V - Earnings call transcript Q3 2019

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Operator

Welcome to Visa’s Fiscal Third Quarter 2019 Earnings Conference Call. All participants are in a listen-only mode until the question-and-answer session of today’s conference. 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 call. welcome afternoon, to Jordan. Visa’s earnings And XXXX everyone. you, quarter fiscal third

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

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

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

GAAP historical non-GAAP the information this available disclosed reconciliation in For the financial today’s release. measures are and in earnings related call,

call turn Now, let Al. over to me the

Al Kelly

Good thank you us. joining and everyone, Mike, for thank afternoon, you.

clear as is to simultaneously our It growth the today long deliver to the term. we in medium invest perform to strong business continues that from well results

and enhancing it are comments our our a to discuss as capabilities few I’ll well a traditional with around FinTechs that our performance our finally, I’m and the offer review building we streamline partnerships as quarter, through on acquisitions going Given was busy my only business progress I’ll investments; globe and the headlines; clients. how in recent then,

of constant better X% XX% client than were third from on volume quarter up anticipated. our runoff quarter or Revenue constant dollar lower branded China, expected border and a basis continued on dollar almost a volumes basis. had domestic XX% and revenue. at by that dual incentives our last rebounded was or XX% X Payments limited be impacted which points start was impact cards captured growth growth on some Cross let’s our with to excluding growth So, results. than

growth accelerated adjusted the rate standard, lapping new was expense growth Vasant growth of items. adjusted a will in And reflecting was more year. the details transaction accounting Processed Adjusted low and XX%, of XX% marketing to a impact nonrecurring investments, EPS XX%. his remarks. number of revenue XX%, last share tax

capturing ahead the strategy to As acceptance out by and we’re growing our building clients. flows, our look our of and in footprint we including A, base pursuing new future, enhancing our investing payment network, expanding

that of brand. our technology, see arsenal building key business, other could capabilities on fortifying bedrock value-added call on be the network we We’re components our and security, talent, and of or what pillars networks, we’re network-agnostic, the

quarter, in payment this will and of and the new we boundaries capabilities our several investments extend announced our capturing backdrop, this that strategic Against progress our accelerate acquisitions and flows network.

XX countries. First, ownership. Earthport we local are services direct Xth, connections assume early system connects we’ve with provides to full May network that Earthport in via July ACH in as payment cross-border pleased that legal obtained control of and with of say

XX% network, networks the of reach our including our and countries capabilities, could the of become Earthport, top ATM Earthport, XX to about through of over Before credentials a have Visa XX accounts. and bank reach Direct extended debit network the in half bank we’ve With accounts Visa markets.

our cards funds VisaNet well to a clients are to single prior integrated to working launch fully bank accounts the we will efforts push underway first, Our are to connection via via calendar provide which year-end, experience, integration and for Earthport. actively and

and of us network of existing Rambus, with acquisitions fraud and in convenience which tokenization, our card to development Also network, payment security acquisition will tokenization This suite including in all ability management support of solutions. transactions types and and the real-time risk of systems. tokenization extend and quarter, our integrated the will from domestic enable tokenization we account-based the announced Verifi services, of agnostic will to to help be the business Visa

XX-digit we a credential domestic a turn can Visa token, into bank Before credential ticket. but account, now a this acquisition, tokenize card a could or Visa a network

Verifi’s best resolution same percentage within connections is existing Verifi Visa decrease chargebacks. helping in merchant’s experience. with that the enable Verifi payment dispute a of with while adds customer when issuers to is class phone connect so which dispute time resolution, friction to leader the spent across the consumer tools, a are call. the industry XX,XXX issue time data merchant calls entire on to the the tools at settled immediately, transaction, reducing at to decreasing one aimed

merchant sale Last as adding new of operating payment of software support which Payworks, functionalities cloud. terminal solution, This acquisition merchants week, and new the to payments to acquirers we quickly and thereby seamlessly such experiences lower via point enables better enables costs. the implement customer a creating merchant announced types,

ecommerce payment InComm platform fully Payworks integrated CyberSource’s solution. payment payments a in-store add create to will omnichannel processing acceptance to

As to payments part innovation label CyberSource’s ecosystem. drive the solution of more to these white capabilities be will in acquire,

in app of Across and Gojek, been that verticals half used you they become service payments, cleaning, laundry XX we mobile a has service, of To downloads a partnered Southeast delivery, sense have million have the a Asia, XXX Super more. in spanning the GoPay. and Approximately, magnitude over tickets different with Gojek, payment and invested have featuring ride-hailing give

for expanding GoPay Visa working to together digital use new both make users payments cases. and easier while We’re to

their our in last access provide use suppliers across year. the we a accounts and partnering space, to a leading payable India investment a types. have BXB payment buyers suppliers Through the PayMate, and In portal, buyers BXB in consolidated India all operates and in Visa buyers XX,XXX since PayMate announced an to region FinTech view data. with credentials, been payments reconciliation connecting we of better CEMEA recently of with who have

from small and businesses helping to checks more bring to well processes via payments credential. and digital to investment their and big a as to seek network volume partnership our payment Our drive incremental efficiencies Visa cash transition by as

