Q4 2023 Visa Inc Earnings Call

Welcome to Visa's fiscal fourth quarter and full year 2023 earnings conference call. All participants are in a listen only mode until the question answer session. Today's conference is being recorded if you have any objections you may disconnect. At this time I would now like to turn the conference over to your host Ms. Jennifer Como Senior Vice President and global head.

<unk> of Investor Relations Ms. Como you may begin.

Thanks, Jordan good afternoon, everyone and welcome to Visa's fiscal fourth quarter and full year 2023 earnings call.

Joining us today are Ryan Mcinerney, Visa's, Chief Executive Officer, and Chris <unk>, Chief Financial Officer.

This call is being webcast on the Investor Relations section of our website at Investor Dot visa Dot com.

A replay will be archived on our site for 30 days.

Slide deck containing financial and statistical highlights has been posted on our IR website.

Let me also remind you that this presentation includes forward looking statements.

These statements are not guarantees of future performance and our actual results could differ materially as the result of many factors.

Additional information concerning those factors is available in our most recent annual report on Form 10-K, and any subsequent reports on forms 10-Q, and 8-K, which you can find on the Sec's website and the Investor Relations section of our website.

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

And with that let me turn the call over to Ryan.

Good afternoon, and thank you for joining us.

Before we begin I will.

Wanted to take a moment to acknowledge the tragic loss of life and suffering in Israel in Gaza.

We are in constant contact with our teams in Israel and throughout the region and I have the deepest admiration for their commitment to each other and their clients. During this exceptionally challenging time.

We continue to monitor the situation.

Prioritize the safety of our people and stay close to our clients to ensure the continuity of business operations.

Turning now to our results.

At the beginning of 2023, there was a lot of uncertainty around the macro economic environment with fears of a recession.

There were many unknowns around FX volatility interest rates and inflation.

There was also some noise in our growth rates in early 2023 due to the effects of army chrome and the suspension of operations in Russia.

Against that backdrop visa delivered.

Total full fiscal year net revenues grew 11% with GAAP, EPS up 18% and non-GAAP EPS up 17%.

Unknown Attendee: Welcome to Visa's fiscal fourth quarter and full year 2023 earnings conference call. All participants are no listen only mode until the question answer session. Today's conference is being recorded.

Credentials grew 7% we.

We also surpassed seven 5 billion tokens.

Unknown Attendee: If you have any objections, you may disconnect at this time.

Total transactions, including cash in payment transactions were 276 billion, which means that visa credentials were used on average 757 million times a day during the fiscal year.

Jennifer Como: I will now turn the conference over to your host, Ms. Jennifer Como, Senior Vice President and Global Head of Investor Relations.

Jennifer Como: Ms. Como, you may begin. Thanks Jordan. Good afternoon everyone and welcome to Visa's fiscal fourth quarter and full year 2023 earnings call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer, and Chris Suh, Visa's Chief Financial Officer. This call is being webcast on the Investor Relations section of our website at investor, visa.com. A replay will be archived on our site for 30 days. A slide deck containing financial and statistical highlights has been posted on our IR website.

We signed over 500 commercial partnerships with Fintech globally from early stage companies to growing and mature players up 25% versus last year.

Merchant locations were up 17% helped by strong growth in Latin America and <unk>.

Global tap to pay penetration, excluding the U S grew five points from last year to 76% of total face to face transactions.

Jennifer Como: Let me also remind you that this presentation includes four looking statements. These statements are not guarantees of future performance, and our actual results could differ materially as the results of many factors. Additional information concerning those factors is available in our most recent annual report on form 10K and any subsequent reports on forms 10Q and 8K, which you can find on the SEC's website and the Investor Relations section of our website.

And in the U S penetration expanded 13 points to surpassed 40%.

Global tap to ride transactions were $1 6 billion for the full year 2023 up over 30% and we added nearly 150, new transit systems throughout the year, such as in Philadelphia in Bangkok, bringing the footprint to more than 750 systems.

More than 40% of our transit system launches. This year also included our value added services acceptance solutions.

Jennifer Como: For non-gap financial information disclosed in this call, the related gap measures and reconciliation are available in today's earnings release.

On the new flow side total revenue grew 17% in constant dollars for the full year.

I'll note a few highlights.

Ryan Mcinerney: And with that, let me turn the call over to Ryan. Good afternoon and thank you for joining us.

Total commercial volume was one $5 seven trillion dollars.

Up 12% in constant dollars.

Ryan Mcinerney: Before we begin, I wanted to take a moment to acknowledge the tragic loss of life and suffering in Israel and Gaza. We are in constant contact with our teams in Israel and throughout the region, and I have the deepest admiration for their commitment to each other and their clients during this exceptionally challenging time. We continue to monitor the situation, prioritize the safety of our people, and stay close to our clients to ensure the continuity of business operations.

We have increased the number of banks that have signed onto visa BTB connect by more than 70%. This year and activation continues to happen with the number of transacting banks more than doubling.

Visa direct had seven 5 billion transactions up 19% year over year, and nearly 30%, excluding Russia across 65, plus use cases and over 2800 programs.

<unk> by more than 500 enablers.

Ryan Mcinerney: Turning now to our results. At the beginning of 2023, there was a lot of uncertainty around the macro economic environment with fears of a recession. There were many unknowns around effects, volatility, interest rates, and inflation. There was also some noise in our growth rates in early 2023 due to the effects of Omicron and the suspension of operations in Russia. Against that backdrop, visa delivered. Total full fiscal year net revenues grew 11% with gap EPS up 18% and non-gap EPS up 17%. Credentials grew 7%. We also surpassed 7.5 billion tokens. Total transactions, including cash and payment transactions, were 276 billion, which means that visa credentials were used on average 757 million times a day during the fiscal year.

Cross border PDP transactions grew 65% year over year and reached a new record for payments volume in the fourth quarter.

Value added services revenue grew 18% for the full year in constant dollars.

Across our hundreds of products, our top 265 largest clients used 22 products on average up 8% from last year versus our overall clients, who used 11 products on average.

With all of this strong momentum in performance. We finished the fourth quarter with net revenue growth of 11% and GAAP EPS growth of 22%.

Other highlights from the fourth quarter include the following in constant dollars Glu.

Global payments volume grew 9%.

U S payments volume grew 6%.

International payments volume grew 11%.

Cross border volume, excluding intra Europe grew 18% with cross border travel up 26% year over year.

Ryan Mcinerney: New Year. We signed over 500 commercial partnerships with FinTechs globally from early-stage companies to growing and mature players up 25% versus last year. Merchant locations were up 17%, helped by strong growth in Latin America and CEMEA. Global tap to pay penetration, excluding the US, grew 5 points from last year to 76% of total face-to-face transactions. And in the US, penetration expanded 13 points to surpass 40%. Global tap to ride transactions were 1.6 billion for the full year 2023, up over 30% and we added nearly 150 new transit systems throughout the year, such as in Philadelphia and Bangkok, bringing the footprint to more than 750 systems. More than 40% of our transit system launches this year also included our value added services except in solutions. On the new flow side, total revenue grew 17% in constant dollars for the full year.

And processed transactions were up 10%.

Across all of our growth levers, we continued to drive progress in innovation and money movement.

As I mentioned last quarter.

When asked why visa.

Our clients tell us they are choosing to deepen and expand their partnerships with us for a number of reasons, including our people our products our value added services, our new flows capabilities and our brand.

We continued to see that play out in our fourth quarter.

I'll walk through each one and highlight some examples.

First our people.

We have the best team in the business and our clients tell us that they deeply value the advice local support and partnership from our outstanding teams, who are laser focused on helping our clients grow their businesses.

Our clients also appreciate our thoughtful leadership, an important and complex industry issues across the ecosystem.

An example, this quarter was with U S Bank, one of the largest issuers in the United States.

They have renewed our long term agreement for their consumer and commercial portfolios.

Ryan Mcinerney: I'll note a few highlights. Total commercial volume was 1.57 trillion dollars, up 12% in constant dollars. We have increased the number of banks that have signed on to Visa B2B Connect by more than 70% this year and activation continues to happen with the number of transacting banks more than doubling. Visa Direct had 7.5 billion transactions, up 19% year-over-year and nearly 30% excluding Russia across 65 plus use cases and over 2800 programs helped by more than 500 enablers.

In addition, we are engaging on consulting services and co marketing projects that include leveraging our NFL sponsorship.

Also in the U S. We are very pleased to have renewed our long standing relationship with top 20 U S. Issuer F N b O across consumer commercial and value added services.

In Brazil credit unions or cooperatives are fast growing and we recently reached an expanded relationship with C. Kobe, whose system spans nearly 340 cooperatives and seven 5 million members.

In addition to our people.

Our payment products and innovations consistently help us when we are constantly driving innovation and delivering next generation payment solutions and experiences that enable our clients to better serve their customers and grow their businesses.

Ryan Mcinerney: Cross-border P2P transactions grew 65% year-over-year and reached a new record for payments volume in the fourth quarter. Value added services revenue grew 18% for the full year in constant dollars. Across our hundreds of products, our top 265 largest clients used 22 products on average, up 8% from last year, versus our overall clients who used 11 products on average. With all of this strong momentum and performance, we finished the fourth quarter with net revenue growth of 11% and gap EPS growth of 22%.

In terms of our capabilities to serve fin techs in.

We expanded our partnership with Nike the first digital wallet in the country to enable their 17 million plus account holders for tap to pay with digital credentials.

We also provide targeted offerings for certain customers.

In India, we are focused on delivering market leading offerings for affluent customers.

With that in mind, we have signed with Fintech <unk> for our consumer credit offering for high net worth and mass affluent customers.

Ryan Mcinerney: Other highlights from the fourth quarter include the following in constant dollars. Global payments volume grew 9%, US payments volume grew 6%, international payments volume grew 11%, cross-border volume excluding entry Europe grew 18% with cross-border travel up 26% year-over-year and process transactions were up 10%. Across all our growth levers, we continued to drive progress in innovation and money movement. As I mentioned last quarter, when asked why Visa our clients tell us they are choosing to deepen and expand their partnerships with us for a number of reasons including our people, our products, our value added services, our new flows capabilities and our brand. We continue to see that play out in our fourth quarter.

We also recently expanded our acceptance with Fintech razer pay to enable visa debit cards to purchase mutual funds and securities offering greater convenience to customers with higher payment success rates versus traditional methods.

And in the E Commerce seller space, we renewed our agreement with Shopify for the balanced card, allowing shopify as U S sellers to access funds from sales by the next business day and receive cash back on everyday business expenses like shipping and marketing.

We also signed a new issuing agreement for small business credit.

Next our value added services are helping us win.

They help our clients innovate and grow provide risk management solutions and drive better outcomes for them and in turn for visa.

