23-Jul-2015 Visa, Inc. · 7/23/2015 · Operator: Welcome to Visa, Incorporated's Fiscal Q3 2015...

Corrected Transcript

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23-Jul-2015

Visa, Inc. (V)

Q3 2015 Earnings Call

Visa, Inc. (V) Q3 2015 Earnings Call

Corrected Transcript 23-Jul-2015


2 Copyright © 2001-2015 FactSet CallStreet, LLC

CORPORATE PARTICIPANTS

Jack Carsky Global Head of Investor Relations, Visa, Inc.

Vasant M. Prabhu Chief Financial Officer & Executive Vice President

Charles W. Scharf Chief Executive Officer & Director

......................................................................................................................................................................................................................................................

OTHER PARTICIPANTS

David Mark Togut Evercore Group LLC

Chris C. Brendler Stifel, Nicolaus & Co., Inc.

Smittipon Srethapramote Morgan Stanley & Co. LLC

Lisa D. Ellis Sanford C. Bernstein & Co. LLC

Bob P. Napoli William Blair & Co. LLC

Craig J. Maurer Autonomous Research US LP

Sanjay Sakhrani Keefe, Bruyette & Woods, Inc.

Darrin D. Peller Barclays Capital, Inc.

Daniel R. Perlin RBC Capital Markets LLC

Jason Alan Kupferberg Jefferies LLC

Bryan C. Keane Deutsche Bank Securities, Inc.

Glenn E. Greene Oppenheimer & Co., Inc. (Broker)

Kevin D. McVeigh Macquarie Capital (USA), Inc.

Kenneth Bruce Bank of America Merrill Lynch

James Schneider Goldman Sachs

Tien-Tsin Huang JPMorgan Securities LLC

David Hochstim The Buckingham Research Group, Inc.





MANAGEMENT DISCUSSION SECTION

Operator: Welcome to Visa, Incorporated's Fiscal Q3 2015 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 over conference over to your host, Mr.

Jack Carsky, Head of Global Investor Relations. Mr. Carsky, you may begin. ......................................................................................................................................................................................................................................................


Thanks, Jamie. Good afternoon everyone, and welcome to Visa Inc.'s fiscal third quarter earnings conference call.

With us today are Charlie Scharf, Visa's CEO and Vasant Prabhu, Visa's CFO.

This call is currently being webcast over the Internet and is accessible on the Investor Relations section of our

website at www.investor.visa.com. A replay of the webcast will also be archived on our site for 90 days. A

PowerPoint deck containing financial and statistical highlights of today's commentary was posted to our website

prior to this call.

Let me also remind you that this presentation may include forward-looking statements. These statements aren't

guarantees of future performance and our actual results could materially differ as the result of a variety of factors.

Additional information concerning those factors is available in our most recent reports on Forms 10-K and Q,

which you can find on the SEC's website and the Investor Relations section of our website.

For historical non-GAAP or pro forma-related financial information disclosed in this call, the related GAAP

measures and other information required by Reg G of the SEC are available in the financial and statistical

summary accompanying today's press release.

With that, I'll turn the call over to Vasant. ......................................................................................................................................................................................................................................................


Thank you, Jack. We reported another solid quarter of financial results with strong revenue and earnings growth

against an economic backdrop that continues to be uncertain. Most of our results were in line with our

expectations going into the quarter with a few highlights and exceptions. Let me speak to those first.

First, we recognized a tax benefit of $280 million. When we last talked to you in April, we had estimated that this

would be a fiscal fourth quarter event, so this is essentially a change in timing. This resulted in an effective tax rate

of 22% in Q3 and shifted $0.12 cents of EPS into the third quarter from the fourth. Based on the shift, we now

expect our tax rate in the fourth quarter to approximate 34%, and for the full year, we are now anticipating a rate

between 29% and 30%.

Second, revenue growth of 12% on a nominal basis was significantly higher than we anticipated in spite of

continuing foreign exchange rate headwinds of approximately 3 points in the quarter. Revenue growth

outperformance was driven by sustained high currency volatility that substantially offset the foreign exchange rate

headwinds as well as low client incentive levels than previously assumed.





Third, our expectation for higher client incentive levels in the third quarter did not come to pass due to lower

payment volumes and performance adjustments in specific geographies as well as the timing and impact of certain

issuer deal renewals. Some of these client incentives are shifting to the fourth quarter as these deals are signed. As

a result, client incentives will be higher in the fourth quarter both in dollars and as a percent of gross revenue.

Despite this, we now expect client incentives for the full fiscal year at the low end of the 17.5% to 18.5% range.

Finally, we revalued the Visa Europe put option, taking $110 million noncash non-operating expense. The increase

in value of this liability was a result of an increase in estimated Visa Europe adjusted sustainable income. As a

reminder, US GAAP requires us to estimate the put option liability each quarter.

Moving on to the quarter's business drivers and our financial results. Global payments volume growth in constant

dollars for the June quarter continued to be solid at 11%, in line with the March quarter. The US grew 9% and

international grew 14%. In the June quarter, US credit grew 12%, flat compared to the March quarter as the effects

of the Chase conversion begin to wane. US debit grew at 6% in the June quarter, down about 0.5 points compared

to the March quarter. Gasoline prices continue to have a significant negative impact, reducing growth in aggregate

US payment volume by approximately 3 percentage points. We continue to see the largest share of these savings

going to debt repayment and stronger consumer balance sheets.

International payments volume growth of 14% was powered by China, the Middle East, Southeastern Europe and

South Asia. The modest uptick in growth rates versus last quarter was driven by the initiation of domestic

payments volume reporting by a large Chinese bank. More recently, through July 21, US payments volume growth

was 10%, with U.S. credit growing 12% and debit 8%, not materially different from Q3 trends.