Direct or U.S. than last growth alone, the of over payment Visa XX months, the have million flows. received XX% more deliver users one to completed these received which continues which funds spend About credentials. In credentials sent Visa funds up have and than of opens XX% CXB. more over opportunities using of have transaction can via additional Visa transaction XXX% Direct, for XX our Visa drive in additional

strategic transparency. convenience our area, with credential Visa Remitly cross-border cross-border announced make list and to to Union. remittance, Western payments adds EMQ, this we’ve through Union new including In cost-effective relationship their partners growing of in customers allowing a Western and with speed, MoneyGram,

Visa the with grown companies the top in space. in disbursement also of facilitate provider Today case cross-border are to States service X secure Direct partnership payout of Setoo customers. remittance, Direct in United insurance to with their using addition the our enabling provider. a in process to the has quick global Visa insurance either claims or use In recently payment XX Insurance-as-a-Service In Europe, and we first SafeCharge, insurance added

for in PayPal United enabling businesses helping disbursement small individual flow small is request Visa allows acquirers gaining launch merchant, is States same-day consumers. small and merchant Transfer the cash use of real in case the of settlements funds Another traction to in business of that the at transfer with time is recent to Canada, addition to by needs Direct Instant businesses. settlement, which the

and on new exemplary remains pay. remain preferred drive to continue ensure experiences that existing user providing way payment the to we flows, to focused we Visa As

point-of-sale Tap pay experience, adopting to are improves the quickly. consumers it significantly and

in digit, was volume similar transactions while volume rate also pay the contactless and up of XX their instance, our face-to-face increases now This made network, that dynamic. XX% almost it quarter surpassed from the to less years single digits. past outside the dollar three are to just countries growth of payments the United payments when to run transactions in least card ago. where a quarter, tap market, cash. States grew this contactless double more the third tap fiscal over a to is introduced number instead We small For UK than XX% is pay low There last seen faster a XX up of processed much the with that of all mid Transaction of transactions consumers has from at face-to-face transactions Visa X.X end Canada September. know countries in year times at growth of transactions, grew

well end of to the In force reaching the other adoption XXXX, million successful markets. States, XXX we’re United tap cards similar and by in underway to tap pay early is seen to Visa in pay to we’ve what

surpass Visa of We by X XXXX. expect to the cards end million

and of continues the be York pilot -- ways transit a open limited been best the of on use of to one stations launched have discussed The we part New XX-month to tap a the very in encouraging. an rollout payments number loop pay. an previously, of as to results XXst MTA to-date May As habituate

solution user making areas progress include are remote and experience tokenization, installation the Other secure we’re payment piloting. commerce, we where improve to the

All reflect volume is of to transactions. experience fundamental leads and frictionless incremental that user enhancements these consistent, simple, secure truth a and

business experiences. it’d We support deliver FinTechs. actively financial know are or be they listening simply success. our working our the we to business and model, takes their user institutions needs, fundamental that strong Therefore, customers’ across not great client it Partnerships whether ecosystems these are to partnerships to to additive model, and traditional our are to

natural up sophisticated access to world key And expand on to and reliability, they enablers and are capability. payments around bring security, the new continue And a scale, because partner we global recognizable opening the be these acceptance. helping FinTechs, and electronic to brand,

ability no exception to develop This FinTechs. with our quarter in was partnerships

their few. across Cabs; largest and credit the issuer launched process this I’d rich users. XXX those aggregator, a a reward a app like to a the in with So, will through product co-brand card million country. the a offer In cab seamless SBI largest simplified management and application we Ola credit highlight proposition card Card, India, all With card app, second

In using is as with brand also Razer, Mexico, and in seven Across leading They’ve customers who Brazil. to lifestyle across markets transactions. delivery and operating and XX,XXX pay users currently global the in million Rappi Razer a more gamers Latin prepaid seamless fulfill Visa month. in card drivers drive its XX to registered Colombia, Pacific, a solutions credential partnered a debit million to to platform also preferred the e-wallet. we’ve their a million Rappi, X secure CyberSource Asia XX close users orders on-demand Pay than implemented offer now more way with delivery America, for for has soon

in effort to In the general reloadable prepaid a the that of population Visa nationwide Turkey, FinTech, of one card. launch with largest XX% the for with Turkish is unbanked partnered purpose, an we program the reach ininal, of

the our and merchants traditional this we out issuers, bring to and deepen build also more We’re will partnerships could with four new for continue opportunities excited I also sure, call but about these quarter. relationships

Leumi, Bank largest on Israel; and the with In Europe, in issuers largest significantly bank win and basis portfolios the renewed credit Across we one the -- volume year-to-year of year-over-year Europe, and basis. commercial France. rate Crédit higher Mutuel, in deal our a is

with up consumers teamed representing MercadoLibre points. we app cobranded Itau Latin and XX% has for Brazil, with volume. marketplace’s a Brazil, million in launch MercadoLibre MercadoLibre loyalty In and installment America capability XX their targeting buyers and a to managing unique card of contactless

our experiences, States, In we’re City JPMorgan pleased enable that extended payment collaborations to the work This enable will deliver the with longstanding partnership system. through the of Chase announce to York electronic enhanced accelerate to tap pay New as United recent to together of subway in the long-term to XXXX. growth our extension we end us such payments, have

