2020 Investor Day
2020 Investor Day
Strategic Overview | Al Kelly |
The Power of the Visa Brand | Lynne Biggar |
Accelerating Global Growth | Ryan McInerney |
Forward-looking Statements
This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are identified by words such as "will," "is expected," and other similar expressions. Examples of forward-looking statements include, but are not limited to, statements we make regarding the opportunities for growth, our strategy, future operations and outlook.
By their nature, forward-looking statements: (i) speak only as of the date they are made; (ii) are not statements of historical fact or guarantees of future performance; and (iii) are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from Visa's forward- looking statements due to a variety of factors, including those contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 and our other filings with the U.S. Securities and Exchange Commission.
You should not place undue reliance on such statements. Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future developments or otherwise.
Please see end of presentation for notes and disclosures.
3 | ©2020 Visa. All rights reserved. |
Agenda | 2020 Investor Day | ||
Strategic Overview | Al Kelly | ||
8:00 a.m. - 9:30 a.m. | The Power of the Visa Brand | Lynne Biggar | |
Accelerating Global Growth | Ryan McInerney | ||
Break and Visa Showcase | |||
Oliver Jenkyn | |||
Growing Consumer Payments | Chris Clark | ||
Charlotte Hogg | |||
9:45 a.m. - 12:05 p.m. | Andrew Torre | ||
Eduardo Coello | |||
Driving New Flows | Ryan McInerney | ||
Bill Sheley | |||
Kevin Phalen | |||
Lunch and Visa Showcase | |||
Jack Forestell | |||
Deepening Client Partnerships with Value Added Services | Mary Kay Bowman | ||
Carleigh Jaques | |||
Melissa McSherry | |||
12:30 p.m. - 2:30 p.m. | Visa: The Investment Proposition | Vasant Prabhu | |
Al Kelly | |||
Q&A | Vasant Prabhu | ||
Ryan McInerney | |||
Mike Milotich | |||
Visa Showcase |
Strategic Overview
Al Kelly
Chairman and Chief Executive Officer
2020 Investor Day
Key trends are driving fundamental changes in the ecosystem
Consumers choosing | Accessto financial | ||
simple, compelling | products and services | ||
experiences | expanding globally |
Flows digitizing | Alternative money | ||
beyond consumer | movement platforms | ||
payments | modernizing |
Digital fintech platforms
increasingly launching
payments products
Governments
becoming increasingly
active in payments
6 | ©2020 Visa. All rights reserved. |
Since 1958, Visa has facilitated commercefor consumers and businesses by providing a secure and seamless payment experience...
7 | ©2020 Visa. All rights reserved. |
...with developments in technology, expansion of our reach and new ways to pay, we are now enabling the movement of moneyfor everyone, everywhere.
8 | ©2020 Visa. All rights reserved. |
We continue to extend our partnerships as the payments ecosystem expands
Issuers | Acquirers |
Neobanks | Merchants |
Fintechs | Enablers |
9 | Wallets | ©2020 Visa. All rights reserved. |
Our industry is unique - total addressable market continues to expand with many vectors for growth
eCommerce share
of spending
New platforms to reach 1.7 billion unbanked
Fintech / wallet expansion
Cash PCE continues to grow
New | |
acceptance | P2P and B2C |
form factors | |
digitization |
Government disbursement digitization
Ecosystem demand for value added services
B2B modernization
Total Addressable | |
10 | Market |
©2020
Since our last Investor Day, the opportunity for growth has expanded
Facilitating Commerce | Moving Money | |||||
$18 | New Flows ($T) | |||||
$17 | 3% | B2b | ||||
Global cash | B2B | $5 | ||||
and check ($T) | CAGR | $120 | B2C | |||
CY16 | CY18 | |||||
$30 |
9% | 14% | $185T | ||
% Digital of | 23% | |||
global retail | CAGR | |||
spend1 | ||||
CY16 | CY19 | |||
P2P $20
G2C $10
11Note: 1. CAGR represents dollar growth of digital spend.
Sources: Central Bank data; Oxford Economics; Euromonitor Merchant Segment Study, 2018; eMarketer Pro; McKinsey Global Payments Map and Visa Analysis.
©2020 Visa. All rights reserved.