Global cross-border volumes registered their third consecutive quarter of 8% constant dollar growth, though the

international component declined 1 point to 9% compared to the March quarter. As has been the case all year,

outbound corridors of Russia, Canada and Brazil remain challenged. Brazil in particular was hurt both by a weak

currency on issuing and lapping the FIFA World Cup on acquiring. The strong dollar has continued to depress

inbound commerce into the US. As we look ahead to the fourth quarter, we're monitoring travel into South Korea

due to the Middle East respiratory syndrome virus also known as MERS and the impact on outbound Chinese

travel from the recent equity market correction.

In Venezuela, currency controls have effectively shut down the cross-border business for private banks. The

bolivar continues to depreciate and we have moved to local currency collection. All this will significantly reduce

revenues from our Venezuelan business for the foreseeable future.

On the positive front, outbound US spending remains robust as well as cross-border trends across the rest of Latin

America, Asia-Pacific and the Middle East. Through July 21, cross-border volume on a constant dollar basis grew

8%, with a U.S. growth rate of 7% and an international growth rate of 8%.

Transactions processed through Visa's network totaled $18 billion in the fiscal third quarter, an 8% increase over

the prior period, but down 3% from the March quarter. The US grew 8% while international delivered 7% growth.

As most of you know, in Russia, we transferred domestic processing to the new national processor, NSPK, in April.

This resulted in an aggregate 2 point decline in processed transaction growth in the June quarter. We expect this

drag on process transaction growth to continue for the next three quarters, approaching almost 3 percentage

points each quarter. Through July 21, processed transaction growth was 8% with a US growth rate of 10% and an

international growth rate of 1%, the international growth rate of course being impacted by Russia.

Now to financial results. Net operating revenue in the quarter was $3.5 billion, a 12% year-over-year increase and

was driven by solid results across all revenue line items. Strong global payments volume drove service revenue to





$1.6 billion, up 9% over the prior year. The quarter also benefited from previously announced pricing action. Data

processing revenue was $1.4 billion and grew 6% over the prior year's quarter, based on continued strong growth

rates in Visa process transactions both in the US and internationally.

While on the subject of data processing revenue, let me call out a dynamic associated with the transition of Russia

domestic processing to the NSPK. While we are no longer processing these domestic transactions, we continue to

own the issuer client relationship. For this reason, we will continue to recognize the associated processing revenue

in our data processing revenue line. This will be offset by payments to NSPK for the actual processing, which will

flow through our network and processing expense line. In short, the revenue stays the same as before, but our

expenses will increase.

International transaction revenue grew 21% to $1 billion as the impact from the previously announced pricing

action and higher currency volatility offset soft cross-border volume growth.

As expected, total operating expenses for the quarter were up 11% over the prior year. Higher personnel costs were

the key driver, impacted by above normal employee incentive accruals tied to better than expected year-to-date

performance.

In terms of the fiscal fourth quarter, we still expect net revenue growth to approach double digits despite

continuing foreign exchange rate headwinds and higher client incentive than we had in the third quarter. Expense

growth rates will moderate from Q3 levels with the full-year growth rate coming in as we expected in the mid

single digit range, which is a couple of points higher than current consensus. For fiscal 2015, we now expect to end

with double digit constant dollar net revenue growth and mid-teens adjusted EPS growth.

We were active in the market in the quarter, repurchasing a total of 15.5 million shares at an average price of just

over $68. Fiscal year-to-date, we have purchased 44.1 million shares at a price of just under $66 per share for a

total of $2.9 billion. We currently have authorization to repurchase up to $2.8 billion of stock.

Finally some early observations on fiscal 2016. As we look ahead, currency volatility could moderate from record

levels, reducing the revenue contribution of cross-border transactions. We will lose the benefit of recent

conversions and absorb the full-year impact of large deal renewals happening in the fourth quarter. Also, China

start-up costs remain unclear at this time

On the positive front, we're heartened that despite an uncertain global economic environment, payment volume

growth has remained steady and healthy. We hope that as the dollars stabilizes, cross-border growth rates will

accelerate and in the US we will lap the sharp declines in gas prices. We're working through the details of these

and other headwinds and tailwinds and how they might impact us next year. As we always do, we will provide a

more comprehensive point of view when we talk to you again after the fiscal fourth quarter.

And with that, I'll turn the call over to Charlie. ......................................................................................................................................................................................................................................................


Thank you very much, Vasant, and good afternoon to everyone and thank you all for joining us. I guess let me start

by just reiterating how pleased with are with our quarterly results. As Vasant mentioned, revenue growth of 12%

was better than we anticipated, especially given the FX impact of about negative 3 points. Adjusted net income

growth was 33% as our anticipated tax benefit was accelerated to the fiscal third quarter from a previously

expected fourth quarter.





Adjusted earnings per share of $0.74 excluding the revaluation of the Visa Europe put option and including $0.12

from the tax benefit I just mentioned, payments volume growth of 11% on a constant dollar basis, the effect of a

strong US dollar and lower gasoline prices continued to negatively impact growth by 3 points and process

transactions and cross-border volume both grew at 8%.

Overall, our results were especially pleasing given that we continue to see very little change in the overall global

economy with a few exceptions. We are hopeful, but not counting on, an improvement in the US economy, but we

see very little improvement with the US consumer in our numbers thus far, if any. There are positive signs in

employment and housing and the accumulated savings from lower gas prices should help, but we'll have to wait

and see. Internationally, we see continued weakness in Brazil and Russia, but we see strength in Southeastern

Europe and parts of Asia-Pacific.

I'd like for a second to address the topic of Visa Europe for a moment. As you may have read in our earnings press

release and 10-Q filing, we've updated our language regarding the put option valuation, which Vasant just covered.

Separately, we announced that we're in discussions with Visa Europe about a potential business combination. I've

said many times that we believe there is compelling logic for both Visa, Inc. and Visa Europe to merge and is

something that we would like to pursue, so this should not be a surprise to anyone. We're targeting to resolve

these discussions quickly, certainly by the end of October, and we'll provide an update during the fourth quarter

earnings call, if not sooner.

Given these discussions, we may be restricted from buying back our stock. There's also no assurance that any

transaction will ultimately be agreed or implemented. At this time, there's really nothing more we can add and

won't comment beyond what I've said here or disclosed in our 10-Q. Rest assured that when there's an update to

be made, we will do so in a public forum.

