Visa Inc. (V) Earnings Call Transcript & Summary

Good afternoon. Thanks for joining us. I'm Chris Donat. I'm a financial technology analyst at Piper Sandler. Welcome to the keynote speech and fireside chat of our 17th Annual Exchanges and Financial Technology Conference. I'm very pleased today to have with me Al Kelly, who is the Chairman and CEO of Visa. Al's been CEO since 2016, Chairman since April of 2019, and of course, he's on the Board since 2014. So I'm not going to belabor the résumé here, but Al does have extensive experience from a career at American Express before joining Visa. So again, I want to welcome everyone here. Just to warrant you all with the schedule. So this fireside chat will last 40-45 minutes, then we'll have a break and resume at the top of the hour -- or sorry, at 1:30 Eastern Time.

So with that, Al, we're delighted to have you here. I want to just jump in with a question of the current environment here? Because you run what has to be one of the most globally dispersed companies on the planet. You get more than half of your revenue from outside of the United States. So how has the pandemic changed? How you manage in the early days? And are you able to do things like, delegate more to local executives? What's different?

Well, first of all, Chris, thank you for having me, and I hope everybody on this call is safe and doing well. It certainly has been a crazy time. I'm in my 12th week locked down and it's truly amazing. Although, I have found a routine, so I feel good about how things are going. Yes. One of the things that people ask me, "What surprised you when you moved from a Board member to being the CEO and actually the globality of the company?" I mean I knew how global it was, but it's -- it really is a global company. We operate in all but 5 countries in the world. In those 5 countries, we're not allowed to operate in because of U.S. sanctions. So we're not in Cuba, Crimea, Syria, Iran and North Korea. We're in every other country and territory in the world. We have 130 offices in 76 countries and we settle every night in 160 different currencies. At all times, we got to have some kind of global values and principles and then trust local leaders to make good judgments based on those values and principles. And it's not a lot of rocket science here. Having strong capable leaders and a very good flow of communications at a global company is critical. We operate in 5 regions, North America, Latin America, Central Europe, Middle East and Africa, Europe and Asia Pacific. Each of those 5 regions is headed by a regional president. Four of the 5 regional presidents have over 10 years of experience at Visa. Charlotte Hogg is the only exception who's got 3 years of experience, and Charlotte runs Europe. To your question, Chris, it's interesting. I don't know that much has changed because of COVID. And as a global company, one of the things that we're used to is stuff happens around the world every day, whether it's unrest in Venezuela or unrest that we've been dealing with in Hong Kong before COVID and now, unfortunately, recently in the last couple of weeks, floods in India. Our offices in Denver and Highlands Park, which was literally across the street from one of the more recent high school shooting incidences in America. Our offices in Nairobi were recently in a building that was shot by Somalian terrorists and -- while our employees were there. So unfortunately, when you run a global company, you run into a lot of issues. We've been -- we obviously have -- do a lot of listening to our local leaders. We have, as you can imagine, processes and meeting cadences that allow us to stay close to what's going on around the world. But basically, it's about putting good people in place, having established guidelines and principles, allowing local adoption of those and having good ongoing communications. And for me, I used -- I was traveling 85% of the time prior to COVID. It's a different world, but in many ways, I'm working longer days, not necessarily a great thing, working longer days and having probably more client interaction and talking to more of our employees than I ever did because a lot of that time was in airplanes. So I think that we, as a company, I've been very proud. After the first few weeks were rocky, right? I mean where everybody's trying to find their ground. But in the last 8 or 9 weeks, I think we really have been on our front foot. We're operating largely as normal and that's with about 97% of our employees globally working from home still today.

Got it. Want to ask another question about your executive leadership. You just mentioned that of the -- of your regional heads, 4 of the 5 have more than 10 years of experience. One thing that's striking to me when you look at the proxy is that most of the named executive officers are between sort of 4 and 7 years at Visa, the exception being Bill Sheedy who's got the remarkable 27-year tenure. How should investors think about the mix of experience that you get kind of out in the regions versus what you have in the -- from the executive offices, so to speak?