The fourth growth inflection point in Visa's 60+ year history offers the next 10x growth opportunity
Inflection Points | |||||
(10x growth over ~20 years) | |||||
BANK | |||||
AMERICARD | |||||
60s | 70s | 90s | 2010s | Next 10x | |
Opening the | The Platform | eCommerce | Everywhere | Visa is Moving | |
Network | as a Service | Goes Mainstream | You Want to Be | Money | |
1960 | 1975 | 1995 | 2016 | Connected | |
Cards | <1 Million | ~40 Million | ~450 Million | 3 Billion+ | Devices |
New Flows | |||||
Payments | <$1 Billion | ~$10 Billion | ~$600 Billion | $7 Trillion+ | |
Network | |||||
Volume | |||||
of Networks | |||||
12Source: Visa Operating Certificates. |
As we look to the next 3-5 years, our strategy is clear
We will accelerate the
growth in our
revenue streams and fortify Visa's strong foundation
Accelerate growth
Grow and broaden our revenue streams in consumer payments, new flows and value added services as we expand the network into the Network of Networks
Fortify our foundation
Build upon Visa's strong brand, leading technology, fortress security and exemplary talent
13 | ©2020 Visa. All rights reserved. |
We have an opportunity to accelerate revenue growth
Accelerate growth
Consumer | New | Value Added |
Payments | Flows | Services |
Fortify our foundation
Brand | Technology | Security | Talent |
Platforms |
14 | ©2020 Visa. All rights reserved. |
Three levers broaden our revenue streams and expand the network
Consumer Payments | New Flows | Value Added Services |
Grow the two-sided network | Expand our Network of | Drive utilization of our |
by expanding Visa credentials | Networks to capture new | services to help our clients |
and acceptance points and | sources of payments and | grow profits and deepen our |
driving user engagement | money movement between | partnerships |
individuals, businesses and | ||
governments | ||
15 | ©2020 Visa. All rights reserved. |
We have an opportunity to accelerate revenue growth
Consumer Payments | New Flows |
Credentials | B2B | |||||||||||||||||||||||
B2b | ||||||||||||||||||||||||
Acceptance | B2C | |||||||||||||||||||||||
P2P | ||||||||||||||||||||||||
Engagement | G2C |
Value Added Services
Issuer & Consumer Solutions
Acquirer & Seller Solutions
Security & Identity
Data Solutions
Visa Consulting & Analytics
16 | ©2020 Visa. All rights reserved. |
Lynne Biggar
Chief Marketing and
Communications Officer
17 | 2020 Investor Day | |
Lynne Biggar
Chief Marketing and
Communications Officer
Ryan McInerney
President
18 | 2020 Investor Day | |
Lynne Biggar | Ryan McInerney |
Chief Marketing and | President |
Communications Officer |
Oliver Jenkyn | Andrew Torre |
Regional President, | Regional President, |
North America | CEMEA |
Chris Clark | Eduardo Coello |
Regional President, | Regional President, |
Asia Pacific | LAC |
Charlotte Hogg
CEO,
Europe
19 | 2020 Investor Day | |
Lynne Biggar | Ryan McInerney | Oliver Jenkyn |
Chief Marketing and | President | Regional President, |
Communications Officer | North America |
Chris Clark
Regional President,
Asia Pacific
Charlotte Hogg
CEO,
Europe
Andrew Torre
Regional President,
CEMEA
Eduardo Coello
Regional President,
LAC
Bill Sheley | Kevin Phalen |
Head of Push Payments | Head of Visa |
Business Solutions |
20 | 2020 Investor Day | |
Lynne Biggar | Ryan McInerney | Oliver Jenkyn | Bill Sheley |
Chief Marketing and | President | Regional President, | Head of Push Payments |
Communications Officer | North America | ||
Chris Clark | Kevin Phalen | ||
Regional President, | Head of Visa | ||
Asia Pacific | Business Solutions | ||
Charlotte Hogg | |||
CEO, | |||
Europe | |||
Andrew Torre | |||
Regional President, | |||
CEMEA | |||
Eduardo Coello | |||
Regional President, | |||
LAC |
Jack Forestell
Chief Product Officer
Mary Kay Bowman
Head of Consumer
and Seller Solutions
21
Carleigh Jaques
General Manager,
CyberSource
Melissa McSherry
Head of Security,
Identity and Data
Products
2020 Investor Day
Lynne Biggar | Ryan McInerney | Oliver Jenkyn | Bill Sheley |
Chief Marketing and | President | Regional President, | Head of Push Payments |
Communications Officer | North America | ||
Chris Clark | Kevin Phalen | ||
Regional President, | Head of Visa | ||
Asia Pacific | Business Solutions | ||
Charlotte Hogg | |||
CEO, | |||
Europe | |||
Andrew Torre | |||
Regional President, | |||
CEMEA | |||
Eduardo Coello | |||
Regional President, | |||
LAC |
Vasant Prabhu
Vice Chairman and
Chief Financial Officer
22
Jack Forestell
Chief Product Officer
Mary Kay Bowman
Head of Consumer
and Seller Solutions
Carleigh Jaques
General Manager,
CyberSource
Melissa McSherry
Head of Security,
Identity and Data
Products
2020 Investor Day
23 | ©2020 Visa. All rights reserved. |
To fortify our strong foundation, we will continue to invest in our brand, technology platforms, security and talent
Accelerate growth
Consumer | New | Value Added |
Payments | Flows | Services |
Fortify our foundation
Brand | Technology | Security | Talent |
Platforms |
24 | ©2020 Visa. All rights reserved. |
To fortify our strong foundation, we will continue to invest in our brand, technology platforms, security and talent
Accelerate growth
Consumer | New | Value Added |
Payments | Flows | Services |
Fortify our foundation
Brand | Technology | Security | Talent |
Platforms |
25 | ©2020 Visa. All rights reserved. |
The power of the Visa brand
Visa is the unequaled category-leadingbrand
The Visa brand drives substantial value
to Visa, clients, partners and the ecosystem
We continue to evolve our brandas Visa's business and the payments landscape evolve
WORLD'S MOST | TOP 100 MOST VALUABLE |
VALUABLE BRANDS | GLOBAL BRANDS |
INTERBRAND BEST | WORLD'S MOST |
GLOBAL BRANDS | ADMIRED COMPANIES |
26 | ©2020 Visa. All rights reserved. |
The Visa brand is preferred around the world
Visa's Brand Preference Advantage Over the Next
Largest Global Payment Network
>8x
4-8x
2-4x1.4-2x
Guatemala | Peru | Argentina | Japan | UAE | UK |
Norway Taiwan | U.S. | Russia |
+4 more | +7 more |
Source: Brand Health Measurement (BHM) is an on-going quantitative survey commissioned by Visa and conducted by independent research firms, Phoenix Marketing International and Ipsos, among consumers age 18-70(18-54 South Korea, Taiwan, and UAE) who have ever used any payment brand. Data collected in FY19 (October 2018 - September 2019). Sample size varies by country. The preferred brand is defined as the brand that was the only brand preferred when asked the question "Which payment brand(s) do you prefer?" Respondents have the option of selecting one brand, selecting multiple brands, indicating that they don't have a preference or selecting "none
27of these". Chart shows the multiple of Visa sole preference vs. Mastercard sole preference in the respective markets. Note: the sample size for Mastercard sole preference is below 50 in Taiwan (12), South Korea (48), Guatemala (5), Peru (11) and Norway (27).
