Visa Inc. (V) Earnings Call Transcript & Summary

Well, welcome back, everybody. Thank you so much for joining us again today, and I'm super excited to have as our keynote speaker, the management team of Visa, which we've been long friends with for a very, very long time, and we appreciate that. From the company, we have Oliver Jenkyn. Oliver is the Executive Vice President, Group President and Regional President of North America. So I have to say 2 things. One, thank you so much for being here. And that title is almost as long as the operating rules of Visa. So we got to work on simplifying these things a little bit, Oliver, don't you think?

Yes, we'll start with the title. The operating rigs are more important than the title so we might do that [indiscernible]

There you go. So look, thanks so much for being here. Really appreciate it. What we've been doing today is starting at a very high level with a lot of companies and then kind of funneling down in to some more areas of specificity. So if we could start, I know you've been putting out some incremental updates around what you're seeing in the economy in the backdrop. And so if you could start there, by just providing -- obviously, in the context of North America and anything else you want to share, but what's the backdrop look like? And maybe what do you expect in terms of the cadence of performance as we progress throughout the year, given all the insight that Visa has?

Yes, for sure. And I think -- well, first of all, thanks for having me, Dan. It's always great to see you and have a conversation. As you know, we recently released an 8-K. So some of what I'll say, I'm sure you guys have already read. But -- and I should also say most of what we're looking at internally is indexed to 2019, the last clean year. Just as we're running the company, there's just a lot of noise comparing to anything that happened subsequent to 2019. So that's a lot of what we're looking at. And some of the key things that we look at, the numbers are pretty good. We feel pretty good about the health of things and where they're heading. Some of the key numbers I look at, total PV in May in that 8-K, 132% of 2019, up a bit from April. We're really pleased to see that debit spending levels in the U.S. are holding firm, even though the government stimulus is further and further in the rearview mirror, that spend on debit is holding up, which is great. Meanwhile, credit is recovering. I think debit was at 151 of 2019 in May. Credit recovered to 114 of 2019, an improvement from April again. So it's great to see debit holding while credit is growing. Card-present improved. I'm just looking at my numbers here, to 113, up 4 percentage points from April. So that's great. Card-not-present, excluding travel at really strong levels, 159% of 2019. So everything feels great. Obviously, travel spend and cross-border travel is still struggling. Domestic travel in the U.S. is doing well. It's almost back to 2019 levels. So overall, that's -- it's pretty healthy, and we feel pretty good about. It's a nice backdrop to have heading into the next year.

As the team was thinking about setting up their views of the world, let's say, a month or 2 ago and looking at the statistics that are coming out today, are you sensing that they are better than what you maybe had anticipated? Or were they generally in line with what you guys had originally thought?

I think they're pretty close to being in line. We're very focused on the next few months of cross-border and specifically travel-related cross-border. And so I think the jury is still out. There's some recovery in green shoots in cross-border travel. But we really are keeping our eyes glued to those numbers to hopefully begin to see a recovery. I think on the domestic numbers that I quoted, it's pretty in line with what we were expecting. We were pleasantly surprised, and we're going to stay focused on, hopefully, continuing to be surprised on debit holding at those strong levels while credit recovers. That is a really powerful thing if that can continue because that's been showing great cash displacement, greater habituation for digital payment usage if that can be a structural change that continues. So we were expecting that, but we're really happy to see that sticking and want to stay focused on that.

Okay. So I did want to mention a little bit around kind of U.S. inbound and U.S. outbound travel. I feel like -- if any indication of what other people want, there's a huge bolus of demand in my mind of things I want to get out and do again, not done it yet, but maybe at some point, we'll be able to do that. But I am interested to know as the lens that you look through, what are you seeing in terms of pent-up demand around inbound and outbound? I know recently you've talked about some specific corridors, U.S. to Mexico being one of those. So maybe if you could share kind of your perspective of what you're seeing. And maybe also what an outsider of Visa should be maybe paying attention to.