Let me move on now and talk about our business, and let me start with our client-related activity, which I feel

great about. Starting with our issuing co-brands, we renewed our co-brand credit card partnership with Southwest

Airlines in the United States. Visa will continue to be the exclusive payment network for Southwest's terrific co-

brand credit card. This renewal is an extension of our 15-year longstanding partnership with Southwest Airlines. It

represents one of our largest and fastest growing co-brand partnerships in the world.

We renewed an important co-brand partnership with Avios, the loyalty program for British Airways and Iberia, a

partnership with Visa covering the United States, Canada, Bermuda and the Caribbean. AAA extended our

longstanding 37-year credit card partnership agreement. We also renewed the credit card portfolio for Wyndham

Rewards, the loyalty program for Wyndham Hotel Group, the world's largest hotel company based on number of

hotels.

And turning to our business internationally, we renewed our strategic credit partnership with Shinhan Card, the

largest issuer in Korea, and Lotte, another top-ten issuer in Korea for debit and credit. SoftBank SB, Japan's third

largest mobile carrier has partnered with Visa to launch a new prepaid card offering to their 37 million

subscribers. And Gazprombank, one of Russia's largest financial institutions, renewed a multi-year debit and

credit agreement.

Let me make a couple of comments about China. I don't have very much to add since we last talked about it last

quarter, but I want to reiterate a couple of things. We continue to move forward with our work to enter the

domestic Chinese payments market and look forward to growing our investment within China. Our business

model, as you all know, is about partnership with banks, retailers, governments and technology companies. We

believe our ability to help them grow will help accelerate broader economic growth within China, both in the cities





as well as the rural areas. And we continue to view this as a significant and important opportunity and one which

is very long-term in nature.

Vasant talked a little bit about Russia. Here we completed the full migration of our domestic transaction

processing to the NSPK in accordance with the law. As Vasant said, Visa is now only processing cross-border

transactions into and out of Russia.

And our work to transform commerce and build out digital payments platforms to support our clients continues.

First, on Visa Checkout, we continue to gain momentum. We have over 270 financial institution partners globally.

We have over 160,000 merchants who are currently live globally with over $50 billion in total addressable

volume. New merchant partners include US companies such as Under Armour, Taco Bell, Dunkin' Donuts,

Williams-Sonoma, Eddie Bauer, LivingSocial in Canada and Starbucks in Australia. To date, we have over 5

million registered users and we've launched Visa Checkout in 16 markets around the world. New markets include

China, Hong Kong, New Zealand, Singapore, Brazil, Colombia, the UAE and South Africa, to name a few. We

continue to see great reactions from our merchant clients and have launched several new global marketing

campaigns, including with Dunkin' Donuts, zulily and Fandango in the US and Cineplex Theatres and Indigo

Books & Music in Canada.

Second, we continue to expand the Visa Token Service. More than 2,300 financial institutions and banking

partners are participating. In addition, Apple Pay in the US and Google globally. International expansion of our

token service will begin later in the fall within our US, Canada and Asia-Pacific regions and allows us to begin

tokenizing Visa Checkout.

Third, we continue to build out our capabilities to support our merchant partners. We're partnering with Verifone

in a way that enables merchants to offer their customers a more streamlined, secured purchase experience across

digital and face-to-face commerce environments. Verifone will connect its point-of-sale gateway to Visa's

CyberSource global merchant payment management platform, providing merchants with a single platform to

protect customer payment data, mitigate fraud and integrate digital and offline payment systems.

Last but equally important is payment security. Obviously, this is an area which is evolving and for us, we're doing

everything we can to differentiate ourself through innovation. Given the current cyber threat landscape, especially

facing merchants, we're committed to developing solutions, help the industry better detect and respond to data

breaches. We announced a partnership with FireEye to bring the first of its kind cyber security capabilities to the

payments industry and extend our combined expertise and intelligence to acquirers, merchants and issuers of all

size. The Visa and FireEye community threat intelligence system will bring together threat information from both

companies, allowing merchants and Visa clients to easily access our leading knowledge of cyber attack data to

quickly detect and respond to the attacks. These new solutions will focus on minimizing risks and vulnerabilities

and detecting and responding to breaches faster.

On a final note regarding FIFA and football, for our investors but also our clients and all of our partners. We view

the stewardship of our company, our brand and our clients with the utmost importance and try to hold ourselves

to the highest standards. We seek to partner with those who think and act like us. I don't believe that FIFA is

living up to these standards. Furthermore, their subsequent responses in my opinion are wholly inadequate and

continue to show its lack of awareness of the seriousness of the changes which are needed. To this end, we believe

two things need to happen to ensure credible reform. First, an independent third party commission led by one or

more impartial leaders is critical to formulate reforms. Second, we believe no meaningful progress can be made

under FIFA's existing leadership. Football itself is a great sport for which we are proud to be associated and we

want to be proud to be associated with FIFA and hope and look forward to working with them to that end.





To close, I just want to reiterate that we are pleased with our financial performance to date. Although we will

provide full-year 2016 metrics next quarter, we feel good about our business, our performance and our innovation

initiatives, which should drive our success in the future. And as a reminder, we have nothing incremental to say

about our discussions with Visa Europe.

With that, Vasant and I are ready to take your questions. ......................................................................................................................................................................................................................................................


Jamie, we're ready for questions. ......................................................................................................................................................................................................................................................

QUESTION AND ANSWER SECTION

Operator: [Operator Instructions] Our first question comes from David Togut, Evercore ISI. Sir, your line is now

open. ......................................................................................................................................................................................................................................................

David Mark Togut Evercore Group LLC Q Thank you. Good afternoon. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A How are you? ......................................................................................................................................................................................................................................................

David Mark Togut Evercore Group LLC Q Very good. Thanks. Could you talk about your strategic options in Europe in the event that you don't consummate

an agreement with Visa Europe? In particular, have you looked at possibly acquiring some of the domestic

payment networks in Europe? ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A Listen, we have, and I've talked about this broadly as well, we have a terrific relationship with Visa Europe today.