Denmark France
Mexico Poland
+7 more
©2020 Visa. All rights reserved.
Visa's brand is also preferred across priority audiences
Audience | U.S. | UK | Japan | India | Russia | UAE | Mexico |
Women
Millennials
Affluent
Non-affluent
28Source: Brand Health Measurement program FY19 full year data (except Japan, Russia and US, which use Q1-Q3FY19 data). A total of 52 markets measured in FY19. Global payment networks included in the calculation are Visa, Mastercard and American Express.
©2020 Visa. All rights reserved.
Brand preference links to higher share of wallet
Multiple of spend when Visa is preferred
>15x
11-14x
6-10x
3-5x
China | Germany | Chile | India | Canada | France | Argentina Hong Kong |
Indonesia Vietnam | Japan Thailand | Poland | Russia | Mexico | UK |
+3 more | +12 more | +8 more |
Source: Brand Health Measurement (BHM) is an on-going quantitative survey commissioned by Visa and conducted by independent research firms, Phoenix Marketing International and Ipsos, among consumers age 18-70(18-54 China, Hong Kong, India, Indonesia,
Thailand, Vietnam) who have ever used any payment brand. Data collected in FY19 (October 2018 - September 2019). Sample size varies by country. Question: Thinking about last month, approximately how much money did you spend on purchase of goods, services
and regular monthly expenditures (excluding rent or mortgage payments)? Question: Thinking about the amount you spent last month, what percentage did you spend using each of the following: (payment brand list varies by country)? Please provide your best
29estimate. Share of Wallet (SOW) is defined as the average percentage that consumers reported spending on Visa when thinking about how much money they spent in the last month on the purchase of goods, services and regular monthly expenditures (excluding rent ©2020 Visa. All rights reserved.or mortgage payments). Chart shows the multiple of Visa SOW when Visa is Solely Preferred vs. Visa SOW when Visa is Not Preferred. Definition of Visa Not preferred = Multiple brands preferred but not Visa, or another brand (not Visa) has Sole Preference.
Note: the sample size of Visa sole preferred is below 50 in Chile (22) and Hong Kong (45).
Brand preference links to higher share of wallet
Multiple of spend when Visa is preferred1
Delivering a premium for clients2
>15x
11-14x
6-10x3-5x
10.7%
U.S. Spend Lift
2%
China | Germany | Chile | India | Canada | France | Argentina | Hong Kong |
Indonesia Vietnam | Japan Thailand | Poland | Russia | Mexico | UK |
+3 more | +12 more | +8 more |
Risk-adjusted
U.S. Balance Lift
vs. leading competitor
Source: 1. Brand Health Measurement (BHM) is an on-going quantitative survey commissioned by Visa and conducted by independent research firms, Phoenix Marketing International and Ipsos, among consumers age 18-70(18-54 China, Hong Kong, India, Indonesia,
Thailand, Vietnam) who have ever used any payment brand. Data collected in FY19 (October 2018 - September 2019). Sample size varies by country. Question: Thinking about last month, approximately how much money did you spend on purchase of goods, services
and regular monthly expenditures (excluding rent or mortgage payments)? Question: Thinking about the amount you spent last month, what percentage did you spend using each of the following: (payment brand list varies by country)? Please provide your best estimate. Share of Wallet (SOW) is defined as the average percentage that consumers reported spending on Visa when thinking about how much money they spent in the last month on the purchase of goods, services and regular monthly expenditures (excluding rent
30or mortgage payments). Chart shows the multiple of Visa SOW when Visa is Solely Preferred vs. Visa SOW when Visa is Not Preferred. Definition of Visa Not preferred = Multiple brands preferred but not Visa, or another brand (not Visa) has Sole Preference. Notes: the ©2020 Visa. All rights reserved.sample size of Visa sole preferred is below 50 in Chile (22) and Hong Kong (45). 2. Transunion analysis of their proprietary US transaction database spanning over 310 million US Visa- and MC-branded active credit cards showing spend lift (March 2017-March 2018
performance period), less Visa-calculated Costco effect; risk-adjusted balance line is calculated on the full database of 310 million active cards whereas spend lift is calculated based on a subset of active credit cards where Issuers send monthly payment data to Transunion.