and support to together solutions. to into world-class space extent partners further with work BXB we commercial our and innovate the co-brand Additionally,

partnerships this Our of remainder several sign to robust, fiscal new year. renewals other pipeline expect in deals is we and and the of significant

for with So, in summary, was acquisitions and partnerships. quarter strategic growth results, exciting Visa strong in it an

with enhance focus evolving to new services Visa’s; we ahead, of class continues all not foundational value-added acceptance look network flows partner, variety our and growing make a be As rapidly just we’re networks, innovative options; best and Visa innovative needs payment a brand. minded, investing expanding and to to growing in our talent, wide our world to that to elements portfolio superior to landscape remain in committed the pay everyone a powerful We and reliable the meet open paid be unmatched technology, the payments ecosystem flexible goal of to and everywhere. our be way as a security

it Vasant. let me Now, turn over to

Vasant Prabhu

Thank Al. you,

and as dollars, accelerated and nominal higher adjusted third dollar XX% expected. and grew over in net than XX% and dollars Despite constant XXXX, our approximately in XX% the nominal EPS quarters quarter, constant a is up in of XX%, basis XX% three EPS trends and over net business revenue on adjusted while grew respectively, revenue basis. XX% strong constant over XX% up nominal on in revenue fiscal Through were dollars. Net growth and currency headwinds, both XX% EPS dollar a in dollars,

dual business cross-border growth across dollar Growth dollars quarter. highlights: payments to UK impact. uncertainty; the last over Payments impacted China volume are trends volumes few which due remains The drivers, A to constant accelerated all UK valid volume was economy revenue XX%. Global and cards, ex-UK global by process transactions from have Chinese payments volume Brexit key X%. and minimal weak growth robust. constant excluding volume, remain improved domestic in

quarter, transaction accelerated full cross-border expectations. cross-border Europe, growth our primarily almost last Argentina. up to exceeding in Adjusting growth Processed quarter U.S. was XX%, gains for X%, growth volume a of to X faster processing constant due from within and points dollar

was domestic Europe platform, timing in after Growth a volumes continues cross-border revenue strong improvement within each reorienting Easter be from has and e-commerce within April, the by based. to quarter to similar last volume was EU. As broad reminder, consistently and month the factoring impacted Europe yields

at growth Growth X and point, of currency last seen exchange drag higher years. by benefiting volatility points five cross-border momentum helped and Every U.S. of region’s was than incentives outbound rate stronger was improved lower The X least mostly volume. by than quarter. we’ve expected. the XX.X%, was pricing lowest impact despite revenue Europe growth client and in Net inbound

and better-than-expected a that of volumes deals of due by new our deal and some we some were estimated, expect fiscal pipeline incentives significant end At lower delays. Client had deals than incentives and have markets renewals done to we robust to point, get year. we for some this very the program in lower

streamlining significantly extending accounts markets, beyond as all of our our transactions and tokenization acquire on XX% bank We Payworks and XX to payment acquisitions our have enhance enabling of agreements two in Earthport reach definitive signed resolution closed of well processing dispute CyberSource. as global own, companies. types capabilities, over to omnichannel other facilitating through These

the all year. end to acquisitions before close these expect We of the

through $X.X added We partnership an Ola MercadoLibre partners, of per enduring one at of common Gojek, our our quarter. new We XX.X stock and repurchased XXXX. $X.XX share, quarter. billion also Chase while to JPMorgan of price quarterly $XXX.XX shareholders returned fiscal dividend like in significant in first billion renewing shares Cabs Including million capital stock-based average for with we the of the $X.X

credit excluding key XX%, our accelerated Growth basis Payments America volume XX%. some debit Asia strong growth XX%. most a was was on UK, growing Europe with dollar excluding X%, the almost up business parts growing Now, in Latin remained up details drivers. on XX% Pacific constant world to and China, X%, the of growing CEMEA XX%,

Credit impact the wins on growth of ultimately we U.S. driven grew of the drag commercial Double-digit last well June. Fuel the were quarter. last X%, to conversion from was volume contribution in as as and prices strong as up The from higher Direct to growth with X the as quarter. start May was was credit a consumer X% continued lap and payments year. by timing debit growth point in Cabela’s quarter faded in start improvement growth. in card Visa last April at similar XX% sustained the Easter

improvements constant volume in Latin weak. accelerated was across remained the Growth XX%, East in points with payments to the growth remained X Brazil International and driven X%, robust by Middle at CEMEA growth Mexico. Africa. strong UK in dollars percentage momentum and growth America in XX% Russia,

and Europe However, with growth Europe. XX% in accelerated the in rest strength particular of to Eastern Central

Asia China almost was XX%, quarter. with Pacific growth line last in excluding

had helping full getting start a the X was from both in a up in healthy quarter, Europe, up last is XX% quarter timing, X Growth points in purchases growth of due Growth on almost in processing remained growth impact. of to a that point, XXXX. CEMEA. within volumes. in gain a cross-border U.S. was from Asia Of approximately improvement, line Argentina, Easter quarter was Brazil accelerated quarter. Pacific to X% points April, growth two growth stable Also X-point After and X%, was dollar the past for improved X online strength off due and through quarter. to strong the spike drag in cryptocurrency in up cross-border in in X XXXX late last transaction resulting Europe volume across quarters driven adjusted X mostly the growth travel-related volume the of which each cryptocurrency point with early Constant spending. dollar and with impacted by last from constant lack Processed basis, the point

couple Another was was beneficiary with accelerated by CEMEA of commerce Europe in and the our commerce the points mid-teens. Australia Japan, and across of growth Latin Canada, broad-based from inbound region. of spend driven most America Outbound biggest increases.