Well, you're right. If you under that power alley is 4 to 7 years. That said, there's a heck of a lot more than that in terms of running the company. If the company was -- if we relied in the 5 people, then the proxy would be in trouble. We need the other 19,995 folks to make up for our inadequacies. We have -- I think investors should feel very good about our team. I've had the ability to work and the pleasure of working with many, many good leadership teams. This is a very good leadership team. It's got great collective experience, great diversity. It's a very collaborative group. There's a good distribution in terms of age on the executive team. I mean, I think we range from 44 to 61. Some of our newest executives who are not in the proxy bring great experience. Paul Fabara joined us about 9 months ago. He had been at AMEX, although we did not overlap. I didn't know Paul at AMEX. And he's our Chief Risk Officer. He had worked at AMEX and Barclays before that. And Jennifer Grant, who runs Global Human Resources, has been with us for about 1.5 years. She came from Air Products. If you look at the executive committee, which is there's 13 of us, we have -- I actually looked at this yesterday. We actually have 100 years of Visa experience. Although if you take Bill Sheedy out, we have 73 years of experience because Bill has been here over 27 years. Chris Clark, who runs Asia Pacific, has been here 18 years. Oliver Jenkyn, who runs North America, has been here 11 years. So those 3 are kind of our veterans. Eight of us, to your point, not just the ones in the proxy, but 8 of the 13 people on the Executive Committee are here, 4 to -- 3 to 7 years. And then you've got Paul and Charlotte Hogg and Jennifer Grant who are the newer people. I'd also say we have great strength beneath that organization of leaders at the executive level. We pay a lot of attention to talent. At every single Board meeting, every single Board meeting, we review one area of the company from a talent perspective. And this year, at our strategic session with the Board in July, we're actually going to do a robust half-day talent review of the company. So it's something I personally pay a lot of attention to. Our Board appreciates staying very, very close to the people in the organization. And they have a good -- I'm one of these people who wants to give a good deal of exposure to the up and coming leaders in our organization. So even once a year, Chris, since I've been CEO, we'll have a dinner with the Board, where I'll invite 10 up and coming people or 10 brand-new people to the company, who are people they wouldn't normally get a chance to interact with. So they get a good flavor for the folks below. So I think investors should feel very good about our people. And for that matter, that's what we're all about. We don't make it daunting. We are a business of intellectual horsepower and innovation, creativity, experienced relationships, and that's what people bring to the party. And so investors should feel good about it.

Great. Part of the reason I'm asking these questions about the employees is, I was operating under the thesis that in this environment, it would be difficult to bring on new people. So who's ever kind of the team you start the pandemic with, is the team you finished. So you turned around and kind of prove my thesis wrong this week when you announced the appointment of Chris Newkirk as Chief Strategy Officer -- I think it was last week. It's a new role. It's actually -- as I look at it, one of your first big hires since you've been in the CEO seat. Can you just give us a little color on that? What's new about the position and why did you hire Chris?

Yes. Well, he's, I think, the fourth EC member I've hired. I hired Charlotte Hogg, who runs Europe; Paul Fabara, Chief Risk Officer; Jennifer Grant, the Head of HR; and now Chris Newkirk. We talked -- you mentioned Bill Sheedy. In the fall of last year, Bill came to me and said, "Hey, I think I'm going to retire." And I said to him, "A, you're not going to. And B, what the hell would you do with yourself?" So we actually, after a number of discussions, agreed that Bill would go to half time. So Bill's a half-time member of the Executive Committee, although he's always there when I look for him, so I don't know how half time he really is. But that's what he is. Bill had a number of responsibilities, and we did have a strategy group underneath Bill, but I decided it was an opportunity to relook some of the things we were doing and decided we could benefit from a Chief Strategy Officer. There's a lot going on in payments. It's -- I've been involved in this space for 3.5 decades and probably more has happened in the last 3 years than in the 32 years before that. And I didn't use a search firm. I literally started asking people who should I think about talking to. Who might be restless? Who might be willing to move? I was also looking for a real athlete. I didn't want to hire somebody who would only come in to be the Chief Strategy Officer. I wanted somebody who everybody would want to move to another role probably sooner than I'd want, in this case, Chris, to move. I didn't know, Chris. Capital One is a great client of ours, have a tremendous amount of respect for Rich Fairbank and the team of people that he has built at Capital One. It's phenomenal and it's a very progressive bank. One of the ones that we most enjoy working with. But somebody introduced me to Chris. I don't even remember who it was. He and I chatted, and then as we talked more and more, I think he saw it as a great opportunity. And I [indiscernible] veteran. He's a 12-year veteran of Capital One. He's worked overseas in Europe. He's worked in the United States. And in Chris, I think we really are getting the athlete that I sought. I think Chris will have a long career at Visa and will do a whole bunch of jobs before he sunsets his career. So we're excited about having him. He's on vacation for a couple of weeks now with his family. I presume it's a staycation, and we look forward to him starting a week from next Monday.