We leverage our brand assets to drive outcomes for Visa and clients
Activating exclusive global sponsorships with FIFA and Olympics
FIFA Women's World Cup 2019TM | Olympic Games Tokyo 2020 | |||
31 | ©2020 Visa. All rights reserved. |
We leverage our brand assets to drive outcomes for Visa and clients
Amplifying key strategic priorities
Tap to Pay | New Flows | ||||
32 | ©2020 Visa. All rights reserved. |
We leverage our brand assets to drive outcomes for Visa and clients
Enabling individuals, businesses and economies to thrive
Support for Small Business | Empowerment of Women | ||
33 | ©2020 Visa. All rights reserved. |
As a result, Visa's clients view the brand as a powerful differentiator
Clients view the Visa brand as stronger than the competition1…
79% | 86% | 86% |
Financial | Merchants | Digital & Fintech |
Institutions | Partners |
…which is one of the key factors that makes Visa a global leader in co-brand
We hold majority share in 13 of the largest 20 portfolios2
We continue to fortify and grow our leadership with top co-brand partners:
Representative wins
Expand and Renew | Grow | |
341. Visa 2019 Global Client Engagement Survey. 2. Visa analysis and publicly available information. Assessment does not include programs in China; Qantas program not included given the direct transfer construct; includes self-issuedco-brands. Of the 13 Visa programs, Visa either has exclusivity or has a majority share of the portfolio.
©2020 Visa. All rights reserved.
Our brand extends as payments evolve…and is transforming for the future
35 | ©2020 Visa. All rights reserved. |
Key takeaways
Together, Visa and its partners benefit from Visa's highly valued brand to drive business outcomes
TheVisa brand is well positioned to support Visa's evolving strategy
Visa is and will continue to be
Everywhere You Want to Be
36 | ©2020 Visa. All rights reserved. |
To fortify our strong foundation, we will continue to invest in our brand, technology platforms, security and talent
Accelerate growth
Consumer | New | Value Added |
Payments | Flows | Services |
Fortify our foundation
Brand | Technology | Security | Talent |
Platforms |
37 | ©2020 Visa. All rights reserved. |
Visa's technology promise includes security, reliability and scale for the benefit of our payments ecosystem participants
Technology is a vital pillar of Visa's business
Processed 140 billiontransactions in 160 currencies, for 15,500 financial institutions across 200 countries and territories
Resiliency is core to the fabric of our network
99.999%availability
We have opened our network for clients
~600 API endpointsopening access to our network, receiving over 1 billion API callsper month
Our network connects the ecosystem
Multiple data centers with10 million miles of privately leased telecommunication lines
38 | Source: Visa analysis. | ©2020 Visa. All rights reserved. |
To fortify our strong foundation, we will continue to invest in our brand, technology platforms, security and talent
Accelerate growth
Consumer | New | Value Added |
Payments | Flows | Services |
Fortify our | ||||
foundation | Brand | Technology | Security | Talent |
Platforms |
39 | ©2020 Visa. All rights reserved. |
Our intelligent security architecture is built on a multi-layered,
data-driven framework to deliver seamless, secure experiences...
End-to-End Transaction Services
1. Account Onboarding & Management
Recognizing fraudulent account activity (e.g., opening or accessing) through sophisticated analytics and risk tools
5. Performance Optimization
Enhancing payment performance through tailored expertise and benchmark data
4. Dispute Management
2. Consumer Identity & Authentication
Enabling seamless, data-led authentication to confirm consumers are who they say they are
3. Transaction Authorization
Optimizing authorizations through sophisticated data analytics that minimize fraudulent transactions
Facilitating logic-based, streamlined dispute management and resolution
Core Network Capabilities
Tokenization | Transaction Controls |
40 | ©2020 Visa. All rights reserved. |
...and provides in-depth protection against cybersecurity threats
Vulnerability | Detection & |
Mgmt | Response |
Data
Security
Threat | Malware |
Intelligence | Prevention |
Identity &
Access Mgmt
41 | ©2020 Visa. All rights reserved. |
To fortify our strong foundation, we will continue to invest in our brand, technology platforms, security and talent
Accelerate growth
Consumer | New | Value Added |
Payments | Flows | Services |
Fortify our foundation
Brand | Technology | Security | Talent |
Platforms |
42 | ©2020 Visa. All rights reserved. |
Visa has transformed our workforce
More Global
1.6x
Faster headcount growth rate in international
markets vs. the U.S. since 20161
More Millennials
+14 ppt
Increase in millennials and younger as a percent of total workforce since 2016
More Diverse
~300 bp
Increase in females as a percentage
of total executives since 2016
More Expertise
~60%
Of our workforce is in technology,
cyber, risk and product
43Note: 1. Growth rate = CAGR.
Source: Visa Analysis.
©2020 Visa. All rights reserved.
We focus on all key constituencies to connect the world and enable individuals, businesses and economies to thrive
Employees
Purpose matters to the entire company
Clients
Good governance
is an ongoing commitment
Shareholders
Society
Local communities
Regulators
Governments
44 | ©2020 Visa. All rights reserved. |
We are driving impact through global corporate citizenship
Society | Local communities |
Connected | Empowering |
500M | women via |
Women's World | |
previously unbanked | Banking, She's Next, |
individuals to | SheTrades |
Visa accounts | |
from 2015-2019 |
100%
Renewable
electricity goal reached in 2019
Assets in Visa | Visa's Practical Money Skills |
Foundation | Program has reached |
$450M | 40M |
people since 2012 |
Visa employees in 2019 donated
40K $4.2M
volunteer hours to 4,700 charities, matched by Visa
45 | Source: Visa Analysis. | ©2020 Visa. All rights reserved. |
We aim to earn and maintain public authority trust in Visa and our business model
Regulators and Governments
Be local
Our government engagement team is embedded in local teams to find proactive solutions to local problems
Be open and transparent
We welcome ongoing dialog with governments to help individuals, businesses, the governments themselves and economies thrive
Be a trusted advisor to governments
We support governments in solving key policy issues and promoting financial inclusion
~90%Of our government engagement professionals are located in the countries and regions they service
Shared our perspective on key ecosystem and security dynamics with:
~1,600Industry and government stakeholders at summits across every region in 2019
Visa School of Public Policy provided payments industry training in 2018 to:
~950Government 42countriesparticipants from
Goal: Governments view Visa as a long-term partner, value the continuous innovation we deliver and provide an enabling regulatory environment
46 | Source: Visa Analysis. | ©2020 Visa. All rights reserved. |
We focus on all key constituencies to connect the world and enable individuals, businesses and economies to thrive
Employees
Purpose matters to the entire company
Clients
Good governance
is an ongoing commitment
Shareholders
Society
Local communities
Regulators
Governments
47 | ©2020 Visa. All rights reserved. |
We have delivered strong financial performance and superior
shareholder returns since 2016...