from by up mix, revenue processing actions XX%, being XX%. International significantly growth country to X% results. processed revenues Net transaction with revenue and i.e., summary a of a clients volatility. XX.X%, rate includes X.X ASC-XXX growth by than sizable low volume Data higher driven revenue benefiting lower increasingly and Europe were remainder growth pricing. grew The as volatility. Service our of from the on which of rate a exchange third by favorable lifted within adoption approximately from cross-border as quick XX%, service currency Moving grew shift slower over utilizing Other expected offset by driven client increased is points. and incentives. well little at of revenue This and a grew value-added quarter better adoption a currency capabilities. a half ASC-XXX financial the drag result lower revenue of headwind pricing a X-point

and deals world. delays, parts of lower expected lower some programs, revenues due some percent in quarter of this than some we for XX.X% lower volumes were a as and incentives the of Incentives to gross deal

revenues on in uptick and QX. see as current in in quarter, gross an a renewals new percent the to deals deals just be third the fourth the of to the incentives based quarter and expect completed of pipeline significant in We signed expected

XX% basis a year associated due with GAAP the multi-district interchange the declined expenses on to Operating litigation. provision last litigation

Excluding related marketing G&A captured in primarily expenses. Cup FIFA driven and the depreciation Marketing by the growth number investments XX%, costs, expenses and grew processing expenses network and ASC-XXX. the Women’s expenses by items, World driven grew investments a XX%, non-recurring of of special driving adoption technology-related to in

adoption expenses impacts, primarily General taxes. The and growth. non-recurring ASC-XXX of X.X ASC-XXX expense approximately and to XX%, grew several added indirect points administrative due to items,

$XX million in change investment quarter, the expenses quarter in largely third in higher $X in the as $XX Year-to-date, due the or gains to Non-operating quarter. million $XX than have gains were second million of last investment rules. EPS, were over $X.XX versus accounting million recorded we

As item. is this know, you a non-recurring

benefit our debt We income well euro-denominated continue forward contracts some interest on debt, to to as balances reduces U.S. from expense. swapping cash higher of our dollar interest from as which our

the and Moving XXXX. to for now quarter the outlook fiscal year entire our fourth

First, of transactions our debit was U.S. business over relatively U.S. quarter. first payments let grew and or X%. X% volume basis the weeks XX%, within growing July, volume Through Processed third constant cross-border X% growth X% volume Europe. credit with me a growth excluding share XXst, July are with three on grew X% dollar driver over which the for consistent cross-border

impact gross put of percent what experienced likely points QX. moderately business to Currency to growth X.X in be higher drivers, our current assumes fourth of third X.X incentives expected will revenue the on outlook expect than you be this headwind. a QX. trends ease to volatility in deal than X The expect the we points the quarter net will rate we be to higher fourth revenue key revenues. quarter, is remain to The together, pricing drag Our exchange we line better third quarter. Based significant our all in across signed quarter net growth and recognition this client of as on When quarter. a than pipeline deals with

to to single The to to expenses of quarter in closed X programs. digit which accounting including is continue we high fourth costs drag our the full mid be and Payworks, growth integration a last quarter growth front, will Earthport on purchase expense range. expense the week. quarter On Fourth points. The EPS exchange ease likely for rate in will for invest and include

growth. revenue We we during we X quarter expect the of business to revenue points acquisitions quarter. to close amount of acquisitions. and timing, a all fourth four results, on tokenization our of When Verifi Depending report of quantify small and fourth add they will the our could our to X Rambus the EPS point and impact expense

to outlook, XX.X% adjusted percentage nominal We X of foreign low the to mid revenues were on impact over on as percentage in a currency the X.X growth nominal are growth EPS gross range; updating points new basis GAAP dollar revenue impact by point items growth, teens new impact. not approximately approximately range; approximately the GAAP high XXXX, special accounting negative is from the low foreign from percentage rate basis, double year. of adjusted driven the Client non-GAAP for an digits positive the standard. standard; XXs net of in our basis, of in expense accounting full-year an including points single increase that currency approximately on of fiscal digit nominal on negative at basis; X.X X tax and the The beginning deals on increase XX% a with XXXX impact incentives low percentage-point dollar a revenue change decrease effective in to anticipated fiscal a including ASC-XXX the revenue percent XX.X% year in and XX% XX% and fiscal

acquisitions several this will year. have We completed be that

As impact I EPS purchase will results. integration on fourth quarter inclusive you quantify the our of for we mentioned earlier, costs accounting and revenue and

we when our you in give our estimates acquisitions also will these October. fiscal for of impact year best on revenue outlook provide XXXX and the We XXXX EPS

the strong currencies. headwinds momentum despite quarter. EPS our We In in business exceeded and accelerated from revenue third summary, expectations,

deals longstanding strategic we are significant through renewals in four to renewals our substantially fourth several with quarter. capabilities and new and new of the importantly, be More acquisitions, enhancing partnerships relationships key executed

long-term growth opportunities payments extraordinary and clip drive to globally. to drive to us continue available capture a invest We digitization at to the healthy

that, to this Mike. back I’ll With turn

Mike Milotich

Jordan. to ready take now are We questions,

Operator

[Operator Instructions] comes Our Sachs. first from from Jim question Schneider Goldman

is now Your line open.