Yes, these are all great questions. Let me make a few points. First of all, I'll just -- I'll tell you some numbers that I'm sure you read in the 8-K, but when we look at global cross-border, excluding intra-Europe, I just look at my 8-K again here, that continues to improve 85% of 2019, up 6 points from April. Again, a lot of that is led by strong e-commerce, but there's improvement in the travel spend as well. I think they went up to about 45% at 5 percentage points. So overall, healing. Second thing I'd say is, as travel recovers, it's disproportionately going to be domestic. And that's what we're seeing now. It's not helping the cross-border numbers, but we are seeing that coming back. Last I looked, the domestic travel numbers within the U.S. either were very close to 2019 or I think have subsequently crossed 2019. So that pent-up feeling, Dan, of wanting to go do something, it's happening. But right now, it's remaining domestic disproportionately. And I think that will probably stick for a while until these border restrictions and the quarantines and everything else start to lighten up. So people are getting their fix, if you will, for travel, but they're going to the beach, right? They're doing short-haul flights. Maybe coming out to California or maybe going to New York for a summer trip or something like that. So we're definitely seeing strength in travel, but a bit more domestic. In terms of cross-border in the U.S., I get a few notes here. We have talked in the past about the U.S.-Mexico corridor, and that corridor has nothing we've seen great spending levels as U.S. travelers, I'm talking outbound here. U.S. travelers into Mexico, up 70% from 2019 levels. But also in Europe, a couple of examples, U.S. to Spain and U.S. to Greece, airline booking volume for each of those countries in May was 2.5 times what it was in April. Spain actual bookings are still below 2019, but Greece is above. Turkey is also above. So there's other corridors that we're really starting to see heat up. On inbound to the U.S. is still sore, I mean, it was down 70% versus '19 in March. We recovered a little bit every week in May. We're very focused on the U.S./Canada corridor. That's our biggest country-to-country corridor in the world, and it continues to have significant border restrictions. Canada as we struggled a little bit with its more than a little bit with its vaccine distribution. And so that volume is still down about 80% in 2019 as of Q2, slowly recovering through May. But I am Canadian, my family lives back in Canada, so I watch that corridor quite closely, and I'm optimistic that, that will start to open up for Canada inbound. So again, I'd say a lot of green shoots, but most importantly, the research that we're seeing and the conversations we're having is very similar what you said, Dan, there's pent-up energy to get out and do things. And while we may be starting with domestic travel, there's a desire for international travel, for people to get back to normal. And the financial wherewithal is there. It's just a travel friction, health restriction. So we're -- we think it will recover. We think it will cover well specifically on the consumer side, but it's going to lag. We need those very high friction restrictions at the border to lighten up.

Right. So in terms of external metrics that we need to keep a mind of is obviously going to be border restrictions. There's a huge correlation obviously to the PV growth associated with that, it sounds like. And so we'll be mindful of that. And obviously, working for a Canadian bank, we're watching that corridor pretty tightly, too. So we're empathetic. Let's jump to some big themes. And this is in the context of kind of a post-pandemic world and thinking about how Visa is positioned relative to some of these themes. So I'll just throw some ideas at you, and then you can tell me where you guys fit and what your tactics are here. So obviously, there's a huge shift towards e-commerce and the need to have an omnichannel experience amongst consumers and the merchants quite frankly. So where is Visa in that regard and kind of what role are they going to play in terms of being able to sustain that for all of your constituents?

So e-com is a great one. In many ways, this is a very simple point. And in many ways, it's a very sophisticated point. The simple point is, listen, the rise of e-commerce, it was taking place well before COVID. It's obviously a huge trend that's gone on for a long time. In so many ways, it's much to do about nothing. But in other ways, we think it's a huge shift. We estimate that COVID pulled forward 3 to 5 years' worth of consumer behavior changes. And to look at the growth rates that you see in e-commerce, it's an impressive set of numbers of e-commerce usage, e-commerce growth relative to card present. But what's even more impressive is to think that literally hundreds of millions of people have to change their day-to-day behaviors to support those huge e-commerce numbers that we saw. And it's that sort of habituation and muscle memory formation that took place that really has us believe that there is a permanent -- we pushed ourselves past the tipping point to a permanent change in consumer behavior. We're doing a lot of work looking at the segmentation of how different consumers change behavior. So you've got first-time users who, my parents, for example, who didn't buy anything online. And there's a huge number of new Visa cards being used online for the first time. Then you've got category expanders, people who really bought things online, but they only did it in a couple of categories and only up to a certain size. That group significantly expanded what they were willing to do online and how often they were willing to do it. And then you've even got the digital natives, who they thought they were all in, but now they've really gone all in. So no matter where you started in that continuum, every segment that we've looked at has gone significantly deeper and they've liked it. And so again, we think that, that consumer behavior has changed, that habituation has changed, that muscle memory has formed, and we don't think it's going to go back. And so we think that's hugely valuable for us because it's not easy to make a purchase online with a $10 bill. You can't jam a $10 bill into your iPhone and make a purchase. So it's going to be an electronic transaction. And that is a huge benefit for us on the issuing side. And then on the acquiring side, a lot of the capabilities that are required to meet these new retail models, the risk scoring, the transaction management, the omni-commerce capabilities to buy online, pick up in store, return in some other store, ship back, like making sure the payments are supporting all of those new ideas, that's on us. It's on the payment facilitators, it's on the acquirers, it's on the issuers. And I think we've done a good job of living up to the test but we feel great about it. So again, the rise in e-commerce, I almost blush by mentioning like that is a thing because it's an eye roll. But if you actually go deeper, this is an enormous change. And just having hundreds of millions of people change of how they behave, that's hard to do. And it was done out of necessity and people liked it. So we feel great about this and we think it's going to stay.

