Visa Stock

All right, everyone. We're going to get started here. Next up, we're very excited to have Ryan McInerney, CEO of Visa. He's served at Visa for a very long time, nearly a decade. And before that, was CEO of Consumer Banking at JPMorgan. Ryan, thank you for joining us today. Really looking forward to the conversation.

It's great to be here. Thanks.

All right. So I wanted to kick us off with a reflection of results so far over the past year and really just the notable strength that we've seen. Spend volume growth has been the fastest that it's been since pre-COVID, excluding the post-COVID recovery. Your value-added services portfolio is growing north of 30%, which I want to touch on later. You took over the business in 2023 and 3.5 years later, despite what's been a period of reasonable amount of disruption across the payments ecosystem, Visa is performing really well. So, what would you attribute the success so far? And to the extent that the stock hasn't reflected that, what do you think the market is missing?

On the last topic about what the market is missing, I think you and the audience might be better positioned to answer that question. On the core of your question, I think, in short, we have a strategy that's working. We have a leadership team that's very experienced and focused on executing that strategy. We have enormous opportunities ahead of us, and we've been deploying a lot of products and innovations in the market to capture that strategy. So I think that's the short answer. The longer version of that answer is 3.5, 4 years ago, we stepped back and did a fair bit of work to set the strategy that we're executing today.

We looked at our capabilities, our market position, the TAMs that were out there, the competitive sets, and we put in place a strategy that we thought could fuel the type of growth that you were mentioning. We did a lot of work to syndicate that strategy inside the company up and down from the most senior people all the way down to country teams all around the world to make sure they understood it. We shared it with investors at our Investor Day. And when I transitioned into the role that I'm in right now, we used that as an opportunity to essentially rewire the operating model of the company.

We restructured how the organization worked with senior leaders responsible for value-added services, for CMS, for consumer payments, those types of things. We gave them full-stack leadership teams. We dedicated product and engineering teams to build a road map to ultimately ship the product and services that I was describing. And we rewired the entire performance management system in the company, how OKRs were set, how people were measured in terms of their performance, how people were paid based on their performance against the measurements that we put in place, so on and so forth. So we're now a few years into that journey. The strategy remains what it is. And I think the momentum that you're seeing is in large part driven by the fantastic leaders we have all around the world executing that strategy.

Yes. So let's touch a little bit on the momentum and just what you're seeing on the broader macro environment. You've consistently highlighted resilient spending across spend bands, seen some recent tailwinds from tax refunds, gas prices, Visa Direct, some of the big sporting events year-to-date. You've also seen some headwinds in areas like cross-border travel due to the Middle East conflict. What are you seeing in terms of the consumer health today? And how are these dynamics kind of impacting spend levels as we close out the year?

Again, in short, I would say strength and stability. If you look at -- let's just talk about the United States, you got to understand there's a lot of uncertainty, right? Consumers and businesses do have a lot of uncertainty. You see that in the consumer confidence measurements. There are uncertainty about some of the affordability issues. They're uncertain about the elections. They're uncertain about a lot of things. But if you actually look at our business and how they're spending, it's strong and stable. In the U.S. for the last 6, 8, 10, 12, 18 quarters, months, I should say, the last 1.5 years, let's call it, our business in the U.S. has been growing about 6% to 8% roughly. This is on a roughly $7 trillion business. That's the size of our business in the U.S. So it's very broad-based, as you said. In the last quarter, our U.S. business grew 10%.

If you look at quarter-to-date through the end of August, it's been growing about 9%. So you've got a strong and stable spending business in the U.S. If you zoom out and kind of look at our business globally through the end of August, we're seeing the continued strength we saw in our third fiscal quarter. Payment transaction growth stable at about 10% year-over-year growth. Cross-border has actually accelerated a little bit. We've seen cross-border go from about 12% year-over-year growth in the last quarter. We're running at about 14% through the end of August. So it's a strong and stable consumer spending kind of in the U.S. and around the world.

That's great. On the cross-border acceleration, is there a tilt to that? Like, is it Middle East recovery? Or is it more broad-based across the entire portfolio?

We continue to see e-commerce growing faster than travel. That's been a trend that we noted in the last quarter, and that continues to be a driver of the strong performance.

Yes. Makes sense. Okay. AI is a huge topic for investors. Every day, there's new news about fundraise, new data centers. We've heard less about the benefits of kind of implementing AI at scale across the enterprise. And I think that's where Visa has some positive data points to share. On your latest call, you shared some of the significant productivity enhancements that you're seeing across the organization. So I was hoping you could just talk about the strategy internally that you have for driving AI adoption and what your vision is for AI internally at Visa?

So first, I think we're still very early in all of this in terms of the impact and the power of these tools are going to have on the effectiveness, the efficiency, the accuracy of certainly Visa and I think companies more broadly. We were early adopters of generative AI in this next cycle of AI. I say this cycle of AI because we've been -- AI has been embedded in what we've done for decades at Visa. But if you look kind of post-ChatGPT moment, we've been early and aggressive adopters of these tools inside of Visa. Visa employees have access to all of the models and the tools at their disposal. And so early on, we not only provided a broad set of availability of the tools to our employees, we provided training. We provided support. We provided mentoring, provided coaching.

And so now you jump forward a few years, we're seeing real productivity improvements. It was on the earnings call, I think you mentioned I talked about some of the improvements we're seeing in our product and tech organizations. Like we're seeing 80% more code commits from our teams. I mean, that's a significant increase. We're seeing kind of an 80% reduction in the time it takes to design and build a product, 80%. We're seeing 65% faster feature development. And those are just a few statistics. If you're kind of inside the company, you would see just the pace and speed of what our teams are able to build and ultimately deploy has accelerated significantly.

And we see it in market. We see it with our clients. They're getting more services and more products from us that are -- have product market fit in the specific markets than we were ever able to do. And we see -- we're also seeing productivity and effectiveness improvements across the organization, whether it's HR, marketing, finance, disputes, all of those types of client service, all those types of organizations as well.

Yes. So sticking with the AI theme, I want to talk about how it's impacting kind of customer demand. We've heard a lot about a heightened focus on cybersecurity in the wake of some of the recent frontier model releases. What impact is that having on your conversations with clients? And maybe just broadly the types of products that you're bringing to market with some of the improved productivity that you mentioned?

This is a top 3 issue for every client I talk to around the world. And as one of their most trusted partners, they are looking for our advice, support, products and services to help them continue to defend their company and the broader ecosystem. So it's a top-tier challenge for our partners. Maybe going through a couple of the things that you mentioned. We were in the Project Glasswing and one of the first companies that had access to the Mythos model. And -- we invested a significant amount of resources to use that model to test and understand vulnerabilities in our company. Luckily, we didn't identify any vulnerabilities that could have been taken advantage from the outside, but we identified a lot of vulnerabilities in the systems, and we put the tool to work to fix those things. As part of that journey, we built a harness.

And again, months and hundreds of man hours were spent to build a tool that we then could use to use Mythos and other models to identify, remediate and fix. And what we did is we open sourced that harness to the world. We published it on GitHub. We're the only company that I know of that has done this. We made it available for free, in part because we wanted our clients to have access to a harness that they could use to deploy if they didn't have Mythos other models to protect their own company. That then has led to a lot of follow-on work where we're working side-by-side with our advisory teams inside of these companies around the world to put this agentic harness to work to help them protect their company.

So that's kind of one example where we've been working with our clients. We also rolled out the Visa Threat Intelligence harness, which is another set of capabilities that puts all of our proven cyber and fraud capabilities to work that our clients consume themselves to then protect their environment. So whether it's open sourcing the harness, our advisory teams, our own products and services, we can talk, if you want, about the company we announced that we were acquiring called BioCatch, which is a company that already serves many companies on the planet and has billions of users where they're protecting them from cyber risk. This is a huge opportunity for us to serve our clients and to help them on an issue that they really need help with.

Yes. So maybe let's go there on BioCatch. You recently announced this acquisition, broadening Visa's reach into the broader cybersecurity space. Like how do you think about the strategic implications of adding that company to the portfolio?

Yes. So we've long served our clients in helping them manage and reduce transaction risk. We have well-proven products and services in our risk and security value-added services business that have helped essentially when you use your Visa card or any card, help merchants and banks identify that fraud and stop it. But what -- building on the topic we're just talking about, but what our clients need more from us is they need solutions that go upstream into identity. Identity has become a critical area of vulnerability. And that's what BioCatch allows us to do is provide a service to our clients where they can protect your identity on your mobile devices before a transaction happens so that we can help our clients avoid the identity theft that might ultimately lead to a fraudulent transaction.

So strategically, we're going up the stack and moving up to provide products and services that can help our clients manage that identity risk in a cyber perspective, which ultimately should also lead to fewer fraudulent transactions.

That leads nicely into the next topic, which is value-added services. This has been kind of a standout performer this past year, representing approximately 30% of net revenue and growing at an impressive 34% in the most recent quarter. Some of the growth obviously has been driven by some of the global events that have happened, but I think you made it pretty clear on the earnings call that all 4 of the VAS portfolio sleeves are growing faster than their historical growth rates.

So maybe with that context, how are you thinking about the sustainability of VAS growth into next year and particularly as you lap some of these major events?

We feel -- this goes all the way back, I think maybe the first question you asked me. We, several years ago, identified kind of these market opportunities, the TAMs, the competitive sets and so on and so forth. We then built and shipped a bunch of product to help our clients with these needs and acquired some companies that we've built into our portfolio as well. And you're now seeing, I think, the flywheel that's working in that context, which ties back to your first question. All of the value-added services businesses, I think, are performing quite well right now.

If I just kind of walk through and give you some examples, our issuer business, we do a whole bunch of different things for our clients in our issuer business. You mentioned kind of the FIFA-related things that we've done at the marketing. But we also -- we have a broad-based benefits platform as an example, where we provide to banks all around the world, all types of benefits that they then provide to their cardholders, whether those be lounge benefits or travel benefits or subscription benefits. We're able to secure these assets at scale and then deliver them through to our clients and partners.

So we've been growing penetration of that product set, but also we've been growing cards. And as we work with our issuers to issue more cards around the world, our credential growth has been growing kind of 6%, 7%, 7-plus percent around the world. That then helps fuel further growth in the issuing revenue.

We talked about risk and identity, and there's a lot of product that we're putting to market there as well. In the acceptance space -- by the way, I was going to mention of an issuer, the Pismo platform. You might want to talk about that. We can talk more about that. That's been, I think, a good success scaling. Tokens is another example. As we've scaled our tokens around the world, that gives us a distribution platform for more risk and identity solutions and transaction solutions as well.

And so the strategy is working. The TAM, if you look at the TAM by issuer and acceptance and risk and identity and advisory, we're still very low single digits in terms of the opportunity that we've captured. The competitive set in each of these areas is different, but we feel really good about our right to win. So we feel good about the future of VAS.

So maybe let's talk about Pismo. That was the next topic I wanted to hit on. The -- I mean, the company has made significant strides since the acquisition. You've expanded into a bunch of new markets. I think probably the big headline this year was the win with Wells Fargo to power their consumer DDAs. So 2 kind of products, please, on issuer processing and then on core. On the processing side, you now have a full stack debit and credit processing platform. What do you see as the main benefits to the client experience of working with Visa now that you have that platform? And then on the core side, maybe just talk about the topic of core modernization in general, something that's been very slow to take place within a lot of the banks. How do you see that evolving over time? And where do you see the greatest demand for that?

Great. I think it's helpful to put in context and go back to what was our thesis, why did we buy Pismo. As I and others travel around the world and talk to clients, there were 2 challenges that they were running into. One is you had a lot of bank CEOs who, in fact, most bank CEOs were either had decided or were contemplating to move to the cloud. The second thing that we kept running into was as more and more, especially fintechs wanted to expand quickly to emerging markets and other geographies around the world, they couldn't find an issuer processing stack that was global enough, nimble enough, cloud native, which is how they built all of their businesses. And that was important for our growth, right, helping them ultimately scale. So those were the 2 thesis that led us to really scour the world for the best technology management team and platform. And ultimately, we found Pismo, which was based down in Brazil. So that's kind of how we got to this place. And then over the last couple of years, we've been working to scale that platform.

On the 2 questions, Will, that you asked, on the first, as it relates to issuer processing, let me do U.S. and the non-U.S. Okay. In the U.S., we've had a debit processing, I would argue the leading debit processing, issuer processing stack for many, many years, it's called Visa DPS. We serve banks big and small with that stack. Now with the combination of Pismo, which has debit, credit, prepaid, commercial, full-stack issuer processing capabilities, we're able to selectively bring that full stack together where there's market opportunity. And what we found is there is some market opportunity at small and midsized banks that are looking to have an integrated credit debit issuer processing solution. It allows them to be more nimble. It simplifies how they run their stack.

And with Pismo and DPS, we're able to combine the best of both worlds for small, midsized banks and fintechs who want to have one issuer processing stack for all of those products. So we announced recently that we were going to market with that capability. We expect that the largest and most sophisticated issuers will continue to run their highly customized credit and debit stack separately, and we continue to expect DPS to be a winner on the debit side of that space. If you go outside the U.S., we're starting to see some similar dynamics around people looking for integrated issuer processing stacks and those capabilities. And we've had a lot of good success using the Pismo asset to capture that.

Okay. On core banking, core banking, like you, I think, were saying, there -- there have been a few big banks around the world that have actually made the move to the cloud. The big ones, you can probably count them on one hand, but there's a lot of them that are considering it. They're working on it. They know that they will be better and can be better at serving their clients if they can operate a core that's in the cloud. It's just a lot more agile, move more quickly, deploy products more quickly to market. And we're in all of those conversations. And I think Pismo is having -- has had a lot of success, and we expect we'll continue to have a lot of success with banks of all types around the world.

Yes. Makes sense. Okay. I want to pivot to agentic commerce. I think this has been one of the kind of most obvious connections with payments and the broader theme of AI and how that's kind of infecting the entire world. Visa has been really active in that space, Visa Intelligent Commerce, Trusted Agent Protocol, the recent collaboration with OpenAI. I think at the same time, like the conversation around autonomous consumer payments seems to have kind of subsided a bit. Many questions kind of remaining around how to verify agents, how to verify intent, who verifies identity. So what do you view as the key barriers to scaling agentic transactions from here? And what do you think the role of Visa and the broader payments ecosystem in agentic commerce will be?

We remain very optimistic about the agentic commerce opportunity, by the way, for us as a company, but also for you all as consumers. We're seeing a lot of adoption among consumers of using these tools for shopping, right, the top of the funnel for discovery. My guess is many of you in the room are similar to myself and other consumers, which is you're using your favorite LLM or platform to compare things, to shop for things, to identify things, but then you're still going to the seller website to complete the transaction. So seeing adoption for shopping, not yet for the autonomous payments.

The barrier that you described, if I had to describe it in one word, it would be trust. Sellers need to trust that agents that are coming into their environment and their websites are actual real purpose-driven agents that users like Will have empowered to go make transactions at their website. That's why we've been building things. I think you mentioned the Trusted Agent Protocol, Trusted Agent directory. We think that Visa can play an important role in building trust on the seller side of the ecosystem.

The second part of the trust equation is consumers, is all of us. We're going to announce tomorrow something we call the Visa Trust Index. We've done research with consumers asking them, do you trust these agentic platforms to go make payments on their own with your money and your financial information. And not surprisingly, most say no. Three out of four consumers say no. They don't trust that to happen. If you ask them, if Visa is involved, do you trust your agent to go make payments on your behalf, 61% of them say, yes, that I trust. So you go from 1 out 4 saying, I trust to 60%-plus. And if you ask the most engaged users, the ones that are using these LLMs at least once a week, that goes up to more than 70%.

So I think we can play an incredibly important role using the capabilities that you mentioned to deliver trust to the buyer side of the ecosystem and the seller side of the ecosystem. And as we build out the capabilities that enable this agentic web, I think we'll play a very important role in all of that.

Makes sense. Let's pivot to stablecoins. I think so Visa is part of the Open Standard joint venture and the launch of OpenUSD. You've also introduced the Visa Stablecoin platform. So can you talk about the strategic rationale behind supporting another stablecoin? How does OUSD differ from some of the existing stablecoins that are out there? And what are the primary focus areas for enabling stablecoin payments?

Yes. So we are big believers in the product market fit for stablecoins in a couple of different areas. One is there's probably 50 countries around the world where consumers and families and businesses have wanted to hold on to U.S. dollars essentially in a bank account for generations, but they haven't been able to, whether it was for cost reasons or availability reasons or others. And then the second is cross-border, whether that be remittances or B2B cross-border. And we view all of that as opportunities for Visa. And so that's why we're focused on the space.

And we have -- we're spending a lot of time building products kind of across the stack for stablecoins, starting at the level of the blockchains, moving up to issuance, moving up to wallets and then the orchestration and infrastructure layer and then ultimately, the application layer. We have teams working against each level of that stack.

You mentioned OUSD. OUSD has the potential to be a very relevant stablecoin, purpose-built for payments. I think what -- I think you asked what differentiates OUSD in the standard is shared economics and neutral governance. And we think it's quite possible that those 2 elements of design of OUSD could help OUSD become an extremely relevant stablecoin globally in the areas where I said that there's product market fit. If you go back down to the bottom of the stack, we've been active as a validator on several payments purpose-built blockchains with Tempo and Arc and Canton, we're a super validator. And because we're involved at the base level of those blockchains, we're involved in the protocols that got put out, the standards that get deployed and those types of things.

If you go all the way up to the application layer, stablecoin issuance has been quite a successful business for us. We have more than 200 stablecoin issuance programs in 50 countries now around the world that are empowering users who have stablecoin balances in their favorite wallet to be able to go spend those balances without having to think about how do I convert it from USDC into whatever fiat currency, maybe Argentinian pesos or something like that. We abstract the user from all that complexity and say, just go use your Visa card, and we'll take care of all that for you.

So those are just some of the areas where we're focused. You mentioned the Visa Stablecoin platform as well. That is a platform we deployed to largely our issuer partners to make it easier for them to participate in a lot of things that are going on in stablecoins, whether that's to participate with OUSD or to participate with settlement on the Visa network and things like that as well. So you'll see a lot more from us across all those different layers of the stablecoin stack, focused on those 2 opportunities, those 50 countries around the world and cross-border.

Great. Okay. I wanted to pivot to competitive dynamics. Obviously, always an evolving landscape. Payments industry has always been very competitive. I think Visa has had some pretty big wins this year. I think you've had some in the travel space in cross-border. You announced the NatWest win on the most recent earnings call. Can you talk about what the conversations have been like with issuers, maybe how they've changed over the last couple of years? And how you see some of those decisioning factors that they're indexing on impacting some of the negotiations?

Sure. Winning as an issuer around the world and serving your clients has become a lot more difficult. You big issuer, small issuer, fintech issuer, a traditional financial institution, keeping up with the pace of innovation and delivering products and services that are going to keep the most sophisticated users engaged and on their stack and on their platform, it's just become a lot harder. So issuers are looking for partners that can help them lead and win in that innovation arms race that they're all competing in right now.

And if you go again back to the first question we were talking about, we've put a lot of work in over the last several years to deploying product and innovation and capabilities in service of our issuers and helping them win, and that's helping us become their preferred partner. The kind of the conversations that you asked about, they've also become much more complex and sophisticated, right? Issuers are not just looking for us as a partner in consumer payments. We're bringing them opportunities in commercial payments, in Visa Direct, in value-added services, which we've spoken about. They're looking for processing capabilities, not just issuer, but core and all those types of things. So it's become a lot more complicated, a lot more complex and a lot more important, honestly, to our partners than it ever has been.

And I think when they're choosing Visa, the feedback that we get is they're choosing our people, we have outstanding people. And when you're a client of Visa day in and day out, there's the products and the tech and the brand, but you need world-class people to help you put those to work in service of them growing their business. So we feel like we have the best team on the planet, and they're helping us win. The Visa brand is a significant differentiator in 200 countries and territories around the world. Our tech stack, the modernized tech stack and Visa-as-a-Service stack that we're putting to work for our clients is a big differentiator. Our value-added services are a differentiator in terms of why consumers are choosing Visa. And all those things when we win are reasons clients tell us that they chose us.

Okay. Got a couple of minutes left here. I wanted to go through a couple of more specific topics, starting with cross-border, which has always been a big driver of growth in the business, growing you mentioned earlier in the update. This quarter, still growing faster than the core business. As you look across the cross-border money movement capabilities that Visa has, whether it's on the consumer side and push payments, disbursements, where do you see the biggest opportunity to sustain or even accelerate some of the cross-border flows on the network?

We see big opportunities in consumer payments. We see big opportunities in our Visa Direct platform. We see big opportunities in our commercial and B2B. I mean, significant, significant opportunities. Like in the consumer payments business, I mean, there's still -- $2 trillion of TAM, a lot of which is still spent in cash and check as hard as that is to believe sitting in a conference room in San Francisco, very true in many markets around the world. And so we're investing to expand our acceptance in those markets. We're investing in marketing, targeting users, making sure they know they can use their Visa credential when they're traveling. We're investing in programs to create benefits. We have something called the Visa Destinations program that allows Visa users to get special curated benefits when they travel to these marquee markets.

So consumer payments continues to be a tremendous opportunity. And by the way, one of the biggest assets and differentiated assets that we have around the world, the ability for a user to wake up in almost any country around the world and travel to almost any other country around the world and not have to worry about how they're going to pay for things. Anybody in the audience who might have traveled to San Francisco here from outside the country, I'm guessing you focus on what to pack in your suitcase, but you didn't worry about how you were going to pay for things because you can use your Visa credential anywhere around the hotel here. So that's one.

The second is Visa Direct. Our Visa Direct platform now has 18 billion endpoints on it, all around the world, accounts, cards, wallets, and we're putting that network to use in service of lots of different partners, whether that's P2P use cases or B2C use cases or C2B use cases and cross-border is an area where that I think is a very differentiated asset. And then the B2B space as well. We talked a little bit about it with stablecoins, but I think B2B represents a meaningful set of opportunities, especially for higher-value cross-border transactions where we can put our products to work.

Makes sense. Okay. I wanted to talk on the regulatory environment, particularly in Europe. I think there's this broader theme around payments nationalism and the push for sovereign payment infrastructure. How is Visa engaging with European regulators and governments to kind of navigate some of the sovereignty concerns? And then specifically, how are you evaluating some of the recent developments in Europe around Wero and the latest pan-European payment schemes?

So sovereignty concerns and those types of things are not a new issue in Europe or anywhere else in the world. We've been engaging for many, many years with both our partners and also elected officials and regulators on this topic for many, many years. In Europe specifically, it's also been a topic for many years, but it's become an even elevated topic in recent years. And we're doing what we've always continued to do, which is engage locally, build locally, have great local teams locally. In Europe, we recently announced a EUR 500 million incremental investment in Europe, data center in Europe, more offices in Europe, a headquarters in Frankfurt, an innovation center in Poland, a lot more people on the ground in our 20 or so offices that span from Iceland down to Turkey.

So we're doing what we do is invest more locally. Now Europe, you asked about Wero. I mean Europe has had and has been building out domestic alternatives for many, many years. They've got domestic card networks, Carbon Care, Redsys, TROY, others. They have a thriving digital wallet ecosystem before you even get to Wero, whether it's Swish or Vipps or Bizum in Spain and many, many others. And they're all having good success. So it's a very, very competitive market with domestic alternatives and has been for many years.