We've been operating in the fashion that we've been operating now since we've gone public. We work closely

together on a day in and day out basis. And they have responsibility for the business and brand in Europe, and we

do everything we can to enable them and vice versa. And that's the relationship that we would see continuing if

these transactions, if these conversations didn't move forward. ......................................................................................................................................................................................................................................................

David Mark Togut Evercore Group LLC Q Thank you. ......................................................................................................................................................................................................................................................

Jack Carsky Global Head of Investor Relations, Visa, Inc. A





Jamie, next question? ......................................................................................................................................................................................................................................................

Operator: Our next question comes from Chris Brendler, Stifel. Your line is now open. ......................................................................................................................................................................................................................................................

Chris C. Brendler Stifel, Nicolaus & Co., Inc. Q Hi. Thanks. Good evening. Thanks for taking my question. I just wanted to talk about the strong growth in cross-

border revenue this quarter, how sustainable that is and whether or not you see additional opportunities for

pricing down the road. Thanks. ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A We had, as you saw, good growth in cross-border. It's a few things. We talked about the geographies that are doing

well and some of the things. We were helped on cross-border revenue growth by two other things, as you know,

pricing and also by currency volatility, so we had spread revenues that flowed through that line. As we look ahead,

I think if the dollar starts to moderate, a big chunk of our business is somewhat depressed right now, which is the

commerce into the US and several corridors are soft like Brazil. It has hurt in a couple of different ways, Russia, et

cetera.

So there is hope as we go into next year that with some of those things now lapping and the dollar hopefully

stabilizing that things could ramp up in terms of volume. On the other hand, volatilities may go back to more

normal levels and would reduce that line. So a couple different trends there but all in all we feel good about it. ......................................................................................................................................................................................................................................................

Chris C. Brendler Stifel, Nicolaus & Co., Inc. Q Excellent. Fantastic results. Thank you. ......................................................................................................................................................................................................................................................

Jack Carsky Global Head of Investor Relations, Visa, Inc. A Next question, Jamie? ......................................................................................................................................................................................................................................................

Operator: Our next question comes from Smitti at Morgan Stanley. Sir, your line is now open. ......................................................................................................................................................................................................................................................

Smittipon Srethapramote Morgan Stanley & Co. LLC Q I know it's early days so far but I was wondering if you could share with us qualitatively if the transactions that

you're seeing taking place on Apple Pay and other mobile payment systems starting to take share away from cash

transactions from consumers who use it? Or is it mainly just a basic substitution of plastic for mobile at the

moment? ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A I honestly don't think we have enough real data yet to talk intelligently about it. All I can talk about is my own

experience, which is I've been using it for both. I mean when we have more acceptance and we start to see more

transactions, we'll have a much better feel and we'll make sure we share that. ......................................................................................................................................................................................................................................................





Q

Okay, fair enough. Thank you. ......................................................................................................................................................................................................................................................


Operator: Our next question comes from Lisa Ellis. Your line is now open. ......................................................................................................................................................................................................................................................

Lisa D. Ellis Sanford C. Bernstein & Co. LLC Q Hey, guys. Can you talk a little bit about your competitive strategy against PayPal now that they're independent

and to what degree you view them as a competitor and what sort of specific competitive initiatives you have in

place? ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A Sure. I've talked about our relationship with PayPal in the past. I'm not sure it changes very dramatically whether

they're owned as part of a broader company or they're independent. Something like half the transactions that go

through eBay wallets are general purpose cards, of which we're roughly half, and that's important. But they also

have a very big business that they then use our transactions to mine from to disintermediate our client's

relationship with us and the client's relationship with our clients, ultimately which are their banks. And so that's

something which has to evolve and is not something that we think is sustainable for the long term.

Our view is when we think about what we've got to do in the marketplace, we actually don't spend a lot of time

thinking about what PayPal's doing or what we're doing any more or less than we look at all the interesting things

that people are doing in the world of digital commerce. What we're focused on is the fact that we're lucky enough

to have a platform and have a client base where we're a leader in the payments business globally. Commerce is

moving to digital platforms. And forget about all of our competitors or people who want to compete with us, we're

doing everything that we can to ensure that we're going to be as successful in the world of digital commerce as we

have been face-to-face.

And so to that end, you see our solutions in the marketplace such as Visa Checkout, which I obviously covered

here and I've talking about elsewhere. But it also relates to all of the other mobile solutions and digital solutions

that you've heard us talk about, everything from our Token Service to the digital enablement program, as well as

just even more broadly opening up API as an access and allowing others to access our services in a way that inserts

us as the payments network into experiences that people are building. So that's what we're focused on and it's very

much focused on the opportunity that exists in the world and not any one individual company out there. ......................................................................................................................................................................................................................................................

Lisa D. Ellis Sanford C. Bernstein & Co. LLC Q Terrific. Thanks. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A





Thanks, Lisa. ......................................................................................................................................................................................................................................................

Operator: Our next question comes from Bob Napoli, William Blair. Your line is now open. ......................................................................................................................................................................................................................................................

Bob P. Napoli William Blair & Co. LLC Q Thank you. I know you said nothing on Visa Europe and maybe this is something you could answer. When you did

change the valuation on the put option, can you tell us what you're looking at, like what information you're looking

at to change that? And then I know there was a formula out there, put call for buying it. If a transaction happens,

would it be under that previous contract formula? ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Yeah, I'll talk about how we go about the put valuation. And in general, I think we're not commenting anything on

the transaction discussions themselves. But we do have to revalue the put every quarter and it has to be done on

the basis of updated information, the most up-to-date information we have. And based on that, we did that again

this quarter. And as a result of that, we came up with a value that is reflected in our Q. And that is a formula that

we've used I believe for the entire eight years that the put has been in place. And it relates to making estimates of

what sustainable net income would be and then there's a multiple applied to that, all of which is described in some

detail.