Yes. When you think about all those incremental new on-ramps that are being created, some are through partners and fintechs and others, are there areas of distinction that Visa brings maybe greater areas of strength to help accelerate those on-ramps and in particular, going into e-commerce?

Yes. Let me think of a few. One of the first things -- I think one of the areas that we can really help is we have a strong brand. We have a big voice. We sort of sit in the middle of the whole ecosystem. So one of the most important things that we spent time on when the pandemic hit was trying to help smaller businesses get online, a lot of the Main Street merchants. They're just -- they're physical store only. They're card-present only. And so we had a significant effort to work with our acquirers and our payment facilitators to try to launch a significant campaign through digital marketing, through media, but also through street teams where we're going out as things start to open back up and say, "Let us help configure your physical store with tap to pay, et cetera. But let's see what we can do with the digital-in-a-box ways to help you get online quickly so that you're diversifying your sales pipeline and you're able to actually sell them lines." We spend a lot of time and a lot of money, all of which is a great ROI because we're bringing people, small businesses online. We spent a ton of time on that, and we're going to continue to do that. And then I think CyberSource as a platform is an enormous task for us here. CyberSource both goes directly to merchants where we can bring some of our capabilities, which we think are best-in-class for all facets of helping a merchant sell online. But we also partner with a lot of acquirers. We white label CyberSource quite invisibly at times to some large, very sophisticated acquirers to make sure that every acquirer doesn't have to duplicate the investment to build some of these capabilities, but we can build it once, extend the capabilities to them and then they can go and help serve their clients in an omnichannel way very effectively. And so that's sort of an enabler model that we've got partnerships in Europe. We've got partnerships throughout Asia, partners in North America, where we're doing exactly this. And I think that's an area where we stand out. And we're doing it oftentimes with big institutions that are both acquirers and issuers. So it tightens our relationship and helps them grow their business.

Yes. I think oftentimes, CyberSource is kind of a forgotten asset for Visa, but it has clearly emerged as a huge resource for so many companies. We definitely hear more and more about that. When we think about some other themes that are -- again, like you said, you kind of blush because they seem so obvious. But as you double click, you realize that they are multifaceted and there's just so many things to do in there. And one of the things that you guys have been talking about for a long time is really tap to pay and contactless payments and all of those kinds of things, which we in the United States have been, I think, slower to adopt than a lot of other places around the world, but we clearly caught up. So what's the current environment for that as you talk with clients and merchants? What kind of adoption rates are you seeing really today and are expecting into the future? And is this going to continue to be something that proliferates, I would think, into the next several years?