Jim Schneider

if the could the partnership. the going Thank the of any the provide length up substantial terms terms of the more economics scope, forward? business JPMorgan any Any extension you. helpful. was you I agreement in there outside the Whether color of be is and change show in anything in that that wondering that detail around very on of of would would

Al Kelly

Jim. Thanks,

We’re it. obviously not to of going details discuss the

happen I is senior it there, sophisticated think, both are very was it. companies kind a on more the the much as focus by a I team we are all color than of year that going big sure and think in our that weren’t with And negotiation good would make add and issuer. various not or satisfied I’m to and two. thought JPMorgan next the renew I talked distracted leadership to that. deal idea things a that happening payments to we over

Mike Milotich

Next please? question,

Operator

comes Peller Darrin Wolfe Our Research. next from question from

line open. now Your is

Darrin Peller

lower the is even in guys. deal. hear just that of think in on this first JPM like the and before, was how the little the all, is actually you it these you And it and pipeline? is in changed incentives, win to in on was renewals before. out rate? better at especially the this wins bit than sounded pipeline Thanks, back comment it’s before? great that than Europe, Look, there actually then, you why obviously anything a despite And of in that’s maybe than winning the of are renewals, rebates momentum It stronger Is guys. it Thanks, saying including rate, the I guide terms guess, were

Al Kelly

about I’d talk couple say Vasant of a a bit incentive. I’ll things, little and the let

on Europe, front all, First foot. our in now of we’re

got We the in our place. are We’ve integration. management team past

there, way the integration in the we’ve of I not on Europe. it been And be And moving distracted pay all but to we’ve been able resources really be to to starting any running a is markets. organization focus activities. to good the think dividends by very commercial much into not that We’re more more able

been it we’ve happening very, of making get out FinTechs that and FinTechs. we happening a quarters in thing the that with, to to Visa is together But of brings are the our second that’s gotten also we is think were focused capabilities Europe I’d over world that the the that global so, think five chute or last admit, to a fabulous the slow easy our And a business be to assets half the bit to appreciate as and think, easy I I our but and sure brand first the and I very act ago. we’ve around little year a scale. on-boarded. easy our lot experience integrate do table on our various FinTechs to to reach with, from to relates

to recently. certainly to the incentives. the I that if those big come me I or that is add talk factors for wants So, think client your don’t know would that two different would Vasant mind I to be when think about about question what about

Vasant Prabhu

the running we some where Several is in might estimates the incentives items have deals I there and to might that have view terms on think sort we a of which reasons -- you had things cases up front, renewed, why make client expected. things. of the lower incentives use than to they’re on we we good of might thought gave variety are we we when a be general haven’t under needed some

permanent is good a actually and thing that continues. that’s and So

been of volumes in incentives. that world lead does the and lower Secondly, have some to lower parts

incentive exchange rates impact as the line, lines. revenue the help gross that know, you Thirdly,

happy of out you which reflected play that which already robust about And the we’re and quarter, also will to over the as have next is lot degree time. the has will you year-over-year they happened, when comparison. time fourth said, Those our do comes we in be out what quarter. tell wins, very a about incorporated we incentives into over a able but that is volume wins, outlook for and The we’re relates a it then, to of time. play some to as So, also we very very pipeline, -- many over

So, right you away. won’t see the impacts

reasons. the of some are those So,

of time. out sort their activity the to play take of you know terms as in volume, time, things and they conversions and And over the now contribution

the sort over two. layer volume or in So, will of a year

things full won’t are the years you from for of now. So, a we couple that see at impact least winning right

Mike Milotich

Next please? question,

Operator

Our next Ellis from MoffettNathanson. Lisa question comes from

now is line open. Your

Lisa Ellis

the that talked the Earthport Question the Good Al, Hi. morning, about acquisitions and with of you of organic investments. Rambus, other and guys. some about strategy,

ancillary more do it you become market strategy a to think time? is talk adding Can You’ve brand, network of specifically this just of that as network extend the sort highlighted finally, into quality this and expand the and opportunity of network maintaining bit what you more model? that business you over the are expect boundaries of Visa sort type these you extend broadly, about going are network VisaNet. And after, of network of services sort of beyond like about of the and you of meaning core to core then, do how more the or you

Al Kelly

Lisa. Thanks,

as a opportunity a it’s are build those to we process either when out card the that and and I And We very security three brand decides value as network, capabilities in where It we able in additional projects very, out. recognize of on see the credential important. revenue payments additive terms or possible lack very not or the to about And other somebody type today, believe credential being we the provide best is take sure network in have way, in stepping card. form of of In pay-as-you-go ongoing many real-time in terms asset whether basis way right in make and have invest on a can. a And transactions us. and a number network in VisaNet. it it’s or virtual be ability grow a some that situations world we to important So, the a be sophistication to the a to And networks, continuing look all is that networks, Company real quarters grow will may transactions VisaNet payment country are of and reliability, involved whether licensing our the at of capabilities. we those continue to an in build shape decides network see terms to basis. And very toolbox we that process, of used, of there Visa that for which from of that a no domestic our capabilities now. some or we have kinds of we to possibly of back type we we are as to