And Wero will be another domestic wallet. They're off to a good start, and I expect that they'll make progress and provide even more competition to the European market, which is thriving today. So the market is competitive. It will get more competitive. There'll be even more domestic alternatives, and we'll continue to do what we do, which is invest locally, hopefully win locally and serve our clients and partners and help them thrive.

Got it. Okay. Last question here. I wanted to ask about the investment philosophy, particularly with the company continuing to operate at industry-leading margins. You recently announced a workforce reduction. But how are you balancing maintaining those healthy margins while also continuing investing in the business. You've announced some specific investments, for instance, in the European market just now. Where are you directing incremental investments today?

Yes. So the reduction in workforce that you referenced is really a step on a journey for us. we've been on a journey for the last 3-plus years of trying to run the company more efficiently, more effectively, more accurately in service of our clients and through that, free up incremental resources to then be able to invest more in marketing and products and salespeople and offices and data centers and all those types of things that hopefully drive this flywheel of continued growth. And we're just continuing to work our way through it.

We're very blessed in that we have significant investment, significant ROI investment opportunities ahead of us in consumer payments, in value-added services and CMS. And the more we can free up resources to invest in those opportunities, hopefully, the more effective we can be serving our clients and driving growth.

Great. Well, I think that's all the time we had. Ryan, thank you for joining us. Really appreciate it.

Thanks for having me. Great to be here, Will. Thanks.

Welcome to Visa's Fiscal Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time.

I would now like to turn the conference over to your host, Ms. Jennifer Como, Senior Vice President and Global Head of Investor Relations. Ms. Como, you may begin.

Thank you. Good afternoon, everyone, and welcome to Visa's Fiscal Third Quarter 2026 Earnings Call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer; and Chris Suh, Visa's Chief Financial Officer. This call is being cast on the Investor Relations section of our website at investor.visa.com. A replay will be archived on our site for 30 days. A slide deck containing financial and statistical highlights has been posted on our IR website.

Let me also remind you that this presentation includes forward-looking statements. These statements are not guarantees of future performance and our actual results, outcomes or timing could differ materially as the result of many factors. Additional information concerning those factors is available in our most recent annual report on Form 10-K and any subsequent reports on Forms 10-Q and 8-K, which you can find on the SEC's website and the Investor Relations section of our website. Except as required by law, we do not undertake any responsibility to update these forward-looking statements.

Our comments today regarding our financial results will reflect revenue on a GAAP basis and all other results on a non-GAAP nominal basis unless otherwise noted. The related GAAP measures and reconciliation are available in today's earnings release and related materials available on our IR website.

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

Thanks, Jennifer. In our fiscal third quarter, net revenue was up 14% year-over-year to $11.6 billion, and EPS was up 11%, both ahead of expectations. Quarterly payments volume grew 10% year-over-year in constant dollars to cross $4 trillion, the first time in Visa's history and process transactions grew 10% year-over-year to $72 billion reflecting strong and resilient consumer spending.

After record-setting net revenue growth in our second quarter, we continued to build on our momentum in the third quarter in 3 important ways: one, through our wins in consumer payments, commercial payments and money movement with a focus on serving our clients; two, with product innovation and development across our business, both what we are building and how we are building it; and three, in continuing to position our value-added services as a key driver of our growth, not just this year, but for years to come. I'll cover all 3, starting with our wins across the business.

Our Visa as a Service stack is rooted in serving our clients. We remain obsessed with helping our clients and the entire payments ecosystem scale and grow. A tangible sign of the trust our clients have in Visa and our capabilities is our Net Promoter Score. For the third consecutive year, we received a score of 76 in our annual global client engagement survey, an enviable number in any industry. Most notably, the MBS for both sellers and fintechs each increased several points with respondents of valuing our strong brand, trusted partner relationships global network strength, reliability and innovation. We see the strength of these relationships in our consumer and commercial and money movement solutions business, with our credentials growing 8% year-over-year in the third quarter and our tokenized penetration nearing 60% of our eCommerce transactions globally.

Let me provide some specific examples. First, in Europe, through portfolio migrations and organic expansion, we have grown credentials by more than $40 million in the last 12 months, which is over 70% faster than the annualized credentials growth we saw in the region from fiscal year 2019 to 2024. And in the next several years, we expect over 30 million more credentials from wins alone in Europe. An example from this quarter is NatWest, where we have won the entire consumer credit portfolio of their retail bank, demonstrating the strength of our strategic partnership that has been restored over the past 5 years.

In Latin America, we have continued to bring our innovation and strong relationship management to drive processing penetration and value-added services. We recently renewed our 55-year relationship with Bradesco in Brazil, across consumer credit and debit, commercial credit and debit and several value-added services. In Colombia, we signed an agreement with [ Grupo Aval ], representing 4 banks in the country to drive domestic processing, enable Visa Direct cross-border transactions and support commercial card issuance in small business. Our processing penetration in the country, which was in the single digits 5 years ago, is now above 90%.

In the U.S., we won the consumer debit portfolio of large Southeast community institution Colony Bank, which is a testament to our clear strategic alignment with our clients and the strength of Visa's debit network and value-added services. Our commercial and money movement solutions revenue grew 17% year-over-year with 13% year-over-year commercial payment volume growth, both in constant dollars as our product development continued to help us win business. For example, in Europe, we signed an agreement with [ Core pay ] to bring our [ Fleet 2.0 ] solution to their fleet card platform, supporting new opportunities across the region with capabilities such as EMV chips, digital wallet provisioning, contactless payments, rich transaction data and global acceptance.

In our CEMEA region, we signed an inaugural B2B travel portfolio in Saudi Arabia with [ Arage ] Bank, one of the largest banks in the region through our Visa Commercial Choice travel product, providing flexible interchange, automation, controls and reconciliation for their OTA clients. And in the U.S. and across 6 countries in Europe and Asia Pacific, we renewed with [ NIM ], a fast-growing B2B travel issuer for virtual cards.

In money movement, Visa Direct transactions grew 21% year-over-year this quarter to $4 billion, expanding relationships to activate new use cases is one key way we enable growth for Visa Direct. For years, DoorDash the largest food and grocery delivery platform in North America has been utilizing Visa Direct for Dasher payouts in the U.S., Australia and Canada, as well as Visa virtual commercial cards to enable Dashers to pay for customer orders at physical locations. This past quarter, we enabled Visa Direct to card for DoorDash's Crimson platform, a dedicated personal banking and rewards program built specifically for Dashers who receive a Visa debit card when they sign up. With all of these examples, it's clear that our people, products and technology are resonating and building trust with our clients globally positioning us for the future.

Now I'll turn to product innovation at Visa. Technology and commerce are evolving faster than ever. As the leading hyperscaler of payments globally, Visa is at the center of this transformation, bringing trust to whatever form commerce takes next. This is showing up in our product development in 2 ways in both what we are building and how we are building it. Let me start with the how. AI is changing how work gets done at Visa. With the dawn of the generative AI era, we moved quickly to deploy AI across our enterprise to assist us in areas like engineering, client service and model orchestration. Now as we enter the era of Agentic AI, we are going beyond AI assistance and harnessing the power of AI to execute work in tasks with our supervision. We have progressed materially in product development and engineering, deploying new tools, plug-ins, agent skills and persistent sessions to create an end-to-end pipeline with human oversight and autonomous capability.

As a result of the unlocks we can realize with this new tooling, we are reforming our product development teams that used to be 10 or more into smaller and more nimble agentic squads of 2 to 4. And the results are meaningful for those teams that are using the Agentic toolchain with 80% more code commits and 80% plus improvement in requirement definition from 30 days to 5 days which has translated to 65%-plus faster feature development.

Now to the what. As a result of this new way of working, we are able to design, build and ship products at an increased velocity with continuous innovation and improvement. I want to touch on 2 areas where we are deploying our new way of working with great impact. Stable coin and agentic commerce. We are active and investing in each layer of the stable coin stack from blockchain to issuance, wallets, infrastructure and orchestration and applications. This quarter, we have made progress in both the issuance and application layers. We recently joined open standard alongside a strong group of partners, open standard plans to issue [ Open USD ] a new stable coin design for global money movement. We look forward to helping connect Open USD to real-world payments.

And in the application layer, we launched the Visa Stable Coin platform for stable coin minting, movement and management. It is designed to enable our partners to settle with Visa in stable coins provide on chain wallet as a service infrastructure and move money between [ Fiat ] and stable coins beginning with Open USD across a wide variety of use cases. Furthermore, Visa stablecoin platform's infrastructure will be integrated with Pismo which can enable tokenized deposits for financial institutions and Pismo plans to add third-party tokenized deposit infrastructure providers in the future.

There is much more to come in this space. And Visa is participating and will continue to participate in all of these layers, whether through building Visa products and services, integrating with partners, investing or acquiring. If stable coins are reshaping the back end of commerce, we see AI as transforming the front end. We believe agentic commerce will expand our addressable market and drive future growth for Visa.

This quarter, we continued to work across the ecosystem by enabling new seller capabilities such as our agent score and agent directory and building infrastructure, such as our token assurance framework to ensure agent initiated transactions are transparent and trusted. Across payments, partnerships are critical in driving adoption and AI is no different. We are excited to be partnering with OpenAI to enable secure Visa payments within agentic commerce. Through the partnership, Visa will provide its global network credentialing capabilities and security infrastructure to support agentic commerce experiences, helping consumers and businesses interact and transact with confidence.

And as part of our partnership with Meta, Visa is enabling new ways to pay across Facebook and Instagram, powered by Visa Intelligent Commerce, allowing consumers to transact seamlessly and securely with Visa tokens. All of this progress across stable coin and agentic demonstrates that we have fundamentally shifted the what and how in our product development life cycle. We now have more than 150 AI-powered applications and over the last 12 months, we have shipped more than 300 major product releases, changes in the way we work and where we invest also impact how we operate the company.

Today, we announced that we are eliminating roles with the majority being in our technology and product teams to ensure that we are continuing to position Visa for future growth. Another important area of product development has been in our value-added services, which grew revenue by 34% in constant dollars in Q3, with the vast majority of the revenue linked to transactions, cards and accounts. In issuing solutions, our network products continue to be key drivers of growth, creating valuable customer experiences. For example, two of our most popular network products, subscription manager and stop payment services, which help cardholders view and decide where their card is on file for a subscription or reoccurring payment now have 2 billion credentials enrolled, and we continue to develop new products, including our AI financial assistant, enabling banks to white label our AI-powered financial insights from their data and Visa's network data for their cardholders right in the bank's own app and website.

We are also expanding our issuer processing capabilities with DPS full-service credit bringing the best of Visa DPS and Pismo into an integrated credit issuer processing solution designed for fintechs and small to midsized banks. We will be piloting it in Q4 with our first client secured in the U.S., and it will be generally available next year.

In Acceptance Solutions, I just mentioned our new agentic tools for sellers and enhanced tokens but this portfolio includes many other capabilities that are driven by both carded and non-carded transactions. Within CyberSource, for example, some of the largest bank acquirers and sellers globally access the latest solutions such as Unified Checkout that launched globally in March. Unified checkout acts as a seamless orchestrator across multiple payment types with Visa hosting and securing the experience so sellers don't have to rebuild every time commerce evolves. Over 4,500 sellers and acquirers globally have enabled this with more to come, including one of our largest acquirers in the U.K.

In Risk and Security solutions, we continue to deliver capabilities to the entire ecosystem, leveraging the latest in AI to help clients protect themselves in an increasingly complex threat environment. We built the [ Visa Vulnerability Agentic Harness ], an orchestration layer that allows us to use models like Mythos to find and fix issues at AI speed. It is available now on GitHub to our clients, along with the technical blueprint remediation and validation agents, and we can provide consulting and solutions to help.

In advisory and other, this quarter marked significant engagement for the FIFA World Cup. In Marketing Services, over the last 12 months, we delivered more than 300 FIFA engagements to more than 240 unique clients with about 20% of our clients utilizing our services for the first time with far-reaching impact in our regions across 70 markets. In the U.S., you likely saw some of our largest clients such as Chase, Bank of America, Wells Fargo and Marriott activate our FIFA offerings and promotions for their customers to drive acquisition and loyalty.

In Latin America, we also saw great engagement, 2 examples I would highlight. In Brazil, a leading bank worked with Visa to launch multiple campaigns, including a promotion entering cardholders for a chance to win tickets for every BRL 100 spent with more chances for new cardholders. From February to June, this campaign had 1 million cardholder participants with an 8% lift in card activation and $400 million in incremental payments volume. In Mexico, the launch of a new FIFA card helped drive significant card issuance for one issuer with nearly 400,000 new debit cards and more than 250,000 new credit cards and 5 joint FIFA campaigns, which included rewards bonuses on [ Tea ] Mexico game days that multiplied upon a win drove a more than 5x increase in average transaction size.

With all of the enthusiasm around FIFA, we are very pleased to have extended our long-standing global partnership agreement as the official payment technology partner for FIFA tournaments. It is unique sponsorship assets like these that make Visa a partner of choice for our value-added services.

In our first 3 quarters of 2026 I have seen the momentum across our business continue to build through the Net Promoter Score from our clients through the rate of client renewals and wins through the accelerated rollout of innovative products and solutions, through the increase in engagement in our value-added services and by consistently delivering strong financial results to our investors. The opportunity ahead is significant and I'm confident that we have significantly shifted our ability to build and grow the future of payments faster and better than ever before.

Now over to Chris to discuss our financial performance.

Thanks, Ryan. Good afternoon, everyone. We delivered a strong quarter, a reflection of resilient consumer spending, improved key business drivers and effective execution of our strategy. In constant dollars, global payments volume was up 10% year-over-year. Cross-border volume excluding intra-Europe, was up 12%, and total processed transactions grew 10%. Fiscal third quarter net revenue was up 14% year-over-year, better than our expectations primarily due to stronger-than-expected key business drivers, higher-than-expected value-added services revenue and better-than-expected FX. Third quarter net revenue was up [ 13% ] in constant dollars. EPS was up 11% year-over-year in both nominal and constant dollars, better than expected, primarily due to stronger-than-expected net revenue growth. Let's go into the details.

U.S. payment volume grew 10% year-over-year, up about 2 points from Q2, a growth rate not seen since fiscal 2019, excluding the post-COVID recovery. With both card-present and card-not-present growth accelerating strongly. U.S. payments volume growth was the result of several factors, including higher tax refunds, the cost of fuel, retail, including the timing of promotional shopping events, strong Visa Direct growth and FIFA-related spend. U.S. credit rose 11% year-over-year, up more than 1 point from Q2. Debit accelerated by more than 2 points from Q2 to grow 9% year-over-year.

Growth across consumer spend band saw incremental improvement from Q2 with the highest spend band continuing to grow the fastest. Across our volume, both discretionary and nondiscretionary spend remains strong. We do not see signs of the lower spend consumer weakening in our volumes.

Third quarter total international payments volume was up 10% year-over-year in constant dollars, generally consistent with the growth we've seen over the past several quarters.

Now to cross-border volume, which I'll speak to in constant dollars and excluding intra-Europe transactions. Q3 total cross-border volume grew 12% year-over-year, up more than 1 point from Q2. Cross-border eCommerce volume was up 16%, 3 points above Q2, primarily driven by retail, including the timing of promotional shopping events. Travel-related cross-border volume was up 10% consistent with Q2. While the conflict continued to be an offsetting factor, commercial and U.S. [indiscernible] continued to improve. And in June, the FIFA World Cup boosted inbound North America and Latin America volume.

I want to zoom in on the tournament's impact on our key business drivers. As we all know, the FIFA World Cup brought many visitors to the U.S. from the first whistle on June 11 through the round of 32 matches on June 30, we saw both host cities as well as destination cities benefit from the influx of fans. A few highlights. Total card present spend in the U.S. accelerated with card-present transactions up as much as 20% in select host cities on match days. We saw acceleration in tap to pay with weekly tapped transit transactions reaching a peak of nearly 40% year-over-year growth in U.S. host cities. Tap to pay transit transactions in Boston were up more than 50% for the June tournament period.

Focusing on inbound cross-border card-present spend, U.S. host cities increased by nearly 25% year-over-year from June 11 to June 30, with the most significant increases driven by fans from Norway, Uruguay and Ecuador. I spend categories in host cities, entertainment and restaurants saw the highest growth in cross-border spend. Match days drove spikes in host cities with Kansas City topping out at 1,000% year-over-year cross-border card-present transaction growth and for destinations like D.C. Metro and Las Vegas, we saw a pickup in spend prior to the knockout matches. And the U.S. wasn't the only beneficiary as Mexico and Canada saw inbound cross-border card-present volume growth of more than 70% and 35% year-over-year, respectively, from fans from countries with matches there.

With that as a backdrop, I'll move to discuss our financial results. Starting with the revenue components. Service revenue grew 14% year-over-year versus the 9% growth in Q2 constant dollar payments volume growth, primarily due to pricing and card benefits. Data processing revenue grew 17%, above the 10% growth in process transactions primarily due to pricing, strong value-added services performance and higher cross-border transaction mix. International transaction revenue was up 6% below the 12% increase in constant dollar cross-border volume growth, excluding intra-Europe, primarily due to lapping the currency volatility peak last year and mix. Other revenue grew 45%, primarily driven by growth in advisory and other value-added services, especially marketing services revenue as well as pricing. Client incentives grew 18%, a step-up of 4 points from Q2, primarily due to lapping low incentive growth last year and strong client performance.

Now to our 3 growth engines. Consumer Payments revenue was driven by strong payments volume, cross-border volume and processed transaction growth. Commercial and money movement solutions revenue grew 17% year-over-year in constant dollars. CMS revenue stepped down from Q2 due to the absence of performance adjustments benefits that helped Q2 and lapping pricing impacts that started in Q3 of fiscal 2025. Commercial payments volume grew faster than Visa's overall payments volume, up 13% in constant dollars and accelerating 2 points from Q2, driven by [ 1 ] of acceleration from both U.S. and international volume growth.

While we have a handful of client wins that have helped us since Q4 of fiscal 2025, the bulk of the strength in our commercial payments volumes has been from our underlying business in both domestic and cross-border portfolios, which we expect to continue well into the future. Visa Direct transactions grew 21% year-over-year with continued strength in both domestic and cross-border. Value-added services revenue grew 34% year-over-year in constant dollars to $3.8 billion, primarily due to 3 factors: one, underlying business drivers which included strength in marketing services engagements related to FIFA; two, pricing; and three, the acquisition of Prisma.

While we had strong growth in all of our portfolios, value-added services revenue was higher than expected, primarily due to greater utilization of our network products in issuing solutions and acceptance solutions. In fact, when we look at VAS results over the past 12 months, all 4 of our VAS portfolios have individually grown faster than their respective historical growth rates disclosed at Investor Day. Looking collectively at issuing solutions, acceptance solutions and risk and security solutions, the revenue has grown more than 20% year-over-year every quarter over the last 12 months in constant dollars. This is faster than the fiscal 2021 to 2024 CAGR for total VAS revenue that we disclosed at Investor Day in February of 2025.

For our advisory and other portfolio, in addition to the strong marketing services revenue growth, we've also increased the velocity of our consulting projects through the help of AI. Just this past quarter alone, for over 700 clients across 100-plus countries and territories, we delivered 1,200 consulting projects, which is more than we delivered for all of 2019. Advisory and other continues to grow the fastest of the VAS portfolios, and we expect it to continue to well into the future, driven by a focus to better serve our clients.

Operating expenses grew 17%, primarily driven by marketing and personnel expenses. This was above our expectations, primarily due to larger-than-expected FX impact from balance sheet remeasurement and higher-than-expected personnel expense as a result of deferred compensation mark-to-market, which as a reminder, is EPS neutral. This was partially offset by the timing of some marketing expenses that shifted into Q4.

In our GAAP results, we had $563 million in severance costs related to changes to our workforce, including those that Ryan discussed as we continue to focus on driving efficiency across the company and reinvest those savings in our highest potential growth opportunities. Nonoperating expense was $35 million better than our expectations, primarily due to the investment income from the deferred compensation mark-to-market impact I just mentioned. Our tax rate for the quarter was 18.4%, consistent with our expectations. EPS was $3.32, up 11% year-over-year, better than expected with an approximately 0.5 point of benefit from exchange rates. For our non-GAAP results, Prisma and Newpay added a little under 1.5 points to net revenue growth, approximately 2 points to operating expense growth and approximately 0.5 point to EPS growth.

In Q3, we bought back $4.9 billion in stock and distributed $1.3 billion in dividends to our shareholders. In May, we settled our previously announced exchange offer for Class B1 and Class B2 common stock. We also funded a litigation escrow account by $250 million which has the same effect as a stock buyback. At the end of June, we had $28.4 billion remaining in our buyback authorization. And in July, we expanded our commercial paper capacity to $7 billion.

Now let's look at drivers through July 21 with volume growth in constant dollars. U.S. payments volume was up 9%, with both credit and debit up 9% year-over-year. A step down from June, primarily due to retail, including the timing of promotional shopping events, a lack of a day's mix benefit that helped June and the change in the cost of fuel. For cross-border volume, excluding transactions within Europe, total volume grew 14% year-over-year with eCommerce up 18% and travel up 12%. Processed transactions grew 9% year-over-year.

As we move to our guidance, let me remind you that it is on an adjusted growth basis, defined as non-GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentation for more detail.

Now moving to Q4 and the full year financial expectations. We expect Q4 net revenue growth in the high end of low double digits, similar to Q3 on an adjusted basis. For drivers, we are assuming that the broader consumer spend stability continues from a macro perspective and our overall drivers remain resilient and strong. On volatility, we are assuming that current levels which are generally in line with Q1 persist, implying more of a drag than was incorporated previously. On incentives, we expect to have renewed about 20% of our payments volume by the end of the fiscal year, and when we combine that with some new business we won, this puts Q4 incentive growth slightly above Q3 on a nominal basis. We expect Q4 operating expense growth in the low double digits, which includes some Q3 expenses shifting to Q4.

Nonoperating expense is expected to be about $80 million. And our tax rate in the fourth quarter is expected to be around 19%. As a result, we expect fourth quarter EPS growth to be in the low end of mid-teens. For our non-GAAP nominal Q4 financials, Prisma and Newpay will add approximately 1 point to net revenue growth, approximately 1.5 points to operating expense growth and approximately 0.5 point to EPS growth.

Pulling it all together for the full year, we expect full year net revenue growth to now be in the low end of low teens. We expect full year operating expense growth in the low end of low teens. Nonoperating expense for the full year is expected to be about $165 million. Our tax rate for the full year is expected to be between 18% and 18.25%. As a result, we expect full year EPS growth to now be in the low end of mid-teens.

In closing, we are already several weeks into our fourth quarter and engaging in our strategic and financial planning work for 2027, and I wanted to make a few comments. As we do every year, we are running a number of scenarios to arrive at our assumptions for the macroeconomic environment, key business drivers and volatility. We have clear line of sight into our expected renewals, product pipeline and the expected pricing impact across our solutions, which, as you know, has tended to be similar in its contribution in the past few years. We have conviction in our strategy and our ability to continue to deliver strong results across consumer payments, commercial and money movement solutions and value-added services. All of this will result in our guidance that we will provide next quarter. As the leading hyperscaler of payments globally, we're excited about the opportunities ahead, the investment decisions we're making and our ability to drive Visa's future revenue growth.