So when you run through that based on the best information we now have to estimate sustainable net income for

Visa Europe and you look at the multiples you have to apply, methodology being exactly the same as what we've

used before, you get to the value we laid out in our 10-Q. So, that's pretty much all there is to it. There really isn't

anything different than we've done before. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A The only thing that I would add to that is that and, as I've referenced, we spend a lot of time with Visa Europe

because we're connected at the hip, and it's very clear that with their change in leadership over the last year and a

half, they have moved to a more commercial model and increased what they would view as the economics that

they are providing for their clients. And that translates through to this view of sustainable income that we've been

able to observe that Vasant just referenced. ......................................................................................................................................................................................................................................................

Jack Carsky Global Head of Investor Relations, Visa, Inc. A Jamie, next question? ......................................................................................................................................................................................................................................................

Operator: Our next question comes from Craig from Autonomous. Your line is now open. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A Craig, you there? ......................................................................................................................................................................................................................................................

Craig J. Maurer Autonomous Research US LP Q





I'm here. Can you hear me? ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A Hey, Craig, we got you. How are you? ......................................................................................................................................................................................................................................................

Craig J. Maurer Autonomous Research US LP Q Okay. I had a question on commercial card. We've been seeing weakening trends across several issuers, including

Amex and USB and I was hoping that you could comment on what you're seeing in that segment. ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Yeah, in general, we had a good quarter on the commercial card. Volume growth in the US for commercial

payments volume is 10% in the June quarter; it continues to perform well. We renewed several multi-year US and

Canadian clients. There's a lot of interest from non-financial institution participants who want to provide value-

added services within the commercial payments industry and these would be things like technology providers or

health care entities and B2B programs, entertainment verticals and so on. So all-in-all, we feel pretty good. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A The only thing I would add to it is when we look at the detail behind the numbers, you actually do see a fair

amount of divergence based on the type of clients that you have. So clients that are focused on the oil industry,

and it's a long list of them, you do see fairly significant weakness, which is to be expected. But on a portfolio basis,

there are other types of businesses that are performing much better, so overall we do get here in the US that 10%

number, but a lot more differentiation than at least we've seen recently. ......................................................................................................................................................................................................................................................

Craig J. Maurer Autonomous Research US LP Q And is virtual card starting to play a big role in commercial payments? ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A Honestly, it's still very small, but obviously something we're focused on and growing. ......................................................................................................................................................................................................................................................

Craig J. Maurer Autonomous Research US LP Q Thank you. ......................................................................................................................................................................................................................................................


Operator: One moment. Our next question comes from Sanjay Sakhrani, KBW. Your line is now open. ......................................................................................................................................................................................................................................................





Sanjay Sakhrani Keefe, Bruyette & Woods, Inc. Q I guess philosophically, I was just wondering if you could just rehash, Charlie, how you would think about a large

M&A transaction and the criteria you would use to assess its value and go forward with the deal? Thanks. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A Sure. What we've said consistently is, first of all, we would start with our first preference would be to grow

organically. We've got amazing assets and we've got amazing people here that have built great things without

having to rely a lot on acquisitions. And so that really, and it genuinely is our first and foremost way that we want

to go about building things. Having said that, there are certainly times when it makes sense to buy things. And I

always like to point back to the three things that we've done so far as the type of things that we think could

continue to make sense.

CyberSource was the most significant acquisition that we've done in the payment space, and we're not looking to

get outside the payment space. Things that we do want to strengthen the benefits that our clients get of running

transactions over a core network and CyberSource allowed us to broaden the capabilities that we had in the online

space. So just in the core of the business, but made tremendous sense for us.

We then bought a company called PlaySpan, which at the core of what we got from PlaySpan was technology and

people. And those people and that technology is what built and powers Visa Checkout today. It wasn't for the rest

of the business of PlaySpan. The rest of it was actually very small. And then the Fundamo business, which got us

far more engaged and understanding and brought us some capabilities in the mobile payment space in the

emerging markets.

And so as we look at the type of transactions that we're looking at, what we've said is there's Europe. Europe is the

big one that could be on our radar screen because that put exists and because of this compelling logic. And beyond

that, we're mostly focused on smaller things that again would add to the capabilities of the existing network that

we have. ......................................................................................................................................................................................................................................................

Sanjay Sakhrani Keefe, Bruyette & Woods, Inc. Q Is there a specific financial criteria that you would look at? ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A No. No, I think every one of these deals are different. I mean you take the deals that I just described, you evaluate

them differently, including what it would cost you to go build something versus acquiring it and how much time it

would take to get to market and what that would be.

I did not talk about a fourth company, because it's small, but very important that we just acquired called TrialPay,

which inserts us into the merchant-to-merchant offers business. We bought that because we thought it was

important to get in the market sooner, and the time it would take to build it would be much longer than that. So

each one of these I think would have a very different rationale, and if it was a big enough transaction that we

would talk about the economics, we know we would have to have compelling logic, both strategically and

financially for you all. ......................................................................................................................................................................................................................................................





Sanjay Sakhrani Keefe, Bruyette & Woods, Inc. Q Thank you. ......................................................................................................................................................................................................................................................

Jack Carsky Global Head of Investor Relations, Visa, Inc. A Next question? ......................................................................................................................................................................................................................................................

Operator: Our next question comes from Darrin Peller, Barclays. Sir, your line is now open. ......................................................................................................................................................................................................................................................

Darrin D. Peller Barclays Capital, Inc. Q Straightforward but just one question. I mean it looks like, I think we saw a shelf was filed, so whether or not

something actually happens with Visa Europe, can you just remind us again on how you think about balance sheet

flexibility, or debt leverage possibilities? And then really just in terms of capital structure and use of cash, I think

you mentioned there could be restrictions on buybacks. Is that included in your guidance for the year? Thanks,

guys. ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Yeah, in terms of Visa Europe transactions, if it happens, should it happen, when it happens, we've always that

said we would be viewing that transaction as an opportunity to do two things at one thing at a time. Clearly it's a

great transaction in terms of reuniting the Visa family. But beyond that, we would also use that as the trigger to

put in place a long-term capital structure. And I don't think our views on that have changed much. In terms of the

second question, Jack, was there another question on that one? ......................................................................................................................................................................................................................................................

