we the did had example. we in government into that last that. explaining a with going with will

have developed lots these big are them. attracted that, lots I relationships and techs certainly, with – think have and of users

work most And capability. to those the payments to we'll to certainly next there, regulatory relationships deal can away, we issues to some and it facing. And or with them the be that And of those to out things. call of of question? and cases, to figure them up are be any it's we're leave on kind phone movement partner going think helpful. with a Jordanne, particular But And them if money we resolve they're require to them. want I in be

Operator

comes Our Sachs. Goldman from Matt question from next O'Neill

Your is line open.

Matt O'Neill

a thinking contactless a follow-up. the sort commerce I was just partners into the Thank move any unrelated catalyst merchant on the then, this of for provide lining could the has Yes. and quick hoping brick-and-mortar greater and been which what have around growth is some if you I secular there? my of any And views back I you sort the will next of comments very how of are probably is one question. just sort demand wondering, you in here taking there significantly payments? there's of could the much. pandemic, if be partners Plaid was the Thank lawsuit But leg bank think I about e-com update robust. silver obviously Hi. for acquisition anecdotal what on inevitably if the is

Al Kelly

and it Well, back work it way communities card-not-present rooting streets impacted interestingly of bricks-and-mortar And see there. was seeing has commerce held as have both charts volumes card-present card-not-present world some issuers a started greatly and main all come to the sorry could in I would up, more by not enough its much around card-not-present see who's think continue to we're probably to – around Card-not-present as and that bounce obviously declines has economies so you back for back to pandemic. situation what our grow. and as on that the love card-not-present any anybody lagged I'm where the world both

I been has case Matt the contactless think for made.

are credentials we've States, that six through XX,XXX going know merchants issuers sorry, momentum have COVID. and – voting months have had added and further has even of kind added the tremendous to We the but cited into pay And to accelerated I of XX actions the – has or consumers anything had as of been momentum million in COVID year. the and contactless their seen had tap or which to tap in United if I'm tap first we behind, pay-enabled governments pay our

in the merchant face-to-face at pay. terminals Something of the world that to enabled occurring is volume like – are occurring is XX% is for tap that

it that it's continue world. at have COVID to growth just think believe might a will accelerate I than So happened perhaps the to I States otherwise. the everywhere the faster help pace here the And grow situation United going around in

– As for Plaid

Vasant Prabhu

that's the things. merchants is of. getting increasingly fosters CyberSource are and at middle of spend customers, categories. And on as couple commerce a a if lot anything across well also more seamlessly know. e-commerce. add serving you categories omni-channel very much innovation has in might e-commerce. And at has better e-commerce I of which focus bricks-and-mortar crisis Al, And made merchants more It as – this that One in everyday a of you've lot as made lot that never better a used seen and become better

with online You've delivery seen with but is going that across with innovative really restaurants. pick been ways. us, in think physically. ways retail order come is And many may curbside which we be broadly up where like And you way up that have here to more you more perfected people a has

a up. delivered one have delivery after and two can more it get option, away by or you So can or picking get you it right delay it day you going

the improve those at continuing that to on. going lot while a mid-XXs think single-digits, a quite stayed minus made important for that minus now. has point most And we've card-not-present very card-present I levels robust there's grow So to Al seen high from even as was XX

So lots of changes underway.

Al Kelly

doing still end It's to close Matt, your question. are approval. the expecting everything And that calendar at comply Plaid we with regulatory address request to me year are the looking any of regulators pending let it. and the from by can are we certainly

when back And January, we calls And to the attracted with the we believe as along from we into in we as are really as we Visa. their the that believe excited Plaid all wanted. are were today, about announcement. have the made best the asset we got they various most prior articulated far Everything how in We fact it And that we believe way lot we of of integration a the fintechs, still they positioned the acquisition depth benefits of of see we are they integrate have that in are fintechs the they're terms there. team. to best

hopeful remain end So very Plaid of to about by excited year. the and we're the close we –

Mike Milotich

Jordanne please, question Next

Operator

from from Wolfe Darrin comes question next Research. Our Peller

Your line open. is now

Darrin Peller

All right. Hey, guys. Thanks.

a couple of ones. Just quick

quarter, First fourth fiscal on fourth quarter comments. the

four you we're services well just I fees those these we QX? clarify guys services, trends CyberSource? that on bigger all see volume I Al shouldn't card-not-present demand are sticking processed versus – value-added saying But terms potentially it when fiscal the lag if seeing doing the the these quarter analytics I prior of the when and seeing then in just be you're to wondering comes to around And the mean, growth for line you service picture, to think out, would given in impact services effect that or just the about the points. guys post-COVID think transactions you do – with other by are guess just of trends we're flattening offset that enough Just

Al Kelly

answer first I'll So address I don't come and let why back piece? second the Vasant and the piece