Vasant Prabhu

it, resolution these it network, I you also we our time of is at can therefore, each also networks but not out provide takes streamline And a or clearly other -- look streamline And lot cost and a we but of the Verifi, dispute better help our enhances if can look agnostic. dispute experience. you of because resolution. it network network on only it’s at mean, consumer Yes. much

value, there’s So, to ability as beyond well both go network. our our to the network as

portion a a money to you point If brand of to extent look mean reliability Earthport, isn’t the that we might not network, it on A with from to how not Visa-branded our cetera our reach. our enhance the all And the that offers. transaction clearly substantially security that does B at et be point us get allows that

a to our us agnostic the be sense network allows makes interest agnostic of it to so, where network be in customers. it serving And

a capability if is to at the their a the an of in-store what online CyberSource now demand, has same you and enhanced approach kind business. business customer their desire see way where incredibly to then, serve And is merchants’ business in can omnichannel high their both between substantially Payworks, which go they time to

So, it existing extend our also it proprietary let’s network. business our beyond, every business, to the opportunity in an case case, enhances say, in but allows every

Mike Milotich

question? Next

Operator

question from Our Deutsche Bryan comes Bank. Keane next from

Your is open. now line

Bryan Keane

in just Facebook guys. Libra. think level curious of Hi, in wanted involvement or ask afternoon. confusion partner strategic Libra. to to how about Just There and Al, Good a the on a your potential market for disruptive Visa Is on Facebook’s it that. some expected is Visa threat? thoughts

Al Kelly

first get say, the any Bryan, the I of out thing to not I’d ourselves. of it’s So, important facts us here think ahead and understand

signed So, of a intent join have letter we to nonbinding Libra.

I companies of, expressed interest. think one it’s have XX that that We’re

has one officially no yet So, joined.

the regulatory number discussions, ability requisite join be including all determined decision the and a satisfy association of obviously requirements. by ultimate will to our the factors We’re of to in

be So, Bryan, in could tremendous and obviously, interest, association. But and to finalized. given expressed it’s helpful really in just a we we really, the believe estimation, there’s that my additive amount early actually days, be we’ve

Mike Milotich

Next question, please?

Operator

Our next question Morgan. comes from from J.P. Tien-Tsin Huang

Your now line is open.

Tien-Tsin Huang

Thank ask to you on so I M&A. much. Good to see wanted the revenue acceleration. also

the deals, stepped said up number you So, of you four.

did deal. one last you year think I

to norm separately, the is the just just do want this if with maybe just maybe appetite activity. you, to So, the deals forward. Visa is more deal I’m for I for Vasant. I’m curious going clarify, new curious, And

you the tax, XXX accounting from adjust items? Aside changed if in change your FX outlook, and for what’s were to and accounting those also

Al Kelly

and see pursue it then And the we’re asset him. let me reality value the Vasant, our relates add answer clients changed or think I’ll to our we to Tien-Tsin, we going part incremental M&A. No, to Let value have for the is our going question directed not we as that’s customers posture an to is, first it. when handle or investors, are or that bring they our

simply busier in we was reached of or deals agreements. quarter This where one deals much definitive a closed terms

Vasant Prabhu

X.X-point year, our the The revenue saw, at of In for higher low FX year. had look is beginning you roughly. the it’s the we the outlook, impact, And net you -- double the if in it’s terms our impact expected digits. guidance changed at as Tien-Tsin, growth, than of higher about accounting also X.X-point unchanged was full

wash. So, it’s sort of a

at other better you impact our revenue the quarter. going expected a at as start Expenses, net-net, they clip. incentives, come from of were accounting underlying the higher double of reasons now, of now last Other mean, and but absorbed revenue fourth as But is about. and continued EPS what Client year; low think the that the levels softer currency started sort rates, healthy clearly, mid-teens to digits had we If than see, we’ve pointed you the that’s been trends, big And year is we had business continued mid I been cross-border pointed as the than starting the volatility out, good the it higher. is fine. the as started; running it we well. volatility, picked invest our fact the teens. of some third year. has in we is for we’ve talked we pretty the growth it lower currency lowest thing slightly at is than Tax in all that the saw negative think we’ve high the seen fact up down would that some in at you the we into have has that has we have out, I can when quarter. So, bit; the five are expected a than quarter generally not to the low, expected beginning international of this up mid the -- well, I I years, somewhat been as thought as

the headwinds our going they’ve did have as in impact growth growth. being be our despite delighted the is it despite double digits. and as So, international nominal But on that been, high that revenue currency dollar decent to low a we’re all

Mike Milotich

question? Next

Operator

Baird. next David Koning comes W. Robert from from Our question

is line now Your open.