Ryan Mcinerney: I'll walk through each one and highlight some examples. First are people. We have the best team in the business and our clients tell us that they deeply value the advice, local support, and partnership from our outstanding teams who are laser focused on helping our clients grow their businesses. Our clients also appreciate our thoughtful leadership on importance and complex industry. This is one of the issues across the ecosystem. An example of this quarter was with US Bank, one of the largest issuers in the United States.

Our acceptance solutions, including Cybersource have really resonated with clients. This year, we sold more than 2600, new acceptance services in over 100 countries.

In North America, Costco has chosen visa acceptance solutions, including Cybersource for all of their U S and Canadian E Commerce transactions.

Lascar Airlines have selected cybersource to process their kiosk payments in support of their initiatives to transform the airport lobby experience.

Ryan Mcinerney: They have renewed our long-term agreement for their consumer and commercial portfolios. In addition, we are engaging on consulting services and co-marketing projects that include leveraging our NFL sponsorship. Also in the US, we are very pleased to have renewed our long-standing relationship with top 20 US issuers. We're FNBO across consumer, commercial, and value-edited services. In Brazil, credit unions or cooperatives are fast growing and we recently reached an expanded relationship with CCOBI, whose system spans nearly 340 cooperatives and 7.5 million members.

In Asia Pacific.

Ana merchants bank the largest issuer in mainland China has renewed its consumer and small business portfolios.

In addition to our flagship risk management services visa advanced authorization and visa risk manager.

They will also expand their use of consulting services.

Bank of China.

And AAM financial service in Japan have also signed on to use VA and VRM.

In Latin America, we have been focused on expanding our processing penetration as it allows us to offer more value added services to our customers.

Ryan Mcinerney: In addition to our people, our payment products and innovations consistently help us win. We are constantly driving innovation and delivering next-generation payment solutions and experiences that enable our clients to better serve their customers and grow their businesses. In terms of our capabilities to serve thin-text, in Colombia, we expanded our partnership with NECI, the first digital wallet in the country to enable their 17 million-plus account holders for tap to pay with digital credentials.

In Colombia.

We have recently expanded our processing penetration through the addition of four more banks under our strategic agreement with <unk>, the market's largest acquirer and issuer processor.

This positions us to reach nearly 80% of domestic transactions by the end of FY 'twenty four from essentially zero in 2019.

As part of these agreements banks have added anywhere from four to 11 value added services, including risks and acceptance services.

Ryan Mcinerney: We also provide targeted offerings for certain customers. In India, we are focused on delivering market leading offerings for affluent customers. With that in mind, we have signed with ThinTech Appify for a consumer credit offering for high net worth and mass affluent customers. We also recently expanded our acceptance with ThinTech Razor Pay to enable visa debit cards to purchase mutual funds and securities, offering greater convenience to customers with higher payment success rates versus traditional methods.

As part of our network of network strategy, we continue to both collaborate with and offer our solutions in the real time payment space. Most recently with fed now.

In Q4 visa became a certified service provider for fed now.

Using our service visa financial institution clients can receive funds in real time through the fed now service with the origination capabilities to follow.

This means that visa is now processing fed now payments with the clearinghouse RTP to follow in the next few months.

Ryan Mcinerney: In the e-commerce seller space, we renewed our agreement with Shopify for the balance card, allowing Shopify's U.S, sellers to access funds from sales by the next business day and receive cash back on everyday business expenses like shipping and marketing. We also signed a new issuing agreement for small business credit.

Now onto our new flows capabilities, which are increasingly an important differentiator to our clients.

On the <unk> side, we are pleased to have reached an expanded long term global agreement across more than 60 countries with Citibank for their commercial card business, which also encompasses over 'twenty value added services.

Ryan Mcinerney: Next, our value added services are helping us win. They help our clients innovate and grow, provide risk management solutions, and drive better outcomes for them and in turn for visa. Our acceptance solutions, including cybersource, have really resonated with clients this year. We sold more than 2600 new acceptance services in over 100 countries.

We also recently won the IBM commercial card business spanning teenie meeting in purchasing card programs in over 60 countries also with Citibank as the issuer.

In Singapore, we renewed our long standing partnership with DBS, the largest bank in southeast Asia to continue offering commercial debit and credit services for consumers and expanded into new commercial products for small businesses.

Ryan Mcinerney: Services. In North America, Costco has chosen Visa Acceptance Solutions, including CyberSource for all of their US and Canadian e-commerce transactions. Alaska Airlines has selected CyberSource to process their kiosk payments in support of their initiative to transform the airport lobby experience. In Asia Pacific, China Merchants Bank, the largest issuer in mainland China, has renewed its consumer and small business portfolios. In addition to our flagship risk management services, Visa Advanced Authorization, and Visa Risk Manager, they will also expand their use of consulting services. Bank of China and AM Financial Service in Japan have also signed on to use VAA and VRM.

On the visa direct side, we continue to expand visa direct reach especially to wallet and points.

Most recently, we signed an agreement with Tencent for the visa direct cross border remittance business.

This will bring the total wallet reach for visa direct to over $2 5 billion.

We've expanded our partnership with pace and from U S and UK payments to enable all of <unk> customers across the globe to send money in real time to eligible visa cards across 170 countries and territories.

Pace and is also a currency cloud customer offering compelling cross border solutions.

Ryan Mcinerney: In Latin America, we have been focused on expanding our processing penetration as it allows us to offer more value added services to our customers. In Colombia, we have recently expanded our processing penetration through the addition of four more banks under our strategic agreement with Treta Banco, the market's largest acquireer and issuer processor. This positions us to reach nearly 80% of domestic transactions by the end of FY24 from essentially zero in 2019. As part of these agreements, banks have added anywhere from four to 11 value added services, including risk and acceptance services.

We also recently renewed with the largest issuer in Korea, Shinhan card for consumer and business credit, which also incorporates the provision of our data capabilities and value added services and the enablement of visa direct for cross border remittances.

We have also continued to add new visa direct use cases with our partners such as with small ticket BTB payments and bill pay.

In Brazil.

RB will enable visa direct for low value high velocity cross border payments as part of their corporate banking business.

In the U S payment platform everywhere will be enabling bill payments with visa direct.

Ryan Mcinerney: As part of our network of network strategy, we continue to both collaborate with and offer our solutions in the real-time payment space, most recently with FedNow. In Q4, Visa became a certified service provider for FedNow. Using our service, Visa Financial Institution clients can receive funds in real-time through the FedNow service with origination capabilities to follow. This means that Visa is now processing FedNow payments with the clearinghouse RTP to follow in the next few months.

And last but certainly not least our brand.

Visa's brand strength helps deliver added value to our clients and their customers financial institutions merchants and partners through a wide range of products and services as well as innovative brand and marketing efforts.

We are pleased to have signed an agreement with universal destinations and experiences to be the exclusive payment network for their new co branded credit card that will be issued by <unk>.

Ryan Mcinerney: Now onto our new flows capabilities, which are increasingly an important differentiator to our clients. On the B2B side, we are pleased to have reached an expanded long-term global agreement across more than 60 countries with Citibank for their commercial card business, which also encompasses over 20 value added services. We also recently won the IBM commercial card business spanning T&E meeting and purchasing card programs in over 60 countries, also with Citibank as the issuer.

In addition, visa is now the official way to pay at Universal destinations and experiences and together, we will provide compelling benefits to visa cardholders across their Orlando and Hollywood properties also in the U S.

We have recently renewed the fidelity investments co brand credit portfolio issued by U S Bank.

And we signed with couponing.

Large retailer with 20 million customers in Korea for their inaugural co brand card.

And in similar.

We have signed a Saudi Airlines co brand with Riyad Bank.

Ryan Mcinerney: In Singapore, we renewed our long-standing partnership with DBS, the largest bank in Southeast Asia, to continue offering commercial debit and credit services for consumers and expanded into new commercial products for small businesses. On the Visa Direct side, we continue to expand Visa Direct's reach, especially to wallet endpoints. Most recently, we signed an agreement with Tencent for the Visa Direct cross-border remittance business, and this. This will bring the total wallet reach for Visa Direct to over 2.5 billion.

And we renewed our co brand partnership with Etihad guest the loyalty program of MTI Airways.

As we look ahead, we're excited to be activating our brand with clients and partners at the Paris, 2024, and Melano, Cortina 2026 Olympic and Paralympic Summer and winter games.

Since 1986 visa has been a proud sponsor of the Olympic movement, which provides an unparalleled opportunity to promote the visa brand at a regional and global level, while also facilitating partnerships and joint business initiatives with clients.

Ryan Mcinerney: We've expanded our partnership with PaySend from US and UK payments to enable all of PaySend's customers across the globe to send money in real time to eligible Visa cards across 170 countries and territories. PaySend is also a Currencycloud customer offering compelling cross-border solutions. We also recently renewed with the largest issuer in Korea, Shinhon Card, for Consumer and Business Credit, which also incorporates the provision of our data capabilities in value-added services and the enablement of Visa Direct for cross-border remittances.

The games provide a unique platform for showcasing product innovation and engaging consumers and clients with exclusive experiences.

We're looking forward to the upcoming games and we have been building momentum in the business across Europe with a particular focus on the continent.

I'll share a few recent highlights for our European business.

On the people front.

Payments is a local business and we have expanded into seven new locations over the past five years and have more than doubled our workforce in the market.

On innovative products, we are well over 100, fintech relationships and have expanded our capabilities through the acquisitions of tank and currency cloud.

Ryan Mcinerney: We have also continued to add new Visa Direct use cases with our partners, such as with small ticket B2B payments and bill pay. In Brazil, bank or RB will enable Visa Direct for low-value high-velocity cross-border payments as part of their corporate banking business. In the US, payment platform everywhere will be enabling bill payments with Visa Direct.

In new flows visa direct has more than 100 enablers and over 1000 programs with transactions more than doubling over the past two years.

And in value added services, we have increased our client penetration.

In VA alone the number of clients enrolled and the service has more than doubled since three years ago.

And we will be introducing nearly 20 additional products in 2024.

Ryan Mcinerney: And last, but certainly not least, our brand. Visa's brand strength helps deliver added value to our clients and their customers. Financial institutions, merchants and partners through a wide range of products and services as well as innovative brand and marketing efforts. We are pleased to have signed an agreement with universal destinations and experiences to be the exclusive payment network for their new co-branded credit card that will be issued by FNBO. In addition, Visa is now the official way to pay at universal destinations and experiences.

We have been steadily building an attractive position on the continent and have built a strong pipeline of signed deals for the future by competing uniquely in each market.

Active cards across continental Europe have grown nearly 50% since 2019.

Over the next few years, we expect to migrate more than 40 million cards across nearly 40 clients.

And the nature of the portfolios, we are winning in Continental Europe tend to include more cross border volume, resulting in higher yields.