And now, Jennifer, hand it back to you.

Thanks, Chris. And with that, we're ready to take questions. [Operator Instructions]

[Operator Instructions] Our first question comes from Will Nance with Goldman Sachs.

Obviously, a very strong result. Chris, I wanted to maybe double click on some of the cross-border trends that you called out around U.S. inbound and the World Cup. And maybe I missed it. It sounds like some very strong impacts in specific cities. Do you have any color or quantification on the degree to which that boosted the cross-border travel numbers in aggregate in June and July and just how we should be thinking about kind of normalizing for that as we look for the remainder of the quarter? Appreciate it.

Sure. I will. Thanks for the question. Overall, it was a very good quarter for cross-border across both travel and eCommerce. Now you were specifically asking about inbound and sort of the relationship with FIFA. We did see inbound into the U.S. and continued to improve this quarter and FIFA did help both North America and Latin America in the month of June.

The thing that I'd point out also is that, as we've spoken about many times, our cross-border volumes are very well distributed. No region comprises more than 25%. And so while there is good enthusiasm around FIFA, and that was great to see the overall underlying health of travel and e-commerce continues to be healthy, and that's something that we anticipate will continue into Q4.

James Friedman with Susquehanna.

Thank you. I wanted to ask about the delta between cross-border and international revenue, the volume versus revenue mix. I think you alluded to some of this, Chris, in your prepared remarks, but if you could elaborate on that, that would be helpful.

Sure. Happy to do so. James, I mean, building a little bit on the question Will asked, first, we start with the fact that our cross-border business remains healthy. We saw strong underlying health and stability across both travel and e-commerce. That's the first place I'd start. The difference that you pointed out between international transaction revenue and the volume -- the cross-border volume I talked to is really related to 2 things. And there are similar things that I've spoken about in previous quarters.

One is volatility. And volatility primarily related to the fact that last year in Q3, we were lapping the peak of the year. The highest volatility quarter was Q3 of last year, and we were lapping that in this quarter. And then the second factor is the mix of the business and the composition of our yields within international transaction revenue can and does vary across our business, for example, different clients or different products like Visa Direct, which typically has a lower yield than our card transactions and different regions or currencies can also contribute to that mix difference. So those are the 2 primary factors.

But the main message I'd send is that the underlying crossed business remains quite healthy.

Thank you. Timothy Chiodo with UBS.

I want to touch a little bit on Pismo DPS and the broader core banking and issuer processing business that you're combining here. Really often, investors have 2 big broad questions about these initiatives. One is around strategy and one is around bank size. On the strategy side, the topic is usually, hey, is this about new revenue streams? Is it about expanding the pie in negotiations? Is it about deepening relationships with issuers and the answer might be all of the above. And on the bank side focus, it's often -- is it about large banks like the big names we've seen announced at Wells Fargo and Citi? Or is it about smaller banks in fintechs. And again, the answer might be both.

But I'm hoping you could elaborate on those 2 topics, the strategy and then the bank size. And really for the bank side, it's more about what are the different things that you're doing for the different sizes of banks.

It's Ryan. I guess stepping back at the broadest level, the Pismo strategy is about identifying and understanding client needs and then bringing solutions to help solve those client needs. And when I first described the Pismo acquisition to investors, I explained that it was based on for the last several years, hearing from our clients around the world that there were 2 important priorities that they had. One is modernizing their stacks, moving to the cloud, moving to API-based services, so on and so forth. And then the second was helping clients move more quickly into more geographies with a cloud-based issuer processing stack that would help them do that. And as you fast forward to today, we're seeing product market fit broadly in those areas. And we believe over time that will help us deepen our relationships with clients that will help us generate more revenue that will help us strengthen our partnership with our clients to your question by helping them meet these needs. So that I think gets to the first part of your question.

To the second part of your question, I guess, let me step back and put it in the context of our overall issuer processing and core bank strategy. I'll start in the U.S. So in the U.S., we have 2 assets. We have DPS, and we have Pismo. I'll try to go through this systematically. So the first thing I'll do is talk about issuing processing. So DPS is and has been the leading debit issuer processing platform in the U.S., DPS services banks of all sizes, big and small and will continue to do so in the future. And now if I shift to Pismo it as a reminder, Pismo is a cloud-native API-based issuer processing and core banking platform. It does -- it essentially provides processing for all payment products, whether it's debit, credit, commercial, DDAs, current accounts and the like. And increasingly, in the U.S., what we're seeing is smaller banks and midsized banks as well as fintechs are looking for an integrated debit and credit processing solution, that will help them simplify their operations and accelerate product innovation. And that's the market need that led us to the DPS Pismo solution that we've talked about.

It's not a market need we've seen from large issuers. We expect that large issuers will continue to run their highly customized debit platforms and credit platforms separately but we do see a market need with small, midsized issuers and fintechs. So we launched the new platform in the U.S., which essentially combines Visa DPS and Pismo capabilities into an integrated issuer processing solution that we can put to work. And as I said in my prepared remarks, we've already had success with one client.

We're also, to your question, deploying Pismo in the U.S. to help banks of all sizes migrate their core bank platforms to the cloud. And as you referenced, we announced Wells Fargo in that space. So that gives you, hopefully, to your question, a very clear sense of kind of the product and segment strategy we're pursuing in the U.S. Outside the U.S., our single go-to-market platform is Pismo and we've now entered 19 new markets since the acquisition. We're seeing market demand from a range of different client types, both for issuer processing and for core banking.

Thank you. [ Bod Kumar ] with [ Rockhill in CoRedburn ].

I just wanted to ask about the revenue algo. Chris, I think you talked about this in your remarks around [indiscernible] and my memory, it was kind of like 9% to 11% net revenue growth based on 15% to 17% [indiscernible] 5% to 7% of consumer payments. It does now appear for part best 2 years that has been quite different with [indiscernible] probably close to mid-20s and consumer payments probably growing more like low double -- low single digit. And obviously, the [ 13% to 14% ] revenue growth well ahead of [ 9% to 11% ].

If we think about that algo [indiscernible] going out kind of beyond this year is the longer term. I'm not asking for new long-term guidance, but just in general, like is that something that the changes out there? Or do you see this as more sustainable and this mix between the feed or thought areas being more in the kind of like growth in the last couple of years versus what we identified at the Investor Day.

Got it. Yes, thanks for the question. I mean we're obviously very pleased with how the year has played out across value-added services, across CMS business, value-added services this quarter, almost 1/3 of our revenue growing at 34%, that's an awesome result. It really reflects the strong execution against the strategy that we laid out at our Investor Day, which is I think the point you're referencing against. And that's what we're focused on. We're focused on running the company. We're focused on executing our strategy, driving product innovation, delivering for our clients and taking all the steps that we've talked about to continue to run the company better and position us for sustained long-term growth. That's our focus right now. We'll continue to focus on that as we close out FY '26.

Tien-Tsin Huang with JPMorgan.

Great results. On the U.S. side, it looks like volume up 10%. You called out that is the highest and quite a bit of time here. So can you -- do you mind just going back and maybe unpacking the growth a little bit more across the items you called out [indiscernible] tax refunds, fuel prices Visa Direct. I think there's some timing or cup of course. Just trying to separate the event-driven spend versus the strong underlying trends and maybe some wins in there as well.

Yes, sure. Happy to do so, Tien-Tsin. Yes, it was a great quarter for the U.S. I mean the place I'd start with is, as Ryan remarked, the consumer spend environment remains strong, resilient. I think the results reflect that. And the strength I would also note is pretty broad-based. We're seeing improvements around credit and debit, discretionary spend, nondiscretionary spend, card not present, and across the spend bands as well, as I remarked in my commentary, we didn't see any signs of weakening across the lower parts of the spend band either.

And so again, point to broad-based strength, reflecting consumer resiliency. And then as you called out some of the ones, I called these out on the call. Happy to give more color. But there was a number of factors that contributed to that acceleration that we saw in Q3, go through the whole list of with higher tax returns, the cost of fuel, retail, which included the timing of some promotional shopping events, strength in Visa Direct -- Direct excuse me, and, of course, the enthusiasm around FIFA that we've seen. Those are all contributors. And all in all, when you put that all together, it great quarter for the U.S. in Q3.

Thank you. Jeff Cantwell with Seaport Research.

Just on the Open USD initiative, Ryan, this question is for you since you seem to be like you would be the kind of person who would never backed out [indiscernible], of course. So a question to you is, in your opinion, is Open USD going after circled and [indiscernible] the established players in the stable coin going round is just the one that's ultimately going to be the winner. I would love to hear your thoughts there.

Let me start with kind of Visa. Visa going forward will remain multi-coin, multi chain. Our role is not to pick winners. Our role is to help clients connect to the stable coin ecosystem securely and at scale regardless of which stable coin, which network, which infrastructure ultimately gain adoption. And so now going back to the open standard, open standard is designed with neutral governance and shared economics in mind. And it designed that way because they believe that model will help scale stable coins for payments. As much as we talk about stable coins on this call and in other venues, stable coins really have yet to scale beyond a few use cases like stable coin linked cards that we've issued in various places around the world.

So we're proud to be a partner of Open USD. We do think that Open USD has the chance to scale as a payment-based stable coin. We think that it is designed in such a way that it creates the incentives for players in our ecosystem to drive it and to use it. But like I said at the beginning, our view of the future is multi chain, multi-coin, -- we're not here to pick winners and losers. We're here to enable our clients to be successful, and that will be our strategy continuing going forward.

Thank you. Andrew Schmidt with KeyBanc Capital Markets.

I just want to ask about value-add services growth. Chris, I think you did a great job sort of illustrating the durability of the growth drivers beyond just the marketing services. But maybe you could just dimensionalize just the go-forward path for perspective? I know there's some things that obviously may not recur, but at the same time, the portfolio is getting larger. The other components are accelerating love to understand the growth profile going forward a little bit better.

And then just on the expense side, remind us the expenses attached with some of these marketing-related revenues. I know there's a little bit of linkage there. A reminder there would be helpful, too.

Thanks for the question, Andrew. Yes, as I said, VAS is having an outstanding year and that strength, that performance is broadly across all the portfolios. I gave a lot of detail, as you pointed out, in my prepared commentary, but I'll just maybe highlight by saying the key point, all 4 portfolios are growing faster over the past 12 months compared to the growth rates that we shared at Investor Day. And so we've seen acceleration broadly across. And it's -- and certainly, marketing services is having a great year with the enthusiasm around FIFA but again, clearly, the other 3 portfolios issuing solutions, acceptance solutions and risk and security are also collectively growing north of 20%. So that really indicates the breadth of the strength of the business.

As I said in the last question, it's really a reflection, I think, of our strong execution against our strategy. There's great momentum. And maybe obviously, we're not speaking about FY '27 at this point, but I will just directionally a big opportunity in front of us. We continue to execute really, really well. And I think that -- we anticipate that those businesses will continue to be strong.

Sanjay Sakhrani with KBW.

I wanted to just touch on the workforce reductions and the associated cost savings. I'm just curious, is the expectation to reinvest all of those savings or actually sort of drop some of those down to the bottom line? And then as we think about the reinvestment of those savings over what period of time do you guys anticipate a return?

It's Ryan. Let me just start, and then, Chris, feel free to add or correct or not. The investments that we have in front of us are enormous. I think what we've shown over the last couple of years is that we can drive efficiencies. We can take the savings that we generate from those efficiencies, and we can invest those savings against the strategic levers that we laid out at our strategy at our Investor Day and deliver accelerated performance as a result. And we continue to feel good about the opportunities ahead of us.

You look out in the consumer payments opportunities, we're continuing to invest against expanding acceptance in cash-rich markets around the world, strengthening our differentiated affluent value proposition, winning in cross-border and e-com. We talked a lot about as on this call, but just enormous investment opportunities in risk and security and marketing services to the earlier discussion, scaling Pismo and feature space in CMS, we're just a range of investment opportunities, whether it's unified B2B payments and acceptance, embedded finance, Visa Direct, which we've talked about.

And then on top of that, stable coins, agentic our brand and our advertising, growing kind of in emerging markets and obviously the Visa as a Service stack. So the timing of it is continual. It's just we're constantly driving improvements and efficiency, identifying savings opportunities. We've done the work in advance to identify the return on investment of redirecting those savings and putting that into the business to drive the results. And the track record is what the track record is, which we feel really good about. And the opportunities are the opportunities that are ahead of us, which are enormous. So that's kind of the context for all of this.

Yes. I would only add. I think Ryan covered it really, really well. The flywheel is working. The thing I'd add is over the past several years, as Ryan kind of referenced, we've grown and diversified our business. And we've done that while maintaining our industry-leading operating margins. Looking forward, we do expect that we'll continue to be able to deliver strong margins into the future as well.

Darrin Peller with Wolfe Research.

Your guidance for fiscal fourth quarter calls for low double digits to low teens, including M&A, and that's incorporating, I think, tough levels of FX [indiscernible] you mentioned but it also likely incorporates uncertainty around the Middle East and less FIFA revenue. So I'm trying to just reconcile the strength we're seeing in that kind of guide for fiscal fourth quarter despite those headwinds. So maybe just help us understand I know VAS is going well. Is there any other key drivers that are providing your conviction on the strength exiting the year? And are any of those unsustainable as we look forward?

Thanks for the question, Darrin. You've had strong revenue growth really every quarter this year in Q3, and we expect Q4 to be strong as well. And as I guided Q3 to be in line with Q4 on an adjusted basis -- sorry, Q4 to be in line with Q3 on an adjusted basis. And underlying that is the strong drivers that you're referencing, strong VAS growth.

From a technical perspective, there are 2 offsetting factors as you think about the models. One is volatility, which as we exit Q3, we think Q4 will be closer to the Q1 levels. Obviously, that could change. But that's the level that we're anticipating. And the second is incentives, which we talked about, which is really a reflection of our new and renewal business. But if I just step back a little bit, I mean, throughout the course of this year, I referenced we've got strong results all year, and we've done what any good company would do, which is from this position of strength, we've taken the opportunity to continue to lean into our investments to fuel our future growth. We've increased the velocity of product innovation. We've engaged with clients in a deeper way. That's all in an effort to continue to secure our industry leadership position and propel our long-term future growth.

So we do expect a strong Q4. We feel great about that as a launching point and think that we're well positioned for FY '27 as well.

[indiscernible] [ Cory ] Capital.

I just wanted to ask around AI. It seems like it's factoring in more prominently or in a tangible way in the business. We heard the comments around product development and the advisory project turnaround cadence. Just wanted to ask what inning you'd say we're in, in terms of penetration across the enterprise of AI solutions that are helping accelerate the business?

It's tougher to say what inning. I feel really good about the progress that we've made in kind of a post generative AI world. But again, just if you zoom out a bit, like we've had a long history of AI at Visa. We are an early adopter of AI many, many years ago. And then you kind of jump forward to where we are today. I mentioned some metrics in my prepared remarks, but we're just -- we're seeing fantastic results. And yes, I really don't know. I don't know how to predict what inning we're in other than to say we've had very good deployment of the AI tools across the company, especially in product and engineering, as I mentioned. We're getting good adoption in other parts of the company. I think we still have enormous opportunity ahead of us there. And we're just going to continue to lean into using these tools to drive efficiency and effectiveness shipping products better, faster and ultimately better serving our clients in the ecosystem.

Dominick Gabriele with Loop Capital.

I was just wondering, Ryan, if you could talk about your ability to capture market share against local European schemes and how that competition has changed over time?

Yes. So in Europe, we -- and I had some of this in my prepared remarks, we continue to win. And we're winning from a number of players across the board, but local schemes is one of them. in the environment that we're in right now, issuers, whether they be fintechs or banks around the world to serve their customers, they need innovation. They need new products. They need reliability. They need resilience. They want access to products like Visa Flex. They want access to Visa Direct. They want affluent propositions. They want more sophisticated virtual card propositions.

All of those types of innovations in those investments, like those are the things we've been investing in for years. We've been deploying billions of dollars. We've been driving our road map out all around the world. And it's hard to keep up, I think, for many domestic schemes around the world and that presents opportunities for us, ultimately, again, in service of our clients. So we feel good about our track record, we feel good about our ability to win. I mentioned some of the, I guess, 30 million cards or so that we expect to convert from wins over the coming years in Europe, and we're excited about that.

Thank you. Our next caller is Dave Koning with Baird.

You called out cross-border e-comm very strong the last quarter, I think you said promotions, Visa, et cetera. It stayed really high in July. Were those factors influencing July to and that we should expect a little bit of a falloff in the next couple of months?

Yes. Let me go through that, Dave, in detail. It's a good question. We did see cross-border volumes in e-commerce at 16%. But even intra-quarter, if you notice what we published in our slides, it accelerated through the quarter, and we actually hit a higher level in the month of June. And the July number that you pointed out is a little bit of a moderation from the June peak. And so the acceleration intra-quarter for the quarter as I pointed out, was driven by retail, which included the timing of the promotional shopping events.

And then the June, the intra-quarter June was benefited by days mix, and retail, the retail event that I just spoke about. And then as we pull that forward through the first 3 weeks of July, it is slightly lower than the month of June, and it's the inverse of the things that help you in. So days mix and the reversal of the timing of the retail, including the timing of the retail promotional shopping event. Those are the factors. When I zoom out, I do think June and July are unusually high, and I would anticipate that it settled back down to a more typical relationship relative to travel.

And last question, please.

Thank you. Harshita Rawat with Bernstein.

Ryan, I want to ask about your updated thinking related to agentic commerce and Visa. There were quite a few announcements coming out of your payments forum on OpenAI partnership, new capabilities. Tell us more about how you see Visa's opportunity within agentic commerce not just with regards to capturing and tokenizing the volumes, but also creating an opportunity for you to sell more of your services and expand your addressable market into new economic constructs like agent to agent [indiscernible].

Sure. I guess let me start at the highest level. We believe that AI and agentic commerce will expand our addressable market. We believe we're in the very early stages of what's going to be a major adoption curve in payments. I think to get a sense of like how this progresses from here, it's instructive to look at other kind of major cycles that we've been through, whether it was e-commerce or mobile commerce tokenization, tap to pay. These innovations and these kind of major forces they followed a similar pattern, right? You have an early period where Visa and other players are establishing standards. We're announcing launching and shipping new products, as you mentioned.

And then you migrate into the early adoption period of -- the early adoption period of the curve, which ultimately then leads to growing consumer momentum and ultimately broad scale. And all of those kind of ones that I mentioned previously have gone through that and they've achieved that broad scale. And we don't think agentic commerce will be any different, but we're in the very early stages. So you have consumers that are already using AI to shop and then the next phase will be enabling agents to transact on their behalf, whether with or without them in the loop. And that's where we come in.

I think the ultimate thing that's going to accelerate that adoption is going to be trust. Trust that the payment is secure, trust that the agent is authorized, trust that the transaction reflects the consumer's actual intent and then the protections exist if something goes wrong. If you look at the products that we've announced over the last several quarters, they're all directly intended to address that trust and ensure that our users have trust in using Visa credentials to make commerce -- to make agentic commerce transactions.

So that's where we're investing. I think across all of this, the timing is tough to predict, I think to the latter part of your question, but our view is pretty simple. Agentic commerce is a win, not an if. We're building like the products, the services, the protocols, ensuring that the ecosystem has what it takes and this will happen, and it will be a positive -- will be a positive tailwind for Visa once we get through those steps of the journey.

And with that, we'd like to thank you for joining us today. If you have additional questions, please feel free to call or e-mail our Investor Relations team. Thanks again, and have a great day.

Thank you all for participating in Visa's Fiscal Third Quarter 2026 Earnings Conference Call. That concludes today's call. You may disconnect at this time, and please enjoy the rest of your day.

All right. There we go. Good morning, everyone. Good morning, everyone. My name is Dave Koning. I'm a senior analyst at Baird covering payments and services. Thrilled to have Visa with us this morning. I think you're all very familiar with the consumer part of Visa, but we have Chris Newkirk, the President of Commercial and Money Movement Solutions.

We also have Jennifer Como, Head of IR. Jennifer embodies Visa, just like a second transaction when I e-mail her, she's always back immediately. So thank you, Jennifer. So as I said, Chris leads the commercial and money movement solutions. And we all understand the consumer payments well. But what you do, it incorporates the corporate credit cards, business invoice payments, Visa Direct, et cetera. Maybe give a brief description on the main types of payments in this unit that you manage and maybe size it a little bit for us.

Yes, absolutely. And Dave, thanks for having me here, and thanks, everyone. It's great to be here with you. So yes, so I look after commercial and money movement solutions, CMS, as we call it, here at Visa. And it's really about serving all the payments and money movement use cases around the world that are not consumers paying merchants. And so it's really -- we think about it as 2 primary sets of solutions. One is Visa Commercial Solutions. So those are B2B carded and increasingly virtual payments solutions; and the second is our Visa Direct platform, which is the world's largest platform for collect hold and payout disbursements. And so maybe I'll sort of step into a little bit of your question here. We've sized the opportunity at Visa in these in these spaces at $200 trillion of TAM globally.

And that's split $145 trillion of B2B payments and $55 trillion of sort of other money movement use cases like P2P, B2C payouts, marketplace payouts, government disbursements, et cetera. And within commercial money movement solutions, we are actively in market going after a relatively good size of that. So $60 trillion we're going after in the B2B flows, $60 trillion of that $145 trillion. And that's split as we go after that market and as we size it, $35 trillion of B2B flows that we are actively pursuing with our Visa commercial solutions. So those card and virtual payments capabilities that we'll talk more about today. And on that B2B side, about $25 trillion of principally cross-border B2B flows that we're going after with our Visa Direct capabilities and then to finish it out, that's $60 trillion, another $55 trillion of those money movement and disbursement use cases that we're going after also in Visa Direct.

And we've been at this for some time, but it is still very, very early innings, as I'm sure we will talk about in terms of the solutions we can bring to bear, the product innovation we can bring to bear and ways that we can continue to leverage all of Visa's capabilities to grow these businesses.

Yes, that's great. And can you go over the competitive landscape and maybe the differentiation of some of the products you have?

Yes. On the commercial side, we're competing with -- principally, it's check, ACH, wire is really how you should think about how most of those payments are made today. And we obviously compete with other card networks as well. We compete with banks who are providing ACH capabilities, obviously, partnered with them and fintechs as well. And the way we are going after that is by bringing to bear our products and solutions and innovations to capture more of those flows at the right kind of price for value.

So for example, there's a lot of discussion in the world today and over the last couple of years about programmable money and the future of programmable money. Our virtual card solutions in VCS are the original programmable money. And what do I mean by that? Well, so with our virtual Visa -- sorry, our Visa commercial payments platform, that enables the end user to the business or even the business' end user, someone out in the field to issue and manage a virtual credential that provides really programmable, configurable control over how that credential, where that credential, when that credential, how much that credential, how long that credential is good for in a way that gives businesses really unprecedented control over managing their employee spend.