Darrin D. Peller Barclays Capital, Inc. Q It was around buybacks, and whether or not it's included. ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Oh, on buybacks. Yes, as you know, there are certain rules under which companies can or cannot buy back stock

depending on the information that is either available or not, and how material it is and all of that. And it is our

sense at this point that we might not be able to buy back stock in the quarter, but things can change. ......................................................................................................................................................................................................................................................

Darrin D. Peller Barclays Capital, Inc. Q Is that in your guidance already? ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A In terms of our, it's impact on our guidance. If we end up not buying back stock for the entire quarter, if that's

what happens, it'll have some modest impact on this year. It will certainly have some impact on next year,





depending on whether we cash out later on and so on. So there's a fair number of variables there. It depends on

how long we're not buying and how fast we catch up, all those kinds of things. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A For one quarter it's not that material. ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Yeah, for one quarter as you can run the numbers yourselves, it won't be that significant, but it is certainly

different than what we might have expected when we last talked to you, so you should definitely factor that in. ......................................................................................................................................................................................................................................................

Darrin D. Peller Barclays Capital, Inc. Q All right. Thanks, guys. ......................................................................................................................................................................................................................................................

Operator: Our next question comes from Dan Perlin, RBC Capital Markets. Your line is now open. ......................................................................................................................................................................................................................................................

Daniel R. Perlin RBC Capital Markets LLC Q I want to revisit a comment you made earlier about, let's just say, competitors who use your information to mine

data to ultimately change behavior away from your bank partners. And I'm just wondering, would the operating

rules that you set forth in VDEP be a means with which to preclude that practice from happening? ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A Well, in VDEP, VDEP does address the usage of our client's data. So the answer to the question is absolutely. I

think the reality is, we sit between a series of people that participate in the payment system. It used to be just the

issuers and the acquirers and the merchants. Now there are additional parties being introduced to that. And we do

think it is our responsibility to all of our clients to ensure that data is being used appropriately and the way they

want. And that's two ways. So whether it's issuer data that passes over our network, the issuers should be

comfortable with. And if it's merchant data that happens to pass over our network, the same is true there. So

VDEP is one means. But it's a broader concept that we do take very seriously. ......................................................................................................................................................................................................................................................

Daniel R. Perlin RBC Capital Markets LLC Q Okay. Thank you. ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Just want to clarify if I wasn't clear earlier that when we talked about our full-year mid teens, that does envision

the possibility that we might not be buyers of our stock in the fourth quarter. ......................................................................................................................................................................................................................................................

Jack Carsky Global Head of Investor Relations, Visa, Inc. A Jamie, next question?





Operator: Our next question comes from Jason from Jefferies. Your line is now open. ......................................................................................................................................................................................................................................................

Jason Alan Kupferberg Jefferies LLC Q Thanks, guys. Just a clarification and a question. Clarification is just on the revenue guidance for the year. Is there

any minor tweak up here at all? Because I know you are still saying kind of low double digits, but I think you had

been saying the low end of low double digits previously. I'm not sure if I heard that same language on today's call.

Whereas the only change in the revenue outlook, just the extra 0.5 points of currency headwind. ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Yeah, we were sort of rounding down to 2% last quarter. We're rounding up to 2.5%. So the currency effect as you

know has been growing through the year. I think the only thing we would say is the third quarter came in clearly

better than we expected because currency volatilities were higher. The incentive piece moved some into the fourth

quarter. So I think as we said earlier, incentive levels both in dollar and rate terms, percent terms, will be higher in

the fourth quarter. So we said last time that we would expect revenue to approach double digits in the fourth

quarter, and that is still our best estimate for the fourth quarter. ......................................................................................................................................................................................................................................................

Jason Alan Kupferberg Jefferies LLC Q Okay. And then just a clarification is on the incentive adjustments in certain geographies that I think you

mentioned as one of the reasons why the incentive line came in lower than expected. What exactly was that? Did

some issuers have to pay back some incentives to Visa? ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Well, it's a couple situations that varies depending on the geography. Volumes don't come in as expected, so they

don't earn the incentives that we or they might have expected. So it hits you both on the gross revenue line and net

revenue line and on the incentive line. And then in a particular, a few situations, there are unique things in

contracts that are resolved within the quarter, so you know. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A It's also just flat out timing of when things get signed. Remember so when we – you know that's a little bit of – I

like to talk about this internally. Just we have to do budgets and we give you guidance, but we really don't know as

we look out in the future what the timing of our clients are going to be and how different negotiations will actually

take place. So when we come to an agreement with a client, it then needs to be documented. The processes and the

timing is usually driven by them. Very often they need to go through their own approvals, and it's very, very easy

for these things to slip by weeks or even a month if not more, depending on how far out we're looking. And so

that's just a very natural thing that happens, which hard for us to predict and hard for us to control. ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Yeah, and this quarter, we had a few international banks that moved into the fourth quarter, and they'll get done

in the fourth quarter. And that's the timing issue. ......................................................................................................................................................................................................................................................





Jason Alan Kupferberg Jefferies LLC Q Okay. Thank you. ......................................................................................................................................................................................................................................................

Operator: Our next question comes from Bryan Keane from Deutsche Bank. Your line is now open. ......................................................................................................................................................................................................................................................

Bryan C. Keane Deutsche Bank Securities, Inc. Q Hi, guys. Vasant, I just wanted to ask can you help us quantify the impact price changes had on the quarter and

maybe what percentage of the price changes have showed up in the third, and do we expect the full impact in the

fourth? ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Yeah. We told you last time, there'll be some modest additional impact in the fourth quarter. One of the price

changes was coming in with a little bit of a lag. So there'll be a modest, it's a small uptick in price impact. But yeah,

I don't think we've specifically quantified the price impact in total, but it takes two lines, the service revenue line

and the international line. And it's those two price increases we took, just to remind everybody, it's the increase in

the US acquirer service fee on all credit products which went up by 2 basis points and the international service

assessment fee, which increased 40 bps for transactions in US dollars, and 80 for transactions not in US dollars.