Ryan Mcinerney: And together, we will provide compelling benefit to Visa card holders across their Orlando and Hollywood properties. Also in the US, we have recently renewed the Fidelity Investments co-brand credit portfolio issued by US bank. And we signed with Coupang, a large retailer with 20 million customers in Korea for their inaugural co-brand card. And in Samia, we have signed a Saudi Airlines co-brand with Riyadh bank, and we renewed our co-brand partnership with Etihad Guest, the loyalty program of Etihad Airways.

So our brand our capabilities our people all of these make a difference for visa clients.

2023 had many milestones and solid financial performance.

As we are now three weeks into our new fiscal year I would like to make a few general points and then Chris will go into more detail.

One there is still macro uncertainty.

But just like in fiscal year 'twenty three I am confident that we can manage through it.

Our strategy and focus remain the same propelling growth across consumer payments, new flows and value added services.

Ryan Mcinerney: As we look ahead, we're excited to be activating our brand with clients and partners at the Paris 2024 and Milano Cortina 2026 Olympic and Paralympic Summer and Winter Games. Since 1986, Visa has been a proud sponsor of the Olympic movement which provides an unparalleled opportunity to promote the Visa brand at a regional and global level while also facilitating partnerships and joint business initiatives with clients. The games provide a unique platform for showcasing product innovation and engaging consumers and clients with exclusive experiences. We are looking forward to the upcoming games and we have been building momentum in the business across Europe with a particular focus on the continent.

Two we are focused on delivering for our stockholders.

In that light I am sure that you saw that we released an 8-K back in September regarding our potential exchange offer program.

We appreciate the dialogue, we've had with class a b and C stockholders.

And the board is evaluating next steps as we continue to engage with investors.

Finally, you may have seen today that we announced a $25 billion multiyear share repurchase program, which reflects our board's confidence in our strategy and future potential.

I continue to see tremendous opportunity ahead.

Visa has the brand the capabilities the strategy and most importantly, the people to propel our growth for years to come and with that let me hand, it over to Chris.

Ryan Mcinerney: Management. I'll share a few recent highlights for our European business. On the people front, payments as a local business and we have expanded into seven new locations over the past five years and have more than doubled our workforce in the market. On innovative products, we have well over a hundred FinTech relationships and have expanded our capabilities through the acquisitions of TENC and Currencycloud. In new flows, Visa Direct has more than 100 enablers and over 1,000 programs with transactions more than doubling over the past two years. And in value added services, we have increased our client penetration. In VA alone, the number of clients enrolled in the service has more than doubled since three years ago.

Ryan Mcinerney: And we will be introducing nearly 20 additional products in 2024. We have been steadily building an attractive position on the continent and have built a strong pipeline of signed deals for the future by competing uniquely in each market. Active cards across continental Europe have grown nearly 50% since 2019. Over the next few years, we expect to migrate more than 40 million cards across nearly 40 clients. And the nature of the portfolios we are winning in continental Europe tend to include more cross-border volume, resulting in higher yields.

Thanks, Brian and good afternoon, everyone. As Ryan said Q4 was another good quarter closing out a strong fiscal 'twenty three driven by healthy growth in payments volume cross border volume and processed transactions and continued solid execution of our strategy with new flows and value added services revenue growing faster than consumer payments.

I'll first start with a high level summary of our Q4 performance and then click into more detail.

Looking at our drivers and constant dollars global payments volume was up 9% year over year and processed transactions grew 10% year over year, both stable to Q3.

Cross border volume, excluding intra Europe growth was strong up 18% year over year in constant dollars.

Fiscal fourth quarter net revenues were up 11% and 10% in constant dollars with minimal impact from FX in line with our expectations.

GAAP EPS was up 22% and non-GAAP EPS was up 21% in both nominal and constant dollars.

Now onto the details starting with the U S payments volume was up 6% year over year stable to Q3.

Credit volume grew 6% year over year and debit volume grew 7%.

Card present spend grew 3% in U S card not present volume excluding travel grew 9%.

U S process transactions growth was stable at 8%.

Over the course of the quarter, we saw payments volume growth tick up from July to September primarily driven by sequential improvement in ticket size growth that was mostly led by fuel with higher gas prices and easier year over year comparisons as well as the positive days mix impact consumer.

Ryan Mcinerney: So our brand, our capabilities, are people. All of these make a difference for Visa's clients.

Consumer spend across all segments from high to low spend has remained stable since March.

Ryan Mcinerney: 2023 had many milestones and solid financial performance. As we are now three weeks into our new fiscal year, I would like to make a few general points and then Chris will go into more detail. One, there is still macro uncertainty. But just like in fiscal year 23, I am confident that we can manage through it. Our strategy and focus remain the same, propelling growth across consumer payments, new flows, and value added services.

Our data did not indicate any behavior change across consumer segments.

In international markets total payments volume growth was up 11% in constant dollars.

Payments volume growth rates were strong through the quarter in most major regions with Latin America, EMEA, and Europe ex UK growing about 20% or more in constant dollars.

Now to cross border, which I'll speak to in constant dollars, excluding intra Europe transactions.

Ryan Mcinerney: Two, we are focused on delivering for our stockholders. In that light, I am sure that you saw that we released an 8K back in September regarding our potential exchange offer program. We appreciate the dialogue we've had with class A, B, and C stockholders. And the board is evaluating next steps as we continue to engage with investors.

Total cross border volume was up 18% and up 152% versus 2019.

Cross border card not present volume growth, excluding travel grew 9% year over year and 173% versus 2019 adjust.

Adjusted for Crypto currency purchases cross border E Commerce spending grew year over year in the low double digits in line with pre COVID-19 growth rates and consistent with the trends we have seen for most of the fiscal year.

Ryan Mcinerney: Finally, you may have seen today that we announced a $25 billion multi-year share repurchase program which reflects our board's confidence in our strategy and future potential. I continue to see tremendous opportunity ahead. Visa has the brand, the capabilities, the strategy, and most importantly, the people to propel our growth for years to come.

Cross border travel related spend grew 26% year over year.

The cross border travel volume index to 2019 increased from 139% in June to 143% September totaling 141% for the quarter, a five point improvement from Q3.

We continued to see healthy travel volume levels in and out of.

Chris Suh: And with that, let me hand it over to Chris. Thanks, Ryan.

Europe, and EMEA, ranging from 145% to 165% of 2019 levels.

Chris Suh: Good afternoon, everyone. As Ryan said, Q4 was another good quarter, closing out a strong fiscal 23, driven by healthy growth in payments volume, cross-border volume, and process transactions, and continued solid execution of our strategy with new flows and value added services revenue growing faster than consumer payments. I'll first start with a high-level summary of our Q4 performance and then click into more details. Looking at our drivers, in constant dollars, global payments volume was up 9% year over year, and process transactions grew 10% year over year, both stable to Q3.

Travel volume into Asia continued to improve indexing at 128% to 2019 levels for the quarter up 10 points from Q3, while travel volume out of Asia was up seven points to 114%.

Looking at mainland China, specifically cross border travel volume continued to improve but remain below 2019 levels.

Travel volume outbound from the U S to all geographies continued to be strong in the mid 100 fifty's indexed to 2019.

Chris Suh: Cross-border volume, excluding entry year of growth was strong, up 18% year over year in constant dollars. GAAP EPS was up 22% and non-GAP EPS was up 21% in both nominal and constant dollars. Now on to the details starting with the US. Payments volume was up 6% year over year, stable to Q3. Credit volume grew 6% year over year and debit volume grew 7%. Card present spend grew 3% and US card not present volume, excluding travel grew 9%.

U S inbound travel recovery accelerated this quarter pushing the <unk> index above 2019 levels for the first time, even as the dollar continued to remain strong relative to pre COVID-19 levels.

Now, let's review our fourth quarter financial results service revenues grew 12% year over year versus the 9% growth in Q3 constant dollar payments volume, primarily due to business mix pricing and card benefits.

Data processing revenues grew 13% versus 10% processed transaction growth led by value added services and pricing.

Chris Suh: US process transactions growth was stable at 8%. Over the course of the quarter, we thought payments volume growth ticked up from July to September, primarily driven by sequential improvement in ticket size growth that was mostly led by fuel, with higher gas prices and easier year over year comparisons, as well as a positive days mix impact. Consumer spend across all segments from high to low spend has remained stable since March. Our data did not indicate any behavior change across consumer segments.

International transaction revenues were up 10% versus the 18% increase in constant dollar cross border volumes, excluding intra Europe.

Revenue growth lagged volume growth, primarily due to declining currency volatility other.

Other revenues grew 35% led by pricing consulting and marketing services and client incentives grew 20%.

Now, let me dive into revenues growth across our three growth engines.

Consumer payments growth was driven by stability in domestic volume growth in processed transactions as well as strong growth in cross border volumes.

Chris Suh: In international markets, total payments volume growth was up 11% in constant dollars. Payments volume growth rates were strong through the quarter in most major regions with Latin America, Samia, and Europe XUK growing about 20% or more in constant dollars. Now to cross-border, which I'll speak to in constant dollars, excluding into Europe transactions. Total cross-border volume was up 18% and up 152% versus 2019. Cross-border card not present volume growth, excluding travel grew 9% year over year and 173% versus 2019.

<unk> revenue grew 14% in constant dollars commercial.

Commercial volumes were up 9% in constant dollars and up 156% versus 2019 remember that revenue is recorded based on last quarter's payment volumes growth, which was 9% in constant dollars in Q3.

Visa direct transactions grew 19% and as we mentioned last quarter were impacted by a client that transition it's domestic PDP transactions to an internal ledger system and that was not meaningful to revenue.

Value added services grew 19% in constant dollars driven primarily by strong advisory services select pricing actions and higher volume.

Chris Suh: Adjusted for cryptocurrency purchases, cross-border e-commerce spending grew year over year in the low double digits in line with free COVID growth rates and consistent with the trends we have seen for most of the fiscal year. Cross-border travel related spend grew 26% year over year. The cross-border travel volume index to 2019 increased from 139% in June to 143% in September, totaling 141% for the quarter. We continued to see healthy travel volume levels in and out of LAC, Europe and Samia ranging from 145% to 165% of 2019 levels.

GAAP operating expenses increased 13%.

non-GAAP operating expenses grew 9%, primarily due to personnel expenses from growth in head count and.

And FX had a nearly two point drag.

Excluding net gains from our equity investments of $7 million non-GAAP non operating income was $79 million benefiting from higher interest income due to rising rates.

Our GAAP tax rate was 16, 9% and non-GAAP was 17% due to a tax benefit related to the extension of the U S. Foreign tax credit regulations, which resulted in an indirect tax expense in the operating expense line and a much larger tax benefit in the income tax provision gap.