David Koning

light little, on another the processing Thanks. extra Easter picked a Hey, I was with days, and quarter, get little I And Yes. timing QX maybe QX day. of guys. I up and actually think a QX know, end guess days you

to the But, of little up and wondering, of the bit of more stable about fiscal of I’m because bit the first of you U.S. transaction days three a decel. in back July, with and actually what pick number back do a So, quarter you QX? get decel weeks kind talked through little

Vasant Prabhu

Yes.

a you below the quarter is processing quarter last to days, normal number to above is, was normal, of normal. terms In next easiest explain of processing it and days, way this was quarter

because right, going ended it that end, you’re quarter is way So, us and days hurt wise the will last processing processing this help to quarter days quarter. us way of the next in

This always a wouldn’t tell relates people three And read quarter three too weeks as don’t more trend. the I it make it. much to normal. was into we weeks,

the the that third is be in outlook trends will our with think, quarter. roughly I line

don’t So, you is weeks, if three think first much. lower I something the tells in higher, it slightly slightly

Mike Milotich

Next question, please?

Operator

next Our from our comes question from Bernstein. Harshita Rawat

open. Your line is now

Harshita Rawat

afternoon. taking I the Thank implementation you Authentication deadline Strong to question. Good want fall. for Hi. this about ask for Customer my PSDX

the how ecosystem is what So, long-term are whether benefits my ready and trade-offs this could question in your Europe thoughts of for the current directive and this evolving, is, be? and deadline,

Al Kelly

we merchants certain been that deadline, half are -- It’s are Strong think throughout absolutely and you? when Harshita, to nation to awareness and actively right is how get into Europe the which the less European be are going by September than trade Customer supposed Authentication authorities associations to place. XXth that of you we’ve raise is engaged with ready

have for European to largely -- regulators. Banking had most of that’s And a the opinion that to aside going We’re extensions look recent already small for It’s certainly be the being pleased as that the very kind not communicated people by UK deadline. local going allow set September think Authority everybody particularly to would is I in It that our very, from for compliance. bad understanding merchants. not enforce regulators example, France, and the that the in they going are

it we’re that past think to is the date. deadline So, look and people there come. time exceptions some move reluctance will for But for is to landing a where I allow

meantime, can we the working sure we them are In merchants help to and as make be with issuers will much they as ready.

and performing solutions to regulation. listing We consumers authentication to exempt authentication. identify out delegated also trust There transactions Visa to customer various is capability, allows therefore identify how figure allows which as got a acquirers already working spelled that to to help in are a authorization on We’ve they optimize out identify secure Visa to are non-exempt the trying them. merchants frequently strong and that that merchants trusted shop

won’t issuers to this to we required place and So, be merchants be come there’s into we’re well get ready. to XXXX. help any things think doing until really I will that number But, people try the of where

Mike Milotich

Next question, please?

Operator

Our next Ashwin from question from Citigroup. Shirvaikar comes

is now open. line Your

Ashwin Shirvaikar

of recently that joined early launched on days, to I Questions get it BXB Connect I answered. hoping but -- things know it’s a was globally. couple

the in inorganic offering, now investments are you on seems looking holistic your based like and ecosystem. it organic First, what’s finding

you that be parts be not, in any might early added? a fair comment secondly, assessment? on area? to is this need So, if what can And you traction And seeing

Al Kelly

early. too just It’s

We stage. past are getting just the pilot

don’t banks world talking the to able results connecting. I We’re be good share expect a just And months. to for around six to various about probably

really take before I to see traction the we BXB think that going with Connect. long it’s

So, there understand people to have banks capability done and be some technical obviously to do. sure what the has still it that can would sales some that work make still is to work do, and

Mike Milotich

Next please? question,

Operator

from David Evercore. from next Togut question comes Our

Your now is line open.

David Togut

really to mega payments Thanks. on Good have afternoon. Piggybacking signed as tech BXB in important bank up year an this a And of just Ashwin’s mergers three growth closed you’ve objective. and BXB Connect payments little course, FIS Bottomline all highlight bit and question, and Earthport.

to I’m out if growth market, which So, cross-border, your curious a build especially as distribution Visa? enterprise specifically you you’ve expand plan, could into the for highlighted lucrative BXB opportunity game upon for

Al Kelly

a rely and on check. level P-cards you’ve we cards where Well, business corporate in the distribution space, cards and volume to to different nail to and we is that successful. you’ve the on build that to I hit enterprise credibility have carded area on traditionally some need. the kinds in the than order rely require virtual integrated with to small got think, issuers and approach of enterprise has the that I generate network into of ability and In mean, David, got systems large been a going head. the whole be the the wires be and partners approach cards, the enterprise we of This you’ve

like continue we’re a that we going forge because continue of be to partnerships one to this unlocking wherever going I think -- volume to in non-carded in and we for can we and that’s to investments distribution look BXB. the the and key try space investments, to BillDesk. ways one look at to So, in going we’re PayMate, build to made And earlier made to partnerships the

Vasant Prabhu

a our Connect basis. and mean, Through one BXB transactions as cross-border that Visa can and address many also Connect basis. transactions transactions high high-value has I we BXB but low-value on component. cross-border on Yes. Earthport is are said, components addresses, strategy a Direct, BXB BXB volume you

also We AR domestic have AP. and to initiatives that cross-border beyond go

so heard you’ve broad with a of Billtrust happening on with it’s partnerships So, our fronts. I’m range on that about multiple and AR. things deal sure