Yes, this is a great question. I think as much as I've talked about e-commerce being the key driver of growth throughout the pandemic, the fact is people still go to stores. And during the pandemic, when they went to stores, they wanted safe and secure, but they wanted clean and contactless. And so as I was saying earlier, it's very hard to change the behavior of hundreds of millions of consumers. It takes time to push things past their tipping point. It can take years. And with tap to pay around the world, we've been at it for a while, but COVID as terrible as it was, provided that sort of catalyst shock to change behavior. And perhaps even more so than e-commerce, the area that it really changed was the situation for tap to pay. And so I thought the numbers taped on the wall beside my office because I'm a huge advocate of tap to pay and have been pushing it for a while. So let me just read it out. Canada is almost 80% of all tap to pay of all face-to-face transactions, almost 80% are tap to pay. In Europe, it's over 80%. Australia, it's almost 100%. Across Asia, it's over 50%. And in the United States, it's now over 10% from basically a dead stop a couple of years ago. So right now in the U.S., we're a bit over 1 in 10 transactions with tap to pay, 1 in 10 of all face-to-face transactions of tap to pay. About 350 million cards, last time I looked, 268 of the top 300 merchants, 23 of the top 25 issuers are issuing contactless. The infrastructure has been built. The [indiscernible] has been consumed. Now it's a matter of rolling it out over time. And if you look at the sort of S curve, the adoption curves of getting to 10% and then how quickly it takes to get to 50%, if the U.S. follows a market like Australia or some of the other markets, if you look at how long it takes for them to go to 10% to 50%, it's about 2 years, a little bit more than 2 years. So we think in a couple of years, we could easily be at 50% of face-to-face transactions in the U.S., maybe 2 to 3 years I'll say. So that habituation has really formed. And I care less about what that percentage is, I care about the number of people who have done it and had a good experience and worked it through. And so we feel fantastic about it. We think this is the new normal. We have globally 20 countries right now where over 90% of all face-to-face transactions are tap to pay. Around the world, we have 65 countries where over 50% of all face-to-face transactions are tap to pay. And if you exclude the U.S., we're almost at 70% of all face-to-face transactions of tap to pay. This is just the new normal. This is how it's going to be forever. And the U.S. is going to catch up, and we're really making progress. And I feel great about that because it's simply better. The chip technology brought the security but it slowed the transaction experience now. Tap to pay has the same security and the same architecture as contact chip, but it has the speed and the efficiency even more so than the old mag stripe technology. So it's the best of both worlds, and we're super excited about it.

That's awesome. How do we think about -- you bring up some interesting points there. And one of them is just reimagining the point-of-sale in a post-COVID world. And tap to pay has a role in that. But I'm wondering as you think and you put on your kind of innovation hat, what do you think is also coming down the pipe in addition to maybe tap to pay or even another evolution of that unto itself?

Yes. This -- I've really enjoyed and been impressed by watching the retail community adjust the physical point of sale during the pandemic. It was done out of necessity. It was done rapidly and, by and large, has been done really, really well. It's a little kludgy at times, but I forget kind of accepted it. And so our view is a lot of these things, buy online, pick up in store, the locker models, the virtual fitting room stuff like that, a lot of that stuff was being tested prior to COVID. People were dabbling with it. Omnichannel was good PowerPoint slide where that was being discussed at executive committees and Boards. But this really pushed it into operational mode. People putting it to work. And again, I think a lot of those behaviors will stick. We see a lot of great things happening in omni, be it buy online, pick up in store at scale, curbside pickup models, either picking it up or going to a locker could even change how malls and strip malls are actually physically designed to enable this. We're seeing a lot of like strange bedfellows in terms of partnerships between tech delivery entities and traditional retailers where they don't have the distribution and they're finding ways to work together, again, making strange bedfellows, but it's working. We're seeing changing roles of stores where you've got a lot more sort of showroom model stores like a Warby Parker. You've got fulfillment centers where it's part store, but also part distribution. Again, a lot of this was happening before, but now it's taking hold. A lot of digital first experiences. We were so long -- it was so long that we couldn't go to stores that a lot of retailers bit the bullet and made the big investments on augmented reality, virtual fitting rooms, those sorts of models, which, again, they existed as sort of innovation ideas, but now people actually really made the investment and are trying them out at scale. We think a lot of this will stick. We also think as we come out of the pandemic that a lot of merchants and retailers will say, we tried a lot of things. Which are the ones that we want to double and triple down on and move to industrial strength and stick with? And which ones are nice experiments? And we actually think a lot of these will change. We, again, have been very impressed with what's happened. We're most focused on is ensuring whatever merchant community decides to do, but the payment infrastructure can support it. And so again, the omnichannel, buy online, pick up in store, how does fraud work in those situations? How can you tie systems together to make sure return is still credited back appropriately? How do you manage security if you're actually paying for it with a tap outside on a portable reader and protect WiFi? How do you tokenize those transactions? There's a lot of considerations that we're impressed. There's a lot of considerations on the payment side that we want to make sure that we the acquirers, the payment facilitators are ready to support the great ideas that the retailers are developing.

Yes. You said you had done some studies internally about how these compression cycles have moved forward consumer behavior some 3 to 5 years. We've touched on a couple of them. I'm wondering, were there other findings that you can share with us that we maybe are not quite as aware of or maybe haven't been quite as on the forefront as we've thought about the payment space.