Chris Suh: Travel volume into Asia continued to improve indexing at 128% to 2019 levels for the quarter, up 10 points from Q3, while travel volume out of Asia was up 7 points to 114%. Looking at mainland China specifically, cross-border travel volume continued to improve but remained below 2019 levels. Travel volume outbound from the U.S, to all geographies continued to be strong in the mid 150's index to 2019. U.S, inbound travel recovery accelerated this quarter, pushing the index above 2019 levels for the first time, even as the dollar continued to remain strong relative to pre-COVID levels.

GAAP EPS was $2 27 <unk>.

non-GAAP EPS was $2 33 up 21% over last year inclusive of a little more than half a point of drag from exchange rates in.

In Q4, we bought back approximately $4 1 billion in stock and distributed $928 million in dividends to our stockholders. We also added $150 million to the litigation escrow account, which has the same effect as a stock buyback at the end of September we had $4 7 billion remaining in our buyer.

Back authorization.

For the full fiscal year 2023, net revenues increased 11%.

Chris Suh: Now let's review our fourth quarter financial results. Service revenues grew 12% year over year versus the 9% growth in Q3 constant dollar payments volume, primarily due to business mix pricing and card benefits. Data processing revenues grew 13% versus 10% process transaction growth led by value added services and pricing. International transaction revenues were up 10% versus the 18% increase in constant dollar cross-border volumes excluding inter-Europe. Revenue growth lagged volume growth primarily due to declining currency volatility.

GAAP EPS of $8 28 was up 18% and non-GAAP EPS of $8 77 was up 17% inclusive of an over two point drag from exchange rates.

Now, let's move to fiscal year 2024.

Before we share our perspective on the year I want to make a few brief comments.

In many ways FY 'twenty four will be as close to a normal year as we've had in a while we have fully lapped the Russia and omicron impacts and overall inflation continues to moderate and many of our markets.

Chris Suh: Other revenues grew 35% led by pricing, consulting and marketing services and client incentives grew 20%. Now let me dive into revenues growth across our three growth engines. Consumer payments growth was driven by stability in domestic volume growth and process transactions as well as strong growth in cross-border volumes. New flows revenue grew 14% in constant dollars. Commercial volumes were up 9% in constant dollars and up 156% versus 2019. Remember that revenue is recorded based on last quarter's payment volumes growth which was 9% in constant dollars in Q3.

As such were pleased to resume our pre COVID-19 guidance practices and will provide our outlook for FY 'twenty for which we will update each quarter.

At the same time, we will no longer be providing the intra quarter eight case associated with interim driver updates.

Now, let's look at what we've seen through the first three weeks of October.

U S payment volume was up 5% with debit and credit both up 5%.

The sequential step down for September was primarily driven by the days mix impact in September and declining fuel prices in October <unk>.

Excluding those two items payments.

Payments volume growth was relatively stable from September to October.

Chris Suh: Visa direct transactions grew 19% and as we mentioned last quarter were impacted by a client that transitioned its domestic P2P transactions to an internal ledger system and that was not meaningful to revenue. Value added services grew 19% in constant dollars, driven primarily by strong advisory services, select pricing actions and hire volume. Gap operating expenses increased 13%. Non-gap operating expenses grew 9%, primarily due to personnel expenses from growth and headcount and FX had a nearly 2 point drag.

<unk> II has not meaningfully impacted volumes so far.

Processed transactions grew 10% year over year constant dollar cross border volume, excluding transactions within Europe grew 19% and.

And travel related cross border volumes were 144% indexed to 2019.

Turning now to our key assumptions as.

As we've said consistently we're not economic forecasters and so at a macro level, we are assuming no recession in our outlook.

We're also not factoring in any impacts from <unk> and student loan repayments, because as I mentioned before we've yet to see any meaningful impact.

Chris Suh: Excluding net gains from our equity investments of $7 million, non-gap non-operating income was $79 million benefiting from higher interest income due to rising rates. Our gap tax rate was 16.9% and non-gap was 17% due to a tax benefit related to the extension of the US foreign tax credit regulations which resulted in an indirect tax expense in the operating expense line and a much larger tax benefit in the income tax provision. Gap EPS was $2.27, non-gap EPS was $2.33, up 21% over last year, inclusive of a little more than half a point of drag from exchange rates.

As the year progresses, and we gather more information with regard to these assumptions we will continue to provide updates.

For key drivers we are assuming that the trends we saw in Q4 generally continue throughout the year.

Overall payments volume growth and processed transaction growth are expected to be in the low double digits on a year over year basis.

Cross border card not present ex travel and ex crypto volume growth will continue to be in the low double digits year over year on a constant dollar basis.

Cross border travel volume, excluding intra Europe year over year growth will moderate to the low twenty's in constant dollars and when compared to 2019 would equate to a 4% to five point improvement each quarter.

Chris Suh: In Q4 we bought back approximately $4.1 billion in stock and distributed $928 million in dividends to our stockholders. We also added $150 million to the litigation escrow account which has the same effect as a stock buyback. At the end of September we had $4.7 billion remaining in our buyback authorization. For the full fiscal year 2023, net revenues increased 11%. EPS of $8.28 was up 18% and non-gap EPS of $8.77 was up 17%. Inclusive of an over two point drag from exchange rates.

This assumption is driven primarily by improving AP cross border travel volume.

Mostly from China and to a lesser extent, improving U S inbound travel volume.

In terms of what this means for the financials I will speak to the numbers on an adjusted basis, which we define as non-GAAP results presented in constant dollars and excluding acquisition impacts, which you can review in the footnotes in our earnings release and earnings presentation for more detail.

Okay first let's discuss net revenues for the full year, we expect low double digit adjusted net revenue growth.

Chris Suh: Now, let's move to fiscal year 2024. Before we share our perspectives on the year, I want to make a few brief comments. In many ways, FY 24 will be as close to a normal year as we've had in a while. We have fully lapped the Russia and Omicron impacts and overall inflation continues to moderate in many of our markets. As such, we're pleased to resume our pre-COVID guidance practices and will provide our outlook for FY 24.

Based on current currency forward curves FX will be approximately a one point drag for the year.

We are assuming that currency volatility moderate slightly from Q4 levels, but remains relatively stable throughout the year on a year over year basis incentives are expected to grow slightly less than what we saw in FY2023.

For new flows and value added services, we continued to expect those to grow faster than consumer payments in FY 'twenty four.

Chris Suh: We will update each quarter. At the same time, we will no longer be providing the inter-quarter-eight-case associated with interim driver updates. Now, let's look at what we've seen through the first three weeks of October. US payment volume was up 5% with debit and credit, both up 5%. The sequential step down for September was primarily driven by the day's mix impact in September and declining fuel prices in October. Excluding those two items, payments volume growth was relatively stable from September to October.

Now moving to expenses. Our current plans are to grow adjusted operating expense in the high single digit to low double digits with approximately one five points of FX benefit to nominal non-GAAP growth.

Non operating income is expected to be between $250 and $300 million.

The tax rate is expected to be slightly favorable to our typical rate of 19% to 19, 5% due to some offsetting factors on.

On the one hand, we have the impact of tax rate increases in certain countries, which puts our new run rate closer to 19, 5% to 20%.

Chris Suh: Reg II has not meaningfully impacted volumes so far. Process transactions for your 10% year-over-year, constant dollar cross-border volume excluding transactions within Europe grew 19%, and travel-related cross-border volumes were 144% indexed to 2019. Turning now to our key assumptions, as we said consistently, we're not economic forecasters, and so at a macro level, we are assuming no recession in our outlook. We're also not factoring in any impacts from Reg II and student loan repayments, because as I mentioned before, we've yet to see any meaningful impact.

However, we also anticipate some onetime tax benefits in the second half related to the resolution of certain tax matters.

In total this will put us between 18, 5% and 19% for the full fiscal year.

Putting all this together, we expect full year adjusted EPS growth in the low teens with about half a point of FX drag to nominal non non-GAAP growth.

Also FY 'twenty four will likely be a tale of two half with variability in our growth rates in the first half to the second half.

Chris Suh: As the year progresses and we gather more information with regard to these assumptions, we will continue to provide updates. For key drivers, we're assuming that the trends we saw in Q4 generally continue throughout the year. Overall, payments volume growth and process transaction growth are expected to be in the low-double digits on a year-over-year basis. Cross-border, card not present, X travel and X crypto volume growth will continue to be in the low-double digits year-over-year on a constant dollar basis.

A few aspects to keep in mind.

Cross border volume intra Europe grew 31% year over year in the first half of FY 'twenty, three and 20% in the second half.

Second recall that we had relatively high currency volatility in the first half of FY 'twenty, three and it moderated considerably in the second half.

Third incentives were 16% higher in the second half of FY2023 versus the first half due primarily to deal timing and client performance.

Chris Suh: Cross-border travel volume excluding intra-Europe, year-over-year growth will moderate to the low-20s in constant dollars, and when compared to 2019, would equate to a 4 to 5 point improvement each quarter. This assumption is driven primarily by improving AP cross-border travel volume, mostly from China and to a lesser extent improving US inbound travel volume. In terms of what this means for the financials, I'll speak to the numbers on an adjusted basis, which we define as non-gap results presented in constant dollars and excluding acquisition impacts, which you can review in the footnotes in our earnings release and earnings presentation for more detail.

As a result, we expect overall adjusted net revenue growth to be lower in the first half than in the second half of FY 'twenty four.

This will also be the case on a nominal basis, even with a slightly larger FX headwind in the second half of FY 'twenty four than the first half.

On the expense side as Ryan mentioned this is an Olympics year, and we expect Q2 and Q3 expense to have the largest percentage increases as we ramp.

But adjusted operating expense growth and the FX impact will roughly be the same in both half.

The tax rate is expected to be lower in the second half than the first due to the anticipated one time tax benefits I mentioned.

Chris Suh: First, let's discuss net revenues. For the full year, we expect low-double digit adjusted net revenue growth. Based on current currency forward curves, FX will be approximately a one-point drag for the year. We are assuming that current volatility moderate slightly from Q4 levels, but remains relatively stable throughout the year. On a year-over-year basis, incentives are expected to grow slightly less than what we saw in FY23, for new flows and value added services we continue to expect those to grow faster and consumer payments in FY24.

So for the first quarter, specifically given the variables I. Just described Q1 is expected to have the lowest adjusted year over year net revenues growth rate with an improving trend throughout the year in Q4 is expected to be at the highest adjusted growth rate.

We expect first quarter net revenues growth in the upper mid to high single digits on an adjusted basis.

Sure.

A few factors to keep in mind again, one currency volatility was the highest in Q1 of 'twenty three to cross border volume grew 31% in Q1 of 'twenty three and three Q1 'twenty three other revenue was strong due to the FIFA World Cup related value added services revenue and incentives were lower than.

Chris Suh: Now moving to expenses, our current plans are to grow adjusted operating expense in the high single digit to low double digits with approximately 1.5 points of FX benefit to nominal non-GAAP growth. Non-operating income is expected to be between $250 and $300 million. The tax rate is expected to be slightly favorable to our typical rate of 19 to 19.5% due to some offsetting factors. On the one hand we have the impact of tax rate increases in certain countries which puts our new run rate closer to 19.5 to 20%.