We deal AP. have partnerships that with other

it’s multiple of fronts. a initiatives variety on So,

question, and strong. the enhance we As today, that settlement to a bunch proposition points. value it -- addresses transaction. exist your reliability since ledger that know tokenization of capabilities, substantially utilize do very We relates and technology, the we pain doesn’t security the is BXB that was whole settlement Connect, We bring to it security bring we of distributed the

about get Connect, as That Al both or as think, which for There develop, volumes when of then years having about pulled the two at are then like with represented together scale. we some and all it anything said, off. takes to going. builds have talked earlier, and it build. BXB I takes some network And both ends talked to contactless. network as the you we to three the up Al time effect We said that is sides you why get time means where wait that have

effect the some Connect. in So, time it before working BXB be will us network for starts

Mike Milotich

Next question, please?

Operator

Capital. question next RBC from comes Our Dan from Perlin

open. now is line Your

Dan Perlin

And vulnerabilities, about getting you. coming years of security I then, these to increase there secondly, you are your think One all distribution you sizable is And closer little for little a the discussions wanted Al, how these the scale to around as a build direct-to-consumer. payment can like talk need dovetail evening. opportunities Thank a new is bit just Thanks. out about globally. just clearly bit Good networks? is, investments for kind on And question twofold. really do points these you the flows VisaNet? investments, in

Al Kelly

cases are We’ve all last Dan, of We’ve as clearly, people. with out I kinds world, that obviously Direct, mean, to institutions, level to the the use chase are is to that explore all organizations got there out continue the kinds like built flows, we’ve wallets of BXB added investment there add them various that all to financial payment that into space. I are all the Visa flows we the our people which payment we down of resources about in drive scale always that business it’s them new year unit not supporting. the my be Gojek won. going greatly to resources of various in to new in to the in with remarks. We’ve they had in plus, talked

is, Visa use from VisaNet -- these think technical a question come Direct able I handle your I’m to sorry I is today. a from standpoint, a various standpoint to I’ll So, in second, technical cases security think

there is of communicate. realize can they world into really are that we the have we the that nonbinding bring agreements and to VisaNet new to get around that area on and our have various we’ve I the new about, understand ones, we simply we’ve might talked our a have getting with new handle we use invest have that clients acquisitions augmentation new street might may capabilities could have what anticipated. them go to to to bring the that not solutions all As sure bigger people getting we case to got bigger And challenge clearly anticipated. the we in think, we that can do not make capabilities the where and we But, feet the out to that some

will that’s of So, where be. the investment preponderance the I think

all my something time. mind Security is the weighs on

spend organization. as of extraordinarily hundreds We We and dollars. millions robust, I knocking this, an wood have say of cybersecurity I’m

of in the work group. hundreds people We have who

doing we’re we’ve to capabilities totally them. any way, security. that into their they now, We’re through and organization terms integrated cybersecurity shape in their form system be very fully is or incredible that acquisitions we or going where before until VisaNet of they the When need anybody VisaNet, that anywhere near that comfortable completely we scrutiny integrate conscious will come at of be goes any we to -- are got look in

got tokenization, know, So, we’re it’s building stay as And that invest you the in Transaction we in that And of ecosystem, remain out good We got It’s security Consumer ahead never our it. It’s one a we place we our believe so stay much as vigilant underpinning of data. have of that is to the obligation we pushing Visa Controls. to at are the we’re the can reasons devalue something reasons to ecosystem. to given continuing guys. the vigilant. trust bad guys of we one And critical in the cybersecurity. payment believe that

have a and over credentials -- a is we lot money of data protecting an time. security can to we’ll their payment consumers invest their area role the continue in. this So, will in of use And their and

Mike Milotich

we last Jordan, have time question. for one

Operator

Our last Susquehanna. question comes from James Friedman from

Your open. line is now

James Friedman

tap-and-pay I the that we and just unique wanted the cases tax X.X remarks, to volume ask, there referenced to market a things you to alluded you. that of or transaction of growth, accelerator times come? the your UK. growth in about the used Al, between anything think in as Is template and prepared UK do you rate of Thank

Al Kelly

we commuting for there or I that we system I say longer market we that and the the and home week, finding remarks, I where XX been bit in those realize to big different purchases. than and particularly used transit in about in kinds most said really the creates they -- Jamie, is is heretofore thing only the as also are world. a can around tap UK markets my for are the And think have transit of are and unique other get have things instances a ticket habit it. instances, that were and people look using home all lower times of in what cash to they to and tapping They work one

over to just up of and time. in system results. really around of That out levels to one a to high MTA a not seven-week period of have said, going we’re where tap-and-pay certainly have in I get how my the see general, world, see XXX-plus we’ll referenced transit where on expect seeing been markets transit we it since of are So, adoption in similar kind think, I plays continue remarks in here I able results running. think as penetrate we we’ll we’ve type the nice pursue that that I projects the the terms of in and the that New in we York including

Mike Milotich

We’d us thank for everyone today. like to joining

please to or you call If our additional again. free have Relations team. And great questions, a email feel day. Investor have Thanks

Visa (V) 23 Jul 192019 Q3 Earnings call transcript