And so, when you say compression cycles, what -- say, what do you mean by that? I just want to make sure I understand.

I'm sorry. You had said that you brought forward consumer behaviors and things that would have otherwise taken 3 to 5 years, you brought them -- these studies that you had done internally. And so my question was really, I call them compression cycles because they seem as though it would have happened over a course of 5 or 6 years, but given COVID, it's compressed them down to 1 or 2 years or happening even more suddenly. So my question is just as you've gone through that process, what else did you glean that maybe it was beyond e-commerce and omnichannel and some of these other things that you maybe haven't shared as freely with the market? Yes.

Got it. Got it. Yes. I think one of the biggest ones, which, again, goes in the bucket of I blushed to say because everyone knows it anecdotally, but when you look at the numbers, it's actually quite stark. Is it decline of cash and actually doing surveys and talking to consumers about their use of cash? Actually, just to make sure I get it right, let me just follow up the numbers. Some of these are my favorite numbers so I keep them around. Yes, here it is. So everyone knows a cash decline significantly in the COVID environment for plenty of reasons. It's dirty, not a lot of in-store spend, et cetera. But here's a few data points for you. So 23% of Americans prefer cash as their medium of payment. That's 2019. That's pre-COVID. I don't understand these people at all, by the way. But anyway, 23% preferred [indiscernible] payment mechanism. And also I want to be clear, it had been stubbornly stuck at 23% for years. During COVID, it fell 5 percentage points to 18%. That might not seem like a lot, but as a payments nerd, it's a lot. And it's not just what they stated as their preference. If you actually look at cash's share of total transactions, pre-COVID it's about 26% and stubbornly stuck there. During COVID, it fell 7 percentage points to 19%. Again, these types of shifts for people who live and breathe the industry are enormous shifts. The final one of my favorite one, pre-COVID, 50% of Americans define themselves as light or noncash users. That basically means they don't use cash at all or they use it maybe once or twice a month. They're very, very light cash users because it's annoying. They don't really do it. 50% pre-COVID. That went up to 66% during COVID. 16 percentage point increase. And I mentioned that just because all of those numbers I mentioned were stubbornly stuck at those numbers for like ages. People just -- this is what they did. There was inertia. The catalyst impact of COVID forced people to change their behavior and all of a sudden, we get years' worth of change in 1 year. And I don't -- we strongly believe in the surveys' data tells us people aren't going to go back and saying now that I've got this more efficient way to pay that I've gotten used to, maybe I'll go back to using cash. So we genuinely believe that the cash research that we've done is quite eye-opening and it's certainly going to help drive structural greater growth for us, particularly on the debit side.

Yes. No. I mean, those are huge pivot points. I wanted to switch gears and talk a little bit about debit versus credit here. You mentioned it early on in the discussion and that debit has clearly dominated in the current environment. And the question is that, I guess, there's two things. One is, what in your mind or in Visa's mind makes that a sustainable category relative to credit versus past time periods? And then secondly, if we remove the idea that there are just credit categories that are just massively depressed, travel, entertainment and those kinds of things. We obviously know that they'll come back and that will help with the credit. But there's also some incremental competitive dynamics that I wonder are going to structurally change the way that people view credit. So there's 2 questions, and they're both kind of big picture ones, but if you could address those, that would be great.

So on the debit piece, if I understand your point correctly, we do think that this huge lift in debit is structurally sustainable and perhaps not quite at the levels that we've seen through COVID. But an elevated debit, we think there are structural reasons for that to remain. Some of them include most notably the cash point that I was just making. The last time I looked, 52% of transactions under $10 were made with cash. Eating into that because people have gotten used to paying with card, tap to pay as a simple way to pay. We think that will help debit growth. The rise in e-commerce, as I said earlier, you can't jam a $10 bill into your iPhone to make a purchase. So structurally, that's going to help electronic payment, which helps us. So those are two of the long-term structural elements. Obviously, some of what's driven debit during COVID has been there's been some recessionary impacts and people tend to spend more on debit than credit during a downturn. They tend to spend what they have versus borrowing. And then stimulus has helped debit over this period of time. But those are sort of temporal impacts to debit. We think the sort of the first points I mentioned are systemic long-term improvements in debit that will help. On the credit front, we absolutely believe that credit has got a nice recovery ahead of it and that will return to sort of established behaviors. And certainly, from all the clients that we're talking to on the issuing side, they absolutely believe this. And I think if you go and look in the market in terms of the offers that are coming out, the lines that are being offered, the acquisition, like the issuers are taking action, which certainly reflects their belief that credit is coming back. It's going to come back really nicely, and the issuers want to be there and get their fair share as it comes. So we certainly don't think there's anything structurally negative that would result in a lower credit growth. If anything, some of the benefits of displacing cash and rising e-commerce should structurally long-term help credit growth. So there was one sort of other sub question in there that you mentioned around new competitive models, new ways to pay digitally online. I mean when you're buying things digitally, it's easier to embed different ways to pay in that checkout experience. But we believe competing in that space is something we're happy to do. And we think our value proposition and brand recognition is going to serve us very well in that space. So we're not too concerned about the continued rise of competition. We think as long as more payments are electronified, we'll compete and get our fair share. So we feel really good about the years ahead of both debit and credit.