So we brought to bear that platform, it's called Visa Commercial Pay, and that's a big part of the success that we've had in Visa Commercial Solutions is, again, bringing that programmability and configurability. Because what that does, if you sort of level up from that is it provides so much of the benefit that people think of when they think of Visa. They think about security, trust, control and the network, the ability to reach so many endpoints. And so that's really how we're out there competing, I think, in a nutshell on the commercial side.

Yes. And are there any verticals that you could kind of describe where you have special solutions, maybe fleet management, et cetera? And maybe within that, when you do a transaction for a different vertical or whatever, how does it work different than when we just swipe our cards, obviously, a consumer transaction. These are often invoice payments a little different. Maybe describe how it works a little.

Yes. Maybe I'll start -- I'll come to verticals just in one second, but I'll set it up by saying, the original sort of use cases, if you think about Visa Commercial Solutions, I mean the original large and middle market one was corporate T&E, the cards that everyone in this room and online uses to pay, which enables their employer to manage their expenses, those T&E expenses in a really kind of robust, well-controlled, well-invoiced documented, et cetera way.

By the way, that's still like a beautiful business, and we compete for it and we grow that business. But over the last several years, what's really emerged is the opportunity to expand the TAM, the serviceable market in the commercial, the B2B space by going after industry verticals in a specialized way, bringing to bear a bit of product innovation to help solve problems for our verticals.

So you mentioned fleet, which I think is a great example of this. So today, around the world, we size it that there's about $1.4 trillion of fleet and mobility payments that are being made today almost entirely on closed-loop capabilities. And so what does that mean? So a fleet driver needs to go refuel, they're using -- essentially think about it as a closed-loop private label solution that's just dedicated for that refueling. And what we've done is we've introduced a solution that we call Fleet 2.0. And what that does is that captures and delivers the benefits of that closed-loop capability and expand the serviceable market for that solution because it's an open-loop Visa solution to essentially capture more of the wallet that, for instance, that driver the needs that they have.

So what do I mean by that? Well, the closed-loop benefits are the ability to track the vehicle number to the refueling station and the mileage, et cetera. That's the sort of the backbone of what these systems have delivered in the past. The open loop and Visa benefits, we've delivered that, but then we also deliver the innovations that Visa has delivered. So those closed-loop systems, they're not EMV chip enabled, okay? It's obviously a huge deal for managing fraud and delivering a secure experience. They don't generally -- they're not generally able to be provisioned to a digital wallet. And the drivers and the fleet managers are not surprisingly, moving to mobile-first solutions. So we can bring those open-loop capabilities of Visa, EMV chip, tokenization, loading into digital wallets, marry them to those closed-loop capabilities and then enable the fleet manager, for instance, or the energy company to, as I say, then capture more of the wallet.

So not just the fleet refuel, but the mobility to get to the job, maybe the hotel, motel stay, the meals, et cetera, all in one integrated solution. So we've launched this in several markets around the world. Standard Bank of South Africa launched last year converted 220,000 closed loop cards that they were doing to these open loop solutions. We're partnering with major players like Octopus Energy, a very fast-growing company in Europe. They're using our Fleet 2.0 solution, Edenred PayTech, which I'm sure you know, also using our solution for fleet and fuel in Europe, but actually also other verticals, employee benefits, procurement, procure to pay, et cetera.

So I think there's enormous opportunity for us to bring the sort of a bit more configurability to our Visa Commercial Pay solutions and then find the right way to solve the needs of verticals and reach into the TAMs that we've not been able to previously get into.

Yes. And what about just the travel and expense credit cards, kind of the original use of business payments on Visa, right? How has that been performing over the last few years? And how do you think of the economics of spend here versus like a consumer card?

Yes. There's 2 things going on when we talk about travel in the commercial space. There's the traditional corporate T&E business, which I described briefly and is a nice and meaningful business. But there's also the online travel agency or OTA piece of B2B travel, which is very fast growing, not surprisingly. That's where consumers and businesses are really doing their travel business now is online. And we, as another vertical where we've done a bit of product development, which I'll describe in a second, we've been able to go into the online travel agencies and deliver to them a solution that really helps them manage their supplier payments in a very, very efficient way.

And so I think on our Investor Day, we said we've grown those OTA volumes 10x in the kind of preceding few years. We continue to see very strong growth in this B2B travel OTA space. In Q4 last year, we won Trip.com's fintech online OTA business. It's called TripLink. That's driving some really strong B2B travel growth for us. In Q3, we announced that we expanded our deal that we have at Checkout.com to support they're getting into this online travel space.

And so again, I think it's -- to go back to your sort of verticals question, we both serve T&E horizontally, and we serve the specialist players vertically with some product innovation, so they get the data that they need with configurable economics so that they work they can then negotiate the economics. We have something called Visa Commercial Choice Travel, which is a configurable set of economics that the OTAs and their suppliers can themselves configure and that's really driving a lot of growth.

And then when we think of virtual credit cards for invoice payments, most -- as you said, most businesses still pay with check or ACH. But increasingly, VCC, the virtual cards are being used. It's still a tiny amount of total payments. Most suppliers don't really want to accept a 3% or whatever combined payment fee. Are you working to reduce interchange fees and just getting suppliers more and more willing to be paid over virtual card? What's happening there?

The flywheel, if you will, to get virtual -- to get Visa Commercial cards growing at the rate they're growing even faster. The basics of the flywheel are the same as they are in the consumer business. It's about driving issuance, activation, engagement and acceptance. I mean you really need to focus on all 4 of those to get that flywheel spinning faster and faster. And we've talked a little bit about issuance here. On the acceptance side, the way we're looking to expand acceptance and the way we're, in fact, expanding acceptance really has 2 components to it.

So one and the biggest piece is really delivering solutions that make Visa cards even more attractive and salient to suppliers to use. The second, maybe to your sort of economics point, which I'll come to in a second. So what do I mean by product innovation? Well, I've spoken a bit about VCP, virtual card platform. That's -- think of that as -- that's on the buyer side. That's a set of capabilities that enables a buyer to manage their spend in that highly controlled configurable way. but there's a supplier side to that equation as well. And we recently launched our Visa accounts receivable manager that's meant to make the supplier side of that transaction as seamless as it can possibly be and as slick as the issuer side, if you will, the buyer side is of that. So what does Visa counts receivable manager do? It's -- essentially, it's AI that can ingest the virtual card payment, however that comes in. Typically, it comes in today over an e-mail.

Sometimes it comes in embedded in an ERP. And it grabs that virtual card credential. It matches it to the invoice in the ERP system of the supplier and completes the payments, marks the invoice is completed and does that all with -- depending upon how the supplier wants to configure it, a human in the loop or a human not in the loop. And what it's done is it's really taken out some of the manual work that was on the supplier side. So that's an example of product innovation that makes the card acceptance more salient for suppliers. Then there's the economic side. And there, there's really 2 pieces to that. One is I mentioned Visa Commercial Choice. That's a set of solutions that we have that enable buyers and suppliers or issuers and acquirers to essentially select and configure their own economics as and when needed.

So we've got a travel version of that. We have a more universal version of that. The second thing that we're doing is honestly selling the value better than we did historically. I think you're exactly right where you started, which is you've got a supplier says, well, I have a $10,000 payment. Do I really want to pay 3% or whatever the number, that's a decent round number for here in the U.S.

It's typically less in other markets around the world. And what they see is that headline number and say, well, that seems higher than ACH, certainly not higher than wire, for instance. And we've just gotten better at selling the value, which is really based on a few things. One is the product innovation that we've done some third-party research executed by Forrester, which we described in our Investor Day that said, okay, well, there's a 3% cost of acceptance. There's actually a 4% benefit just from the benefits of not having to chase bad debt.

There's some other efficiency gains in terms of some of the automated processing that I described. There's working capital benefits, which are a really important part of the sailings of these commercial products. So the buyer typically gets 15 to 45 days to pay. The supplier just like any other Visa merchant is typically getting paid with settlement the next day. So that working capital benefit is not just for buyers, the working capital benefit is for suppliers. And there's a buyer preference, right?

Just as there is on the consumer side, corporate buyers, if the supplier takes cards, prefers cards for data reconciliation and oftentimes rebates or other things that come along with that. And so we're sort of attacking that acceptance piece with product innovation with, frankly, better go-to-market motions than we've had in the past and with more configurability on the economics.

Yes, I always think everybody in this room should try to pay the suppliers with a card because you get often 50 bps or whatever reward points. And suppliers, it's always been -- like you said, it's been a headwind, but because of how fast you get paid, the accounting department might have half a person less or something, right? There's a lot of savings on that side. So that makes sense.

Yes, that's exactly right. And that's why in our fiscal '24, we brought 30,000 new business suppliers as new acceptors that we never had before. We continue to sell the value principally through our partners who are out in market talking to corporates about the value.

Yes. Great. And then agentic, how do you see Visa Commercial Solutions benefiting from agentic? We think often on the consumer side, you try to buy a pair of jeans or something at a certain price and an agent finds it for you. But in commercial, how does that work?

Yes. I'm honestly like so excited about the space and the opportunity agenetic can bring to B2B. Before I get there, let me just kind of level set with how we think about how agentic is going to impact Visa card and virtual payments, whether they're consumers or businesses. So we think about this in a number of ways. One is agentic is just going to continue to accelerate the digitization of commerce, right? And we saw that it's sort of a third compounding wave, if you will. There was e-commerce, then we had mobile commerce. Now we're entering the agentic commerce age and all of those are digitization of payments, and that's a tailwind for Visa's business. It's pretty hard to pay an agent in cash, right?

The second is we anticipate more transactions, right? Agents will split transactions in smart ways. There are micro transactions that are going to be micro transactions that they have never been before as agents need to perhaps pay for tokens. And so more transactions, we see as a tailwind. The third is third-party economists, they have forecasts of AI driving global GDP growth of 80 to 150 basis points. Accelerated GDP growth, again, is a tailwind for our business.

And then fourth, to come, Dave, to your question, a genic as applied to B2B, I think, is an exceptional opportunity. There's still so much -- and you talked about a minute ago that can we save half a person in the controller's office. I think we're going to save far more than that, right? Today, B2B payments, they just don't work all that seamlessly and all that well. There are human beings who are doing invoicing, taking payments in, invoice matching, reconciliation, chasing buyers for complete payments offering faster payment terms, et cetera. It's a very manual and fragmented ecosystem.

And agentic is really going to -- has so much potential to streamline all of that. We're in, I think, the most exciting time to ever be in B2B payments. We're going to see what we've talked about for a while now. We are seeing what we've described as the consumerization of those B2B payment experiences. And what we mean by that is they're slick and intuitive and digital and mobile native as our kind of consumer payments experiences are. We're in the midst of that. And agentic is going to, again, streamline so much. So you could go -- if you haven't done it, I'd encourage you to go online and check out some of the work that we are doing with some of our clients we have a video online that shows ramp, having taken Visa's intelligent commerce capabilities and built the capabilities to make B2B payments.

You should check the video out. I'll tell you that video is about making payments online, which is the way human beings make payments today. And I think that's really important. And we are doing everything we can to ensure that our credentials and our capabilities, including all the controls that we talked about and the receivable side, that all of those work incredibly seamlessly and bring the value of Visa to that agentic future.

But as I say, if you go and look at that demo video, just bear in mind that, that's like a web experience that's built for humans. And that's really important because that's how most payments are done today. The potential for MCP to model context protocol to also accelerate this like agentic as applied to B2B payments is really massive because you think about what MCP allows. MCP allows agents to essentially bring together tools to complete the payments on behalf of humans. And they can do that in ways, obviously, whether it's humans in the loop, if the transaction sizes are high, et cetera, or not. But this MCP layer that obviously we have, but the ERPs are developing, et cetera, I think, again, is an enormous tailwind for Visa.

Because if you pull way up in this agentic world, what is it that do you think users are going to want to expose that businesses are going to want to expose? So they want to expose their account number, the routing number for their account that may happen, but I suspect that, again, the salience of the security, the rules that we have, chargebacks, fraud protections, authentication, tokenization, that bringing all that to bear in this agenetic future for B2B I'm very bullish on the salience and our opportunity there, which isn't to say we're taking any of it for granted. We are working extremely hard, as I say, to make sure our credentials, our authorization, our controls are all built for that genic MCP future.

Yes. That's great. And just to remind everyone that the number of transactions is as important or more important than the volume in a lot of ways. So if you have more micro transactions work and then all the fraud protection around it helps your VAS business, so a lot to be encouraged about here.

Yes, absolutely. I mean we have VAS on our CMS transactions, on our Visa Direct transactions and our Visa Commercial Solutions transactions. That's all reported as part of our VAS, but just as it is in our consumer business, we have issuing solutions, acceptance solutions, risk solutions. We have advisory solutions that are -- some of which are quite analogous to what we do on the consumer side and some of which are fit for purpose for commercial.

And if we move to Visa Direct, that's grown very rapidly. I always think of Visa Direct as Venmo payments. Because that's what many of us use it for. But you do a lot more. Maybe walk through some of the products here.

Yes. So Visa Direct started -- just as a sort of context setting for folks, Visa Direct started with, I think, a very cool idea, which was let's reverse the flows on the network so that we can put money back into accounts and not just draw money out. And it's just grown so much since then. So starting with that capability, which was the ability to reach Visa cards with push payments, if you will. We've added the ability to reach bank accounts all around the world with our Earthport acquisition.

We've added the ability to reach digital wallets all around the world. We've added with our Currencycloud and YellowPepper acquisitions, the ability to collect, to take payments in, to hold, convert, hold them in multicurrency wallets in addition to the payouts capability. And YellowPepper is really the backbone for our Visa Plus directory and directory management services. And we've brought all those together so that now we reached 18 billion endpoints. Last year, we did, I think, 12.6 billion, 12.5 billion transactions, up from 1.6 in only a handful of years ago. And as you say, we continue to see really strong growth. You mentioned Venmo. The origin of the business was really kind of the first successful use cases were domestic P2P. And domestic not just P2P, but domestic is still the largest part of our business. We had very healthy growth rates. I think our last publicly disclosed growth rates were from our Investor Day where we grew 40% over the preceding 3 years.

And we continue to expand into new markets, expand into new domestic use cases, insurance payouts, payroll payouts, gaming payouts, gaming pay-ins, account opening. If you want to instantly open your Robinhood account, you can do that with a Visa Direct transaction. And we've had a lot of focus on growing the cross-border side of the Visa Direct business over the last couple of years. So it's still a smaller part of our business, growing more rapidly than the domestic side of our business. And the cross-border business gives us the opportunity to compete for FX attachment with the better yields that go along with that. So really excited about what we're doing in the Visa Direct business.

Yes. And it's growing super fast, like you said, it grew 27% last year, I believe, compared to 8% for your just overall debit business. Maybe describe a little why it's growing so fast. And then why we don't just use a bank to bank? Like why don't I just send from my Baird account to a JPMorgan account somewhere else? Why do I use Visa?

Yes. The growth is -- it's not terribly sexy. It's executing on the strategy that we described at our Investor Day, which was grow domestic, grow cross-border, I told you a little bit about both of those. And really importantly, sort of land and expand, if you will, with our clients, win the client and then grow our business with them in multiple dimensions. Sometimes that can be winning more of their existing business where they are seeing the value delivery of Visa Direct, and they move more of their business off of whatever they were using and on to the Visa Direct rails, so to speak, or that can be helping our clients who see the power of Visa Direct help them grow into new use cases and launch new businesses and grow their business in that dimension.

And we have a number of clients with whom we really -- it's about getting that first win and then we can show the value. And so why not just bank to bank. Obviously, we can deliver the bank accounts, too, and we do to bank accounts in 195 countries around the world. But on the card solutions, it's just -- it's a really strong value proposition in terms of bringing to bear, again, like the trust, security, reliability, resilience, uptime, risk management of the Visa network.

So just to pick one small example of that. In A to A schemes in countries around the world or RTP schemes, when those are launched, they typically become the #1 fraud vector in financial services in those countries, at least for the first X number of years until that gets resolved. In Visa Direct, we have a capability called account name inquiry, ANI. It's a value-added service. So the revenues monetization shows up in the value-add services side of our business. But we have proven with our clients and their end users that when -- you present with a user with the opportunity to actually confirm that it's Dave's account that, that drives more usage to the card as a Visa Direct as the mechanism to get paid, and it dramatically reduces chargebacks or disputes in that space. So again, bringing those value-added services, I think, in a way that's very difficult just because we're a network operator, and we're plugged in our network of network strategy to so many payment modes around the world, we can bring that network breadth. I think it's very hard for others to deliver at that global scale.

Yes. And maybe we have maybe 30 more seconds or so. But VAS, what role does that play? I mean VAS is growing super fast, all the services around transactions and everything. How does your business play with VAS?

Yes. I think the 20-second answer if I have that is all of VAS is applicable to the CMS business. We work incredibly closely with the VAS team. And as I say, everything from, look, Pismo is an accelerant for Visa Commercial Solutions. We won some Westpac business, which we've announced, part of that win was because Pismo could solve the issuer processor bottleneck, if you will, that was necessary to get to market fast with our client.

We do advisory and marketing services work. Visa Advanced Authorization is applicable in our transactions. The ANI that I told you about is another example of value-added services. So it's an incredibly important part of making our business and our solutions very, very compelling to our clients and salient and winning in the market.

Great. Well, thanks. And we're going to see a lot of you at the World Cup, I know. We're going to see a lot of commercial. So it's going to be great to see.

Looking forward to it.

And please join me in thanking Visa and Chris.

Thanks, everybody.

Good morning, everyone. Welcome to the second day of Bernstein's 46th Annual Strategic Decisions Conference. I'm Harshita Rawat, the senior analyst covering U.S. payments, and I'm delighted to be here with me today, Ryan McInerney, Visa's CEO.

It's great to be here today. I just heard from Colin, the Head of Research that this is a record-setting Bernstein conference. So congratulations.

Thank you. So Ryan, there is so much to talk about, but let's get the macro out of the way. What are you seeing in terms of current spending trends, both domestically and in cross-border?

We're seeing a lot of resilience. We -- during our last quarter earnings call, shared the spending trends, both domestically, internationally, cross-border. And what the numbers all showed was an enormous amount of resilience, strong consumer spending, broad-based. If you look at United States, discretionary, nondiscretionary, both remaining very stable and resilient. If you look across spending bands from the highest spending bands down to the lowest spending bands, resiliency, cross-border, a lot of resiliency around the world.

So really a lot of strength. We updated the numbers through, I think it was May 14. And what we showed across U.S. domestic spending, across payment transactions, across cross-border was slight improvement across the board. And through today, we continue to see that.

So I think there's certainly uncertainty in the world. Consumers are uncertain. Businesses are uncertain. There's certainly a lot of things happening around the world that people are looking at in the future and wondering what's going to happen. But if you actually look at the facts and you look at the data, especially as it relates to our network, there's an enormous amount of resiliency in consumer spending, and that continues today.

That's great. So Ryan, it's been a busy couple of years for Visa. We've had a lot of product and partnership announcements from you over the past year. a lot of growth initiatives around agentic, stablecoins, value-added services, and we'll talk about those. But taking a step back, it does appear that the product velocity at Visa has accelerated. So maybe talk about the changes you have made since becoming CEO at the organizational level, which have contributed to that?

The product velocity has increased. The product market fit has increased. The adoption of the products that we've shipped has increased. And in large part, that is a result of many of the changes that we've made over the last several years. The first set of changes that we made when I took over about 3.5 years ago, we were reorganizing and redesigning how we design, build and ship products at Visa.

A few specific changes that we made. One is we reoriented all of our product teams to be aligned against consumer payments, against consumer -- against money movement and commercial and against value-added services. And then within our value-added services areas, specifically against issuing and acceptance, risk and so on. We built persistent scrum teams aligned against all the opportunities in those specific areas. We rebuilt from the bottom up how our product and engineering teams are incented, compensated, shared OKRs, I mean, everything. And we redesigned the entire product development cycle at Visa.

You then jump forward a couple of years and we have had mass adoption among those teams of agentic tools. Our design teams, our product teams, they're using prototyping tools. Certainly, our engineering teams are using all the available agentic tools to accelerate the velocity and improve the products that they're building and shipping. And then you look today at Visa and the migration that's happening is the development and the deployment of agents as part of those product development scrum teams.

So what's happening is we have more scrum teams because the scrum teams are getting smaller, and they're able to use agents on their behalf to design, prototype, build and ship. And through all of that, one of the other big unlocks that we found is we've done a much more purposeful job of integrating kind of the country managers and their teams into the early product development cycle. And so what's happening is we're shipping product that has much better product fit, that has much bigger adoption at the country level all around the world because we've taken that voice of our country managers and ultimately, our clients much earlier into the design iteration, prototyping and build phase of our product development life cycle.

So we're very excited about the velocity. We're very excited about the product market fit. And ultimately, to your point, you see it in the results. You see the types of products that we're shipping around the world like I'm going to take the Flex credential, which we truly believe will be one of the revolutionary innovations in consumer payments. And you're seeing adoption from all different types of products, traditional financial institutions, fintech players, BNPL players, crypto players and the like. And I think that's one just very pragmatic example of that change in the product development approach of Visa.

So staying on this topic of innovation, let's talk about agentic. How does agentic commerce expand both your addressable market and the value proposition you bring to your customers with respect to increased digitization, new categories of commerce and growth in B2B, et cetera?

Sure. We have deep conviction that agentic commerce is going to be a very important wave of the digitization of commerce around the world, but it's still very early. So -- but to answer your question about the TAM and the growth opportunity with agentic, we see a number of incremental growth opportunities that come when we see the rise eventually of agentic commerce.

The first is just more digitization. So we saw this with the rise of e-commerce. We saw this with the rise of mobile commerce, and now we will see it with agentic commerce, which is just an acceleration of the shift from the face-to-face commerce environment to digital. That's a benefit for Visa. That was in both those ways, it will be in agentic.

The second is just more transactions. I think there's going to be a lot of incremental transactions that come from agentic commerce. I'll give you a few examples. One is when we ultimately all have agents going out shopping and then buying on our behalf, they're going to look for opportunities to find the best product, the best value, the best availability, those types of things. And ultimately, that's going to lead to more transactions. What might used to have been 4 items that I buy in 1 cart from 1 merchant is more likely to be 4 separate transactions at 4 separate merchants as my agent optimizes on my behalf.

Another example will be machine-to-machine transactions or agent-to-agent transactions, digital, largely very small ticket transactions where my agent might be buying compute or tokens or images on my behalf. Those are all incremental transactions. Those don't exist today. That's an opportunity for Visa to capture those transactions onto our network. So that's a second area where we're quite excited.

You mentioned in your question, a third area that I would note, which is B2B. I think B2B will -- as a result of agentic commerce, B2B transactions on the Visa network will increase. B2B transactions have been something we've talked about for a long time, and maybe we'll talk about in your questions today. I think that is one of the most -- that specific segment has some of the best product market fit for agentic commerce. I think that's one of the first areas where you're really going to see agent-to-agent commerce provide real value for buyers and sellers.

And then the last thing I would say is I think there's broad-based consensus that you're going to see an increase in GDP from everything happening with agentic, whether it's 0.5 point, 0.75 point, 1.5 points, I think is less relevant. That's going to lead to more consumer spending. That is going to be incremental opportunity and growth for Visa.