Got it. I wanted to ask a couple of questions about the current environment and how through the pandemic has changed the world from a lot of different perspectives. But one thing we saw with in March quarter was, the contactless volume's up 40% year-on-year, and that's been something that -- there's other geographies around the world where contactless is tremendous. And the United States has been a little bit of a laggard. Just as we think about the revenue implications for Visa, do you see -- or should we think about contactless card transactions as displacing cash? Or are they displacing other dipped or swiped debit and credit transactions?

This is a tremendous opportunity for the company and for players in the ecosystem. We call it tap to pay. Contactless, same thing, but we call it tap to pay. It's the most frictionless way to pay in a face-to-face environment for both the consumer and the seller or the merchants. It has really become a default in many parts of the world. In fact, as you alluded to, the U.S. is much further behind but gaining momentum. We have just about 200 million cards in the United States now that are enabled for tap to pay, Chris. It is the most in the world, by the way. We hope to have 300 million enabled by the end of this calendar year. But that's still only 1/3 of the 900 million credit -- debit cards there are in the United States. So there's still a lot of room for growth. Tap to pay definitely displaces cash in 12 countries around the world, over 90% of Visa's transactions are tapped to pay. In 50 countries, more than 50% of the face-to-face transactions are tap to pay. And what's really exciting about tap to pay is that we have clear proof that it increases the engagement of the customers. So for example, globally, we've seen an average of a 20% lift in volume for people who start to tap to pay. If we look at the U.K., where we've had a long set of experiences, especially with the Tube in U.K. transport, anybody who uses tap to pay in the U.K. subway system ends up having a 70% increase in transactions. And in Asia, where tap to pay has really taken off, we're seeing 4x more transactions for a tap to pay user than a non-tap to pay user. The U.S. is still kind of mid-single digits in terms of tap to pay, so way behind, but it's an enormous opportunity. The average American, Chris, makes 12 cash transactions a month, and 55% of all transactions in the U.S. are -- that are under $10 are cash. So the opportunity is really significant. And what's happened with COVID-19, and this is one of the really positive movements related to what's happened with COVID-19, is that people are seeing cash as something that carries germs. And we've seen numerous merchants actually say, "Hey, I don't want to take cash." So I think it's going to accelerate the adoption of tap to pay in the United States and continue to -- we'll continue to see higher penetrations of it outside the United States. So I think demand is rising and will rise at a pace much greater than it would have, had it not been for COVID-19.

Understood. Transition a little bit from -- I think Visa was tap to pay in the industry in general, that is an important public health consideration and does a lot to, I think, ease people's minds when one's sort of stressed in risking as well. There's a lot of pain out in the economy these days because of the pandemic. And we've seen some lobbying efforts by the National Restaurant Association and the American Nightclub (sic) [ Nightlife ] Association, which I confess I did not know was a thing until seeing about the National -- American Nightclub Association in the Wall Street Journal. Anyway, they're both looking for reductions in interchange fees. And my question to you is, would Visa consider doing any sort of temporary reduction in interchange fees to help certain merchants who are under distress? Or how are you thinking about interchange fees in this environment?