And there'll be a little more impact in the fourth quarter than there was in the third. ......................................................................................................................................................................................................................................................

Bryan C. Keane Deutsche Bank Securities, Inc. Q Okay. Helpful. Just one quick one. Will the intangibles associated if there is an acquisition of Visa Europe will be

amortized or will it be long-lived? ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Well, that is getting very far ahead of things right now. If there is a transaction, if and when, and once the details

can, are clear, we can talk about all of that. ......................................................................................................................................................................................................................................................

Bryan C. Keane Deutsche Bank Securities, Inc. Q All right. Super. Thanks, guys. ......................................................................................................................................................................................................................................................

Jack Carsky Global Head of Investor Relations, Visa, Inc. A Next question. ......................................................................................................................................................................................................................................................

Operator: Our next question comes from Glenn Greene from Oppenheimer. Your line is now open. ......................................................................................................................................................................................................................................................

Glenn E. Greene Oppenheimer & Co., Inc. (Broker) Q





Thank you, just wanted to go back to the incentives conversation. Obviously it was lower than I think most of us

thought in the quarter. And it sounded like it was timing. Did some of that timing kind of bleed into next year?

And I don't know, Vasant, if you we're starting to try to call out that incentives as a percentage of gross revenue

increased going into fiscal 2016. And just to clarify, did you have incentives meaningful for Costco or does that

kind of happen when the volumes come on? ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Yeah, I think it's too early to give you any particular point of view on 2016. We'll do that when we talk to you in

October, and we'll also talk about Costco and its impact on 2016 and so on. As it stands today, the incentives, the

deals we were thinking we would get done this year still look like they're going to get done this year. So we'll

probably see the full year impact of them next year, but it doesn't seem like any of them are moving into next year

at this point. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A The only thing I would add is just on Costco for a second is Costco, the impact to us of Costco is next year for us

fiscally. So that's whether it's incentives, whether it's volume, revenue associated with it, that's when you'll see the

impact of Costco. And then the other thing I would add is we've, those of you that have been covering us for a long

time know this, we do view our incentives going up as a good thing. It's incentives go up when we're driving more

business through the system and so that wouldn't be a surprise to us. ......................................................................................................................................................................................................................................................

Glenn E. Greene Oppenheimer & Co., Inc. (Broker) Q Okay. Great. Thanks for the clarification. ......................................................................................................................................................................................................................................................


Operator: Our next question comes from Kevin from Macquarie. Your line is now open. ......................................................................................................................................................................................................................................................

Kevin D. McVeigh Macquarie Capital (USA), Inc. Q Great. Thank you. I wonder is there any type of sensitivity to think about relative to the FX volatility in terms of a

certain band of volatility, how it impacts the revenue. Because obviously we've seen a nice pickup, and not to get

2016 specific, but just any band in terms of how it impacts the revenue? ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Yeah I mean there's two dimensions here, and in this quarter you probably saw both dimensions at play. One, I

believe there's publicly available information on currency volatilities and different metrics you can look at. So at

least you can get a relative sense of how currency volatility is doing versus last year or prior quarter or on a multi-

year basis and so on. And it's been high. The other thing that also had an impact on this quarter was the year-over-

year comparison. This was a quarter where not only were volatilities high in this quarter this year, but they were





unusually low or lower than they've been recently in the third quarter of last year. So we sort of benefited from

both things when you look at a year-over-year comparison. But you can look at external data to track some of this. ......................................................................................................................................................................................................................................................

Kevin D. McVeigh Macquarie Capital (USA), Inc. Q Okay great. ......................................................................................................................................................................................................................................................

Jack Carsky Global Head of Investor Relations, Visa, Inc. A Next question. ......................................................................................................................................................................................................................................................

Operator: Next question comes from Ken Bruce of Bank of America Merrill Lynch. Your line is now open. ......................................................................................................................................................................................................................................................

Kenneth Bruce Bank of America Merrill Lynch Q Thank you. Good evening. My question relates to the co-brand partnerships and the just general issuing

partnerships and it really is independent of any one, but I guess if you could step back and look at, there's been a

lot of discussion about the increasing competitiveness on some of these deals. And I'm hoping you might be

willing to share some observations from your position at the table as to how the balance of power, if you will, is

shifting, if there's any clear kind of direction of who's capturing more of the economics or just how things have

evolved over the last couple of years. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A Sure. Listen, I think co-brands are certainly a very competitive part of the business, especially here in the United

States. We've been lucky enough to have a significant number of the large and successful ones. And so when you're

the big incumbent and they come up for renewal, they're always on your mind and you're very tuned to what's

going on in the competitive environment.

But just as we talk about on the issuer side, people ask about, well, is the issuer side getting more competitive in

terms of the way networks think about it. And I think the reality is since we've gone public, there's been an

extraordinary amount of competition between us and our competitors on these deals. And you see that

competition embedded in the numbers that we've all been printing for years now. So the answer is, yes, you see it

in the co-brand space, but I also think that the co-brand business and the issuing side of the business, there has

been more concentration that has developed.

And the other thing which I think is becoming quite important now is with the evolving nature of payments and

things that are going on, whether it's issuers or co-brands, I think what we wind up seeing is that our clients are

making very significant strategic decisions at this point relative to who they want their payments partner to be.

They're not talking about this as a commodity. They're not talking about just network services as something that

you need to look at in terms of just what the price is. They're sitting there saying payments is an important part of

my business, whether I'm a co-brand partner, because these are my most important clients, or on the issuing side,

where they say payments this quarter, what I do, I need someone that's going to help me navigate and be

successful in this brave new world of digital commerce and evolving payments that we live in and I need to pick

the very best partner to do that.





So we're thrilled with the success that we've had, not just with Costco, but Southwest, as you've seen, is a terrific

partner, and other conversations that we have ongoing. And so the answer is, yes, financially they are competitive,

again we've seen that. That's to be expected. But there are two parts to the conversation. ......................................................................................................................................................................................................................................................