You mentioned e-commerce, and that was fascinating, right? It not only accelerated cash digitization, which helped you, but also helped you gain share from domestic schemes. And contactless was a good analogy also for increase in number of transactions and what it does to Visa in terms of the growth. But you mentioned agent-to-agent transactions, kind of those micro transactions. There is a perception among some investors that stablecoins may be more suited to the money layer of this new Internet as opposed to cards. Tell us why that's not the case.

Yes. So we have deep conviction that Visa credentials are by far the best way to pay and be paid in an agentic world. And I would even just ask everyone in the room, just think about themselves as consumers for a moment. In an agentic world where you're going to send your agent out on your behalf to buy things for you or your family, what are you going to want to use?

Are you going to want to use a credential that has broad-based acceptance that has well-established rules and criteria that if something goes wrong, you know what's going to happen. You're going to want to use a credential where if you get the wrong item, you know with confidence that you're going to be able to return it and get your money back if you need. If there's fraud, you know that you're covered.

If you -- just think about, again, yourself as a consumer and compare that to stablecoins. Stablecoins is an instant irrevocable transaction. There is not broad-based acceptance. You don't know where you can use it. You don't know what's going to happen if something goes wrong. And I think this is why we have such deep conviction. We showed this in the rise of e-commerce, you were mentioning earlier. This became very clear in the rise of mobile commerce and will become the default way to pay and be paid in agentic world because it's so well established.

In addition, you've got 5 billion credentials that exist out in the digital ecosystem with many more digital Visa tokens that maybe we want to talk about, 200 million-ish merchants that accept these credentials around the world. This ecosystem has been built for agentic commerce. The Visa platform is purpose-built in many ways for the rise of what's going to happen in terms of agentic commerce.

And as we saw in the early days of e-commerce, fraud was a huge problem. And when trust becomes so important, I think that's where Visa delivers the value proposition more strongly. I want to follow up on micro payments specifically, Ryan. What role can Visa play in this kind of agent-to-agent micro payments? And for the audience, maybe can you explain?

Before I comment on micro transactions, I want to go back and just comment on the word that you used trust. So there's a lot of conversation in the world right now about the limiting factor for the rise of AI, and it's largely compute and energy. The limiting factor, in my opinion, for the rise of agentic commerce is exactly what you said trust. And that is what Visa brings to that ecosystem. That is the summation of all those components that I was mentioning earlier is trust.

And I think when you look at the Visa brand and what it means both to buyers and sellers, there's inherent trust in that brand that's going to give users confidence to use Visa credentials in an agentic world. Okay, micro transactions. So what we're seeing is with the rise of these developer tools, think Claude Code, for example, which I'm sure all of your audience is quite familiar with and is likely used or is using.

We're seeing the ability for essentially everyone, for all of us to become developers. The tools are that easy. They are getting that simple that everyone, all of us in this room and on the phone, our children, our spouses, we all are going to become developers. And with the rise in availability of these tools, we're all going to be building. And when we build, we're going to need to buy. So what you're going to see is the command line interface, the CLI, which is what you interface with when you're on Claude Code or one of these other tools, essentially is going to become a commerce platform.

All of the users around the world that become developers are going to use the CLI as a commerce platform and have their agent go out and buy compute or tokens and some of the things that I was describing earlier. So let me give you an example. Let's say you go on to Claude Code and you want to go build a website or an app. You're going to need to go buy compute. You're going to maybe need to go buy a URL. You're going to need to go buy maybe some imagery. You want to go buy some stock images to whatever you want to do on your app or your website.

You're going to need to go interact with APIs of services to go buy those different things, whether it's compute or tokens or images or what have you. And what we're doing is we're building the ability for you to load your Visa card into that interface and just have your agent go buy whatever it is you need to go build and then ultimately launch your app.

Now those transactions are going to be very small transactions. But what we've shown over time is that we can adjust our pricing, we can adjust our commercial model to make sure that our credentials are the best way to pay and be paid for those small transactions. We've done that with transit. We've done that with vending. We've done that with lots of different services around the world. I mean, if you think back maybe 5 years ago or 10 years ago, who would have thought we'd all just be tapping our Visa cards to go buy a Coke at a vending machine. Well, that transaction is too small. That couldn't be possible. But we're able to easily adjust all of those commercial elements to make that happen.

And so that gives you a sense of what we see happening with agent-to-agent transactions. And the way I think about it is every API is going to become a point of sale. And your agent is going to be able to go interact with all of those APIs and buy whatever services you need to get done whatever you can dream up and build through the command line interface.

Yes. So you can adjust your pricing model, you can back settle transactions. And then at the same time, you're giving these agents the trusted credentials and kind of you're verifying the agents, right? Like all of the trust also becomes a big part.

The trust, the scale, the availability, the credentials. And then ultimately, I come back just like in the agentic commerce use cases, users, human beings, all of us are the ones that are going to decide how our agents go pay. And for the same reasons that we all prefer to use Visa credentials in the physical world, in the e-com world, in the mobile world, we're going to prefer our agents to use those credentials in the agentic world.

Ryan, I want to switch gears and talk about stablecoins. So you have a thriving stablecoin-linked card business. You now also participate in some of the new emerging blockchains for payments. I know you've talked about the services opportunity with respect to stablecoins. Clearly, you view stablecoins as an opportunity for Visa. What do you think is misunderstood by some with regards to Visa and stablecoins?

We view stablecoins as a significant opportunity. I think it's not surprising there's some misunderstanding because this is all early and it's moving fast. So let me step back and give a few very pragmatic examples of how we are embracing stablecoins and stablecoins are an opportunity for Visa.

The first is one of the areas where there's product market fit for stablecoins is consumers in countries around the world where they have a strong preference to hold U.S. dollar-denominated accounts. Think Argentina as an example. If you live in Buenos Aires, for generations, your family has wanted to have accounts in U.S. dollars, but they've either been too expensive or unavailable to you. Now with stablecoins, you have easy, frictionless access to hold your savings in U.S. dollar-denominated stablecoins, whether it's USDC or USDT or what have you.

That's happening in countries all around the world. What we've done is we've issued Visa cards on top of those stablecoins. So if you're an employee of Visa in Buenos Aires, you get paid twice a month in Argentinian pesos. You can now easily move that money into USDC, for example, in your favorite fintech wallet, and you are issued a Visa card on top of those stablecoins and you go live your life just as if you were paying in Argentinian pesos.

You can go to the grocery store, you can go to the restaurant, you can go buy petrol for your car. That has had great product market fit. I think we've got 150, 160 programs around the world. It's growing very, very quickly. The user experience is very strong. That's an example of a real opportunity for stablecoins.

Another example for stablecoins is where there's product market fit in B2B cross-border. And here, we are using stablecoins ourselves. We settle about $13 trillion a year on our own network. Essentially, every day, one of the things Visa does is we stop and we look around the world and we figure out who owes who money across the 14,500 financial institutions on our network. Historically, we settle that in fiat. We do it Monday through Friday, and we do it once a day. But now we're using stablecoins to offer settlement 7 days a week, multiple times a day across border around the world.

It's still relatively small single-digit billions of dollars, but it's growing very, very fast. And it offers a lot of benefits to our user base, to our financial institutions. They might have had to hold collateral for a long weekend when we couldn't settle. Now they don't need to hold that collateral. If you're an acquirer, you're able to pay your merchants more quickly. So those just give you a couple of examples.

I guess the last thing I would mention, you alluded to this in your question, we're also playing a leadership role on a lot of the emerging payment-specific purpose-built blockchains, whether that be Tempo or Canton or others. And they are looking for us to play an important role because of the leadership, the experience and the value that we bring to those blockchains. And I think you'll see some important innovations coming out of our product road map built on those blockchains.

It's so fascinating that one of the best product market fits for stablecoins and consumer payments is a Visa card.

Exactly. Maybe -- to be honest, maybe at this point, the single best product market fit except for crypto trading. The one thing you can really point to all around the world that has actually impacted people's lives is stablecoin-linked Visa cards.

So Ryan, taking a step back, the cost of acceptance of cards comes up quite often in discussions. And most of those comparisons are often not apples-to-apples. People often compare credit cards to kind of debit-like products. Debit cards are already quite cheap and credit cards offer a lot of value to the consumers. Maybe talk about the value the cards bring versus just the settlement rail and the flexibility you have on pricing constructs in that whole cost of acceptance debate.

Yes, sure. Cost of acceptance is a nuanced topic for a number of reasons, some of which you mentioned. The first is it's very different in different parts of the world. I think the analogy you were giving there was probably focused on the U.S. But if you go outside the U.S., credit cards are actually much cheaper in some parts of the world. And so it's just different in different parts of the world. Let me talk about the U.S. because I think that's where a lot of the questions come.

First, credit and debit are very different. As you mentioned, debit relatively inexpensive, certainly relative to the value that's provided. And most of the relative use cases that people talk about when they talk about stablecoins is really in the debit space because that is money that's available and money that you pay now versus pay later, what you do on a credit card.

In the credit space, I think one of the things people forget is that Americans are carrying around Visa credentials in their pocket person phones that represent more than $3 trillion of purchasing power. That is a gigantic amount of horsepower for spending, for sales, for merchants and ultimately for the U.S. economy. And the opportunity to spend that is what is a big amount of fuel for the U.S. economy. And that is the price to value that you were mentioning when it comes to credit cards.

The second thing that happens is many Visa users, most Visa users earn rewards when they use their credit cards to spend. And that is why they have a preference, as I was mentioning earlier, to use those credit cards in the physical world. They have a preference to use those cards in the digital world, and they will have a preference to use those cards and have their agents use those cards in an agentic world.

And then getting to the latter part of your question, as I alluded to earlier, what we've shown historically is we have a lot of flexibility to optimize and change and customize our pricing to fit different use cases to ensure that we're delivering real value and ultimately, product market fit for these credit cards in different use cases.

I'll give you one example since we're here in New York. Most people in the audience have probably tapped their Visa card to ride the subway. That's a good example of where we had to customize our commercial model, customize our pricing to make it easy for New Yorkers to simply tap their Visa credit card to get through the turnstile. And there's many other examples like that, and there will be in an agentic world going forward.

Once you tap, you never go back. So Ryan, I want to switch gears and go back to the Investor Day and revisit the Visa-as-a-Service construct. Can you walk us through the layers of your stack and how they allow you to use the different components of Visa's platform to create solutions for clients?

Sure. Maybe I'll start by just explaining the value-added services businesses that we have and then put those in the context of the stack. So we -- and maybe I'll start by just explaining the journey that we've been on with Visa over several years. We -- if you put this in context, we have evolved our business in many ways to enable our users to use Visa credentials in lots of different use cases. But enabling those payment use cases is hard. It's hard for issuers. It's hard for fintechs. It's hard for a lot of the ecosystem players. And so what we've done over time is build a set of value-added services for issuers, for acquirers and merchants to enable them to deliver those use cases for users.

And so we've built a set of different services and a set of different solutions that our users can consume to help them issue new cards, to reduce fraud, to protect them from cyber, to enable an omnichannel point of sale for a merchant, those types of things. So going back now to your question, what we've done is we've delivered all of that through what we call the Visa-as-a-Service stack. And at the foundational level of our stack is our network of networks, VisaNet, which is our network that we have processed transactions on for many decades, but also the network of networks that we've built with 14 billion endpoints around the world as we've connected our network to all available networks around the world.

And then on top of that, we, over time, have componentized all the services, a few of which I mentioned earlier, into module consumable APIs that any of our partners can consume from us in a single API integration. The third level of our stack is where we take those module services and we've combined those into solutions, into products, into custom-built services that our partners can consume if they don't want to consume all the modularized services themselves.

And then finally, at the top of our stack, we've made it very easy for anyone around the world to access all of that, the access layer of our stack. So whether you're a large sophisticated financial institution or whether you're a developer in Nigeria, you are able to access Visa essentially as a hyperscaler. We are the largest hyperscaler of payments and money movements around the world.

Developers, fintechs, big techs, financial institutions, they're building on our platform. They're accessing those services and solutions through our Visa-as-a-Service stack so that they can simply and easily issue new credentials, manage those credentials, provide fraud protection services, loyalty services, card benefits, tokenization.

And by building on that stack, they get access to close to 200 million merchant accepting points around the world, 5-plus billion Visa credentials around the world, all of the Visa tokens that are embedded in the ecosystem and the like. They get immediate access to scale, the largest network for payments and money movement around the world that they can get by accessing the Visa-as-a-Service stack.

So Ryan, you were talking about this earlier. Arguably for investors, historically, it was just easier to forecast Visa's revenue growth. All you needed was a card penetration number globally and you can get a very nice revenue growth for Visa. Fast forward to now, the revenue growth you're delivering is at an accelerated pace versus historical levels, in part because of the value-added services successes. The complication for investors is that it's harder to create a model out of VAS and forecast it. So maybe help us understand what is driving the growth of your VAS businesses and more importantly, what drives your conviction in the opportunity you see?

Great. Harder to model, but a bigger opportunity, a much bigger opportunity. But let me do my best to explain that. So as I mentioned, the origins of our value-added services business are in service of our clients. Helping our clients, issuers, acquirers, merchants grow and thrive in an increasingly complicated commerce environment is what led us to build and ultimately grow and scale these businesses.

We have 4 value-added services businesses. The first is our issuing business. So where we build, design and ship products and services to help issuers issue credentials, manage credentials for their end users. Those issuers could be large financial institutions, of which we serve most around the world as well as fintechs and other players that are issuing credentials. That's the first area. What's an example in that business?

We have issuer processing services. For example, in the U.S., we have our DPS business, where we provide issuer processing services for debit credentials. A few years ago, we bought a company called Pismo, which is a cloud-native issuer processor that provides issuer processing services for credit, debit, prepaid, commercial. They also provide core bank ledger services, which is essentially the operating system for banks. We deploy Pismo all around the world in service of our issuers to make it easier for them to issue credentials or run their bank.

We -- for example, we announced last quarter that Wells Fargo has chosen Pismo to be the operating system for their retail bank, one of the largest, most sophisticated retail banks on the planet. But Pismo also is the provider of choice for fintechs that are growing and issuing credentials all around the world. So that's the first of the pillars of our value-added services business. And again, the origin is providing services that can help our clients do a better job issuing Visa credentials around the world. That's one.

The second is our acceptance business. If you are a seller around the world or importantly, if you are an acquirer around the world, keeping up with the innovation arms race to provide omnichannel services that can compete with the best acquirers on the planet is a very hard task. In our acceptance business, we have a platform called CyberSource. That is exactly what CyberSource does.

Using acquirers as an example, we provide white label services to acquirers in countries all around the world so that we take the technology development road map off of their shoulders and we provide it to them. It shows up in the market, not necessarily under the Visa brand shows up under the acquirers brand, but they're paying us for those services, and we're providing them that technology road map.

The third is risk and security. And this may be the most needed set of value-added services in today's environment. where we provide both to issuers and acquirers and all ecosystem participants, scoring algorithms, platforms to help them manage fraud, security, cyber, all of the things that are risks in this environment. An example there that I would point to is our Visa Advanced Authorization score.

When you go tap your Visa card at a retailer, it's likely being scored in real time, I think, up to 400 different data elements to determine if that is you and if it's ultimately a purchase that you intended to make. That's even harder to do in an e-commerce environment or as we talked about earlier, in an agentic environment. That platform has become an essential tool for so many ecosystem participants around the world to make sure that they're reducing fraud and increasing sales.

And then finally, we have an advisory business, where we provide services that range from data and analytics services to marketing services to even strategy and advice services to our clients to help them navigate this complex world or provide marketing using our sponsorships like FIFA and the Olympics that are unique and bespoke to them that only Visa can provide.

All 4 of those businesses have enormous TAMs. In all 4 of those businesses, we are competing against legacy players in those industry segments that don't have the sophistication that we do. In all 4 of those areas, we have a unique ability and competitive advantage to win because the buyer that we are selling to is a long-term Visa partner, a partner that we have been embedded with for decades, a partner that we are arguably their most trusted partner, a partner where we have existing commercial arrangements that have long been approved by all the buyers in that organization. So that's a very important right that we have to win.

And we're building and we're shipping organic product in each of those verticals, and we're buying companies that we're able to then put into our distribution network, companies like Pismo, as I mentioned, or Featurespace that we recently acquired that we're able to distribute through our salespeople in 200 countries and territories around the world. That is why we've built these businesses. That is what the businesses are. But importantly, that's why we're seeing so much product market fit, and that's why the businesses are growing so well.

These businesses now represent close to 1/3 of Visa's revenue. These businesses have been consistently growing at more than 20% year-over-year for years, I think 28% in the most recent quarter. And we have only scratched the surface of the available TAM and the available opportunity in each of those verticals at our clients.

There's so much to talk about there, but we need to get to so many other topics, Ryan. So tokens, let's talk about them. You now have 17.5 billion plus tokens globally, which have grown from $2 billion 5 years ago. Tell us about what tokens do for you with respect to enhancing the network and also your opportunity to deliver more value-added services? And in what ways are agentic tokens kind of different?

If you look at the scaling of tokens over the last several years, it's a great example of the ability of Visa to scale something broadly around the world. And to answer your question, the value that tokens play at the highest level is 2 things. First, a much, much better digital transaction platform. So one of the reasons that we've seen tokens scale so broadly is they're just a much better way to engage a digital transaction than a traditional 16-digit number on your credit card or debit card.

We see broadly sales go up for merchants and fraud come down. Authorization rates go up on average about 5 percentage points. That's enormous for a seller. I mean, that is enormous for a seller and fraud comes down about 25% up to 1/3. So you've got lower fraud, higher sales, which is why we've now seen token scale to be about 50% of all Visa e-commerce transactions around the world. But these tokens also represent an embedded broadly distributed innovation distribution platform. We have these digital capabilities now embedded in the point of sale at billions of points of sale and enabled merchants around the world -- for users around the world that allow us to now distribute value-added services through this distributed and embedded innovation distribution platform. And that is a huge opportunity for us.

And we've shown the ability to give sellers the option to turn on different services, almost like light switches on the embedded tokens in their companies to help them with all different types of things to provide a better user experience, a better omnichannel commerce experience. So we are very excited about the distributed platform that we've built. We're very excited about how many of these tokens exist. But going back to the earlier discussion, this is one of our biggest advantages to truly enable agentic commerce. All of the distributed tokens that you mentioned, the 17.5 billion Visa tokens that are enabled throughout the ecosystem, this is what's going to enable agents to be able to buy on your behalf in a simple, distributed at-scale trusted way that is going to, I think, be the platform of choice for agentic commerce.

Ryan, I want to switch gears and talk about commercial and money movement business. It looks like the revenue growth has accelerated here in part by some of the mix dynamics. I know you talked about cross-border growing faster within commercial. There is then the opportunity within B2B that you alluded to earlier. What drives the inflection in the CMS growth opportunity for you from here?

Well, we're executing the strategy that we shared with our investors at Investor Day. We did the work. We identified the opportunities. We put in place the strategy. We shared it with our investors, and we've been executing it. And I feel great about the execution and ultimately, the results that we're starting to see. Our commercial business is roughly a $2 trillion business that grew at about 11% year-over-year in the last quarter. We have seen growth both domestically, but especially cross-border. The percentage of commercial in terms of our overall cross-border is as high as it's ever been.

And all 3 of the areas of opportunity that we identified, we're making real progress. One, we have been focused on converting consumers who are using consumer Visa cards into small business cards. Sounds very simple, very significant impact. When you get a small business owner who is currently in a consumer card and we upgrade them into a small business card, all sorts of good things happen. They have more credit line. They have more ability to spend. They have better rewards, and we've shared a lot of the recent wins that we've had in that space in the small business space, and you're seeing that in the results.

The second thing we focused on is commercial issuance, virtual card issuance. And that we started to have a lot of wins. I talked in the last quarter about the win we had with Trip.com is one example. And you're seeing that in the results, especially in the growth in cross-border commercial.

And then finally, we're seeing a lot of uptake in product innovations and network flexibility. One example of network flexibility is helping us grow acceptance for commercial cards, which is a program we call Visa Commercial Choice. So we talked about the flexibility in our commercial -- our pricing model earlier. This is another example. So essentially, what we did in this space is we gave buyers and sellers in the commercial space to negotiate a price point that worked for them so that they could accept and use Visa credentials to pay for things in the commercial space. And that has unlocked a lot of acceptance and volume growth for us. So it's as simple as a good strategy, great execution. We're starting to see the results, but we're still very early. There remains an enormous opportunity, and we look forward to continuing to grow that business.

Great. Ryan, let's talk more about the core of Visa, consumer payments. You have historically grown several percentage points faster than the addressable consumer spend. I know in some markets, for example, the U.S., that delta relative to personal consumption expenditure has narrowed. Can you expand upon this? And how do you see Visa's consumer volume growth prospects relative to addressable spend growth?

We still see enormous opportunity, enormous runway with consumer payments. It's a roughly $20 trillion TAM for our business. A little more than half of that, about $11 trillion is cash and check. A little less than half of that is all the other ways that consumers are paying around the world that's an opportunity for Visa. That might be domestic schemes, that could be ACH, account-to-account, those types of things. So an enormous TAM. And what we've shown is that we're able to put products, services and innovations in market that ultimately drive our users to prefer Visa and drive growth that is faster than the underlying overall consumer spend.

One of the things we shared with investors at Investor Day was that even in countries around the world where there's essentially no cash, we've gotten down to essentially 0 cash, countries like Canada, South Korea, Norway, New Zealand, we shared others. We showed that even in those markets, we have consistently grown and recently grown Visa payment volume faster than the underlying consumer payments growth. And the reason is because of all those other ways, people continue to pay even above and beyond cash and check. Domestic schemes are a great example.

When we compete in e-commerce, in mobile commerce, ultimately in agentic commerce, we simply have more innovations, more capabilities than our domestic competitors have. So ultimately, Visa users choose to shift payment volume to Visa credentials, which then drives our spend faster than the underlying opportunity. So given all of that, given our track record, given our product pipeline, given the $20 trillion opportunity that I mentioned, we have conviction that we'll be able to continue to grow the consumer payments business for quite a long time.

And I want to follow up on some of your comments and ask about Europe specifically. I know after the Visa Europe acquisition, things changed quite a lot for you in Continental Europe. And that region offers opportunity not just for cash, but also gains from domestic schemes, which you have been gaining share from. But more recently, there's also been some nationalism concerns. So maybe just talk about Europe as a secular growth opportunity.

Sure. Europe has been a great engine of growth for us. As you said, we're winning share in Europe, and Europe will continue to be a significant opportunity for Visa. Over the last 5 or 6 years ago, we have invested significantly in Europe. We've doubled the number of people. We've added 50% more offices. We've strengthened our client relationships. We've brought new products to market, all of which has led to the momentum, the growth, the share shift and winning in Visa.

And as we look out on the opportunity in Europe, it remains significant. still enormous amounts of cash in Europe. I think it's more than $2 trillion annually still spent in cash. Domestic schemes still have, as you said, a lot of share, which we view as a lot of opportunity in Europe. And just yesterday in Europe, we announced a significant increase going forward in our investments in Europe. We announced a EUR 500 million incremental investment in Europe in the next 10 years. We announced a new innovation hub in Europe. We announced a new Cyber Fusion Center in Europe. We announced we're building an additional data center in Europe. We announced we're building a new product and innovation hub in Europe.