Yes. Listening to you answer the question, it jarred my memory to a presentation you had given, I think, a few years ago, and it was talking about how it was really more around millennials. Millennials spend a lot more like their parents than they ever want to admit. You're smiling because you maybe remember given this presentation. So I was there. I'm just wondering, has Visa updated some of their thinking as we think about the next generation. I mean are they also likely to be spending in similar ways to maybe the way I spend or my parent spend? Like is there that evolution that you think can continue?

Yes. I'll just -- I'll remind everyone what I said back then and then I'll answer this question specifically, but the title of the presentation is basically millennials are much more like their parents than they'd like to admit, right? And the idea as people often -- millennials don't want to use credit. They only use debit, even on debit, they only want to spend what they've got and et cetera, et cetera. And the conclusion of the research was for millennials and the impact that they took a hit from the economy, their life cycle curve shifted a little bit. Family formation was a little bit delayed. Household acquisition was a little bit later. Picking up a car, buying a car was -- everything was delayed a little bit in that natural life cycle. But when they actually started to act like adults, their behavior very much reflected their parents and credit -- the use of credit picked up. They're -- what they were attracted to in cards, maybe the value propositions that they were attracted to were a little different, but they were still moving to credit. And that certainly was the conclusion. That's what we've continued to see. Now as for the generations that are coming up behind millennials, Dan, I haven't seen the analysis if you've done it, I haven't seen it yet. So why don't I dig into it and get back to you, but it is an interesting question.

Yes. No, I'll wait for the next presentation. I was just wondering if you had -- were willing to give any insights because that was a great presentation, obviously stuck in my mind. And speaking of kind of very forward thinking, crypto has become a huge talking point. It's much more pronounced today than it was even a year ago. And the roles at which a company like Visa can play, I think, are continuing to expand rapidly. So my question is basically, what do you, as a representative of Visa think about crypto? How do you define it in your own words? And what is Visa prepared to do as playing a role in this new ecosystem?