[noise] expected due to client performance and other items.

Adjusted operating expense growth is expected to be in the high single digits, driven by head count growth and salary increases.

We anticipate approximately half a point FX headwind to nominal net revenues growth and approximately one five point benefit to nominal non-GAAP expense growth.

The tax rate is expected to be closer to a new run rate of between 19, 5% and 20% in Q1.

First quarter adjusted EPS growth in the upper mid single digits with minimal impact from FX.

Chris Suh: However, we also anticipate from one time tax benefits in the second half related to the resolution of certain tax matters. In total, this will put us between 18.5 and 19% for the full fiscal year. Putting all this together, we expect full year adjusted EPS growth in the low teens with about half a point of FX drag to nominal non-GAAP growth. Also, FY24 will likely be a tail of two halves with variability in our growth rates in the first half to the second half.

Keep in mind that the adjusted basis as defined as non-GAAP results presented in constant dollars and excluding acquisition impacts.

And non-GAAP expenses, and EPS exclude acquisition related items and the litigation provision for the first quarter of 2023 for.

For FY 'twenty for the estimated results exclude approximately $20 million or one set of acquisition related costs and approximately $40 million or <unk> for the amortization of acquired intangibles.

Chris Suh: A few aspects to keep in mind. First, cross-border volume X intra-Europe grew 31% year over year in the first half of FY23 and 20% in the second half. Second, recall that we had relatively high currency volatility in the first half of FY23 and it moderated considerably in the second half. Third, incentives were 16% higher in the second half of FY23 versus the first half due primarily to deal timing and client performance.

And finally moving to capital return as Ryan said the board has authorized a $25 billion multiyear share repurchase program and increased our quarterly dividend by 16%.

In summary thesis underlying business continues to be healthy and stable and the growth opportunities are significant.

There continued to be macro uncertainties, we feel confident in our ability to manage the business through a changing environment and deliver value for our stockholders and now Jennifer let's move to Q&A.

Thanks, Chris and with that we're ready to take questions.

Chris Suh: As a result, we expect overall adjusted net revenue growth to be lower in the first half than in the second half of FY24. This will also be the case on a nominal basis, even with a slightly larger FX headwind in the second half of FY24 than the first half. On the expense side, as Ryan mentioned, this is an Olympics year and we expect Q2 and Q3 expense to have the largest percentage increases as we ramp.

If you would like to ask a question. Please press star one and clearly record your name and will be announced prior to asking your question to ensure all questioners are heard and we ask that you. Please limit yourself to one question once again to ask a question. Please press star one to withdraw your question Press Star two.

First question comes from Darrin Peller with Wolfe Research Your line is open.

Chris Suh: But adjusted operating expense growth and the FX impact will roughly be the same in both halves. The tax rate is expected to be lower in the second half than the first due to the anticipated one-time tax benefits I mentioned. So for the first quarter specifically, given the variables I just described, Q1 is expected to have the lowest adjusted year over year net revenues growth rate with an improving trend throughout the year and Q4 is expected to be at the highest adjusted growth rate.

Hey, guys. Thanks for the for the time and congrats on the quarter just when thinking about your guidance for the fiscal year ahead. It's good to see the constant currency double digit growth rates. So just wanted to make sure we understand the inputs.

As you think about structural growth as far as some of the inputs like value added services new flows.

One I mean, maybe you can give us a little more color on what you're assuming for some of those some of the vas on new flows growth potential and.

And then more importantly, do you believe that's the right algorithm medium term is the structural growth of this company sustainably.

Chris Suh: We expect first quarter net revenues growth in the upper, mid to high single digits on an adjusted basis. A few factors to keep in mind. Again, one currency volatility was the highest in Q1 of 23, two cross-border volume grew 31% in Q1 of 23 and three. Q1, 23 other revenue was strong due to FIFA World Cup-related value added services revenue and incentives were lower than expected due to client performance and other items.

At the same 10% to 12% range, it's been or has anything changed.

Thanks, guys.

Okay.

Yes, let me address that distress.

So yes, a couple of things I'll say about the FY 'twenty four guide first the underlying drivers as we shared.

Both payments.

Chris Suh: Condoms. Adjusted operating expense growth is expected to be in the high single digits driven by headcount growth and salary increases. We anticipate approximately half a point FX headwind to nominal net revenues growth and approximately one and a half point benefit to nominal non-gap expense growth. The tax rate is expected to be closer to a new run rate of between 19.5 and 20% in Q1. This puts first quarter adjusted EPS growth in the upper mid single digits with minimal impact from FX.

Payments volume and processed transactions will be growing in the low double digits, which is <unk>.

Very consistent and reflects the stable business trends that we see in the underlying drivers.

I also said on the call commentary that we do expect Vas value added services and new flows to continue to be our growth engine going.

Growing faster than the consumer the consumer payment as part of the business and so I think that structure. What you described is consistent in many ways 23, and that's what we certainly expect to see in 'twenty four.

Next question Jordan.

Our next question comes from Dave Koning with Baird. Your line is open.

Thanks, so much good good job and I guess, two quick ones Asia Pacific constant currency volume growth was 4% a little lower than normal maybe you could dive into that and then tax rate longer term basically in the out years 19, 5% to 20%. That's how we should think about it.

Chris Suh: Keep in mind that the adjusted basis is defined as non-gap results presented in constant dollars in excluding acquisition impacts. And non-gap expenses in EPS exclude acquisition related items and the litigation provision for the first quarter of 2023. For FY24, the estimated results exclude approximately $20 million or one cent of acquisition related costs and approximately $40 million or two cents from the amortization of acquired intangibles.

You.

I'll talk about Asia, maybe put into context of what we're seeing around the world and then because you can take the tax rate.

Just to answer your question specifically on Asia as you said growth ex China slowed four points from Q3, there's a couple of things going on there. One is we're lapping some strong COVID-19 ramp in Q4 of 'twenty two but we're also seeing a little softness in a couple of places, notably Australia is what I.

Chris Suh: And finally, moving to capital return. As Ryan said, the board has authorized the $25 billion multi-year share repurchase program and increased our quarterly dividend by 16%. In summary, FISA's underlying business continues to be healthy and stable and the growth opportunities are significant. While there continue to be macro uncertainties, we feel confident in our ability to manage the business through a changing environment and deliver value for our stockholders.

You too.

Hey, guys, just kind of back to back up and look at that and kind of the bigger picture what are we seeing around the world.

Outside of Asia, It sounds like you've looked at the numbers and you would've seen or seeing resiliency.

Jennifer Como: And now Jennifer, let's move to Q&A. Thanks, Chris. And with that, we're ready to take questions. If you would like to ask a question, please press star one and clearly record your name. It will be announced prior to asking your question. To ensure all questioners are heard, we ask that you please limit yourself to one question. Once again, to ask a question, please press star one. To draw your question, press star two.

Outside of North America, and Asia, If you look at Europe ex UK Latin America EMEA.

Most of these regions are growing at around 20% or more so we feel good about what's happening there on the tax rate, Chris I'll turn it over to the long term tax rate, yes sure Dave.

I do think Thats the right way to think about at least based on what we know now the new run rate, where you would put at about 19, 5% to 20%. It does it is related to how our tax the mix of tax jurisdictions around the world and certain tax increases in certain parts of those royalties as we talked about in the next fiscal year will be below that due to some of the benefits that we.

Darren Peller: Our first question comes from Darren Peller with Wolf Research. Your line is open. Hey guys, thanks for the time and congrats on the quarter. Just when thinking about your guidance for the fiscal year ahead, good to see the constant currency double-digit growth rate. So just want to make sure we understand the inputs and how you think about structural growth as far as some of the inputs like value added services, new flows.

Anticipate in the second half of the year, but based on what we know today the new run rate is that your estimated.

Darren Peller: So number one, I mean, maybe you can give us a little more color on what you're assuming for some of those, some of the vast and new flows growth potential. And then more importantly, do you believe that's the right algorithm, medium term? Is the structural growth of this company sustainably at the same 10-12% rate? It's been or has anything changed? Hi Darren.

Next question Jordan.

Our next question comes from David <unk> with Evercore ISI. Your line is open.

Thank you good to see the 19% growth in visa direct transactions and in particular, the 65% growth in cross border PDP transactions year over year as we look to FY 'twenty four what are some of the biggest most promising new use cases, you're working on for visa direct.

Chris Suh: Yes, let me address that, this is Chris. So yeah, a couple of things I'll say about the FY24 guide. First, the underlying drivers, as we shared, both payments volume and process transaction will be growing in the low double dudes, which is very consistent and reflects the stable business trends that we see in the underlying drivers. I also said on the call commentary that we do expect that value added services and new flows to continue to be our growth engines, growing faster than the consumer payments part of the business. And so I think that structure, which you described, is consistent in many ways to 23, and that's what we certainly expect to see in 2020. Jordan.

Yes, Hey, David.

Unknown Attendee: Next question, Jordan?

Cross border remittances is a big one since you called that out all highlighted I mentioned I think on this call and some others. The work, we're doing with pace and in.

As shown on and things we're doing around the world. We've mentioned in previous calls with some of the both kind of.

<unk> traditional and Fintech remittance players.

65% year over year growth is strong and continue to invest behind that with new partners.

Try to drive further growth going forward.

We're focused on bill payments, we're focused on earthquake earned wage access we're focused on insurance disbursement, we continue to focus on PDP more broadly and new geographies around the world, both domestic and cross border.

Dave Koning: Our next question comes from Dave Koning with Fared, your line is open. Yeah, thanks so much. Good, good job. And I guess two quick ones, Asia Pacific, Consecurrency, Volume Growth was 4% a little lower than normal. Maybe you could dive into that and then tax rate longer term, basically in the out years 19 and a half to 20%. That's how we should think about it. Thank you.

If you just back up.

I've said this I think on previous calls I believe at this point in time visa direct is the largest app scale money movement network on the planet. We have made investments consistently year over year to get to a point, where we now have $8 5 billion endpoints 3 billion cards 3 billion accounts with some of the news I know.

Chris Suh: It is all I'll talk about Asia, maybe put in the context of what we're seeing around the world, and then because you can take a tax rate. Just answer your question specifically on Asia. As you said, Growth X-China slowed 4 points from Q3. There's a couple things going on there. One is we're lapping some strong COVID ramp in Q4 of 22. But we're also seeing a little softness in a couple places, notably Australia is what I'd point you to.

In my prepared remarks, $2 5 billion digital wallets.

And we will continue to invest in expanding the network even further but now we've got the ability to work with enablers around the world sell new use cases in and put this network to work and we're going to continue to do that and look forward to hopefully talking about more of the good results to come.

Next question Jordan.