And so that reflects -- those innovations reflect our commitment to Europe. They reflect the opportunity in Europe, and they reflect our continued excitement to deploy more products and services and innovations in Europe. As you said, there has been historically, actually for decades, and there is now a focus among Europeans, clients, regulators, elected officials and everyone on the importance of payments as it relates to the -- as it relates to how payments fuel the European economy.

That's been true for the last several years that we've had the success we've had. That's been true for the last several decades in Europe, and it's certainly true now, and it's understandable. I think it's understandable not just in Europe but around the world. But I think what Europeans are seeing is our dedication to Europe, our focus, our investment and ultimately, the safety, security, reliability and scale that Visa provides to buyers and sellers in Europe.

Ryan, we only have a couple of minutes left. So my last question for you. We talked about a number of growth opportunities and accelerated product velocity at Visa. What is your vision regarding how Visa as a business will evolve 5 years from now?

Well, first of all, it all starts with our clients. we wake up every day thinking about doing everything we can in service of our clients and then everything works backwards from that. But if you're asking about what is the impact on the business, I think you're going to see continued growth in consumer payments, given all the opportunities that I mentioned around the world. You're going to see accelerated growth from agentic commerce for the reasons that we discussed.

You're going to see an increased diversification of Visa's business, diversification of clients, diversification of revenue sources, diversification of geographies around the world. And importantly, you're going to see continued growth in value-added services given the importance to our clients and given the enormous amount of products and services and innovation that we're shipping across all of those pillars that I described.

Fantastic. Ryan, thank you so much for joining us today.

This has been fun. Thanks for having me. I appreciate it.

All right. Thank you, everyone, for joining this morning. My name is Tien-Tsin Huang. I'm the payments analyst at JPMorgan, and it wouldn't be a tech conference without Visa. So excited to have Visa kick off the second day here.

From Visa, we have Chris, the CFO. Chris, thank you for being with us.

Of course, thanks for having me. Thanks, everyone.

We have a lot of things to talk about. But I thought I'd kick it off just with -- I like Ryan talking about Visa being the hyperscaler of payments. Hyperscalers, AI, there's so many big buzzwords now in tech, but I thought that was a pretty clever way to describe Visa. What does that mean to you as the CFO?

Yes. I think it's a great analogy. I mean, simply put, at the highest level, it means we're curating an ecosystem, helping it be successful, helping the participants in an ecosystem be successful. And in turn, that's going to enable Visa to have more growth opportunities that will drive durable long-term growth for Visa.

If I think about what that means, if I just even click down a layer deeper, maybe versus starting with like what do we mean when we call ourselves a hyperscaler, the leading global hyperscaler for payments, the way we define it, of course, is that analogous to a more classical sense, we enable an ecosystem, all the participants in the ecosystem to build on our stack. And in turn, that grows the stack, it grows the ecosystem and the participants in it, including Visa.

And so if you think about the layers of our stack, we call it Visa as a service stack, again, quite analogous, you start with the foundation layer, which is really our network. If you think about sort of the 175 million merchants, the 18 billion endpoints, the 200 countries that we operate in, that forms the infrastructure layer, if you will, analogous to that.

Then you have the services layer, which is really the components, the building blocks that we've now componentized, but just the building blocks of our service. So think about credentials, authentication, tokenization, security, those features now are componentized.

The next layer up from that is our solutions layer, which we take the building blocks and the services layer, and we've created solutions that we make available to a broad set of clients and then finally, the access layer, which is really the client entry point. So think client APIs as the best way to do that.

And when you sort of wrap that up, it enables us to continue to win in consumer payments and commercial money movement. It enables us to expand our TAM associated with AI and agentic. It allows us to be the interoperability layer between stablecoin and sort of traditional payments, and then sort of just broadly expands the opportunity to continue to deliver success with VAS.

And so when you put all that together, it's really an evolution of our network strategy. It enables the ecosystem to grow, it enables us to embrace innovation, grow our addressable market and continue to ensure that we continue to see durable long-term growth.

Yes. And it seems to be working. Last quarter was probably the best quarter we've seen out of Visa in quite some time. So I thought we'd start with that before we go into the details. How would you characterize it, Chris? How the quarter landed, how does that inform your thinking for the rest of the year?

Yes. It was an outstanding quarter. It was the best quarter of growth that we've seen in over a decade, excluding kind of the pandemic recovery period. We can sort of go into like the different puts and takes of that, but maybe the first 2 statements, like the broad framing that I would offer is that, one, underlying consumer spend continues to be resilient in the U.S. and internationally, and we're seeing that across multiple dimensions. Happy to talk about all of that.

And the second thing, just in terms of highlights, reflections on the quarter is that both -- the 2 areas that we call our growth pillars, value-added services and CMS or commercial and money movement solutions, they're really thriving, we're executing really well. Those are areas that we focused on for a long time, as you know, strategy, investment focus, and we're seeing terrific growth.

VAS was $3.3 billion, 30% of our revenue last quarter and grew 27%. CMS grew 24%. So those 2 growth pillars, again, the fastest-growing parts of our business, are doing really excellent. So that's consumer resilience and strong execution across CMS and VAS.

As we click in, there are many sort of puts and takes into the quarter. We saw stronger volatility than we anticipated, still a drag year-over-year, but it's certainly better than we anticipated. We saw incentives coming in lower than we anticipated, deal timing, some performance adjustments, and so those are -- and then value-added services, of course, as I indicated, continues to be really strong.

A lot of that pulls through to the full year. We were happy to take the strong half one combined with our revised outlook for the second half and raise our full year guide for both revenue and EPS, stronger volatility, stronger value-added services, too, which is really, again, a highlight.

FIFA World Cup is only about 20 days away. We see great client enthusiasm for it and enthusiasm also translates into working with Visa to activate the brand, our investment in the FIFA brand and the logos, and we see that.

I gave some examples on the earnings call. We talked about a client in LAC who has 20 million cards, and they did a campaign with us, and they've seen a 10% uplift in active cards, which drives more payments volume. So it's a great flywheel that's working as well and in years that we have something like a World Cup going on, it's even more tailwind to growth. So all in all, a really great quarter, growth in the areas we'd like to see and consistency, I think, the pulls through to the full year.

Good. So drilling in on volume, you gave an example there, Chris, just thinking about the volume acceleration, how much of it is cyclical versus secular and some of the things that you're promoting? Because even if I look at the U.S. accelerating, I think it's the fastest growth we've seen in 3 years. And to me, it quiets some of the worries around saturation and high card penetration. Cyclical versus secular, how would you describe it?

Yes. I mean, you're right. I mean, the first statement I'd say I agree with you, underlying drivers, I just call it consumer resilient, that's shorthand for -- across the breadth of the business, U.S. PV up about 1.5 points in the quarter.

Some of that was tax return driven. We talked about that. There's, by all measures, higher tax returns landing in consumers' pockets, but also underlying fundamental strength, we're seeing discretionary spend, nondiscretionary spend be strong. We're seeing debit and credit be strong. We're seeing spend across different -- from low-spend bands to high-spend bands, all being quite healthy.

So all the indications, U.S. continues to be quite healthy. International PV as well, stable, strong in most markets with one exception being CEMEA, which was down 2.5 points, but that was really concentrated around the conflict and happy to talk about that as well. But all in all, sort of indications that there are good, strong underlying fundamentals across our drivers.

We're seeing it in PV, we're seeing it in processed transactions. We're seeing it in cross-border as well. And so that was all through Q2. And then in the period subsequent to that, I gave -- in my earnings commentary I gave the update through April 21. And we said, okay, at the end of Q2, we saw U.S. PV continue to remain strong. In fact, maybe up a little bit.

I know it's only 3 weeks, and then PT was kind of staying in -- it moderated a little bit, but sort of staying there. And then cross-border had moderated down a little bit, and I gave the reasons being timing of Ramadan as well as the conflict in the Middle East impacting travel.

Just by way of update through now May -- yes, May 14, we've seen all those levers, U.S. PV, processed transactions, cross-border both travel and e-commerce, all improve a little bit from that April 21 date. It's up slightly since that time frame. And so again, it just shows -- it's not like one thing driven, some sort of secular thing. We're seeing broad-based strength, and it's consistent in all the metrics that we track.

Okay. That's a good update. That's encouraging for sure. So you mentioned the conflict, let's just drill in on that, and cross-border. I think going into the quarter, Chris, you know this, there was a lot of concern around the conflict, airline capacity being drawn down. Of course, like you just say things are tracking pretty well. How do we separate these headlines from actual performance? We're always trying to, of course, get an edge and try to predict based on some of these signals, but it didn't quite play out. What is your exposure there? What signals do you watch? And what does the outlook assume specifically?

Yes. I almost want to sort of -- we talk about the conflict and the impact of the conflict in general. But I go back to the statement that I just made, which is across our cross-border volumes, consistent strength and stability that we've seen, not just this last quarter, but for many quarters. We've continued to be strong. But let's unpack because there are a lot of puts and takes.

In the quarter, we did see travel in the CEMEA region, in particular, in March as the conflict accelerated, if that's the right word, the travel was impacted. But there was offsets. There was strength in the U.S., notably, which we called out and strength in the U.S. comes from lapping -- there's 2 or 3 things I would call out, lapping low inbound volumes from a year ago from Canada that helps both travel and e-commerce.

There was strength in LAC because actually some currencies in LAC, notably Brazil, Mexico, Colombia had strengthened versus the U.S. dollar, and that always has an inbound -- historically has an inbound lift. We're seeing that. That also travel and e-commerce. Benefiting travel from AP was strong OTA volumes that we saw that helped on the travel line.

And so those things, we're seeing stronger commercial volumes in there as well, commercial cross-border volumes. And so those are the puts and takes that got us there, which then got us to a pretty strong number in Q2, offsetting the March impact. And then the update.

Now it's kind of like what I just did with total volumes just to drill into the cross-border thing a little bit deeper. As I indicated in my -- in your last question, cross-border did tick down. And there was 2 things that I called out. One is the timing of Ramadan. It just -- we were lapping the post-Ramadan surge from a year ago in the first weeks of April. And then the conflict in the Middle East.

And so through May 14, we're actually seeing cross-border in total kind of be aligned to the levels that we saw in February. And if you recall what I said on earnings, we said, if you just normalize for the Ramadan timing, it actually -- that April sub period, the 21 days would be -- would have been close to February as well.

And so the implication of all that is we've seen some strengthening in fact in the post-April time frame to get us back to the February levels in total. And so again, a lot to unpack, but we're seeing even in spite of some variation from region to region, we're seeing strength and consistency and healthy travel and e-commerce volumes.

And I think the second part of your question is like, well, why do we see that, and I do think it goes back to the we talk about this regularly. We talk about the fact that the exposure to Visa's business is one of the most diverse anywhere. And that applies to cross-border. It applies to the fact that no single region is more than 25% of our inbound volume. We've talked about that consistently.

Also the fact that e-commerce is now a bigger percent of total cross-border, about 40%. And e-commerce has more association with everyday spend. And then there's things like more cross-border commercial volumes and other things like that, which is again, the diversity of the business provides for great resilience, consistent health that gets reflected in aggregate.

Yes. So mix diversity is the answer, right, that's driving a lot of the resilience that you see overall in the performance of the business. One more, if you don't mind, Chris, just I always hate to ask it, but just with FX volatility, you mentioned it, how big of a contributor could that be or is that to the model?

It's -- as I indicated, it was one of the sources of outperformance relative to our expectations. It was a drag year-over-year because we had some high volatility a year ago, but this is kind of notoriously hard to predict, I would say, given how much variability, how much volatility there has been in the volatility line.

Maybe if I could just take a minute to step back and explain because I can't size it for you in the same way -- in exactly the way that you asked, but I could give you some -- I could try to dimensionalize it a bit. The place I'd start is sort of understanding what it is -- how we monetize volatility.

And maybe just working backwards, how do we report it out so that when you all look at it in our P&L, we have a line in our revenue reporting called international transaction revenue. That's primarily driven by our cross-border volume and -- but it's not all our cross-border volume. Cross-border revenue can land in different places, but international transaction revenue which is defined as when the merchant and the issuer are not in the same country. So that's cross-border by definition.

And so it drives off of -- and so we monetize that cross-border volume in 2 ways in international transaction. One is we collect fees on that volume. And then secondly, because we transact in 160 currencies and settle in 25, at our scale, we can offer currency conversion services to our clients. And when that happens, that's the second part of the fee structure in international transaction revenue.

And when -- and so mechanically, every day, we publish a bid-ask spread. And then as volatility goes up or goes down, it changes the size of the spread, and therefore, how we monetize it. And so that's been -- when we guided to Q2, January, if you remember at the beginning of January, volatility was pretty low, and then it went up significantly throughout the course of the quarter. And so hence, we overperformed. And then we are lapping some high numbers from a year ago.

But that all said, we've kind of reverted back to where we started the year in terms of the full year volatility number. Yes. So that's how volatility lands on our P&L. Now we're anticipating sort of a normal year in total. Obviously, geopolitical events and things like this can impact that. And so we'll have to see how it all plays out.

Yes. Well, despite the drag, despite the conflict and everything else, right, like we said earlier, the results have been really quite strong, strongest in quite some time. So let's pivot just for the sake of time, let's do value-added services, right? You mentioned 30% of revenue, it's been growing mid-20s plus for, what, a year now.

You mentioned a few like FIFA, some projects that you do. So my question here is what's more episodic, onetime type revenue versus structural growth that you're seeing from value-added services to get you to that mid-20s number in the end?

Yes. Totally, value-added services has been a continued highlight. We had a particularly strong quarter at the 27% growth rate. It's 30% of the business today. And if you think about where in 2019, the combination of VAS and CMS was about 23% of the business, and today, just VAS alone in Q2 was 30%. So we've come a long way.

I just -- I do think that we've been benefiting by clarity of strategy, clarity of focus, going after big addressable markets where we have -- that are either core or core adjacent where we have a great position to capture and it's a big TAM, and we're early days in that, and we've invested behind it, both in product and go-to-market. And so like those are all the things you'd want, I think, a company to do to go after a big addressable opportunity.

VAS is -- that all said, VAS is, I know sometimes like it's not as easy to understand what all the pieces are. And so there's a lot of services. Value-added services is not a product, it's a sort of a growth division. We have hundreds of products and services. We categorize them into 4 portfolios, each of them are big.

The last time we shared the numbers that the smallest with $1.3 billion, the biggest was $3.5 billion that applies to FY '24 numbers, and they were all growing in the mid-teens or higher. And so you're seeing breadth across the business. They're issuing solutions, which are services and products and services targeting our issuing clients really driven off of Visa transactions.

The second are acceptance solutions. For the namesake, products and services targeting acceptance clients on the merchant side of the house. Those are really driven by all payment transactions, Visa and non. The third is risk and security solutions. It really is about protecting the ecosystem and also the underlying base is all transactions. And then the fourth is advisory and marketing services, and that's really driven by engagements.

Now just sort of like go into your question a little bit more in terms of what's driving it episodically, the strength, as you know, has been not just this quarter, not just this year, in the 3 years that I've been at Visa, I think we've grown more than 20% every single quarter. And over the last 4 quarters, we've seen that even accelerate a little bit more.

And so that just go -- and if you go back to all the earnings commentary that we make, you see that different things drive growth in any particular quarter, which all just is indicative that the business is quite healthy across the broad breadth of things.

And maybe the final thing I'd say, I just -- sorry to spend so much time on VAS, but it's really important. And the message that I would also convey is when we think about that breadth of business that we talked about, the 4 portfolios, the hundreds of services, the billions of dollars that it's driving, the vast majority of that business is very deeply connected to our card network business.

That's transactions, that's accounts. So -- and cards, and so across the breadth of the business, there's a very durable underlying fundamental connection to the core business, and that gives us great comfort.

And then we continue to expand, geo expansion, product expansion, even through acquisitions like Pismo and Featurespace, those are going to be additive to going to capture that TAM, the ability to continue to add more value, which means we have the ability to price to that value. And so when you add that all up, both the past performance and our outlook for value-added services, it's a business that we continue to be very optimistic about.

Sure. No, it makes sense, too. So I thought we'd just drill into one. I picked issuing, if you don't mind. Let's do issuing and think about Pismo, had a lot of success since you acquired it. You just mentioned it. And you mentioned on the call that you picked up some new business with Wells Fargo, which has gotten a lot of attention there.

So tell us about the thesis there. Why is it important for you to own Pismo, own processing assets? We have a lot of other issuer processors that are here at the conference, Chris. So why is it important differentiator for Visa to own that?

Yes. I'll try to -- those 3 -- I think 3 different questions sort of embedded in there. One is the thesis behind Pismo. Pismo is cloud native issuer processor core banking platform. It's very complementary to our existing. We didn't really have a core banking platform. And we had DPS, which was primarily debit, primarily U.S.-based, and so -- and Pismo was debit, credit, commercial, and it was, like I said, cloud native, and it was international. And so they were sort of good complements to that.

We've seen -- you mentioned -- you referenced the Wells Fargo win. I think it's indicative of our strategy. We're going -- it's a global strategy. It addresses clients from large to small, the Wells Fargo deal is a great example of the confidence that we have in the service as well as now endorsed by a very significant client. Obviously, it's early days, and we're going to have to prove all that out. But that's all on plan.

We've expanded Pismo, 5 new countries expanded. I talked about geo expansion in FY '25. That's 15 new countries that we've entered since the acquisition. So geo expansion, product expansion, kind of consistent with that thing that I talked about with value-added services to capture more TAM through that way.

The combination of the 2 is powerful. You can really have an end-to-end solution across issuer processing, core banking platform and our payments network, the distribution that Visa brings to an incredible technology that we found in Pismo that now has a global distribution platform with Visa, with our client engagements. I think it makes for a really compelling story and a compelling value prop for our clients.

So you've also bought Prisma and Newpay and -- so now you're combining that together, it feels like with Pismo. I mean, we have to pay attention, right? Because any time Visa buys something, you put it on your network, you're going to amplify the growth rate. Why was it important to fill it out? Specifically, I think Argentina is the geo there.

Yes, it is Argentina. Exactly.

Why is that so important?

Well, it was -- it is a very Argentina-specific strategy. We bought 2 companies really there in one transaction, Prisma and Newpay, and Prisma is a credit debit issuer processor. And Newpay is an RTP network plus an ATM network. And that's a little bit new for us. But it makes great sense given Argentina RTP and ACH networks comprise 45% of the PCE in Argentina. And so that's an interesting opportunity for us to -- in a single market, go do that.

I think Prisma has a lot of the same attributes that I just described with Pismo in Argentina, the combination of the Visa distribution and the brand can really have that end-to-end solution for clients. It's a very comprehensive way to engage from a go-to-market standpoint.

And we could also bring a lot of -- I mean, Prisma has had a lot of success in the market. They have good -- a lot of clients and a deep penetration into that market. But now we can also improve by bringing our global innovation and technology platform that we could bring more advanced technology, whether it's around risk and authentication or tokenization we can invest in that market.

And I think the combination of that, as I said, the RTP share of the business, the issuer processing side of the business, combined with Visa's -- the strength that Visa brings, I think we can really accelerate growth in Argentina.

Okay. That's fair, and it makes sense. You mentioned tokenization and it feels like owning some of these assets gives you an advantage to deploy some of these tokens. But can you update us -- we're quite bullish on the tokenization opportunity for Visa. So a decade plus in building that out, and it feels like it's gaining more momentum.

So maybe quickly just go through tokenization, where are you with penetration? What's next for us to expect in terms of growth? I know agentic gets a lot of attention there. We can talk about that separately if you like. But just tokenization, where is it? Where do you see the momentum going?

Yes. I mean, like consistent with what you just said, we've been bullish, if that's the right word, on tokenization for a long time. We've been investing behind it, broadly, meaning innovation, adoption. We've been really pushing on adoption. And to date, I think we're pretty happy with where we're at, where over 50% of e-commerce transactions are now tokenized, and that's 30% up year-over-year. And so good progress as we -- on kind of the look back, if you will.

We think that we can get to a state where the vast majority, near 100%, should be tokenized on an e-commerce transaction basis. And so there's still a lot of work to do. Even though we've come a long way, there's plenty of growth to go. I think there's -- we're working across the ecosystem. There's all the benefits, and I won't repeat all those, but at the highest level, higher auth rates, lower fraud, modern credentials, programmable credentials in some sense.

I think we can go after new markets. We can go after in terms of tokenize additional sort of getting the other 50%. You can go after use cases like stored credentials. That's a decent-sized opportunity out there, and we're working with a lot of parties to go penetrate deeper into like stored credentials. You can go after lots of sort of different use cases as well. And so we're going to continue to grow, I think, the tokenization utilization.

Agentic, as you mentioned, it becomes a critical enabler for those scenarios. And so that's another place of focus for us as well. And so we're going to continue to drive adoption, utilization. And like I said, we've proven out I think to the ecosystem broadly that there's a lot of benefits to a tokenized transaction.

Yes. I think it's a tech conference. So I have to ask you about agentic commerce that actually we feel like tokenization could be foundational especially network tokens for agentic to take off, not just here in the U.S. but globally. I think we had a bunch of companies, we had Accenture yesterday talk quite a bit about how excited they are about agentic commerce like OpenAI. Probably we'll talk about it as well here later on the same stage.

So how do you see agentic playing out? You have such an important role here in developing the framework for it. What should we be watching? It feels like the 4-party model will stay intact, but there are different motivations for different players to promote it. What's your view on it?

Yes. I mean we're incredibly excited and it's early days, I'd say, both those things. And the excitement, again, shorthand, means we've been actually meaningfully putting a lot of work into this for a long period of time. We've rolled out our initial view of Visa Intelligent Commerce, now it's been more than a year ago when we had the product drop event. And so this is something that we view as sort of beyond linear, like it's the evolution of e-commerce into agentic commerce.

From an opportunity standpoint, maybe I'll start there. We think it accelerates our opportunity to grow. And it does it in probably 4 meaningful ways. One, it digitizes -- it accelerates the digitization of transactions further of payments. Two, we think it enables B2B scenarios to rapidly accelerate. That's been -- we've been looking at B2B scenarios, B2B money movement for a long time, and it's been more elusive to penetrate.

Three, we think agents will just create more transactions. We think they'll intelligently split transactions. And for us, transactions are a very important unit of measure in our business. And fourth, when you add that all up, us and many others who forecast this would indicate that GDP growth would accelerate by something between 80 and 150 basis points depending on whose forecast you're looking at.

So when you add that all up, that's just a bigger pool of opportunity for Visa to go after. And so that's important. So again, I talked about our framework for looking at structurally large TAM opportunities to go after. There's a lot of work to do in that. I think with any sort of payments, when you get into the payment side, there's lots of layers to it.

You've heard us and many other parties talk about protocols and standards. I think that's a really important layer. There needs to be trust in standards and protocols at many layers between the consumer and the agent, the agent and the merchant and then all the way through to complete the payments experience.

We've put our views out there with Visa Trusted Agent Protocol or VTAP, which without going into gory details, just basically at the end of the day, if you want to use a Visa Card, we're going to support that, if you want to use a card, you're going to support that through the protocols. That's one layer.