Net Revenue ($B)
15%
CAGR
23.0
15.1
FY16FY19
Non-GAAP EPS ($)1
24%
CAGR
5.40
2.84
FY16FY19
Total Shareholder Return
29%
CAGR
Growth of $100 from 9/30/16-9/30/192
$212 Visa
$146 S&P 500
FY16 FY17 FY18 FY19
48Notes: 1. Non-GAAP EPS excludes the impact of special items and equity investment gains and losses. 2. Growth of $100 from September 30, 2016 through September 30, 2019. Assumes reinvestment of dividends.
Source: Visa Analysis.
©2020 Visa. All rights reserved.
...driven by meaningful growth in our business drivers
Growth since 2016
Facilitating commerce | Moving money |
34%Payments volume | 2xBank account reach |
40%Payments transactions | 130+Fast funds enabled countries |
42%Merchant locations | 41%B2B payments volume |
49Sources: World Bank; CAN; RBR; Visa Operating Certificates; VisaNet data; Visa analysis.
©2020 Visa. All rights reserved.
We are a purpose-driven company that will fortify our foundation and grow revenue streams
We have a clear approach and strategyfor the opportunity
With themost scale in the industry and many engines of growth, we are operating from a position of strength
Our industry-leadingbrandis a real differentiator
Our peopleare innovative collaborators with the ecosystem
We are committed to thoughtful engagement, working with and mindful of all stakeholders
50 | ©2020 Visa. All rights reserved. |
Accelerating Global Growth
Ryan McInerney
President
2020 Investor Day
Key takeaways
We have a significant opportunity for continued growth in consumer payments
Our addressable market continues to expand as we extend into new flows
We are utilizing an expanding Network of Networksto move money for everyone, everywhere
Value Added Servicesexpand the revenue growth opportunity beyond payments and money movement and drive growth for our clients
52 | ©2020 Visa. All rights reserved. |
Three levers broaden our revenue streams and expand the network
Consumer Payments | New Flows | Value Added Services |
Grow the two-sided network | Expand our Network of | Drive utilization of our |
by expanding Visa credentials | Networks to capture new | services to help our clients |
and acceptance points and | sources of payments and | grow profits and deepen our |
driving user engagement | money movement between | partnerships |
individuals, businesses and | ||
governments | ||
53 | ©2020 Visa. All rights reserved. |
We have an opportunity to accelerate revenue growth
Consumer Payments | New Flows |
Credentials | B2B | |||||||||||||||||||||||
B2b | ||||||||||||||||||||||||
Acceptance | B2C | |||||||||||||||||||||||
P2P | ||||||||||||||||||||||||
Engagement | G2C |
Value Added Services
Issuer & Consumer Solutions
Acquirer & Seller Solutions
Security & Identity
Data Solutions
Visa Consulting & Analytics
54 | ©2020 Visa. All rights reserved. |
Growing consumer payments remains an enormous opportunity
1Cash and check continue to grow, totaling $18T globally
Consumer | New | Value Added |
Payments | Flows | Services |
- Spend continues to shift from physical to digitaland Visa's share of digital is 3x that of physical
- There is a wave of next generation issuers- neobanks, fintechs and digital platforms - issuing credentials
- The cost to enable acceptance has dramatically decreasedand next generation acquirers are expanding acceptance
- Governments are increasingly engaging to digitize payments
55Sources: Central Bank data; Oxford Economics; Euromonitor Merchant Segment Study 2018; eMarketer; Comscore.
©2020 Visa. All rights reserved.
1Cash and check continue to grow
Consumer | New | Value Added |
Payments | Flows | Services |
Significant untapped potential to increase PCE penetration and grow core revenue
Global Cash & Check ($T)
2018 Constant Dollars
CAGR 4%
18
14
CY12CY18
Cash & Check Opportunity by Region
$3T | |
$4T | $6T |
$2T | $3T |
Cash & Check Opportunity as a % of PCE:
High (>50% cash & check)
Moderate (25%-50% cash & check)
Low (<25% cash & check)
56Sources: Central Bank data; Oxford Economics; Euromonitor Merchant Segment Study 2018; Visa Operating Certificates.
©2020 Visa. All rights reserved.
2Spend continues to shift from physical to digital and Visa's share of digital is 3x that of physical
Consumer | New | Value Added |
Payments | Flows | Services |
Total Global Retail Spend ($T)1
29 | CY16-CY19 | |||
25 | CAGR | |||
22 | ||||
3% | ||||
Physical | 19% | |||
14% | ||||
9% | ||||
23% | ||||
Digital | ||||
CY16 | CY19 | CY22 |
Visa's Share of Every $1 Spent
Physical
~15¢
Digital
~43¢
57Note: 1. Total global retail spend excludes travel and event ticket sales. CAGR represents dollar growth of digital spend.