Well, let me make a couple of points about interchange fees. First of all, it's a vital part of a vibrant, innovative electronic payment system, plain and simple it is. Secondly, it supports financial institutions' ability to extend credit, which is the engine for commerce in the world and enables the purchasing power of consumers. The third point I'd make is that, certainly, to a degree, governments interject into pricing, in general, I think it's a bad practice. I think free markets are the best way to set debt pricing. That said, we're at a time where the most important thing that has to happen is we have to restart the economies and reopen places. And I think in doing so, as economies have been rocked in the last 90 days, the most important bedrock principle, I think, everybody should be following is do no harm. And I certainly get very, very concerned if somebody steps in and says, let's start to adjust pricing, at a time when we should be doing no harm because I think it could have a wide-ranging implications that are not going to be positive, in a time where we need to bring countries and states and reopen them and get those small business owners and those restaurants and everybody else's up and going. That's the most important thing that can happen right now for all of these small businesses.

Okay. And Visa typically does an update of certain pricing every year, but you've postponed that one this year, right? In an effort to keep stability and...

We did -- twice a year, Chris, we do changes to the ecosystem. Most of the time, not all the time, they involve pricing. We were due to do one in April and we have postponed it for now and that one did have pricing changes. But there are pricing changes up and down, affecting different industries, but we did postpone it because, again, in the spirit of doing no harm, we've actually tried to create a -- think about the infrastructure like we would during the holidays that we don't want to do anything that's going to disrupt the economies of the world any more than they've been disrupted already.

Okay. And then just one last one about your volume in the pandemic. You disclosed some data earlier this week about May activity. And one of the notable positives was in the United States, card-not-present excluding travel, which I think was basically e-commerce, is up nearly 40% year-on-year. Can you talk a bit about the benefits of e-commerce, not just because it displaces cash, but also because there's other revenue streams that you get from e-commerce, like the CyberSource business? Help us understand how e-commerce plays for you?

Well, it's interesting. The card-not-present, excluding travel, never went below 0. It got very close to 0 at the end of March. It was a very low single-digit in terms of growth, and then it was up 10% in mid-April. It was up, I think, around 30% in May. And as you said last week, it was up almost 40%, which is incredible. And the growth trajectory has gone up even as face-to-face has started to come back a little bit. Although, again, if you looked at the data we disclosed and looked at the graphs, face-to-face is still like negative 20% to 25%. So it's not as if it's doing extraordinarily well. This e-commerce runway is, again, one of the most exciting things to come out of COVID. The reality is that only 14% of global retail spending is in e-commerce. So there is an enormous opportunity for growth. And for us at Visa, it completely displaces cash. You can't stuff cash into an iPad or an iPhone or any other device. So we get around 3x the volume in e-commerce that we would get in the face-to-face world because cash isn't an option. So it's a great thing for us. Economically, we're indifferent. I think sometimes, people have different views. But in terms of the actual fees we get on the transaction and processing the transaction, we get the same fees whether it's card-present or card-not-present. So economically, we're indifferent. But you alluded to in your comment that we could do other things and that's true. We have -- we can sell generally more value-added services in a card-not-present e-commerce situation. And let me give you 2 examples, one you mentioned and I'll come -- I'll do that in a second. One is fraud. Ever since we put chips in cards in the United States, fraud has shifted and this had nothing to do with COVID. Fraud shifted from the face-to-face world to the online card-not-present world. And so our risk and data capabilities become very, very valuable in that environment. You also mentioned CyberSource. It's become a very meaningful business, trillion dollars of volume, 450,000 merchants around the world. And it's a gateway that enables e-commerce or omni-commerce for a merchant. It's, in essence, the people just think about it, our CyberSource is the equivalent of kind of the terminal in a face-to-face world. It's enabling payments of any kind to be taken at somebody's website for commerce. And so we think that between things like CyberSource, fraud capabilities, risk capabilities, we have the ability because e-commerce is moving so rapidly that we could sell those other services. The last point I'd make, Chris, is it wouldn't surprise me if we have seen 3 to 4 years -- or we will see 3 to 4 years of the acceleration of e-commerce adoption in a 6-month period because of what happened in COVID. I mean, we've seen huge increases in the number of first-time e-commerce around the world. We had 13 million people in Latin America activate an e-commerce transaction for the first time last quarter. We have seen 30% increases in the United States in terms of people who are active in e-commerce. So it's a very exciting development that I think has got some permanence to it in terms of upside for the industry and for Visa.