Yes. Crypto, I mean, there's clearly a lot of talk about crypto. Some of it very thoughtful informed and some of it much less so. Where exactly crypto goes from here and it's a long-term trajectory. I think the jury is out. I don't think we've got a crystal ball in all of that. Having said that, we're very active in this space. And maybe I'll say two things. One, how we look at the space and then what we're doing in this space. How we look at the space, this will probably resonate with everyone listening, but it's worth taking a second. We very much see crypto in two different buckets. There are cryptocurrencies and then sort of digital currencies or stable coins. And crypto currencies for the most part are assets. You're buying an asset for the hope of appreciation. It's kind of like a digital gold. We like to think of it sort of like Bitcoin. You can go buy something with gold or Bitcoin, but it's not particularly efficient. It's not a very effective way to go make purchases. So it tends to be much more of an asset. It's still important, but it tends to be much more of a store of value than a medium of exchange. And then, of course, there's a digital currency, stable coin, which are backed by existing fiat currency. So USDC, obviously backed by a U.S. dollar that, given the ubiquity and stability of the U.S. dollar, there's real opportunity there for that being a medium of exchange in global commerce. So we do -- both are important, but we do take time to really try to draw the distinction between the two to make sure folks really digest and understand that, which I'm sure everyone listening does. In terms of what we're doing with the space, there's four or five things that we're doing. First of all, we want to make sure that it's easy to use your Visa credential to purchase cryptocurrencies. So we want to make that an easy way to be an on-ramp into the crypto world. We also want to do the opposite. So cash out from a crypto account or a crypto wallet back into fiat currency. And that one is important because if you thought -- sorry about that. If you've got $1 million in Bitcoin in your account, for example, and you want to go buy a burger, it's very difficult to actually have that transaction happen. But if you put a Visa credential on the front of that -- a crypto wallet or crypto exchange account, if you put a Visa card in front of that, then you can convert that back to fiat currency, go buy your burger and fries, and you have new utility from the assets that are backing that transaction in your account. So essentially, we want to be an on ramp and an off ramp between the regular world and the crypto world, by enabling you to buy in and then cash out using a Visa credential. So those are the first two things. We're also -- we've also built APIs, crypto APIs for issuers. So if a regional bank wants to be able to offer the ability for their consumers to buy Bitcoin, for example, in their mobile bank account, then we have built APIs and we've built partnerships on the back end to enable an issuer to consume those APIs and enable their consumer to make a purchase of Bitcoin, and we'll facilitate that transaction for given the relationships we've got. We've also built the capability to settle on our network in digital currencies. So we can transact in, I think, it's 160 currencies. We settled and, I think, about 25. We've built the capability to settle in USDC, and that's something we'll continue to test and learn. Those are four. There is a fifth, which is a bit further out there, and that's having conversations with central banks about Central Bank digital currency, CBDC. We're having some conversations to help steer that in different directions. So that's kind of a different vein of work. So very, very active in this space. I think we're very fluent and very focused on. Lots of conversations with our clients. Where it goes from here, we're not sure, but we're going to stay close to it on behalf of our clients.

Yes. No, it's -- I mean, just the sheer scale and breadth and relationships that Visa has would seem as though there's on-ramp, off-ramp opportunity is the right place to be. If we shift gears a little bit and go to B2B, I know we were talking about that a little bit before we get started today. This is a long journey that B2B has been on. And I've often been asked the question, why does it take so long to have something that seems so obvious and has so many pain points to ultimately come to fruition. So I would ask you the same question and then also maybe update us on where Visa is in terms of solving a lot of those problems.

Yes. Well, you probably know this, Dan, but just to put my answer in context to everyone there. A bit less than a year ago, I was asked to run our global commercial B2B business. So in addition to the North America responsibilities run this globally. And so my answer comes with a little bit more dirt under the fingernails, sleeves-rolled-up answer. And what I would just say is the truth is the space is hard. Inertia is a powerful beast. And my take on having spent the past year with my sleeves rolled up in the space is the opportunity is as big, if not bigger, than what we represent and what we think internally. It is a huge opportunity. The idea that the current way that it operates is inefficient and someone is going to fix it, I absolutely believe that. And I think there's huge value for the person that cracks it, but it is hard. People have legacy ways of doing this business. It is -- the way it works is sometimes feels like it's written in Latin. So figuring out how it works that way, why it works that way. As I mentioned, the inertia of some of the models that are out there, it's just -- it's going to take a while to build it out. But the way -- the parallel I draw is when we launched Visa debit in the United States, it takes a while. Like we launched Visa Direct. And Visa Direct is huge growth now, but we spent years doing the plumbing and the infrastructure to make sure the AFT, OCTs could work the way they could work in getting all of our clients to do the tech work to build it out. So I very much look at it from the point of view of anything that's worth doing is worth doing well and it's going to take a little bit of time because if it was easy, someone would have done it by now. But really, inertia, fragmentation and the fact that it's sort of written in a different language in normal payments. So there's a lot of other reasons why -- those are some of the reasons why it's hard to really get the traction on it. But hand on heart, Visa will absolutely be one of the players that help solve this on behalf of the industry, and I'm super excited over the next 1 to 5, 10 years for this to be a really, really rich vein of growth because there's something that needs to be fixed. And you know the buckets that we look at, $120 trillion market, $20 trillion cardable, $10 trillion cross-border B2B, $90 trillion domestic APAR. I think of those three in that order is short term, medium term, long term in terms of the work we need to do to get them done. But they're all going to get solved, and we're going to be involved in a solution for all of them. But more tactically, we have good work underway in the next generation of small business issuing, increasing penetration in large mid-market and corporate card, the OTA travel business globally, we have some exciting initiatives underway. The virtual card payable space, a lot of great build-out, a lot of great client conversations to accelerate that space. B2B Connect, we've talked about with you guys in the past. Again, it's going to take a bit of time to get the traction, but you're building something for the long term, fleet and fuel opening that up. I mean just a list of ideas and the revenue and opportunity against each. It's an exciting space, but it's going to take a bit of time, but we'll be there at the end.

