Former VP at Visa Inc
- Visa’s (NYSE: V) operating environment and ongoing performance
- Visa Direct overview, transaction volume outlook and potential catalysts and limiting factors
- FedNow’s threat to cannabilise transaction volumes from the Visa Direct network, noting economic impacts
- Evolving competition with Mastercard (NYSE: MA) and other major payment processors
What are your thoughts on Visa’s operating environment? Which 2-3 broader market trends should we monitor?
How should we be factoring in the assumption of a potential global recessionary environment going forwards, as well as some of the anomalies we’ve seen in Fx markets with the strength of the US dollar? To what extent is that a near-term hurdle vs a longer-term threat?
What might be the longer-term outlook for the spread in terms of transaction margins for cross-border payments? I understand they’re sometimes 8x as great as a conventional domestic transaction. By what magnitude are you expecting compression?
Would compression be more of a function of regulatory intervention, similar to what we saw with the recent Durbin proposal, which has been removed from spending and in budgetary bills? In what scenario would we expect some sort of compression?
How are you viewing the adoption of real-time payments networks? Where would you say we are?
What do you see as the best and worst use-case adoptions for real-time payments from the consumer and business angles? What are your assumptions behind this? You mentioned B2C transactions – could you lay out where you see the most upside in terms of adoption?
How does Zelle fit in given it is real-time payments but doesn’t involve the card, because it’s more of a bank-to-bank transfer? Is it a competitor to the networks or is its use somehow limited?
As we see the ubiquity of the real-time payments networks increase, as well as the launch of FedNow, does it change the equation in terms of relying on Visa Direct or Mastercard Send to facilitate these transactions for the settlement?
Has the FedNow launch increased banks’ leverage in terms of negotiating price from the Visa Direct side, at the very least?
Based on the assumption that we’re reaching a future point where real-time payments is more ubiquitous, how can we build a framework where Visa Direct’s market share might be more resilient vs fragile, whether it’s with respect to use cases or anything else?
Can you elaborate on the complexities involved with facilitating cross-border payments? To what extent are these easier to replicate over time? Do you expect anyone to meaningfully replicate the scale and network that Visa is creating?
Could you elaborate on your earlier comments about the network of network strategies? What do you think is missing from Visa Direct’s portfolio? How should we think about the building blocks to getting there?
Does management’s ability to execute on this give you any pause in that it is coming from this legacy core network background, and coming into this amalgamation of different fintech solutions to build this network? I would imagine some friction in terms of thought leadership.
How should we think about Visa’s M&A strategy going forwards, especially in what areas might be unrefined and where an M&A opportunity might be most accretive?
Do you have anything additional to highlight about the Visa Direct product?
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