Got it. Well, I'd like to shift gears into a set of questions around financial technology and your bank relationships. I think about Visa, like since the early days, as an industry association, Visa had to strike a balance between the bank members, the card issuers and that's a mix of large and small banks. In today's world, you throw fintechs into the mix. And yesterday at our conference, we had panels with Time and SoFi, Betterment, Robinhood. Time was singing the praises of Visa Direct. Can you help us understand though as you have these challenger banks, in some ways, that are -- I think the traditional banks might see the most threats. But how do you balance whose needs you're trying to help meet, the fintechs or the bank?

A very good question. One of the roles we play is to make the ecosystem as good as it can be. And in my mind, Chris, the more scale, the greater the risk -- greater the reach, I should say. The more security, the more people are comfortable coming on to a network. And it's good for everybody. Our business is solely -- one of the things that's a bedrock principle of our strategy is partnerships. The ecosystem is based on partnerships. And frankly, we're agnostic to who wants to be a partner with us and we don't pick winners and losers. When it comes to partners, we want to provide individual attention and build a depth of relationship that works for that partner, whether it's a big money-centered bank that has a credit card business or it's a small fintech that's going to issue credentials. But anybody who's going to grow the nodes on the network, where we can add more card credentials or any form factor for that matter, and on the other side, somebody who's going to grow the number of merchants that are available for acceptance. We want those people to be part of our network. In fact, in any good network, each participant should get more out of it than they actually put into it. And that's our goal, is to make the network as big and as strong as it could possibly be. And whether it's a big bank or a fintech, I think there's a few things we bring to the party for everybody. One is our brand. We really have an outstanding brand. And it's -- every third-party analysis would show that it is the preferred brand in electronic payment systems. And it drives incremental spend when people see it and use a Visa credential. The second thing we bring is our network platforms, our VisaNet, our debit processing, Visa Direct and Earthport and then downstream, both Plaid and B2B Connect. VisaNet operates at almost [ 6 9s ]. It's got world-class cybersecurity. We have 600 APIs that are available to be consumed by our partners. And those APIs now are getting 1 billion calls a month. So they're really getting a lot of use. The third thing we bring to the party and why I'm appreciative of the first couple of questions you asked me about people is we bring our people. We bring local expertise about products and services. We bring expertise about issuer and processing solutions, seller solutions, data and loyalty. We've got a big consulting and analytics arm. So those people that we bring to bear and make available locally to a fintech or locally to a bank are equally incented to do and bring volume into the network and drive high levels of satisfaction. The only thing I would say that's different about the fintechs, and we were a little bit slow to recognize this, is that they can't deal with the same bureaucracy. They want more speed. And so we developed a fintech fast-track program. We started it in Europe and we've spread it now around the world. And so people can get to our network very, very quickly. And I think that's a real positive for us and for them. But net-net, the more, the better, big, small, single country, multi-country players, where our door has got a big open sign on it to come talk to us about being a partner on our network.

Wanted to ask one question around the banks because at Piper Sandler, we watch bank mergers very closely. Visa had 2 important wins this year through banks that combine through mergers of equals. So Truist and TCF. And for Truist, BB&T was mostly a Visa shop, while SunTrust issued some cards with Mastercard. I know you can't tell us from the Truist perspective why you won, but can you give us a little color on how you make that winning pitch when there's a bank merger and businesses on the line?