Sources: eMarketer; Comscore; Central Bank data; Oxford Economics; Euromonitor Merchant Segment Study 2018.
©2020 Visa. All rights reserved.
New ecosystem participants, technology advances Payments | Flows | Services |
Consumer | New | Value Added |
and governments are driving the digitization of cash
3
There is a wave of next
generation issuers - neobanks, fintechs and digital platforms - issuing credentials
1B+
Potential credentials from
Visa wallet partners
4
The cost to enable acceptance has dramatically decreased and next generation acquirers are expanding acceptance
>90%
Reduction in cost to enable acceptance compared to dedicated terminals
5
Governments are
increasingly engaging to digitize payments
~3x | India card volume |
growth since | |
demonetization in | |
November 2016 |
~2xJapan government targeted increase in digital penetration 2016-2027
58Sources: Publicly reported user numbers; Reserve Bank of India; Ministry of Economy, Trade and Industry of Japan; Visa Analysis.
©2020 Visa. All rights reserved.
Visa's network uniquely positions us to lead the digitization movement
13,000
Visa Issuers
3.4B
Cards
750M $8.8T 180B
Visa Tokens | Payments | Payments |
Volume | Transactions |
Consumer | New | Value Added |
Payments | Flows | Services |
3,000
Visa Acquirers
61M
Merchant Locations
~65M
POS Enabled for Tap to Pay
59 | Sources: RBR; Visa Operating Certificates; Visa Analysis. | ©2020 Visa. All rights reserved. |
Increasing the number of endpoints and deepening engagement will drive growth
Consumer | New | Value Added |
Payments | Flows | Services |
Credentials | Engagement | ||
• | Leading issuers | • | Activation& usage |
and co-brands | • | Authorization | |
• | Next generation issuers | • | Click to pay |
• | Unbanked | • | Tap topay |
• | Tokenization | • | IoT |
Acceptance |
•New acquirer / PSP partnerships |
•Fintech enablers |
•Wallets |
•New form factors |
•Underpenetrated use cases |
60 | ©2020 Visa. All rights reserved. |
Our endpoints are rapidly expanding through the opening of traditionally closed-loop ecosystems
Credentials | Acceptance | |
| | |
| | |
| | |
| | |
Wallets | ||
| | |
| |||
| |||
| |||
| |||
Networks | |||
Chilean local network | | | |
Caribbean local networks | | | |
Consumer | New | Value Added |
Payments | Flows | Services |
Total opportunity from current closed-loop partners:
1B+ 65M+
61Sources: Partner provided user numbers; Publicly reported user numbers; Visa Analysis.
©2020 Visa. All rights reserved.
Growing credentials to bring new consumers into the digital payments ecosystem
Consumer | New | Value Added |
Payments | Flows | Services |
•Continue to lead and grow sharewith traditional issuers | of the 25 largest portfolios | |
in North America are | ||
and co-brands | 19 | primarily Visa1 |
- Expandissuancewith neobanks, fintechs and digital platforms
- EmbedVisa credentialsin digital wallets
- Reach theunbankedthrough new products and government partnerships
- Drivetokenizationto enable new use cases
70%+ | Global fintech win rate2 |
1B+ | Potential credentials among |
Visa wallet partners | |
500M | Previously unbanked individuals |
connected to Visa accounts | |
from 2015-2019 |
~6B | Tokenized transactions |
62Notes: 1. Includes debit and consumer credit. 2. Fintech win rate based on analysis of deals won as a percentage of total pool of deals over a certain size.
Sources: Nilson; U.S. Consumer Payment Panel Study; Publicly reported numbers from large wallet partners; Visa Operating Certificates; VisaNet Data; Visa Analysis.
Enormous opportunity remains to expand acceptance
- Developstrategic acquirer partnerships to broaden Visa's acceptance reach
- Partner withfintechs andleading wallets to enable new acceptance methods
- Attractsmaller, cash-based merchants through QR codes / mPOS / tap to phone
- Invest inunderpenetrateduse cases
Consumer | New | Value Added |
Payments | Flows | Services |
5.5M | Net new acceptance locations | |
in 2019 via partnerships1 | ||
50M+ | ||
QR merchants in China | ||
accessed through AliPay | ||
and WeChat partnerships | ||
19M+ | mPOS devices globally | |
180+ | Cities with live tap to pay |
transit systems and 150 | |
more planned |
63Note: 1. Excluding China.
Sources: Juniper Research; Visa Operating Certificates; Visa Analysis.
Deepening user engagement and increasing usage accelerates growth in the core business
Consumer | New | Value Added |
Payments | Flows | Services |
- Increase user and selleractivation and usagethrough data, analytics and consulting
- Improveauthorization rates andreduce fraud in eCommerce
- Reduce eCommerce friction throughclick to payand tokenization
- Drive repeat usage inface-to-face (F2F) through tap to pay
- Betterintegrate payments into IoT technology that powers daily life
15% | Lift in cross-border spend |
per card when issuers use | |
Travel Predict |
$25B | Annual fraud prevented by | |
Visa Advanced Authorization | ||
$1T | eCommerce volume from | |
participants committed to Visa | ||
Token Service | ||
+10% | Year-over-year growth in | |
average transactions per active | ||
tap to pay card in top Visa | ||
markets from 2016-2019 | ||
~10B | Connected consumer | |
devices globally |
64Sources: Juniper Research; VisaNet Data; Visa Analysis.