Our next question comes from Ramsey El <unk> with Barclays. Your line is open.

Chris Suh: If you guys just kind of back up and look at that in, you know, kind of the bigger picture, what are we seeing around the world? You know, outside of Asia, as it sounds like you've looked at the numbers and you would have seen, or seen, you know, resiliency. You know, outside of North America and Asia, if you look at Europe, XUK, Latin America, Samia, you know, most of these regions are growing, you know, at around 20% or more.

Alright, Thanks for taking my question.

You guys had a lot of great commentary on commercial and BTB progress in deal wins in the quarter can you just give us a broader update on your commercial strategy, where do you see the bigger opportunities there going forward.

Yes. Thanks.

We did have some really good commercial wins in the quarter.

A couple of different buckets.

One is we're looking to expand our partnerships right. So I mentioned Citi and IBM. This quarter I mentioned SAP last quarter and we're just we're having good success building and expanding those partnerships around the world.

Chris Suh: So we feel good about what's happening there on the tax rate. Chris, I'll turn over you to the long term tax rate. Yeah, sure. Hi Dave. Yeah, I'm I do think that's the right way to think about it. At least based on what we know now, the new run rate we would put at about 19 and a half to 20%. It does, it is related to how our tax, the mix of our tax jurisdictions around the world and certain tax increases in certain parts of those world.

First thing we're focused on is expanding verticals and in <unk>.

Heard us talk about government travel fleet and fuel I talk about agro I think last quarter working at selling into marketplaces like I mentioned healthcare. So taking these products innovating, creating new use cases and delivering them into new verticals and then.

Chris Suh: As we talked about in the next fiscal year, we'll be below that due to some of the benefits that we anticipate in the second half of the year. But based on what we know today, the new run rate is, is as you estimated.

I'm, just making the products easier to use yesterday, we announced that actually we had a new product to make it easier to accept virtual cards, we call it virtual card acceptance platform.

Unknown Attendee: Next question Jordan.

David Togut: Our next question comes from David Toga, whatever for ISI or line is open. Thank you. Good to see the 19% growth in the visa direct transactions and in particular, 65% growth in cross-border P2P transactions year over year.

Virtual cards are preferred acceptance of many suppliers, but they're not as easy to accept is sometimes we'd like them to be so putting new platforms out to make the core products like virtual cards easier to use.

Ryan Mcinerney: As we look to FY 24, what are some of the biggest most promising new use cases you're working on for visa direct? Yeah, David, you know, cross-border remittances is a big one. Since you called that out, I'll highlight it. You know, I mentioned, I think, on this call and some others, the work we're doing with, you know, pay send and, you know, shenan and things we're doing around the world. We've mentioned in previous calls with some of the both kind of traditional and sin tech remittance players. You know, 65% year over year growth is strong and, you know, continue to invest behind that with new partners and, you know, try to drive further growth going forward.

And then continuing to invest in the partnerships that we've announced over the last couple of years <unk> is a great example of a partner that we announced a couple of years ago that we are investing in and growing in and really getting to see some of the benefits of that around the world. So I guess the last thing I.

I would say Ramsey is just also taken these products more broadly around the world and certainly different countries outside of the most developed markets that we work in.

There is opportunity to get some of the basic products into the hands of small businesses for example, and a lot of countries. We're doing business. There is still a lot of small businesses that are actually using consumer products.

Ryan Mcinerney: We're focused on bill payments. We're focused on earned wage access. We're focused on insurance disbursements. We continue to focus on P2P more broadly in new geographies around the world, both domestic and cross-border. If you just back up, yeah, I said this, I think on previous calls.

Instead of the more sophisticated advanced small business products, let alone the large and middle market products that we can get out there. So.

More partners more use cases more verticals more countries will continue to invest in that business.

Next question Jordan.

Ryan Mcinerney: I believe at this point in time, visa direct is the largest app scale money movement network on the planet. We have made investments consistently year over year to get to a point where we now have 8.5 billion endpoints, 3 billion cards, 3 billion accounts with some of the news I announced in my prepared remarks, 2.5 billion digital wallets. And we'll continue to invest in expanding the network even further, but now we've got the ability to work with enablers around the world sell new use cases in and put this network to work. And we're going to continue to do that and look forward to hopefully talking about more of good results to come.

Our next question comes from will Nance with Goldman Sachs. Your line is open.

Unknown Attendee: Next question, Jordan?

Hey, guys. Appreciate you taking the question you had some interesting.

Interesting commentary around gas processing market share gains wondering if you could just give us kind of a state of the union of where you stand with that and if theres any geographies that are kind of top of mind as opportunities to increase processing share what would those be yes sure.

Sure I mean, we.

We're very focused on processing share for a couple of reasons, but the one I noted I noted in my prepared remarks is a very important one which is we can deliver more of our value added services when we're actually processing the transaction.

Obviously, we are more yield when we process the transaction as well just on the core processing of it but the ability to serve our clients more effectively deliver them our risk capabilities are issuing capabilities, our loyalty capabilities and those types of things are enhanced when we actually process. The transaction. So we spent a lot of time on it I think we've made very good progress.

Ramsey El: Hi, next question comes from Ramsey Ellisa with Barclays, your line is open. Hi, thanks for taking my question. You guys had a lot of great commentary on commercial and B2B progress and deal wins in the quarter.

Ryan Mcinerney: Can you just give us a broader update on your commercial strategy? Where do you see the bigger opportunities there going forward? Yeah, thanks. It was, we did have some really good commercial wins in the quarter.

Over the last many years.

I mentioned in Colombia in my prepared remarks in Colombia is a good use case in a lot of these markets.

Ryan Mcinerney: You know, I put it a couple different buckets. One is, we're looking to expand our partnerships, right? So, you know, I mentioned city and IBM this quarter. I mentioned SAP last quarter. And we're just, you know, we're having good success building and expanding those partnerships around the world.

To really unlock the processing, we have to work with.

The local processor, which we did in Colombia, and then work with the clients to get them on that processor.

They will then test out the transaction see how they work and then ultimately move those transactions of Ethernet, which we like.

Ryan Mcinerney: Second thing we're focused on is expanding verticals. You know, you've heard us talk about government travel, fleet and fuel. I talked about Agro, I think last quarter, working and selling into marketplaces, like I mentioned, healthcare. So taking these products, innovating, creating new use cases and delivering them into new verticals.

We've been very focused in Latin America, we've made some good strides in several different countries in Latin America, and I think we continue to have opportunity in Latin America, we're making strides in Europe, and we'll continue to focus on.

Processing opportunities in several different countries that have local schemes in Europe as well as some places in Asia Pacific So.

Ryan Mcinerney: And then, you know, just making the products easier to use. Yesterday, we announced that actually we had a new product to make it easier to accept virtual cards. We call it virtual card acceptance platform. You know, virtual cards are preferred acceptance of many suppliers, but, you know, they're not as easy to accept as sometimes we'd like them to be. So putting new platforms out to make the core products like virtual cards easier to use.

Those are some of the opportunities we have well. Thanks next question Jordan.

Our next question comes from James Fawcett with Morgan Stanley. Your line is open.

Great. Good afternoon, everybody just wanted to circle back on the travel component of cross border and how youre thinking about that in the coming year. I can appreciate that you guys have often said that youre not necessarily economic forecasters, but can you just repeat for us what your underlying assumption is for the coming year, and then maybe give a little bit of color.

Ryan Mcinerney: And then, you know, continuing to invest in the partnerships that we've announced over the last couple of years. You know, Lex is a great example of a partner that, you know, we announced a couple of years ago that we've invested in and growing in and really getting to see some of the benefits of that around the world.

And for us of how you're arriving at.

That expectation and target for the year. Thanks.

Ryan Mcinerney: So I guess the last thing, you know, say Ramsey is just also taking these products more broadly around the world. In so many different countries outside of, you know, the most developed markets that we work in, there's there's opportunity to get some of the basic products into the hands of small businesses, for example. In a lot of countries, we're doing business. There's still a lot of small businesses that are actually using consumer products. Instead of the more sophisticated advanced small business products, let alone the large and middle market products that we can get out there.

Let me give some context on how we think about just cross border travel in General and then Chris you can add <unk> fill in the blanks on the assumptions that we've made for the year.

Here's how I'd think about it.

In and out of Asia.

We still have yet to normalize so as Chris alluded to or said in his prepared remarks.

We have opportunity to continue to catch up to pre COVID-19 travel levels in and out of Asia.

There is also the opportunity to still catch up into the United States.

Ryan Mcinerney: So, you know, more partners, more use cases, more verticals, more countries. We'll continue to invest in that business.

More broadly around the world.

I would say we've got a normalized in terms of cross border travel, but I think what's interesting is we've normalized at a growth rate higher than pre pandemic levels people are traveling international at this new normal at a faster rate than they would've been all else equal before the pre COVID-19 level. So in a couple of quarters, we still have an opportunity.

Unknown Attendee: Next question, Jordan. Our next question comes from Will Nance with Goldman Sachs. Your line is open. Hey guys, I appreciate you taking the question. You had some interesting, interesting commentary around processing market share gains, wondering if you could just give us kind of a state of the union of where you stand with that. And if there's any geographies that are kind of top of mind as opportunities to increase processing share, you know, what would those be?

To.

Catch up to what would be normalized levels around the rest of the quarters around the world, Although we've normalized but at higher growth rates than we saw pre COVID-19.

Unknown Attendee: Thanks. Yeah, sure. I mean, we were very focused on processing share for a couple of reasons, but the one I noted in my prepared remarks is a very important one, which is we can deliver more of our value added services when we're actually processing the transaction. Obviously, we are more yield when we process the transaction as well, just on the core processing of it, but the ability to serve our clients more effectively deliver them, our risk capabilities, our issuing capabilities, our loyalty capabilities and those types of things are enhanced when we actually process the transaction.

Mentioned the numbers for the year sure the only thing I'd really add and I covered a lot of the assumptions.

On the call commentary the thing that I might just emphasizes that it is pretty healthy growth and if you look at what we've shared in terms of what we expect the index to grow at four to five points a quarter I think that does reflect what Brian said, which is normalized.

Normalized in many cases and continuing to be elevated growth.

Next question Jordan.

Our next question comes from Jamie Friedman with Susquehanna. Your line is open your lines.

Unknown Attendee: So, we spent a lot of time on it. I think we've made very good progress over the last many years. I mentioned Columbia in my prepared remarks and Columbia is a good use case in a lot of these markets to really unlock the processing. We have to work with the local processor, which we did in Columbia and then work with the clients to get them on that processor. They will then test out the transaction, see how they're working and ultimately move those transactions to these and that which we like.

Hi.

Thanks for taking my question, Brian in your prepared remarks, you called out Cybersource I know, it's a very important asset for you and always has been but.

Why is ensuring that there is an increased cadence in the business and if so why would that be.

Thank you.