Vasant Prabhu

Sure.

a comments that service based line, are third have look you down in X.X would report as They're been third the was said the said volumes in and already. had on been So fees fees we in revenue lines the if we on our the the lag, various in we range. you as And point. have known as going indicated at hopefully done quarter. not service the you revenue And the to XX% told our would X, and you quarter total volumes low service down net fees as

So number volumes improve, and next front if that on happen. That's a service fee change transactions fact. is quarter. the to to even going known And domestic isn't the going improve

that's locked So in.

we to the expect is So But Value-added goes will Incentives transactions go higher revenues when up. transactions, other will that incentives. the volumes go do thing on line definitely the contra-revenue will revenues volumes go improve up line reflect on benefit revenue won't but on we domestic a don't Incentives service will get processing on up. we which of we – and up definitely up – case the the be we services definitely lag. it volumes higher it incentives that book the will get because line. with from the services go will will get the line, fee incentives

than is offset then the direction I a the reason improves you better of from there's going fee single biggest service be biggest want cross-border that So that. there. in other there's If cross-border. to in an something in going you've just be be change the and lag. would aware the to of QX, got to But be to variable pressure trends trend it recognizing expect that QX

if we're help you more like on. it. We've to later questions So can the we more there's with you complexity And of you by hopefully, in. some some times created turbulent these help because tried things answer

Al Kelly

value-added on on a post-COVID I'm in world. your very Darrin going And with second services what's to question, bullish happen

also continue. First CyberSource and processing up. anything fraud. Where of if those is need for some services, in that service those going are value-added declines the we've and seen of volumes benefits Travel-related a to go readily, all through risk card go is And as will as And volume of issuer pandemic. will back. The travel run travel-related will going two-thirds our platform-type comes so to will transactions once said, benefits waive better that is comes as waived I the fees those some won't get go we're we past because back. fees We've pandemic, which up, the up. as travel

profile our of out value-added well COVID how So they'll the and services very over good about contribution continue to feel being revenue make diversify positioned they'll coming very see and I time.

Vasant Prabhu

Yes.

the think of think things add which are I there, to growth to their largest sustain has already going value-added other three accelerated. our services we

for become conversion the Our Debit the business, is first debit. right directed now. which engine issuer saw growth has processing July. of weeks XX% are you Debit in rates cash as towards three

certainly growth from the always have So business shift clearly focus benefit as we an are an CyberSource to is benefits a to fraud will finally processing debit e-commerce area with CyberSource is rates. growth is on issuer now that fraud benefiting the more then lot accelerated our which as really rates and e-commerce. the on. shift. things long level, from clearly as where services, at move high can help risk omnicommerce, their And And

rates to post-COVID. can reasons believe growth sustain they're So higher that

Mike Milotich

Next question, Jordan.

Operator

Our comes question next from from Susquehanna. Friedman James

now Your open. line is

James Friedman

some characteristics. Hi, in Al you. PXP you thank remarks your growth prepared shared

you was I me. You applications what some could were you seeing disclosure wondering PXP that you're But -- at I to if new the about there. repeat quick going same use share of kind cases at also how the time said was least develop? and

Al Kelly

Direct said with United providers; we have where and big applications the our that we countries Russia. were saw of in Square other XX% And third there in through the past, was PXP record and -- Venmo, Well providers. America -- different increase we're in quarter PXP to in States QX PXP the America developing in world. quarter the seeing relationships said that track QX. we us quarter. becomes toward PXP what are we nearly got skewed we're for almost -- with now United And was in XXX% something we sorry a the apps where looking tremendous as platform apps around my in saw this Peru that States transactions XX% the and over Zelle Cash, prior two in etcetera, progress But PXP Latin think people working Latin remarks capability most is I our in up Visa the up I of in that I'm as third in with PXP heavily We've are

Vasant Prabhu

run had we Since issues some we'll longer. earlier

past we'll at go XX probably hour. least minutes the So for

Operator

from question comes from next Maurer Our Autonomous Research. Craig

line open. Your is

Craig Maurer

EPI pick was incentives continue into if to cross-border continue pick I should you we year be continue of to domestic hoping comment recovery of -- revenue percentage X next Vasant, gross then cross-border the up Thanks. whatever perhaps, the a that and in the What's on to we cross-border two version about at as see maybe to point or terms from on of percentage? comment upside the we're Durbin where could going? next risk X stagnate thinking year and up renewal volume a intra-Europe or Europe? Amendment And this in Al

Vasant Prabhu

I Yes. projections it's like easy to long-term In think these times not make clearly.