Well, I subscribe to the theory that we're on -- under a microscope every day. We've got to earn our client satisfaction and earn their business every time we work with them. And the day we get complacent is the day that we're in some trouble. In my mind, complacency has to be the enemy. I'm not sure there's a big difference, but to that end, whether it's a merger situation or just a deal renewal, I should say, I mean, it starts with there's a market clearing price, right? There's -- we got to be competitive at some level on price or you're not going to be in the game. But after that, I think you look to distinguish yourself in different ways. And obviously, our brand, which I talked about a few minutes ago, is a big part of that. Capabilities are a big part of it. The people I talked about are a big part of it. The creativity you can bring to the party, your approach to how you suggest you're going to partner together is important. I think that was our approach, both in TCF and with Truist. I think in Truist's case, as you well know, they are undertaking a huge, bold and exciting move to create a new brand. That is not easy. That is a big, big step that Kelly King and Bill Rogers decided to take together to establish a new brand. And I think that we spent a lot of time talking to them about brand and how we think about brand and build brands. And I think that our experience with brand, our view of how the Truist brand could get established, I think, resonated with the Truist team. I also think we try to approach these deals by, yes, you got to get past price, and then you got to talk about how, together, you're going to build a partnership that's targeted and based on growth. And that's what we try to do. It's about having a real frank discussion about what it's going to take to grow together and build that relationship through the negotiation, so that when you've signed the contract, you're hitting the ground running and you've got the people in place and hopefully the basis of a trusted relationship to get going. Needless to say, we're thrilled to be partnering with both TCF and with Truist.

Great. And I have another one from kind of a bank issuer perspective. You mentioned that you're no longer spending 85% of your time traveling and you're -- one benefit is you're on the phone more with card issuers. From my research colleagues in Piper Sandler, we know that the card issuers are going to face a number of challenges over the coming months. They've got impending charge-offs in the next 6 months or so, forbearance programs. We've got a lot of shifting customer behavior. So how can Visa help the card issuers navigate this environment?

That's a good question, too. We've been spending a lot of time with our clients just sharing information. And a lot of the best clients are sponges for information. They realize that the more they learn and the more access they get to information, the better things are. I guess I'll highlight 3 things, Chris. One, as I mentioned a few minutes ago, our Visa consulting and analytics arm. We actually have 500 dedicated consultants now. Last year, they did 1,000 projects. And right now, what are they doing? They're helping issuers set up and optimize their e-commerce strategies, they're helping them rethink authorization as the volume has shifted to card-not-present. They're helping them analyze their portfolio. They're helping with their digital acceleration, particularly in some cases, in terms of acquisition, to helping them with risk management. They're helping them with customer engagement. So the [indiscernible] that we have actively going on with our clients around the world. Second area I'd highlight is risk services. That's probably our oldest area of value-added services. I mean, we've been -- we've had various forms of risk and authentication and authorization products for some time. They're essential to a lot of our clients, and they're very important in this card-not-present e-commerce world as things have shifted. We operate at remarkable scale there. We evaluate in one of our products, our flagship [indiscernible] we evaluate 500 attributes in 1 millisecond to provide authorization information to our clients. And that product is called Visa Advanced Authorization and a lot of our clients use it. A third area we're helping clients is data. We have something called the Visa Analytics platform. We have now 5,000 active clients on that platform. It is a big time up since the COVID started. In fact, we saw a 33% increase in the [indiscernible] went to Visa Analytic platform for in the second quarter -- over the second quarter of the prior year. And so I would say that advice, risk services and data are at the top of the list of the things that we're doing for our clients right now. So -- and we'll stay engaged and provide the support they need as we move forward.

Okay. I wanted to ask you one numbers question about the incentives that you have out there. Because traditionally, we think about incentives as being roughly 20% of gross revenues. But it looks like we might see a little bit of a shift in the gross revenue lines, which you report, particularly international transactions looks like it's going to be more adversely affected. So basically, the question is should we think about the incentives on international transactions as roughly 20%? Or given that a lot of the incentives are around card issuance and merchant acceptance and usage, it seem a little different from international transaction.