Yes, as I said, Jamie my prepared remarks.

We're seeing great strong client demand around the world for Cybersource why I think as a result, a lot of the investments we've made in the platform over the last several years, we've and we've been very purposeful about investing in our omni commerce capabilities for Cybersource, we've been very purposeful and investing in our <unk> capabilities.

Unknown Attendee: We've been very focused in Latin America. We've made some good strides in several different countries in Latin America, and I think we continue to have opportunity in Latin America. We're making strides in Europe and we'll continue to focus on processing opportunities in several different countries that have local schemes in Europe, as well as some places in Asia Pacific. So, those are some of the opportunities we have. Well, thanks.

Our risk management and fraud prevention capabilities.

A lot of that has been driven by sitting down with our clients and partners understanding their roadmaps understanding what they needed us to deliver.

Will Nance: Next question, Jordan. Our next question comes from James Faucette with Morgan Stanley. Your line is open. Very good afternoon, everybody. I just want to circle back on the travel component of across border and how you're thinking about that in the coming year. I can appreciate, as you guys have often said, you're not necessarily economic or casters, but can you just repeat for us what your underlying assumption is for the coming year, and then maybe give a little bit of color on inputs of how you're arriving at the end of the year.

Those investments and then having success growing with our partners and in any given market around the world when clients start adopting the cybersource platform and others look around at the success, they're having with authorization rates, our transaction success or others that leads to new opportunities and we've had the ability to sell into those so thanks for the question.

Question Jordan.

Our next question comes from Sanjay <unk> with <unk>. Your line is open.

Thanks.

Will Nance: That expectation and target for the year. Thanks. Let me give some context on how we think about just crossword travel in general and then Chris, you can add, and or fill in the blanks on the assumptions that we've made for the year. Here's what we think about it. You know, in, in and out of Asia, you know, we still have yet to normalize. So as Chris alluded to or said in his prepared remarks, you know, we have opportunity to continue to catch up to pre-COVID travel levels in and out of Asia.

On <unk> II, Chris you mentioned no impact yet and also sort of caveat at the outlook I'm. Just wondering is there anything that gives you pause there and then Ryan anything you guys are doing proactively to get in front of any adverse impacts. Thanks.

Will Nance: There's also the opportunity to still catch up into the United States. But more broadly around the world, I would say we've got a normalized in terms of cross-border travel, but I think what's interesting is we've normalized at a growth rate higher than pre-pendemic levels. People are traveling international at this new normal at a faster rate than they would have been all else equal before the pre-COVID levels. So in a couple quarters, we still have an opportunity to catch up to what would be normalized levels.

Why don't I talk just contextually about Reg II and then you can picture and also on <unk> question.

So two things going on obviously with Reg I, let's just talk about them. Both one is the change that was made last summer.

Into effect with regards to routing in the E comm space.

As we mentioned in our prepared remarks, there we haven't seen any meaningful impact having said that there's a lot of work happening around the ecosystem.

And.

We're out there talking to clients and partners about our products and our value propositions, making sure. They understand the benefits of a visa transaction, especially in the E Commerce space, where often the merchant holds the fraud liability. So our sales teams are in with merchant clients and acquire clients day in and day out explaining the value of our products showing them the value of our products.

Will Nance: Around the rest of the quarters, around the world, I think we've normalized, but at higher growth rates than we saw pre-COVID. You want to mention the numbers for the year. Sure. I, you know, the only thing I'd really add, and I covered a lot of the assumptions in the call commentary. The thing that I might just emphasize is that, you know, it is pretty healthy growth. And if you look at what we've shared in terms of what we expect the index to grow at four to five points a quarter, I think that does reflect what Ryan said, which is normalized in many cases and continuing to be elevated growth.

Going forward.

We feel good about our ability to compete.

Second thing that's going on with Reg II.

I'm sure people would have seen as the fed has announced that they're going to I think its tomorrow.

Some changes potentially to the debit interchange rate in the U S.

We don't know what theyre going to say, we'll obviously follow it very closely.

When they do publish something we'll take a look and see if it merits a response on our behalf.

Ryan Mcinerney: Next question, Jordan. Our next question comes from Jamie Friedman with Susquejana. Your line is open. Hi, thanks for taking my question. Ryan, in your prepared remarks, you called out cyber source. I know it's a very important asset for you, and always has been, but why is, am I inferring that there's an increased cadence in the business, and if so, why would that be? Thank you. Yeah, as I said, Jamie, my prepared remarks, we're seeing great strong client demand around the world for cyber source.

And just as a reminder, interchanges exchange of value between the merchant and the issuer.

And I think what's notable about our business model is we've proven that we can be resilient and have a strong business in regulated interchange markets nonregulated interchange markets and markets that have higher regulated interchange and lower regulated interchange so.

Ryan Mcinerney: Why? I think it's a result of a lot of the investments we've made in the platform over the last several years. We've, and we've been very purposeful about investing in our omnicomers capabilities for cyber source. We've been very purposeful in investing in our tokenization capabilities, our risk management fraud prevention capabilities. And a lot of that has been driven by sitting down with our clients and partners, understanding the roadmaps, understanding what they needed us to deliver, making those investments, and then, you know, having success growing with our partners.

Ryan Mcinerney: And, you know, in any given market around the world, when clients start adopting the cyber source platform and others look around at the success they're having with authorization rates or transaction success or others, that leads to new opportunities. And, you know, we've had the ability to sell into those. So, thanks for the question.

As you alluded to a lot going on in the U S with Reg II, but.

We're all over it and we feel good about our ability to compete.

And I'll just add on from a guidance perspective, hopefully we're very clear on the call we have not seen any meaningful impact thus far and therefore haven't include.

Included any impact of that in our FY 'twenty guidance, but it is early days and there's a lot going on this is Ryan Ryan described at length and so we'll keep you posted as things evolve in the coming months.

Next question I'm sorry.

Our next question comes from Dan Perlin with RBC capital markets. Your line is open.

Thanks, I just wanted to ask a question around <unk> and the implications for just the broader based authorization rate improvements and this is not just domestic but like international it just feels like a lot of your partners are able to drive higher authorization rates as a result of the token. So I'm just wondering how youre viewing that in the context of.

Sanjay Sakhrani: Next question, Jordan. Our next question comes from Sanjay Sakhrani with KBW, your line is open. Thanks. I have a question on Reg II, Chris, you mentioned no impact yet and also sort of caveated the outlook. I'm just wondering, is there anything that gives you pause there? And then Ryan, anything you guys are doing proactively to get in front of any adverse impacts? Thanks. Why don't I talk just contextually about Reg II and then you can get your ending else on Sanjay's question?

Being able to drive incremental transactions back to visa.

Yes, thanks for the question.

For a reminder for everyone.

<unk> is technology that we use that essentially helps protect issuers merchants and consumers and to your question ultimately drives higher authorizations and lower fraud.

I think I said in my prepared remarks, we crossed seven 5 billion tokens as of the end of September.

198 markets.

Sanjay Sakhrani: So two things going on, obviously with Reg II, let's just talk about them both. One is the change that was made last summer that went into effect with regards to routing in the e-commerce space. As we mentioned our prepared remarks there, we haven't seen any meaningful impact. Having said that, there's a lot of work happening around the ecosystem. And, you know, we're out there talking to clients and partners about our products and our value propositions, making sure they understand the benefits of a visa transaction.

I think we have 14 billion token transactions in the fourth quarter, which is growing at like 60%. So this is another example of a platform and a service that we invested in over many years and we're now scaling broadly around the world.

But to your question we are we're seeing on average.

Somewhere between 4% and 5% higher approval rates across our partners and we also see it with a reduction in fraud, a 30% reduction in fraud. So you say why do we have $7 5 billion tokens that are now out there in the ecosystem well if youre one of our partners as you said and you can reduce your fraud rates, 30% and driver off rates.

Sanjay Sakhrani: Especially in the e-commerce space, where often the merchant holds the fraud liability. So our sales teams are in with merchant clients and acquire clients day in and day out, explaining the value of our products, showing them the value of our products and going forward, you know, we feel good about our ability to compete. The second thing that's going on with Reg II that I'm sure people would have seen is the Fed has announced that they're going to, I think it's tomorrow, announce some changes potentially to the debit interchange rate in the US.

Four to five percentage points that is a great opportunity that's higher sales thats lower fraud, that's better customer experience.

And we continue to invest in that platform as well, we see a lot of benefits to our issuers to our consumers.

Ultimately use the products will be you'll see more from us enhancing the platform in terms of using the final biometrics and.

Sanjay Sakhrani: We don't know what they're going to say, you know, we'll obviously follow it very closely and when they do publish something, we'll take a look and see if it merits a response on our behalf. And just as a reminder, interchange is an exchange of value between the merchant and the issuer. And, you know, I think what's notable about our business model is we've proven that we can be resilient and have a strong business in regulated interchange markets, not regulated interchange markets in markets that have higher regulated interchange and lower regulated interchange.

Enabling merchants to be able to authorize and authenticate customers across multiple devices and those types of things. So yes higher off lower fraud, we love the platform continuing to invest in.

Sanjay Sakhrani: So, you know, as you alluded to a lot going on in the US with Reg II, but we're all over it and we feel good about our ability to compete. Yeah, and I'll just add on from a guidance perspective. Hopefully we're very clear on the call. We have not seen any meaningful impact thus far and therefore haven't included any impact of that in our FY24 guidance, but it is early days and there's a lot going on as Ryan described at length. And so we'll keep you posted as things evolve in the coming months.

Chris Suh: Next question Jordan.

Next question Jordan.

Our next question comes from Trevor Williams with Jefferies. Your line is open.

Great. Thanks, a lot Chris I wanted to clarify on incentives within the guide I think you said, you're assuming slightly slower growth than in fiscal 'twenty. Three I just want to make sure is that year over year growth in dollars or as a percentage of gross revenue and then just a second part to that you're framing this as a more normal year should we be interpreting that.

As meaning all else equal a normal year incentives should be going up kind of plus or minus 100 basis points as a percentage of gross revenue. Thanks.

Hi, Jeff.

Yes, let me try to clarify a bit.

As I said 'twenty 'twenty four is in many ways a normal year, it's still normalizing in some aspects, but in many ways. It is normalizing and as a result, we've made some changes we've returned to pre COVID-19 practices on a number of fronts.

Dan Perlin: Our next question comes from Dan Perlin with RBC capital market to your line is open. Thanks. I just wanted to ask the question around tokenization and the implications for just broader based authorization rate improvements. And this is not just like domestic but like international. It just feels like a lot of your partners are able to drive higher authorization rates as a result of the token. And so I'm just wondering how you're viewing that in the context of being able to drive incremental transactions back to be so. Thanks. Thanks for the question.

We provided formal guidance as you went through that as we went through in detail and we've talked about on this call for the full year in next quarter and will continue that practice and that guidance is on net revenue guide specifically.