Kenneth Bruce Bank of America Merrill Lynch Q Great. Thank you. ......................................................................................................................................................................................................................................................


Operator: Our next question comes from James Schneider from Goldman Sachs. Your line is now open. ......................................................................................................................................................................................................................................................

James Schneider Goldman Sachs Q Good afternoon and thanks for taking my question. Charlie, I was wondering if you could give us any more color

on China in terms of – understanding that it's still early days and you have limited visibility, but do you have any

sense in terms of restrictions you might be subject to when you do eventually enter that market? And if not, can

you give us any kind of roadmap for when you expect to see greater clarity on those rules? ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A So on the first piece, the answer is no. What has been published is helpful relative to what we need to do in order

to do the work to apply for a license to start establishing the functions that have to reside in China. So those have

been very, very helpful. Relative to how regulations evolve and what the actual business would look like in China,

that's a ways off and we do not have a tremendous amount of clarity on that yet.

And I'm sorry, what was the second part of the question? ......................................................................................................................................................................................................................................................

James Schneider Goldman Sachs Q The timing for when you get more clarity. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A I don't know. No one knows. We live here in the United States and so we know our own system quite well and we

never know what timing looks like in this country. But listen, I think the Chinese government has been, the State

Council issued its decision. They've come out with some more information, which is certainly helpful. And at this

point, we have plenty of information to do the work that we need to do to be in a position to apply for a license and

to do the work. And honestly, that's what we're focused on. I mean, there's a lot of work for us to do, both to make

the application but also be in a position to be able to operate, if we're lucky enough to be issued one of those

licenses, and that's what we're focused on.

And as I said, when we talk about this being a long-term opportunity, it's for some of these reasons you point out.

We don't know exactly what the regulatory climate will ultimately be. We don't know exactly the role we will play





until we actually get there. But we do believe that there's great value for all the participants in the marketplace for

us to be helpful. So we feel very good about what we can do in the country and what it means for us in the long

term, but again it'll likely be long term and not short term. ......................................................................................................................................................................................................................................................

James Schneider Goldman Sachs Q Thank you. ......................................................................................................................................................................................................................................................


Operator: Our next question comes from Mr. Huang from JPMorgan. Your line is now open. ......................................................................................................................................................................................................................................................

Tien-Tsin Huang JPMorgan Securities LLC Q Great. Thanks. Good quarter here. I just wanted to ask on the delta from your reported 12% revenue growth and

the 6% to 7% you expected. Can you break it down for us by component, what each driver was in terms of how big

it was? I heard FX volatility, lower incentives. Did pricing stick maybe better than expected? Things like that. ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A No, I'd say you got them. Volatility is normally going into a quarter, we don't assume that volatilities will stay at

the sort of the high levels they were last quarter. We assume things may settle down a bit, which they actually

might in the fourth quarter given things are settling down in Greece and settling down in China and places like

that. So it was the spread revenues from volatility. It was somewhat lower incentives. It was offset by exchange

rates. So you've got all the factors. Pricing didn't have an impact relative to what our expectations were. It was as

we expected. So I think you've said it. ......................................................................................................................................................................................................................................................

Tien-Tsin Huang JPMorgan Securities LLC Q Okay. And so did you size the FX volatility and how big that was? And then also separately, on OpEx, were there

any one-timers that drove up the OpEx, or was that really just personnel? Thanks for taking the questions. ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Yeah, on the OpEx as we said, the year is progressing better than we might have expected, and so we made some

adjustments as we normally do at this time of the year in accruals for incentive compensation. That would

probably be the single biggest item that shows up in the expense growth. Other than that, the only thing I said in

my comments was that we had exchange rate impacts of up to 3 points. And fortunately, the currency volatility

stayed at levels that offset a significant portion of that. ......................................................................................................................................................................................................................................................

Tien-Tsin Huang JPMorgan Securities LLC Q Offset them. Okay, bulk of that. Got it. Thanks so much. ......................................................................................................................................................................................................................................................





Jack Carsky Global Head of Investor Relations, Visa, Inc. A Jamie, at this point, we have time for one more question. ......................................................................................................................................................................................................................................................

Operator: All right. Our last question will be coming from David from Buckingham Research. Your line is now

open. ......................................................................................................................................................................................................................................................

David Hochstim The Buckingham Research Group, Inc. Q Yeah, thanks. Maybe I have a two-part question then. Is there any update on the EU's efforts to regulate inbound

cross-border fees? And a follow up. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A There's no update. ......................................................................................................................................................................................................................................................

David Hochstim The Buckingham Research Group, Inc. Q Okay. ......................................................................................................................................................................................................................................................

Charles W. Scharf Chief Executive Officer & Director A Part two? ......................................................................................................................................................................................................................................................

David Hochstim The Buckingham Research Group, Inc. Q Yes, maybe just expand on what you said about US credit payments volume growth, and how much of the

deceleration was Chase conversion related, and what you're seeing in the way of discretionary spending relative to

last quarter. ......................................................................................................................................................................................................................................................

Vasant M. Prabhu Chief Financial Officer & Executive Vice President A Really no change whatsoever in terms of what we're seeing. There's a big impact on debit from the gas pricing

because, I think three to one people use debit cards rather than credit cards. And yes, the Chase conversion will

continue to moderate and will mostly be gone I think after the next quarter or so. And that will mean that our

credit payment volumes will reflect whatever the gas impact is. And the gas impact will also begin to moderate as

we lap it. But in terms of how people are deploying their savings from gas, there really hasn't been any change, and

I think Charley referred to that in his comments. So the US consumer remains sort of okay, not great. ......................................................................................................................................................................................................................................................


Well, thank you all very much for joining us today. If anybody has any follow-up, feel free to call Investor

Relations. Thanks again. ......................................................................................................................................................................................................................................................






Thanks, everyone. ......................................................................................................................................................................................................................................................


Thank you. ......................................................................................................................................................................................................................................................

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

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