Yes. So it sounds like there's still a lot of infrastructure and the inertia associated with all the parties involved, it's just going to take some time. But it does feel like, finally, the technology has caught up with the problems that exists. So hopefully, we'll hear more about that in the coming years. If we talk about real-time payments for the moment. This is another topic that's probably near and dear to your heart. There's a lot of new systems that are being created here in the states and around the world, in particular. I'm just wondering how you see them evolving over time. Again, what role do you think that you guys are going to play in that? And then how does that shape maybe your strategic thinking around the North American market?

Yes. I think RTP is interesting. Similar to crypto to some extent, whether RTP gains material traction and usage in consumer merchant payments in North America, I think it's still TBD. I'm not -- I'm not reading against or for it but I think it's TBD. Keep in mind, there's over 40 RTP networks last time I counted around the world. And their uptake is, I think, is mixed in terms of how much it's really driven change. Having said all of that -- or I should also say, and I do think our debit network and our Visa Direct network actually serve a lot of these use cases pretty well. So whether it takes off, I think, is an open question in sort of core consumer payments. Nevertheless, we're super happy and are very active in supporting RTP. If this is something that consumers and merchants want to use, if this gains traction, we want to be there to help provide services and security and reliability and loyalty, dispute resolution, et cetera, that actually would make that network functional. And so we continue to build out capabilities to serve RTP networks. We've made a bunch of acquisitions in tokenization, disputes, authentication, et cetera, to help make that happen. So we'll continue to build out a suite of services to help RTP players with the value-added services that they need to deliver. We also currently do and plan to continue to partner with RTP networks in our network-of-network strategies, so if we're trying to push money to different markets around the world. If an RTP network is very prominent in the market, we want to push into that RTP network and have them be the final mile to push to the accounts in that local market. So in some form, RTP networks around the world are going to be important and relevant, and we're going to be playing with them and we're actively working with RTP networks as they're developed in the United States, and we're going to continue to do so.

Yes. So we got maybe 30 seconds left here, so I'll leave you with the last word. As you kind of put your -- the lens of the possible hat on and understanding all the responsibilities that you have at Visa and the great resources that, that touch, what do you envision really is going to be playing out of significance that maybe most people either have misconceptions on or just haven't really thought much about as we think about the next 5 to 10 years?

Yes. I'd say the 3 big ones that I'm most focused on when we just talked about B2B, that is going to be solved in the next 5 to 10 years. And the people who solve it are going to be huge beneficiaries. That's one. Two, which I'll call it Visa Direct, but it's really broadly money movement. There are a whole bunch of use cases on the sort of -- on the fringes of core consumer payments, be it P2P, remittance, payout, disbursements, early wage access, like all of those elements, those need to get solved as well and simple money movement in that space, which Visa Direct is very active in, that's all going to get solved and there's going to be significant value for people who open up all of those segments. So that's a big one, which I'll lump Visa Direct. And then the third one for us at Visa that we're focused on is just value-added services. I mean the story I would like to tell is I just bought my teenage daughter a car. And the base car was like whatever, $19,000. But after you actually buy the value-added components of the safety features and the radios, if you wanted the leather seat, it's actually a fair bit more expensive. But I don't begrudge the fact that I added those core value-added services to the car and made her and me happier that we had it. And so when I -- similar with the iPhone, you can buy the hardware, it's great, but what really brings it to life is the app store and all the capabilities and the software that comes with it. Similarly with Visa, we've got our core offering, which is fantastic. But all of the value-added services that we can offer to merchants and the issuers are incredibly valuable and powerful that make our clients happier and stickier with the core service that we're offering and actually can drive revenue for us in powerful ways. And so turning sort of entirely to Visa, we're very, very focused on really building out those value-added services to help drive client satisfaction and revenue for ourselves at the same time. So -- those are three of the big things that we're really focused on delivering in the years ahead.

That's great. Well, we're out of time. I can talk to you all day long. So thank you, Oliver, so much for being with us today. Really appreciate it. I know you're busy, and best of luck in all your new endeavors. So thank you so much for your time. Appreciate it.

Thanks, Dan. Appreciate talking you.

Yes. Take care.