significant, In terms its borders been have depends not restrictions and seen quick recovery all possible reopening. it sluggish. It cross-border pretty it's have of some suppose I recoveries. or opened the yes that been on borders remains we've Wherever

we're globally that not So in New it reopening, may you've there the as to seen Australia, regions. there are across It's EU. geographies open extent already the mostly but it's up opening borders Zealand be that starting within be corridors to other open could hearing

terms black of think recovery. and it's So cross-border white, the not I in

us. of -- what But in of gross have what might revenue to would call changes stay depressed because of how of travel won't the if been might help normalized will you patterns mix it some to certainly the incentives open -- mix revenues. than remains And countries up. that see could percentage You higher earnings cause cross-border

the it that's service tends is lag quite such most another fees probably to from to so service quarter be lag. our quarter influencing moderate. in have our will don't fee fourth factor service business swings other stable, fee one The acute significant the which effect is Normally that because

levels So wait quarter. some you and but in will how see see corridors, probably service in fast certainly from probably to because because normalize best cross-border the It will stabilizing. I fee describe cross-border normalize normalizes. recover is, way the fourth the business normalize will It of we'll it will the think it

Al Kelly

a compliant Visa to make questions your a their the requirements decision that unaffiliated is asked route me or Durbin about ability their to routing we have free fully And two restrictions all select the choice. other on the Durbin. address enabled various debit don't rules And of Let inhibit Amendment. with often are routing and other decisions or of you requirements card. merchants do networks merchant's any

very own or it in with developing We a developing or have is either countries very, regions network. think -- their I So not something to groups that it's used Durbin. countries shape a though thing of intra-market good we're dealing do do we're not would an It's as of EPI, scheme investment. and relates with. onetime know that to or network to that history a dealing inexpensive we

and all security, of to the have to be and elements prevention, invest etcetera. it creative relates risk, You fraud to authentication continue innovate stay as push ahead and to

clients that our be they constructively And on doing with networks them regulators on know make sure we various on us to so making business our banks that obtain behind running we the be. will continue continuing to and will engage in our possibly we're networks. and they EPI. good other to benefits monitor invest as on and the Europe going hand, as But by continue could to to focus And can with heavily

Mike Milotich

Next question please, Jordan.

Operator

from from comes question Huang JPMorgan. Tien-Tsin next Our

Your line is open.

Tien-Tsin Huang

I couple thanks. a in just times saw it's Vasant. XXXX, want Hey what know XXXX. of you U.S. to through than I the on and credit we in ask spread it debit But went wider

quantify differences so, but way yield wanted just sure much can impact don't try I make debit we benefits? between And how the just want to on attribute outperformance to there make curious, products. sure. secular a I think versus and stimulus to the So is any to two of also,

Vasant Prabhu

a the view that world depending as parts think should differences are you so on. Yes. modest of some I There don't huge on yield factor. and

entertainment to probably which so The stick propensity uncertainty. time, debit money impact checking reasons are attribute go that credit digital we seen will we'll into through in that and something people money and and spend of putting of money that benefits some that Affluent five on think the reasons. continue. cash sticks. has I that we terms going clearly, in prepaid as debit, incentive The continue ahead, times to Visa customers some of economic in some is the cards, debit. economic has strong, in debit probably in accounts, linked for the been in time payments unemployment that Direct benefited something went do and In a being e-commerce distributed The then, One, categories, about have and crisis big which a But that's fact clearly, impact for there's might the -- not still I become the money to very that discretionary see do versus helping most restaurants, you mechanism from going helped they can is you has COVID. others just of like that -- a fact that everyday off has over increase to And hit conversion items spend borrowed Visa that. is the has for few clearly think that normalizes travel sticking. particular, long have categories to spend -- payments

going to way disproportionately I that, most it cash stick. helped to the debit So has likely the best that acceleration and is think conversion is describe of

Al Kelly

I would their e-commerce using just non-travel much, it I you XXXX observation XXXX, I do bigger if cards much than the And doing appears time that frame. are back, card-not-present e-com is same more that their look just -- Tien-Tsin, add and debit it's credit about the think much who people only But Al. are cards.

Mike Milotich

Next question, please.

Operator

Our Evercore. next question from from comes Togut David

Your line open. is

David Togut

Thank how you. of Good the transaction going much help might if in in should drivers And cross-border afternoon. the drop out big that's XX% Could forward? about inter-European I you we think the lot international decline terms imagine drivers versus just But of of through some us a international yield? of debit? think be you could parse the transaction yield how travel. in revenue revenue

Vasant Prabhu

Yes.

was volumes. the XX% So important decline volumes it's excluding cross-border The people excluding intra-Europe. I to cross-border very point intra-Europe volumes, think constant of was decline to roughly to -- continue dollar in

in intra-Europe. line is, and reason So that that more looks decline like transaction. can total Intra-Europe cross-border you at the roughly volume look you with if -- being revenue a includes that. domestic The see, as

in transactions revenue is revenue our entirely fact almost volume intra-Europe international is driven line contribution the from international small. intra-Europe. In line, The excluding by very

other Exchange things have few in can. volatility can a impact. there's Now can. an Changes rate currency there that shifts