New flows represent a $185T opportunity
Consumer | New | Value Added |
Payments | Flows | Services |
Consumer Payments | New Flows | Value Added Services |
Grow the two-sided network | Expand our Network of | Drive utilization of our |
by expanding Visa credentials | Networks to capture new | services to help our clients |
and acceptance points and | sources of payments and | grow profits and deepen our |
driving user engagement | money movement between | partnerships |
individuals, businesses and | ||
governments | ||
65 | ©2020 Visa. All rights reserved. |
We are focused on capturing new flows using our growing Network of Networks
Consumer | New | Value Added |
Payments | Flows | Services |
$185T
B2B | B2b | B2C | P2P | G2C |
$120T | $5T | $30T | $20T | $10T | |||||
• | SME, T&E, Fleet, | • | Merchant | • | Insurance | • | Friends and | • | Government |
Purchasing | Settlement | • | Payroll | Family | Benefits | ||||
• | Receivables, | • | Marketplaces | • | Gig Economy | • | Remittances | • | Tax Refunds |
Payables | • | Alternative | |||||||
• | Cross-border | Lending |
66 | Sources: McKinsey Global Payments Map; Visa Analysis. | ©2020 Visa. All rights reserved. |
The $185T opportunity is spread around the world
North America | Europe |
Consumer | New | Value Added |
Payments | Flows | Services |
$53T | $40T | Asia Pacific | |
Latin America | CEMEA | $74T | |
B2B | $8T | $10T | |
B2b | |||
B2C | |||
P2P | |||
G2C |
67 | Note: Regional totals rounded. | ©2020 Visa. All rights reserved. |
Sources: McKinsey Global Payments Map; Visa Analysis. | ||
Visa's Network of Networks strategy
Consumer | New | Value Added |
Payments | Flows | Services |
All Endpoints
Move money end-to-end for businesses, governments and consumers
All Networks
Optimize speed and costby using all available networks
Unify fragmented networks to complete transactions started on one network and finishing on a different network in a frictionless way
Always Available | Facilitate liquidity andguarantee payments through |
Visa Settlement Service |
Enable Value Added Services (e.g., tokenization,
Intelligentauthentication, fraud reduction, dispute resolution) on transactions
68 | ©2020 Visa. All rights reserved. |
Enabling money movement with Visa's Network of Networks
Consumer | New | Value Added |
Payments | Flows | Services |
VisaNet
Other Visa Networks
• | PLUS | •Visa B2B |
• | Earthport | Connect |
Non-Visa Networks
• | Card Networks | • | SWIFT |
• | RTP / ACH | • | Correspondent Banks |
• | SEPA |
69 | ©2020 Visa. All rights reserved. |
VisaNet | Other Visa Networks | Non-Visa Networks |
Senders:
Consumers
Businesses | The Network of Networks |
Governments
70
Consumer | New | Value Added |
Payments | Flows | Services |
Receivers:
Consumers
Businesses
Governments
©2020 Visa. All rights reserved.
Network of Networks transactions: Cross-border examples
Consumer | New | Value Added |
Payments | Flows | Services |
Illustrative | U.S. | Canada | |||
1 | Carded | VisaNet | VisaNet | ||
to Carded | Visa | Visa Direct | Visa Direct | Visa | |
2 | Carded | U.S. | VisaNet | ACH | Philippines |
to Non-Carded | Visa | Visa Direct | Via Earthport | Bank Account | |
3 | Non-Carded | U.S. | ACH | RTP | Germany |
to Non-Carded | Bank Account | Via Earthport | Via Earthport | Bank Account | |
4 | Non-Carded | U.K. | Visa B2B Connect | RTP | Singapore |
Via Earthport | |||||
to Non-Carded | Visa B2B Connect | Corporate Account | |||
Corporate Account |
71 | VisaNet | Other Visa Networks | Non-Visa Networks |
©2020 Visa. All rights reserved.
Role of RTP in Visa's strategy
45+ RTP networks live and 30+ in progress globally
Consumer | New | Value Added |
Payments | Flows | Services |
Ecosystems typically have three layers:
Applications and services drive revenue and profit opportunity:
Applications
End-user applications that access RTP infrastructure to move money or enable payments
Core infrastructure build is a high investment,low return business with limited scalability,no network effects and strong
Used by participants and / or | ||
operators to enhance | ||
Services | the transaction | |
Facilitation of real-time, account- | ||
to-account clearing and real-time | ||
Core | or near real-time settlement | |
Infrastructure |
government or bank consortium control
Infrastructure is typically open to be used by all market participantsto move money at a regulated price
Illustrative RTP
revenue opportunity
72 | Source: Visa Analysis. | ©2020 Visa. All rights reserved. |
We will utilize RTPs as part of our Network of Networks strategy
Consumer | New | Value Added |
Payments | Flows | Services |
Applications
Partnering with application providers to facilitate transactions using Visa's Network of Networks
Delivering key Value Added Servicesto RTP operators such as tokenization, | |
Services | authentication, fraud reduction and dispute resolution |
Core | Leveraging all available RTP systemsto move money as part of our |
Network of Networks platform | |
Infrastructure |
73 | ©2020 Visa. All rights reserved. |
Value Added Services help our partners grow | Payments | Flows | Services |
Consumer | New | Value Added |
profits by enhancing their utilization of Visa's networks
Consumer Payments | New Flows | Value Added Services |
Grow the two-sided network | Expand our Network of | Drive utilization of our |
by expanding Visa credentials | Networks to capture new | services to help our clients |
and acceptance points and | sources of payments and | grow profits and deepen our |
driving user engagement | money movement between | partnerships |
individuals, businesses and | ||
governments | ||
74 | ©2020 Visa. All rights reserved. |
Value Added Services grow revenue and help clients Consumer NewValue Added
capitalize on best-in-class capabilities and innovation