There's a lot of work going in on the issuing side to help merchant -- have issuers get ready. There's a lot of work going on, on the acceptance side as you think about enabling merchants to initiate agentic payments in a trusted way. There's work going on with developers. We're working -- we've talked about Visa CLI, which is a Command Line Interface, which is really letting developers experiment using the protocols put out by Tempo.

And so there's work at every layer, but I think at the end of the day, for payments to really work in a seamless, frictionless way, the trust and security layers are probably the most important. And this is where it plays into Visa's strength. And so we think we have a great position to help enable this future scenario and we'll keep at it.

Yes. And I'm sure there's going to be more to study, but the foundation is being laid, it feels like, and Visa has been very, very -- playing a big role in that. So, no, thanks for walking through that. I know we're almost out of time. I thought we'd ask just maybe a couple more.

I didn't ask you about CMS. It did accelerate. So just quickly on that, it does feel like the commercial side is maybe getting a little bit more momentum. Is that a fair characterization? Or is there other factors that are driving some of the CMS? We're all using our commercial cards that get here today.

Yes. I would agree with the momentum statement. And some of it is more, and some of it is consistent, like Visa Direct has been a consistent performer for a period of time that you see the transaction growth, which we publish every quarter has been strong. It was, I think, 23% in the second quarter.

You've seen commercial payment volumes, PV accelerate. That's been the part that's better. A year ago, it was high single digits. And this quarter, it's at 11 points of growth, 1 point above where it was even last quarter. And so that's been good to see.

We did see strong revenue growth this quarter. It was aided by some deal adjustments that we call the performance adjustments. And so there's a little bit of timing in that as well. But nonetheless, underlying fundamentals continue to be strong and one of the important growth levers in our business that we've talked about consistently.

Yes. B2B has been something we've been talking about for a while. So we're always going to ask you about it, Chris. So we're just about out of time. I think I started with the hyperscaler question, and we're thinking about the evolution of Visa, it does feel quite different than when I first got to know it whatever it was 2 decades plus ago.

The card conversion story, it feels like it's yesterday, and now we're talking about value-added services, agentic and CMS. So help us organize how you think of Visa over the next decade? Is this really this push towards VAS and that's going to dominate the conversation a little bit like we had today? Is it going to be more CMS led? It would be agentic? How would you encourage us to organize it?

All of it. I know we have like 20 seconds. So I'll give like the highest level answer that's the most comprehensive, which is at some level, our strategy is working. We've been working -- we've been at this for a long time. We've been focused on the right addressable markets, we've been investing behind this from a product and service standpoint. We've been executing really well.

And it takes time in the payments ecosystem for these things to pay off. And it's really actually gratifying to see that our strategy is working, that the durability of our business and our network is playing out the way that it has over the course of time as we've gone through innovation and shifts and as we have in the past many times.

And it gives me great optimism that we'll continue to be able to do so as we navigate through this next generation of innovation shifts, whether that's agentic or stablecoin. I think we're in a great position to continue to grow.

No, for sure. It feels that way. I know you're working hard, and it's nice to see it all come together. Chris, I think you've been traveling everywhere. Thank you for being here with us. It means a lot to me. Thank you.

Thanks so much. Thanks, everyone.

Welcome to Visa's Fiscal Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. If you have any objections you may disconnect at this time.

I'd now like to turn the conference over to your host, Ms. Jennifer Como, Senior Vice President and Global Head of Investor Relations. Ms. Como, you may begin.

Thank you. Good afternoon, everyone, and welcome to Visa's Fiscal Second Quarter 2026 Earnings Call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer; and Chris Suh, Visa's Chief Financial Officer.

This call is being webcast on the Investor Relations section of our website at investor.visa.com. A replay will be archived on our site for 30 days. A slide deck containing financial and statistical highlights has been posted on our IR website.

Let me also remind you that this presentation includes forward-looking statements. These statements are not guarantees of future performance, and our actual results, outcomes or timing could differ materially as the result of many factors. Additional information concerning those factors is available in our most recent annual report on Form 10-K and any subsequent reports on Forms 10-Q and 8-K, which you can find on the SEC's website and the Investor Relations section of our website. Except as required by law, we do not undertake any responsibility to update these forward-looking statements.

Our comments today regarding our financial results will reflect revenue on a GAAP basis and all other results on a non-GAAP nominal basis unless otherwise noted. The related GAAP measures and reconciliation are available in today's earnings release and related materials available on our IR website. And with that, let me turn the call over to Ryan.

Thanks, Jennifer. In our fiscal second quarter, net revenue was up 17% year-over-year to $11.2 billion, and EPS was up 20%. This represented the strongest net revenue growth since 2022. And when you exclude the post-pandemic recovery and the Visa Europe acquisition, it was the strongest since 2013. Payments volume grew 9% year-over-year in constant dollars to $3.7 trillion, and process transactions grew 9% year-over-year to $66 billion.

Our business has incredible momentum. Visa has become the leading hyperscaler of payments globally, and our strategy and Visa-as-a-Service stack will help us drive future growth in 4 important ways: One, we are winning in consumer payments, commercial payments and money movement. Our investments in innovations are paying off in a meaningful way and will continue to drive growth; two, AI and agentic commerce will expand our addressable market, and our efforts will accelerate Visa's long-term growth; three, stablecoins and blockchain are significant opportunities, and we've established Visa's role as a key interoperability layer between this powerful infrastructure and real-world solutions for users. And four, value-added services is an even bigger opportunity and has demonstrated its value as a key driver of our growth, now representing 30% of our net revenue, growing at 25% plus in constant dollars. These services have durable competitive advantages as the vast majority are linked to transactions, cards and accounts, and they are only strengthened with AI, reinforcing their importance as a growth lever for years to come. We have deep conviction in our ability to grow revenue well into the future, not just for the next 3 to 5 years, but beyond. I'll go through each of these 4 drivers in more detail.

As I mentioned, our investments in consumer, commercial and money movement are delivering meaningful results. We are winning with fintechs, wallets and apps. They are building on our stack and tapping into our innovation and our vast acceptance footprint to help hyperscale their growth and ours, capturing both carded and non-carded payments.

A few recent examples. Just last week in the U.K., we partnered with TikTok to launch a debit card specifically designed for content creators. The creator card enables faster access to income from TikTok Live, brand partnerships and platform payouts so that creators can spend, plan and reinvest in their business quickly.

In Japan, a country with nearly 50% of spending in cash, we are collaborating with mobile payments app, PayPay and their 40 million monthly transacting users and millions of acceptance locations to deploy new domestic and international solutions. With Visa, PayPay plans to grow Japanese merchant acceptance, utilize our Visa Flex credential to integrate multiple payment methods into a single Visa credential and expand internationally.

Shifting to commercial and money movement solutions where revenue grew 24% in constant dollars as we continue to reinforce the value of our offering with expanded reach and tailored solutions. Visa Direct, the largest money movement network globally, now has more than 18 billion endpoints. This vast network is helping us win new business and power more transactions. In Q2, we had 3.7 billion transactions, up 23% year-over-year. In the U.S., X will soon begin early public access for X money, enabling push and pull payments for their millions of users with Visa Direct and payments anywhere Visa is accepted using a Visa Flex credential.

In Mainland China, UnionPay International will connect Visa Direct with UnionPay's Money Express, enabling real-time cross-border remittances and payouts to reach more than 95% of their debit cardholders through a single integration.

Moving to commercial where this quarter, we drove 11% payments volume growth in constant dollars with strength in our travel, fleet and premium business reward portfolios. Commercial cross-border volume now represents the highest percentage of both commercial volume and total cross-border volume in Visa's history. In travel, we expanded our agreement with fintech issuer processor, High Note, to enable their OTA platforms with our flexible interchange product for virtual cards called Visa Commercial Choice for Travel, which also includes specific automation, controls and reconciliation across the travel value chain.

In fleet, we signed a new agreement with Westpac that expands our partnership and demonstrates the potential for Pismo for commercial card modernization. We also secured their commercial card portfolios, including credit and debit for small business.

Another example of deepening relationships with our clients is with Scotiabank. Across 11 countries in Latin America and the Caribbean, we have created a new strategic agreement, consolidating our relationship and expanding into new areas of issuance focused on affluent and small businesses. So our momentum in consumer, commercial and money movement is clearly strong and will strengthen with agenetic commerce and stablecoins.

I'll start with agentic commerce. We believe AI and agentic commerce will expand our addressable market in 4 important ways: First, like e-commerce and mobile commerce before it, agentic commerce will accelerate the digitization of commerce around the world. And just like the acceleration from e-commerce and mobile commerce, Visa will benefit.

Second, agents will create significantly more transactions. Agents will intelligently split purchases across multiple transactions, optimizing price, timing and value to the buyer. And importantly, in some use cases, we expect agents will pay for their own data and resource consumption transaction by transaction and event by event, which creates an entirely new category of commerce with micro transactions.

Third, we will see accelerated digitization of B2B payments, where there is still enormous friction that AI agents can help remove. They will be able to automate payment initiation directly from invoices and contracts and manage approvals autonomously. In this context, virtual cards and tokenization will become a preferred way to pay and be paid.

And lastly, just like the advent of e-commerce and mobile commerce, agentic commerce will increase economic growth generally. Third parties estimate we are looking at a boost of 80 to 150 basis points of incremental GDP growth from AI. And when GDP grows, spending grows and digital payment transactions grow.

Visa is extraordinarily well positioned to win in agentic for 3 important reasons: our network; security; and trust. Our network has enormous scale, more than 175 million seller locations, 5 billion credentials in 200 countries and territories with nearly 14,500 financial institution clients who have opted in to using this network. Payment security is only going to become more difficult and more valued. With our scale comes over 300 billion transactions annually, equating to an average of about 900 million transactions per day. And all of the data that comes with it. Visa has proven it knows how to manage transaction risk, identity risk and fraud, all enabled by this transaction data.

And trust. Visa has well-established trust grounded in our standards and brand. We set the standards that enable trusted payments in the digital and emerging agentic ecosystem. And a big part of our network, security and trust are Visa Tokens. Visa is a proven leader in tokenization, which is foundational in e-commerce, and is set to become an essential element of trusted transactions in an agentic world. People overwhelmingly choose to pay with cards, face-to-face and online, and they will prefer their agents to pay with cards.

And merchants want this, too. We recently launched Intelligent Commerce Connect, which acts as a network protocol and token vault agnostic on ramp to agenetic commerce for agent builders, merchants and enablers.

Now while it's early, we are seeing growth in agentic shopping and the emergence of early agentic commerce. Real transactions with Visa Agentic tokens. And AI continues to evolve. With the AI landscape, we are seeing that quad code and other agentic coding assistance will allow anyone to become a developer. It's that easy to work in simple command style tools like the command line interface or CLI. These agentic coding assistance are a great example of how we see AI and agentic commerce increasing economic growth as they enable anyone to bring their new business ideas to life. We see a world where we will all design, build and launch digital products and experiences ourselves, engage with digital platforms and buy digital services using the CLI or a sleek consumer-friendly version of one as our interface.

The CLI itself is becoming a commerce platform, and we believe that the preference and value of cards will be equally strong for all sizes of transactions, including micro transactions. A key to making this happen is enabling safe, simple and easy payments that are widely accepted by all API end points. We recently launched Visa CLI as a proof of concept which shows how easy it is for a developer, soon all of us, to use their Visa credential to pay for digital services like an image, a website builder or more via the CLI. The early feedback we have been receiving from developers is very positive. And as we move forward, we plan to enable CLI commerce at scale, which means scaling the availability of command line tools and card acceptance by promulgating standard products, rules and pricing. Over time, we have continued to adapt our technology and commercial model to win when new payments use cases emerge. Transit, vending, parking, subscriptions, app purchases and Visa Direct are all great examples of where we made purposeful investments to enhance our commercial and technical model to deliver new, smaller ticket payments use cases. Agentic commerce will be another great example.

In all of these use cases, Visa cards are providing significant value. They're easy to use, broadly accepted, integrated into the transaction flow, offer privacy, unlike most stablecoins offer a way to manage liquidity in aggregate rather than funding millions of real-time micro transactions, offer an issuer KYC user, security protections if something goes wrong, and in many cases, cards offer rewards and benefits. We see no other payment method on earth that delivers all of these features. Buyers know this, sellers know this, and soon so will agents. We expect more transactions, more value-added services and therefore, more revenue in the years ahead from agentic.

Let's shift to stablecoins and on-chain payments. Our strategy and innovations have positioned Visa as a hyperscaling bridge layer between stablecoin and real-world solutions and applications for users. I'll call out 3 important examples. On-ramps and off-ramps, settlement and money movement and blockchain infrastructure. In many countries around the world, especially in emerging markets, consumers and businesses are increasingly using stablecoins as a store of value, essentially on chain, primarily U.S. dollar-denominated accounts. In these countries, stablecoins are not generally accepted as a means of payment. We are providing on-ramps and off-ramps with stablecoin-linked Visa cards. So consumers in these countries are increasingly using stablecoin-linked Visa cards to spend their stablecoins online and at their local grocery store, petrol station and restaurants where Visa is accepted. Businesses are using stablecoin-linked Visa cards to buy digital advertisement and supplies for their businesses. And we now have over 160 stablecoin card programs globally with key partners such as Rain, REAP and Bridge. And the payments volume continues to grow at a very strong rate, up nearly 200% year-over-year in Q2.

Now to my second example, a pragmatic real-world B2B use case, Visa's own settlement capabilities. Last year, Visa settled almost $13 trillion among and between our nearly 14,500 financial institution partners. Nearly all of this was settled in fiat currencies on Monday through Friday. We have been enabling our clients to settle with us using stablecoins. So an issuer who's working in stablecoins can pay us on stablecoin 7 days a week and an acquirer or a merchant who wants to get paid can get paid in stablecoins. This provides immense liquidity and efficiency benefits. We have just added 5 additional blockchains for settlement, Arc, Pace, Canton, Polygon and Tempo, bringing the total to 9. We currently have a $7 billion annual run rate of stablecoin settlement volume, and it's growing fast, up more than 50% since last quarter.

Now to the third example, becoming a key player in blockchain infrastructure. We are actively participating and innovating to ensure Visa plays an important role in emerging payments-focused blockchains. We are design partners for Layer 1 blockchains and have become a validator on Tempo and a super validator on Canton network. Our role as a design partner with Tempo allowed us to play a critical role developing and launching the machine payments protocol card specification that is enabling Visa CLI payments. Running a validator node moves Visa from a blockchain participant to an infrastructure leader. And in the case of Canton, where we are a super validator, Visa also helps govern the network that validates the transaction. Ultimately, we will help operate the infrastructure that can make private regulated blockchain transactions possible. Additionally, we are increasingly providing value-added services to crypto-native partners and traditional financial institution partners to help them expand their stablecoin offerings to better serve their users, which is a good transition to the fourth driver of Visa's growth: Value-added services.

As I said at the outset, value-added services is a bigger opportunity than ever for Visa. Value-added services revenue grew 27% in the second quarter in constant dollars, and we are just getting started. VAS is inextricably linked to our network business and with that comes significant distribution globally. We have transaction data at scale, and we will enhance that data with AI. We have the brand assets and sponsorships to provide unique opportunities for our clients and Visa to grow, and we are winning because our VAS portfolio of solutions brings powerful capabilities, the trust that Visa stands for and our commitment to continuous innovation. The vast majority of our value-added services revenue is linked to transactions, cards and accounts. So as we grow consumer and commercial payments, we are also fueling VAS growth. For example, e-commerce transactions are the fastest-growing part of consumer and commercial payments, and many of them utilize our value-added services to help increase authorization rates and reduce fraud. Also, affluent cards are the fastest-growing area of consumer payments and more and more of them have a deep set of card benefits and loyalty services linked to them. Across Visa, AI is making what we do even better, especially for our value-added services. Our new Visa large transaction model is beginning to act as the foundational model for a variety of AI-powered fraud and risk services at Visa. Early results have shown that it can power up to a 5x increase in fraud value capture. Our team has been integrating new AI-enabled features across our suite of ad solutions, including the recent release of 6 dispute resolution capabilities. In fact, across all of our services, client adoption has been the fastest among AI embedded services such as smarter stand in processing and Visa provisioning intelligence. In addition, our brand and sponsorship relationships are highly valued. In our fiscal year 2026, Olympic and Paralympic Winter Games sponsorships tracked ahead of plan with more than 100 projects across more than 70 clients in nearly 40 markets. And with FIFA, we have already seen increased activation of cards, spend and engagement from our clients. Our acquired capabilities represent important growth opportunities as well. In Q2, Pismo signed our first clients in France, the Philippines, Paraguay and Romania, reaching 15 new countries since the acquisition, and we're thrilled to announce that Wells Fargo has entered into an agreement to migrate to Pismo's core account ledger as part of its core banking modernization over the coming years, reflecting the strength of the partnership between Wells Fargo and Visa.

We recently announced the acquisition of Prisma, a credit, debit and prepaid issuer processor; and New Pay, a real-time payment services bill pay and an ATM network. We believe the combined technology platforms will accelerate the deployment of advanced technologies such as tokenization, biometric authentication, intelligent risk tools and Agentic Commerce Solutions and help us to grow both our carded and non-carded business in Argentina. Our value-added services are highly differentiated and even more so in an AI world.

Before I close, I wanted to say that we are watching the impacts from the conflict in the Middle East closely. Chris will go into more detail about the impact on our business in a moment. Our primary concern is and has been the safety of our team and clients. You can see from our second quarter performance that there is momentum in our business, tailwinds behind us and enormous opportunities ahead of us. We are pushing every day to build the future of payments faster and better than ever before and to make our stack the most capable and valuable way for our partners to connect to the world's payments ecosystem. Our track record, strategy, innovation and Visa-as-a-Service stack will help us drive growth well into the future.

Now over to Chris to discuss our financial performance.

Thanks, Ryan, and good afternoon, everyone. We delivered an outstanding second quarter with strong revenue and profit growth, driven by effective execution of our strategy and the resilience of our diversified business model. Drivers remain strong and relatively consistent with Q1. In constant dollars, global payments volume was up 9% year-over-year. Cross-border volume, excluding intra-Europe, was up 11%; and total processed transactions grew 9%. Fiscal second quarter net revenue was up 17% year-over-year, with the outperformance largely driven by higher-than-expected volatility, stronger-than-expected value-added services revenue and lower-than-expected incentives. Second quarter net revenue was up 16% in constant dollars. EPS was up 20% year-over-year in both nominal and constant dollars, better than expected primarily due to stronger-than-expected net revenue growth.

Now let's go into the details. U.S. payments volume grew 8% year-over-year, up almost 1.5 points from Q1, reflecting resilience in consumer spending, e-commerce spend outpaced face-to-face spend. Both U.S. credit and debit demonstrated broad-based spend improvement, and we believe both were helped in part by higher tax refunds. Debit grew 7%, up almost 1 point from Q1; and credit grew 10%, up more than 2 points from Q1, with strong travel spend in both consumer and commercial.

Growth across consumer spend band saw incremental improvement from Q1 with the highest spend band continuing to grow the fastest. Across our volume, both discretionary and nondiscretionary spend remains strong. We do not see signs of the lower spend consumer weakening in our volumes. Second quarter total international payments volume was up 10% year-over-year in constant dollars, generally consistent to the growth we've seen over the past several quarters. Latin America and Europe payments volume growth was relatively consistent with Q1 in constant dollars. Canada had a more than 1 point improvement from Q1, primarily due to processing days. In Asia Pacific, we saw macro improvements in Mainland China. And in other Asia Pacific countries, we saw strong client performance.

In CEMEA, we saw a step-down of about 2.5 points in payments volume growth in constant dollars from Q1, primarily due to the conflict in the Middle East. Keep in mind that CEMEA generally represents about 6% of our total payments volume.

Pulling it together, globally, our total payments volume growth remained strong, up almost a point from Q1 in constant dollars.

Now the cross-border volume, which I'll speak to in constant dollars and excluding intra-Europe transactions. Q2 total cross-border volume was up 11% year-over-year, consistent with Q1. Cross-border e-commerce volume was up 13%, a point above Q1. While crypto continued to be a slight drag, the improvement was primarily driven by U.S. inbound volume. Travel-related cross-border volume was up 10%, generally consistent with Q1, led by continued strength in commercial and improved U.S. inbound volume that generally offset the impact in the Middle East that was most pronounced in March.

With that as a backdrop, I'll move to discuss the financial results. Starting with the revenue components. Service revenue grew 13% year-over-year versus the 8% growth in Q1 constant dollars payments volume, primarily due to pricing and card benefits. Data processing revenue grew 18% versus the 9% growth in processed transactions, primarily due to pricing, strong value-added services performance and higher cross-border transaction mix. International transaction revenue was up 10%, below the 11% increase in constant dollar cross-border volume growth, excluding intra-Europe. Even with the favorable FX, we had offsetting impacts from volatility, mix and hedging. While volatility was better than we expected for the quarter, it was still below last year's levels. Other revenue grew 41%, primarily driven by growth in advisory and other value-added services, especially marketing services revenue as well as pricing. Client incentives grew 14%, lower than our expectations, driven primarily by deal timing and performance adjustments.

Now to our 3 growth engines. Consumer Payments revenue was driven by strong payments volume, cross-border volume and process transaction growth. Commercial and money movement solutions revenue grew 24% year-over-year in constant dollars. CMS revenue was better than expected, driven primarily from performance adjustments and deal timing in addition to pricing. Commercial payments volume grew 11% in constant dollars, up more than 1 point from Q1 and faster than Visa's overall payments volume growth primarily due to strong client performance, driven by both new wins and continued cross-border strength. Visa Direct transactions grew 23% year-over-year, consistent with Q1, driven by continued strength in domestic and cross-border. Value-added services revenue grew 27% year-over-year in constant dollars to $3.3 billion, driven by underlying business drivers, which included process transactions, number and mix of credentials and client consulting and marketing engagements and pricing. Value-added services revenue growth was better than expected, primarily due to greater demand for network products for issuers and acquirers and marketing services.

Marketing services leverage our brand assets, expand and deepen our relationship with our clients, help them increase engagement with their customers and drive increased spend, all while growing revenue at attractive levels of profitability. As Ryan mentioned, the Olympics and FIFA are exciting opportunities this year, and we also see further expansion opportunities for sponsorship beyond sports. One example was with the music tour sponsorship in Asia Pacific for a popular K-pop group. We completed activations from multiple clients in the region and drove increased payments volume growth and card issuance, which drove revenue for our clients and Visa, in addition to driving direct VAS revenue. For one client, they saw a nearly 30% increase in year-over-year spend as a result of this campaign; and another client saw a $50,000 increase in card count in just 6 weeks.

Operating expenses grew 17%, consistent with our expectations, driven primarily by personnel and marketing. Nonoperating expense was $45 million, above our expectations, primarily due to lower cash balances and higher debt levels and interest rates than forecasted. Our tax rate for the quarter was 16.4%, consistent with our expectations. EPS was $3.31, up 20% year-over-year, better than expected with an approximately 0.5 point benefit from exchange rates. For our non-GAAP results, Prisma and New Pay increased net revenue and operating expense growth by approximately 0.5 point each and had a minimal impact on EPS growth.