And directional commentary about the growth in incentives, which.

To your specific question. It is a dollar year over year growth rate that we said, we will grow slower in 'twenty four relative to 'twenty. Three importantly, this is very very consistent and it's aligned with how how we think about the business, how we manage the business going forward.

Ryan Mcinerney: Just a reminder for everyone, tokenization is technology that we use that essentially helps protect issuers merchants and consumers and to your question ultimately drives higher authorizations and lower fraud. I think I said in my prepared remarks, we crossed 7.5 billion tokens as of the end of September. We're in 198 markets. I think we have 14 billion token transactions in the fourth quarter, which is growing at like 60%. So this is another example of a platform and a service that we invested in over many years and we're now scaling broadly around the world.

Haven't guided on the percentage, which is the other part of your question. Because again. This is this is consistent with how we manage the business the thing that.

We do track very importantly is that we look at the yield across our net revenue yield specifically and that's remained very stable and thats very consistent again with how we think about deal economics.

Next question Jordan.

Our next question comes from Tien Tsin Huang with Jpmorgan. Your line is open.

Ryan Mcinerney: To your question, we are. We're seeing on average somewhere between 4 and 5% higher approval rates across our partners. And we also see it with a reduction in fraud, a 30% reduction in fraud. So you say, why do we have 7.5 billion tokens that are now out there in the ecosystem? Well, if you're one of our partners, as you said, and you can reduce your fraud rate 30% and drive your author rates 4 or 5 percentage points, that is a great opportunity.

Hi, Thanks, Max at money 2020 is really good energy here I'm curious Ryan is if you'd characterize the deal pipeline.

As being any different than what it was a year ago, how does that feel to you in.

I don't mind me asking just on the credential side I think you said up 7% I'm curious same thing as pipeline there support that same kind of high single digit growth in.

In fiscal 'twenty for credentials.

<unk> glad there is great.

There is great energy and money 2020, and I Hope my visa team members that are there are serving clients finding sales opportunity is growing our business.

Ryan Mcinerney: That's higher sales, that's lower fraud, that's better customer experience. And, you know, we continue to invest in that platform as well. We see a lot of benefits to our issuers, to our consumers who ultimately use the products. You'll see more from us enhancing the platform in terms of using the phyto biometrics and enabling merchants to be able to authorize and authenticate customers across multiple devices and those types of things. So, yeah, higher off, lower fraud, we love the platform, continue to invest.

Yes, we see a great pipeline.

We really do with clients issuing fintech co brands.

With opportunities to grow credentials I mentioned some of the new things on my prepared remarks, and we're having good success.

Just some of the wins on the call whether its city of U S Bank F N B O Fidelity Shinhan, China merchants Bank Shopify I mean, the list goes on rate IBM DBS.

Unknown Attendee: Next question, Jordan?

Trevor Williams: Our next question comes from Trevor Williams with Jeffries, your line is open. Great, thanks a lot. Chris, I wanted to clarify on incentives within the guide. I think you said you're assuming slightly slower growth than in fiscal 23. So I want to make sure, is that year of year growth in dollars or as a percentage of gross revenue? And then just the second part to that, you're framing this as a more normal year.

He had Saudi we.

We feel good about the pipeline we feel good about the way our teams are out there serving clients around the world. We feel good about the wins that we have in <unk>.

Feel good about the growth that is generating.

Our next question Jordan.

Our next question comes from Ashwin <unk> with Citi. Your line is open.

Hi, Chris.

Congratulations on the quarter questions on open banking.

Trevor Williams: Should we be interpreting that as meaning all else? This equal a normal year incentive should be going up kind of plus or minus 100 basis points as a percentage of gross revenue? Thanks. Yeah, hi Jeff. Yeah, let me try to clarify a bit.

CFPB, obviously proposal concerning against truck competition shift to open banking few days back.

You guys have.

With open banking frameworks outside the U S. In many different geographies. It just kind of curious how that translates in terms of products in terms of acquisitions, you made like petsmart and so on to.

Chris Suh: As I said, 2024 is in many ways a normal year. It's still normalizing in some aspects, but in many ways it is normalizing. And as a result, we've made some changes. We've returned to pre-COVID practices on the number of fronts. We've provided formal guidance as you went through, as we went through in detail, and we've talked about on this call for the full year and next quarter, and we'll continue that practice.

To bring that over to the U S.

Thanks for the question.

I think the CFPB rule that they put out is good for Americans I think it's.

Chris Suh: And that guidance is on net revenue guide specifically and directional commentary about the growth and incentives, which to your specific question, it is a dollar year over year growth rate that we said will grow slower in in 24 relative to 23. Importantly, this is very, very consistent in some lines with how we think about the business, how we manage the business going forward. We haven't guided on the percentage, which is the other part of your question, because again, this is consistent with how we manage the business.

It's great for clarifying the structure and the regulatory framework here in America I think.

It's likely to be a catalyst for growth of open banking in the United States.

It gives clarity to all the various different players in the ecosystem. If you think about it like it's it's a great opportunity for Americans to be able to put their own data to work.

And different types of digital tools that will help their own personal financial management help manage their financial lives better get a better view of their finances across multiple different providers.

Chris Suh: The thing that we do track very importantly is that we look at the yield across our net revenue yield specifically, and that's remained very stable, and that's very consistent again with how we think about the economics.

And then to your point, we've seen different regulatory frameworks in different markets around the world. Our tank business continues to perform very well in Europe.

Which obviously was one of the leaders in terms of establish a regulatory framework for open banking.

Ryan Mcinerney: Next question, Jordan. Our next question comes from Tinging Wang with JP Morgan. Your line is open. Thanks. Next I had money 2020 is really good energy here. I'm curious, Ryan, if you characterize the field pipeline as being any different than what it was a year ago, how does that feel to you? And if you don't mind me asking just on the credential side, I think you set up 7%. I'm curious same thing is pipeline there is support that same kind of high signature growth in fiscal 24 credentials.

And we look forward to the opportunity to bring <unk> outside of Europe. So when we look at the proposed rules here in the U S. We welcome that because we want to understand what the regulated regulatory expectations are so that we can build a business that will thrive and serve our clients and serve consumers effectively. So thanks for the question last question Jordan.

Ryan Mcinerney: Thanks. Hi, Dijon. Glad there's great. Glad there's great energy of money 2020, and I hope my visa team members that are there are serving clients finding sales opportunities growing our business. Yeah, we see a great pipeline. We really do with clients issuing Fintech co brands with opportunities to grow credentials. I mentioned some of the new things on the prepared remarks. And we're having good success. You know, I think it is some of the wins on the call, whether it's, you know, city or US bank, FNBO, Fidelity, Xin Han, China Merchants Bank, Shopify.

Final question comes from Hershey's <unk> with Bernstein. Your line is open.

Good afternoon.

Looking into the next fiscal year and beyond I want to ask about the cash.

I'll be quick.

As you know this is all I think the person asking question for these investors.

Thinking about again given the pandemic.

General inflation tailwind how are you.

Youre thinking about the runway, especially segmenting it between developed markets and also.

Politically.

Okay.

Yes, thanks for the question.

Continue to be excited about the cash check digitization opportunity around the world.

We continue to digitize cash and check around the world and economies continue to grow around the world. So I think.

Ryan Mcinerney: I mean, let's go on, right? IBM, DBS, Etihad, Saudi. We feel good about the pipeline. We feel good about the way our teams are out there serving clients around the world. We feel good about the wins that we have and feel good about the growth that is generating.

Continues to surprise many people when they look at developed markets like the United States, how much cash and checks still exist and certainly when you look to the developing world how much cash and checks still exists. So we continue to be excited about the runway. We think it offers us tremendous growth opportunity.

Ashwin Shirvaikar: Next question, Jordan. Our next question comes from Ashwin Syruviaker with city. Your line is open. Amira, and Hi, Chris, congratulations on the quarter. Questions on Open Banking, CFPB, obviously proposal to sort of jumpstart competition shift to Open Banking a few days back. You guys have death with Open Banking frameworks outside the US in many different geographies. It's just kind of how that translates in terms of products, in terms of acquisitions you made, like think this more and so on, to bring that over to the US.

And we're going to continue to work with our partners across the ecosystem to get more credentials into consumers' hands get more acceptance out there in the ecosystem, especially among micro and nano merchants.

And work with our partners to drive more activation and usage among the credentials and feel good about that entire algorithm.

And with that we'd like to thank you for joining US today. If you have additional questions. Please feel free to call or email our investor relations team. Thanks, again and have a great day.

Thank you for your participation in today's conference you may disconnect at this time.

Ashwin Shirvaikar: Thanks for the question. I think the CFPB rule that they put out is good for Americans. I think it's great for clarifying the structure in the regulatory framework here in America. I think it's likely to be a catalyst for growth of Open Banking in the United States, is it gives clarity to all the various different players in the ecosystem. It's a great opportunity for Americans to be able to put their own data to work in different types of digital tools that will help their own personal financial management, help manage their financial lives better, get a better view of their finances across multiple different providers.

Ashwin Shirvaikar: And then to your point, we've seen different regulatory frameworks in different markets around the world. Our Tink business continues to perform very well in Europe, which obviously was one of the leaders in terms of establishing a regulatory framework for Open Banking. And we look forward to the opportunity to bring Tink outside of Europe. So when we look at the proposed rules here in the US, we welcome that because we want to understand what the regulatory expectations are so that we can build a business that will thrive and serve our clients and serve consumers effectively. So thanks for the question.

Unknown Attendee: Last question, Jordan.

Harshita Rawat: Our final question comes from Herschito Arwe, with Bernstein. Your line is open. Good afternoon.

Ryan Mcinerney: As you're looking into the next fiscal year and beyond, I want to ask about the cash digitization opportunity. As you know, this is always a persistent question for recent investors and of course, they're thinking about it again, given the pandemic, both forward and during station tables. So how do you think about the run through especially segmented yet between developed markets and also yet a little bit more competition? Thanks. Yeah, thanks for the question. We continue to be excited about the cash check digitization opportunity around the world.

Ryan Mcinerney: We continue to digitize cash and check around the world and economies continue to grow around the world. So I think, you know, it continues to surprise many people when they look at developed markets like the United States. How much cash and check still exists and certainly when you look to the developing world, how much cash and check still exists.

Ryan Mcinerney: So we continue to be excited about the runway. We think it offers us tremendous growth opportunity and we're going to continue to work with our partners across the ecosystem to get more credentials into consumer hands, get more acceptance out there in the ecosystem, especially among micro and nano merchants and work with our partners to drive more activation and usage among the credentials and feel good about that entire algorithm.

Unknown Attendee: And with that, we'd like to thank you for joining us today. If you have additional questions, please feel free to call or email our investor relations team. Thanks again and have a great day.

Unknown Attendee: Thank you for your participation in today's conference.