Former director at Visa Inc
- Visa’s (NYSE: V) operating environment and considerations for the macroeconomic climate
- Visa Direct and opportunity in real-time payments
- Regulatory outlook, Visa’s positioning in cross-border payments and strategies for international expansion
- Product strategy, roadmap for the “network of networks” initiative and medium-to-long-term outlook
What’s your overview on Visa’s operating environment? Which 2-3 key trends or drivers should the investment community monitor?
How would you contextualise the broader digitisation of payments and the potential impact on the trends we’re seeing between the debit and credit side? How does that open the door for additional value-added services for players?
How should we think about Visa’s penetration in different international regions? How do you expect that penetration to trend?
Can you elaborate on the regulatory framework for cross-border between regions or corridors such as the Europe and the US, intra-Europe or US-Japan? How is the regulatory framework set up and who controls the rates or transaction fees that card networks can charge on these?
How can we get a better understanding of the size of cross-border fees? I’ve seen various figures claiming 3x or 5x of traditional interchange fees. Can you provide any hypothetical examples of how these are calculated?
Is there a way to rank from highest to lowest in terms of cross-border fees across any of the corridors, leaving aside the outside consumer coming to the US as the most lucrative? How should we benchmark it?
Do you see any particular market where Visa might be at risk of losing market share or maybe even outsized potential to gain a significant amount of share? What are your assumptions around that?
What’s your outlook for broader regulatory risk for the major card networks? There’s been some recent news flow about a proposal by Senator Durbin to increase competition for the major card networks by offering alternative network routing choices. What are the implications for something like this?
Is there any way to contextualise or elaborate on the impact on the licensing, interchange and processing fees or the cardholder reward schemes you’ve been mentioning? What ultimate impact would you expect on the top line, from a devil’s advocate standpoint of it going through in full severity?
What regulatory wildcards are you seeing on the horizon, outside of the more recent announcement we’ve discussed? Does anything in the regulatory environment give you pause in terms of card networks and their growth strategies?
Do you expect outsize pricing pressure regarding interchange or cross-border fees in many other markets?
What is your high-level overview of the Visa Direct platform, its various use cases and how it plays into the broader growth strategy?
Do you see any material threat to the Visa Direct platform from Mastercard’s offering or any of the government-regulated offerings such as FedNow? The ECB [European Central Bank] is either in development with one or had developed it entirely. How do you expect these offerings to interact in terms of market share or usage?
Do you see any material threat from blockchain, non-centralised distributed ledgers or cryptocurrency? That seems to be one of the main benefits touted by evangelists on that side.
How would you grade the progress in developing the Visa Direct network overall? Is it X% finished? What does the product portfolio look like at maturity?
Can you elaborate on how the partnerships are structured? It seems they’re in a mixed boat of being competitors but also relying on each other through the partnerships. How should we contextualise the profit-sharing schemes or how these companies interact with this “network of networks” strategy?
You mentioned the Direct network being around 40% complete. How would you rank the product areas or use cases to potentially explore going forward? Where might have the most potential upside, either an existing use case or one that is yet to be added to the current Direct network?
What is Visa’s positioning in the disbursement space across the new gig economy-type companies and the interaction in how they’re paying these pseudo-contracted workers?
Do you see any material threat across the competitive landscape or from further adoption of the Apple Pay or Google Pay systems? Is there any potential of disintermediating from these card networks?
Understanding that you would rank Visa network above Mastercard, where does that leave players such as American Express or Discover in terms of ongoing network performance, going forward?
With respect to building out additional use cases for the Direct network, how does that influence your outlook for Visa’s potential M&A strategy? Do you expect the company to look at a specific group of businesses or subsector?
What is your 3-5-10-year outlook for Visa regarding the strategies we’ve discussed today?
Where do you think the story goes wrong for Visa? Could the recently proposed legislation by Senator Durbin be the largest potential for downside risk for card networks?
Is there anything additional to highlight about Visa? Do you have any closing remarks?
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