So decline corridors terms is that focus of see intra-Europe. decline ex on. and and some that's you watching others, in corridors. what indicator then, in intra-Europe But ex the volume XX% are volumes changes because explains in the you revenues line But explains across which should versus the can small XX% as yield that -- differences than that of doing some mix better in best

David Togut

on a thoughts just going XX% processing you Got forward? the growth follow-up, and quick in yield it. as comment year-over-year could And transaction just

Vasant Prabhu

Right. There's cross-border volume. it. is than up a cross-border One held two that, little factors have driving better transactions

mid-teens the acquisitions mix helped bit, yield. services higher a as processing So second have you has cross-border are value-added that heard, have And growing because And for transactions a in some is and the in line. we in services value-added the line. that

data helped processing those go two up. things yields So have

David Togut

appreciated. Much

Mike Milotich

Next question, please.

Operator

Our next from Koning from Baird. question comes Dave

open. is line Your

Dave Koning

bit change Yeah. And decline. following volume volatility down that gap I much? revenue guys. said you better a Hey, but there to to yield a up factors Is kind But FX of in volume revenue the volatility guess other that to XX% decline. the about? I know thanks going than there last probably than on are XX% that think question, helped make any FX little ex-intra-Europe other QX in little

Vasant Prabhu

factor. difference The always relatively small They variables But right, currency is There'll each a volatility XX% other that match some all differences XX% can be to between delta. make precisely. two. is of a one first won't the you're the there,

factor can than have be others. yields Another mix. corridors Certain would better

of the difference. closely volumes, intra-Europe cross-border higher-yielding track to should But if of corridors, other have a volumes. ex can recovery favors something So you that, than it pretty

Dave Koning

Okay. you. thank Well,

Mike Milotich

Jordan, last question. one take And we’ll

Operator

from last Harshita from comes Our Bernstein. Rawat question

open. is line Your

Harshita Rawat

some very and regulators on not for governments? understand a conversations fees Al, in this can expand of recent environment. I your crisis hand Hi. especially phenomenon. that's Thank payments, then digital for lower merchants real benefits in lobbying are this you with question. upon are there new you But taking Now and my one current

about in you governments can your and talk – evolving conversations crisis? just this with how regulators just Thanks. are So

Al Kelly

territory think finding intentioned things are to out all trying like themselves here. they're figure in to people I And well governments uncharted right Look, many the do.

for that, in is time talking everybody. answer kind have This changes. Governments we terms increasingly governments terms do for amount I moving to less of core I looking Our best right is are moment. biggest now we're pandemic harm of as at the no piece parts, relates that is the fighting payments not of the as in mean, any to us think advice this for many it of because to to also a role to happening information through to going a of would of a I of is become the adoption terms their thing, could they of governments what's of get in they their it say form point in view. in in And of real-time lot to understand last from trying we than what countries And on trends, digital see they're ways, there's get faster what's interest in models picture want more economies. the can themselves. them

And thank-you opposed on digitally things, advise they're looking to other them cutting of funds to as they they so Visa could programs, programs, programs, checks. have all as to and stimulus are unemployment up help kinds how distribute genned –

that very, of the have also what my governments reasonable So, I very they're good at terms moment is being thoughtful think and and saying, being they're view – in are listeners.

they going whatever services. them as as information setters in governments, to them provide various to we're with counsel with clients to them for to provide as so, laws and and their as continue can be to need and And role role to well their advice our whatever job Visa provide do of we potential both helpful in

before not situation little of we we when comment a gather out, Before I country one the in did of I'd things and to the just terms world. – closed with blackout a I like And again. race I in the around the cite had that the that make transmission close about – did was

our And injustice week it's women stop. company. steps in part. our African-American last scholars and a drive journey to four and a have our the Visa to discrimination. We inclusion At to announced XX% frustrating to jobs next increase to underrepresented we're program. past years. recently time thank within of Mike, U.S. With that you social has the It's U.S. number everybody. five years eradicate that by next colleagues to and the injustice We committing the that want want be presidents to the announced in vice of We part did we've men centuries, announced unacceptable and number importantly, Black But it's we committed experienced has of – For Visa do of actions, establishment of including it incredible by you next do way the the in social it's offensive, across and XX% and our overall underrepresented above three the forms Visa the number and and case. diversity increase world. to that, very to and in

Mike Milotich

Thank Al. you, Yes.

again, once yes, for apologize the technical I challenges. So

have if here free the reach to well sure that's will as everything. on and on Investor website our of questions course to and Relations replay transcript the feel team as you help make we're We reflect happy the And out us you. additional that

So, thanks so day. great have a and much