Payments Flows Services
Deepen relationships | ||
by enabling our | ||
Help our clients | clients and partners | Capture new |
to succeed | ||
grow profits with | sources of | |
platforms and | revenue to | |
services that | complement | |
unlock the power | payments and | |
of our networks | money movement |
75 | ©2020 Visa. All rights reserved. |
The convergence of physical and digital commerce drives increasing demand for Value Added Services
Consumer | New | Value Added |
Payments | Flows | Services |
Issuer & Consumer | Acquirer & | Security | Data Solutions | |
Solutions | Seller Solutions | & Identity |
Platforms that power | Secure, reliable services for |
payments transactions, | sellers and acquirers that |
enable growth and innovation | reduce friction and drive |
and influence the customer | acceptance |
journey |
Protections against fraud, theft and unauthorized use through advanced risk management capabilities
Data tools to help clients grow their business and drive differentiated experiences
Visa Consulting & Analytics
Actionable insights, recommendations and data-driven strategies for clients and partners
~$3.5BFY 2020 Projected Revenue | >20%Growth from FY 2019 |
76 | Source: Visa Analysis. | ©2020 Visa. All rights reserved. |
Visa offers a broad and expanding suite of Value Added Services
Issuer & Consumer | Acquirer & | Security |
Solutions | Seller Solutions | & Identity |
Consumer | New | Value Added |
Payments | Flows | Services |
Examples
Data Solutions
• | Issuer Processing (DPS) | • | Acceptance | • | Token Management | • | Visa Analytics Platform | |
• | Digital Issuance | • | CyberSource | • | Fraud Management | • | Benchmarking | |
• | Account & Transaction | • | Urban Mobility | • | Authorization | • | Data APIs | |
Controls | • | Tap to Phone | Optimization | • | Marketing | |||
• | Consumer Benefits & | • | Account Updater | • | Authentication | • | Underwriting | |
Experiences | Loyalty | • | Fraedom | |||||
• | ||||||||
• | Installments | |||||||
• | Dispute Management | |||||||
• | Open Banking | |||||||
Visa Consulting & Analytics
•Strategy | •Product | •Portfolio Management | •Risk | •Digital | •Execution |
77 | ©2020 Visa. All rights reserved. |
Our growth strategy has three levers to drive double-digit revenue growth
Consumer Payments
Digitizing cash & check
PCE1($T) CAGR
41 5%
31 | 18 | 4% | |||
14 | |||||
16 | 23 | 7% | |||
CY12 | CY18 | ||||
Cash & Check | Other | ||||
New Flows
TAM 4x the size of PCE and
low penetration rates
B2b | Visa |
P2P | Penetration: |
<1% | |
B2B$185T B2C | |
G2C |
Value Added Services
Expanding TAM with new
services and solutions
2x
FY 2019 revenue growth in Value Added Services vs. Consumer Payments
78Note: 1. Excludes non-financial transactions consisting of payments that are imputed by national statistics agencies such as homeowners' imputed rent; numbers may not sum due to rounding.
Sources: Central Bank data; Oxford Economics; Euromonitor Merchant Segment Study 2018; McKinsey Global Payments Map; Visa Analysis.
©2020 Visa. All rights reserved.
Key takeaways
We have a significant opportunity for continued growth in consumer payments
Our addressable market continues to expand as we extend into new flows
We are utilizing an expanding Network of Networksto move money for everyone, everywhere
Value Added Servicesexpand the revenue growth opportunity beyond payments and money movement and drive growth for our clients
79 | ©2020 Visa. All rights reserved. |
Notes and disclosures
During the three months ended December 31, 2018, we updated our definition of payments volume to now include all disbursement volume related to Visa Direct, in addition to the funding volume previously included. All prior periods presented have been adjusted accordingly. Please refer to the Operational Performance Data section of Exhibit 99.1 in Form 8-K filed on January 30, 2019 for more details on the impact from this update in our payments volume definition.
Total transactions represent payments and cash transactions as reported by Visa clients on their operating certificates.
On occasion, reported payments volume, transaction and card information may be updated to reflect revised client submissions or other adjustments. Prior-period updates, other than the change to the payments volume definition, are not material. Figures may not recalculate exactly due to rounding. Percentage changes and totals are calculated based on unrounded numbers. Constant-dollar growth rates exclude the impact of foreign currency fluctuations against the U.S. dollar in measuring performance.
All brand names and logos are the property of their respective owners, are used for identification purposes only and do not imply product endorsement or affiliation with Visa.
Any reference to PCE is as of 2018 unless otherwise noted and excludes non-financial transactions consisting of payments that are imputed by national statistics agencies such as homeowners' imputed rent.
For real-time payouts, actual fund availability varies by receiving financial institution, receiving account type, region and whether transaction is domestic or cross-border.
This presentation includes data researched by Euromonitor International plc for its client, Visa U.S.A. Inc. and its subsidiaries using industry standards. Euromonitor disclaims and excludes any and all liability for any loss suffered by any party as a direct or indirect result of the use of any of the Extracts.
Use cases are for illustrative purposes only. Program providers are responsible for their programs and compliance with any applicable laws and regulations.
80 | ©2020 Visa. All rights reserved. |
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Visa Inc. published this content on 11 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 February 2020 16:32:02 UTC