Okay. So let me try to give a little bit of color here. First of all, our philosophy is that we want alignment with our clients in terms of progress. We want to pay for performance. So the majority of our incentives are variable and they're tied to payment volume. As you would see changes in payment volume, you would see requisite changes in incentives. Some contracts, Chris, have cross-border specific incentives, but it's not the majority. So if cross-border is predominantly impacted and domestic payment volume is not, you will not see a stronger correlation between gross revenue going down and incentives going down. To be more clear, gross revenue will go down more than incentives will go down in that particular case. But it's also important to note that there's a -- opposing -- an important opposing force here, which is that we have contracts where we have multiyear incentives. So it's an incentive for performance over multiple years. And what we do is, as the client is advancing to the degree that they are meeting those incentives, we accrue on an ongoing basis, annually, as they're earning those incentives. But if there's a significant drop in performance, such that we view them as not being able to reach those levels of volume to meet those incentives, in one quarter, we could unravel an incentive that is a multiyear value to it but we've unraveled it in one quarter. So there could be those cases that occur as well. The last point I would make is that, remember that a number of our revenue streams, an increasing level of our revenue streams are not tied to incentives, CyberSource, which we talked about earlier, $0.5 trillion of volume is not tied to incentives. So net-net, I think investors -- I would say to investors that they should expect that our incentives as a percent of gross revenue to not be materially different from what we thought at the beginning of the year before we knew about COVID-19.

Okay. And I think I've got time with you for about one more question here. So I wanted to ask one about competition, really, and more specifically competitive threat because over the years, Visa has dealt with a number of different ones. You could arguably call the creation of the Discover Network a competitive challenge and then MCX and you had Softcard or Isis as it was branded. And we think about China, you've got Alipay and WeChat Pay. I'm just wondering how you think about the competitive environment out there? And is there anything you're concerned about? Whether it's Central Bank digital currencies or is Visa just trying to focus on the key relationships you have and make sure that those are done and the business takes care of itself? What's your philosophy on the competition here?

That's a glass of wine question. There's a lot packed into that. Look, first of all, I've had it be my philosophy since I became CEO that everybody is a potential partner until they prove otherwise. And that we shouldn't be concerned because somebody else is doing something. The reality is the payment ecosystem is loaded with frenemies. We have very good relationships and contractual relationships with PayPal on certain fronts and we compete on other fronts. We have seen -- one of the incredible changes that we've seen in the industry is that 3 years ago, people were telling me that all of these closed network -- proprietary wallet networks that were being created by mostly nonfinancial institutions, whether it's Paytm or Gojek in Asia, were going to be a real problem for Visa. One of the great things that's happened in the last 12 months is that, these proprietary closed networks that were heretofore not available to Visa have decided to open them up. They've seen Visa's brand, our global reach, our cross-border capability. All as things that could be very additive for them. And a lot of them now have become issuers and/or acquirers. And some of that -- the economics of being an issuer and acquirer in an open network than a closed network. You mentioned -- I think you mentioned the guys in China. We now have deals with both Ali and WeChat for accommodating an inbound person into China to shop by loading their Visa card into WeChat or Alipay, and with the co-brand card, the first that Tencent has done with an international payment scheme for Chinese customers who are -- would leave China to shop or conduct business as global citizens. The big techs, we have very good relationships with, Apple, Google, Facebook, Amazon. I mean, these are all people that we interface a lot with and respect tremendously. And for the most part, we have a lot of depth to our relationships. And look, the bottom line is, some people will be strictly competitors. And frankly, the people that are the strictest competitors to us are Mastercard and cash. Beyond that, almost everybody else is a partner to somebody else here or they're a partner to us and a competitor somewhere else. But that's not new to us. We've been dealing with those kind of multidimensional kinds of relationships for some time in Visa's history. Certainly, it's more complex in the last few years as many, many more players, the fintechs that you mentioned and we talked about earlier, have come into play, the big techs. But all in all, I feel very good about the way we partner, the level of our partnerships and the way we have decked our people against those various players. So I think we're in a good place there.

Excellent. Well, Al, with that, we're out of time here for what we asked you for. We appreciate you taking the time to show up at our Piper Sandler Virtual Exchanges and Fintech Conference. Appreciate you being our keynote speaker for today for the fintech side because you touched so much of the bank and the new fintech world. Visa plays very well in the frenemy environment, which I think is -- can be a challenging place to play, but you play it successfully. So thank you.

Thank you, Chris. Thanks for having me, and thanks to everybody else for listening to me. And I hope everybody stays well. Thank you.