In Q2, we bought back $7.9 billion in stock, the highest quarterly buyback in Visa's history and a tangible sign of our capital allocation strategy at work and our belief in the long-term value of our company. We also distributed $1.3 billion in dividends to our shareholders. We funded the litigation escrow account by $125 million which has the same effect on EPS as a stock buyback. At the end of March, we had $13 billion remaining in our buyback authorization. And in April, the Board of Directors authorized a new $20 billion multiyear share repurchase program, putting our total buyback capacity at approximately $33 billion.

Now let's look at drivers through April 21, with volume growth in constant dollars. U.S. payments volume was up 9%, with credit up 10% and debit up 8% year-over-year. For constant dollar cross-border volume, excluding transactions within Europe, total volume grew 9% year-over-year with e-commerce up 14% and travel up 5%. The step down in travel from March was driven by both the impact from the Middle East conflict and Ramadan timing. When you normalize for Ramadan timing, the total April cross-border volume growth was in line with February levels. Processed transactions grew 8% year-over-year.

Now let me move to our guidance, which is on an adjusted growth basis, defined as non-GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentation for more details. The key message is we are increasing our total net revenue and EPS guide for the full year. For net revenue growth, we now expect low double-digit to low teens. This incorporates the strong year-to-date performance and our current assumptions on drivers, incentives, volatility and expected higher value-added services revenue growth, which incorporates the increased enthusiasm from our clients for the upcoming FIFA World Cup.

Let me walk through those assumptions. First, the drivers. We are assuming the broader consumer spend stability continues from a macro perspective. The Middle East conflict has introduced some near-term uncertainty in particular to cross-border travel spend in the CEMEA region. As we have seen, our spend is incredibly diverse. And as we look to the rest of the year, we are expecting improvements in the U.S. and Latin America inbound travel due to FIFA, and we have the lapping impact of low U.S. inbound growth from last year. Furthermore, cross-border e-commerce continues to grow very well, so we're assuming our drivers overall remain resilient and strong.

On pricing, there are no material changes in our pricing assumptions. And as we said before, our new pricing goes into effect in the back half of the year.

On incentives, we have no material changes. You may recall that Q3 2025 represented the low point for incentive growth last year. And as we will be lapping that, we still expect a step up in the incentive growth rate from Q2 to Q3.

On volatility, it was higher than expected in Q2 and, thus far, into Q3. We are, therefore, bringing our assumptions back up to where we originally guided in October with Q3 and Q4 more in line with where we exited in Q4 of 2025.

On the expense side, largely due to the increased client demand for FIFA-related marketing services, we also expect low double-digit to low teens operating expense growth. We are investing further in marketing-related solutions that will generate incremental revenue around our activations in a high-yielding and profitable way. For example, after we set our budget for the year, we partnered with 1 client in Latin America with nearly 20 million cards to design FIFA campaigns tying exclusive tournament experiences to everyday spend. And in just over 3 months since the launch of the campaign, the client reported a 10% lift in active cards, driving payments volume growth, and Visa generated $10 million in VAS revenue for delivering these campaigns. And with the first match less than 45 days away, the FIFA campaigns should continue to deliver value to our clients, their customers and to Visa.

Our expectation for nonoperating expense is now approximately $150 million as a result of the first half and our increased debt levels and interest rate estimates. We have no change to the range for our tax rate between 18% and 18.5%, although we do believe it will be closer to the low end of that range. This implies adjusted EPS growth in the low teens, also revised up from our prior outlook. For non-GAAP nominal expectations, our acquisitions add approximately 1 point to net revenue growth, approximately 1.5 points to operating expense growth and approximately 0.5 point to EPS growth.

Moving to Q3 financial expectations, which again are on an adjusted basis. We expect Q3 net revenue growth in the low double digits. Consistent with the directional comments provided at the start of the year, this low double-digit growth should be the lowest growth quarter of the year. When compared to Q2 growth rates, there are a few dynamics at play. First, higher incentive growth as a result of deal timing and lapping of the low point of incentive growth in Q3 2025; second, lower volatility levels with a tough comparable versus the highest volatility quarter that we saw last year; and third, the second half weighted pricing going into effect which will somewhat offset the first 2 factors. For those of you connecting the dots to the full year guide, this implies an approximately 1 point step-up in net revenue growth from Q3 to Q4, primarily driven by less of a drag from volatility and stronger marketing services related revenue. We expect Q3 operating expense growth in the low teens, a slight step-up from Q2, primarily due to FIFA-related marketing. Nonoperating expense is expected to be about $55 million. And our tax rate in the third quarter is expected to be around 18.5%. As a result, we expect third quarter EPS growth to be in the mid- to high single digits.

For our non-GAAP nominal Q3 financials, Prisma and New Pay will add approximately 1.5 points to net revenue and approximately 2 points to operating expense growth and an approximately 0.5 point to EPS growth. As always, if the environment changes and there are events that impact our business, we will remain flexible and thoughtful on balancing short- and long-term considerations. To echo Ryan, we firmly believe in the future growth of Visa. We have a proven track record of delivering strong net revenue growth driven by higher growth in both commercial and money movement solutions and value-added services, underpinned by consistent consumer payments growth, all with industry-leading margins. The opportunity across our entire business is significant, and we are executing against our strategy to capture it as is evident in the financial results that we're delivering.

Now, Jennifer, I'll hand it back to you.

Thanks, Chris. And with that, we're ready to take questions. [Operator Instructions]

[Operator Instructions] Our first question comes from Tien-tsin Huang from JPMorgan.

A really strong revenue momentum here, sorry. Just thinking about Ryan and Chris, what you guys went through, I took a lot of notes. I think, was the largest revenue upside that we've seen in 3 or 4 years. So I was just trying to just aggregate it. What were the biggest factors that drove the upside in the quarter? And how does that change your second half outlook exactly? I don't want you to rehash everything you talked about there, Chris, but just trying to maybe rank the top 2 or 3 things.

Sure. Sure. Tien-tsin. Yes, in Q2, we had a very strong quarter. We're very pleased to see that. Both net revenue and non-GAAP EPS coming in better than we expected. In terms of differences, I think that was your question versus what we had expected. The things that I would call out, again, are volatility. It was very low, if you recall, at the start of January when we set the guide and then it rose higher throughout the course of the quarter. It was still a drag year-over-year, but it was better than we anticipated.

Secondly is our VAS business. We had strong growth, again, across all our portfolios. It was better than we expected, primarily due to greater demand for our network products as well as marketing services. And then incentives grew at 14%, which was below our expectations for the quarter, primarily deal timing, performance adjusted -- performance adjustments rather.

In terms of our Q3 guide, primarily the difference as I said, largely, our assumptions around incentives remain the same. The volatility was higher in the course of Q2, and we're anticipating that pulling through into Q3, and we're continuing to see strength across the breadth of the business. And so we're anticipating another strong quarter in Q3.

Next, we'll go to Craig Maurer from FT Partners.

I wanted to ask about the agentic commerce discussion had earlier in the call. We've seen American Express step out there and take on the risk of a fraud on [ agentic ] transaction. And so I'm curious about the -- are you -- how can you achieve something similar with a 4-party network versus a 3-party network when it seems that issuers are going to have to buy in to whatever rule-making you decide on? Or are they going to be left to decide how they're going to deal with that risk? So any discussion there would be helpful.

Sure, Craig. And I appreciate the question. If I just start at the highest level, just as a reminder, this is all very early. And I think as the agent commerce use cases and threat vectors start to mature, we'll adapt and evolve our capabilities and our rules, which you noted. As we have historically -- you saw this with the evolution of e-commerce, you saw it with the evolution of mobile commerce. If a Visa cardholder experiences fraud, they're going to be protected. That's been part of the promise for Visa cardholders for a very, very long time.

I would add to that, in agentic commerce, we're going to have more transactions that are initiated from authenticated tokens, which is good. It will further reduce fraud, it will further protect the ecosystem. And the other benefit of agentic commerce is issuers and merchants are going to have more data on transactions. They're going to have data on user intent. They're going to have more data to include in the dispute processes and all of those types of things. So we're working very hard on it. And again, as all of this starts to mature and evolve our rules with full buy-in from the entire ecosystem.

Next, we'll go to Matt O'Neill from Bank of America.

Love to follow up on some of these discussions as well around stablecoin and agentic. Specifically, could you just maybe take a step back and give us the high-level unit economic top-of-the-house view? Are these transactions kind of accretive? Dilutive? Or are you agnostic but obviously, very excited about the type of growth rates we're seeing in volume and a small but increasingly important base?

Yes. Thanks for the question. Again, I would orient here and go back to what I described in my prepared remarks, which is that we've positioned ourselves as a hyperscaling bridge layer sitting between this very powerful infrastructure, stablecoins, and blockchain and on chain payments in general, and real-world solutions and real-world applications for users. So we're taking kind of the Visa-as-a-Service stack, and we're engaged in at all the different levels in the stablecoin stack and ultimately delivering these bridge solutions that have very similar economics to the products that we have today.

So if you're an average Visa employee in Argentina and you're holding $1,000 in stablecoins in your wallet, and then like I said in my prepared remarks, you go use your Visa debit card issued on top of those stablecoins to go to the restaurant, to go buy petrol for your car, to go buy groceries for your families, the economics of those products look just like our normal products. So by investing in building this hyperscaling bridge layer, we're providing real-world utility for buyers and -- sellers, and we're doing that in the context of similar economics to what we deliver today.

Next, we'll go to James Faucette from Morgan Stanley.

I wanted to follow up on the agentic topic and specifically in the area of agent-agent transactions. I realize that a lot of these are very small and micro transactions. But wondering if you can talk about some of the capabilities of this and the Visa networks that you can deliver in those kinds of environments. And whether that be beyond just the transaction but providing trust, et cetera, and how we should think about the potential for that to be accretive or additive to the volumes that you do?

Yes, thanks. We're very excited about all of it. And we feel extremely good about our position. I kind of emphasize one of the words you mentioned, to go back to what I said in my prepared remarks, which is you look at our network, you look at our security and you look at the trust that our users, both buyers and sellers have in Visa, and all 3 of those are going to position us in a very strong way. There's like a lot of talk around AI in general. And the limiting factors, if you will, when people talk about compute and they talk about power and they talk about data centers, I think the limiting factor for agentic commerce is trust. I think when we all think about ourselves as buyers and we all think about ourselves having agents go out and transact on our behalf, we are going to fall back on payment methods that we, as users, trust. And kind of go back to the way I was describing Visa cards in my prepared remarks, they're easy to use, they're broadly accepted, they're integrated in the transaction flow, they offer privacy they offer sellers a way to manage liquidity in aggregate rather than funding millions and millions and millions of real-time micro transactions using stablecoins or something like that. They offer billions of issuer KYC users that are ready to go with these credentials, and they offer security protections if something goes wrong. And then you add to it that in many cases, we all have cards that offer rewards and benefits. So when you think about yourself as a user, when you think about kind of who you're going to trust your agent to make payments on your behalf, whether those are macro transactions, average transactions or micro transactions, we feel really good about our ability to win those transactions for our users using all of those capabilities.

Next, we'll go to Tim Chiodo from UBS.

I want to talk about 2 programs, both that have something in common. They are allowing for reduced total cost of acceptance to merchants; and also providing more data or requiring the merchant to provide more data to Visa. And those are, of course, the commercial enhanced data program, or CEDP, and then the more recent introduction of the Digital Commerce Authentication Program, or DCAP.

So for CEDP and DCAP, they both have that reduced cost element, and they also have the more data element. I was hoping you could expand upon the importance of these 2 programs for the payment ecosystem and what that data may mean to Visa.

Yes. Thanks for the question, and thanks for being so studied on our programs. It's great to hear. And I think I bridge my answer for your question to the answer -- that was part of the answer I was saying earlier, which is a lot of the ways that we can add value as a network as digital commerce continues to evolve to both our merchant partners, our acquirer partners and our issuer partners is by creating enhanced data payloads so that our partners can use that data to, as I was saying earlier, run more efficient dispute processes, to run better risk programs to make better authorization decisions, to help reduce fraud. And these 2 programs that you mentioned, CEDP and DCAP, both have those elements in common. We're able to use kind of our position in the ecosystem, whether it's in the case of CEDP, a commercial product platform that we've built; or in the case of DCAP, the tokenization platform that's been deployed to deliver these types of data payloads, create incentive -- create incentives for players across the ecosystem to add that data to the transaction payloads and then create opportunities for people to use that data. And I think that's what both those programs have in common.

Next, we'll go to Bryan Bergin from TD Cowen.

I wanted to dig in on VAS and really the underlying strength that you noted here in the network assets and the marketing services offerings. It really seems like a switch kind of flipped here over the last 4 quarters, just to carry the overall robust level of growth. So key on what has worked so well there and how you're thinking about the sustainability of those key contributors.

Yes. Thanks for the question. Let me broaden it to the widest aperture and then specifically hit your question on VAS. I think if you just take a step back, we laid out a very clear strategy to you all at our Investor Day a couple of years ago. We have worked very hard to create investments in the company, to invest ahead of those opportunities, whether that's product solutions, sales force, go-to-market, new ways of running the company in order to drive the performance that we were looking at. And I think overall, what you're seeing is us executing that strategy along the lines that we all describe to you.

If I look specifically at VAS in that context, if you go back again, several years, we built out the VAS business units. We built leadership in the company. We've built leadership teams. We built product road maps and we've been deploying those products aggressively. We've been shipping new, especially AI-driven products in the issuing solutions space. We outperformed in the quarter in our AI-driven stand-in processing platform. We outperformed in our Visa Supplier Payment Services platform. Those are 2 of the issuing service -- issuing solution platforms. In the acceptance side of the business, our Visa account updater platform outperformed. That's one that allows merchants to automatically upstore credentials when you might have had fraud on your account and it was reissued or something like that.

Looking at our risk and security solutions area, we saw outsized performance in VCAS, our Visa Consumer Authentication Service, or also in our VAA and VRM platforms, Visa Advanced Authorization and Visa Risk Manager. These are all products that we've been deployed in market, largely AI-driven products, and they've been driving broad-based outperformance across the value-added services portfolio. So a long way of saying, I think that's right. I think you're seeing the strategy working. We're executing the strategy, and you're seeing the results.

Next, we'll go to Harshita Rawat from Bernstein.

I have a question on payments nationalism. We've seen this growing desire for countries to control their payments infrastructure or at least have it locally. There's been some renewed discussions in Europe. I know this is not something new to you. You've worked through this in the past, but maybe share your updated perspective in payment nationalism outside the U.S. and how you're engaging with the government.

Thanks. As you would know and read and I alluded to, we're spending real time on it, but we've been spending real time on it for a while. Nationalism and sovereignty concerns are not new for Visa, whether it's in Europe, to your point, or more broadly around the world. And if you think about it, payments are an inherently local thing, like they're critical to work, the way that they need to work in every country we do business around the world. And international sovereignty considerations are a long-standing feature of the payments landscape. We've been dealing with these issues for decades. We -- in all of our key markets, we operate with local teams, local infrastructure, local partners, to navigate the regulatory political and market-specific requirements of any given country or market. And that's as true in Europe today as it has been, and it is true in other markets as it has been.

If I just, I guess, comment specifically about a couple of things in Europe. First, we are deeply committed to Europe. We have a long-standing presence there across 38 countries. We've got, I think it's 29 offices, more than 6,000 employees in Europe. The business itself is very strong and growing. We've been adding cards and winning business. We added nearly 30 million cards in the last year or so. And we told you all that we were going to bring on another 30 million cards because of wins that we've already closed over the coming year. So we're winning. And I think that's because buyers and sellers in Europe really value the Visa network, the Visa brand, the Visa Trust. There's been a long-running set of initiatives in Europe, some of which have gotten more traction than others. For those that have gotten traction, there is a pretty wide base of domestic digital payment wallets in Europe that I think have had good uptake, especially in the account-to-account, but more so in the person-to-person space. And then you've got the long-running story of, I think, what was first Pepsi and then Epi and now were -- and then you add the digital euro to that as well. Our expectation is there's going to be more competition in Europe, not less, just like we see around the world. We're going to continue to kind of deliver what we do and do the best job we can and as a result of that, hopefully continue to win more than our fair share.

Next, we'll go to Darrin Peller from Wolfe Research.

Chris, one for you is just if we can dissect how much of the vast strength is driven by the World Cup versus sustainable drivers?

And then, Ryan, when I think about VAS again, you talked a lot about the -- all the different services you're providing. Have you seen a step function in demand for your fraud protecting services? We've heard about a lot more fraud instances given AI and bots and others being used. I'm just curious if you're seeing that directly impact you guys in terms of demand for the products.

Yes. Why don't I go first to that and then Chris, you can fill in. And the short answer is yes. We really -- we've seen more demand across the board for our fraud products. And I think that's a signal of 2 things. One is the environment that we're living in. When I go talk to CEOs of clients around the world, whether they're issuers, acquirers or merchants, fraud is a top 3, top 4 concern for them. And that just wasn't the case several years ago. And fraud broadly defined, whether that's cyber or more traditional payments fraud, enumeration attacks and everything in between. And it cost them on the bottom line. It ultimately creates bad user experiences, and there's a high demand for services. And then second, they view us as their most trusted provider for these types of services. And we've been able to put product and services out in market that are performing at much higher levels than the market had seen.

One example, I think, I mentioned in my prepared remarks is our own Visa LLM that we've built based on billions of our own transactions, our own foundational model for payments that we're now using to fuel a lot of these models and solutions. And it's having 2, 3, 4, in some cases, 5x improvements in value capture. So yes, we're seeing a lot of step-up in demand for those products and services.

Darrin, I'll just add on just to dimensionalize that a bit. As Ryan talked about, we're seeing very broad-based strength across all the portfolios. And while we do anticipate seeing accelerated marketing services growth this year with the Olympics and with FIFA, that doesn't take away from the growth that we're seeing across all the portfolios. In Q2 specifically, I talked about network products being one of the drivers of the outperformance. And so we are continuing to see strength. And specifically with regard to marketing services and the durability of that, obviously, when there's a big event, we tend to see strong growth, but it's also a business that we see -- we're quite optimistic about. As you know, it deepens our client engagements and in turn, helps their clients grow their Visa business with us. And so there's a good flywheel at work. And we think clients are definitely interested in engaging with us in it. And so that's a business that we'll continue to see be strong as well.

Next, we'll go to Andrew Bau from BMO Capital Markets.

I wanted to hit on the vast kind of margin dynamics. You emphasized marketing and other value-added services growing at attractive profitability. And as we think about as, as it becomes a larger share of revenue and scale, how should we think about the incremental margins relative to Visa's historical network margins over time?

Yes. Yes, let me try to parse that apart a little bit. I mean the first thing I'd point to is, obviously, looking at the facts, meaning looking backward at history. Now we've grown our value-added services business to be 30% plus or minus of our business, and we've done so while preserving the overall margins of Visa, and it's grown across a number of portfolios. Now as you point out, though, I think embedded in your question, there are different margin profiles within those different business portfolios. And we're continuing to see strong growth across all of it. The important thing on the marketing services that we're seeing this year is the point that I made to the last question, which is there is definitely a profitable business. It's incremental revenue and incremental profits to Visa, but there's also this flywheel where, as our clients continue to grow faster, they continue to drive volumes and drive spend back to Visa. And that's good for both of us, frankly. And so that's a flywheel that we've seen and proven to work. And so when we look at the totality of the business, we continue to be really disciplined about our expenses across the entire breadth of our business, and we continue to be really enthused about the opportunity to invest.

Next, we'll go to Bryan Keane from Citi.

Congrats on the awesome results. Looking at the cross-border growth chart, Chris, can you help us quantify the impact of Ramadan and the Middle East? I guess it looked like March, it spiked higher, which I guess is a surprise given what's going on in the Middle East. And then the month of April year-to-date results, it comes back a little. And I'm just trying to figure out when we net this all out, some of these onetime impacts with maybe a lingering impact in the Middle East, what should we put together for our models for cross-border in third quarter?

Sure. Yes, let me talk to that. Our cross-border business has been and remains strong and healthy. even with the latest data that you referenced, the April data where cross-border had ticked down 1 point to 9. If you normalize for Ramadan timing, it's impacted -- that April data is impacted by Ramadan timing and the Middle East conflict. And if you normalize the Ramadan timing, it will be back to February levels.

Why is this? As we've spoken to many times, our cross-border business is very resilient. It's well distributed. And while there is some impact in the Middle East as we saw in Q2 and we do expect to see in Q3, we've seen that there's offsetting factors, strength in other regions, other parts of the business. For example, we're expecting an increase in inbound volumes in the U.S. and Latin America given the enthusiasm for the upcoming World Cup. We're lapping a low period of U.S. inbound a year ago. And commercial volumes continue to be stronger. And also, I should point out, cross-border e-commerce has been stronger than travel and is a bigger share of cross-border volumes today. So all considered, whether it's cross-border or frankly, across our entire business and payments volumes, we continue to expect our drivers to be healthy and strong, and that's what's embedded in our expectations for the rest of the year.

Next, we'll go to Jason Kupferberg from Wells Fargo.

I wanted to tie together some things we've already talked about on the call, particularly related to VAS and obviously, the CMS business performing really well. Also, we think back to the Investor Day last year, the medium-term outlook we were talking about was 16% to 18% growth combined for VAS and CMS. Clearly, you're well ahead of that now. You're in the mid-20s range. Olympics and FIFA maybe helping a little bit this year. But just should we be recalibrating our multiyear view on how fast these businesses can collectively grow?

Yes. Listen, we don't -- first, I'll just start with the caveat that we don't guide to growth pillars. We are seeing terrific performance, momentum, execution across both those growth pillars. We talked about VAS extensively. I won't sort of rehash all of that. I will talk about CMS a little bit since that's new. The 24% revenue growth this quarter is higher than we've seen in recent quarters. I did note in my prepared comments that some of that outperformance this quarter was related to adjustments and deal timing as well as pricing. And so while the underlying fundamentals remain very healthy, we don't anticipate some of those onetime items to reoccur. But that doesn't take away from the strength of the business across both VAS and CMS as well as, frankly, the strength in our consumer payments business. So we're really enthused about the overall -- the strength of the business across the broad portfolio, and we'll continue to focus on executing against our longer-term growth aspirations.

We'll take one more question, please.

And for our final question, we'll go to the line of Sanjay Sakhrani from KBW.

Ryan, congratulations on your Wells Fargo relationship signing at Pismo. That seems to be a meaningful add in the U.S. I'm just curious, one, how should we think about the monetization strategy? Is that like a VAS revenue addition? Or is it in other areas? And then secondly, do we see more of these large bank types as a target opportunity for Pismo?

Yes. Thanks for the question. On the answer to your question around the geography and the P&L, I think, Pismo, well, I'm going to leave that for Chris. So I'll let Chris take that in just a second.

When we talked about buying Pismo, I shared our thesis for why we were buying Pismo. And it was 2 things. One is when we have been talking to the leaders of our large financial institution clients around the world, there was a common theme. They were all preparing to embark on a platform modernization strategy often involving a migration to the cloud. And that -- we identified that as a structural shift, almost like a moment in time opportunity for the entire industry around the world. And then the second part of the thesis was there were a lot of issuers, especially fintech issuers, that were trying to expand geographically, especially into emerging markets, and there wasn't an issuer processing stack that was cloud-native, modular and had the ability to scale geographies quickly. And those were our 2 theses. And so far in our journey with Pismo they're both playing out. And what I said at the time is we had scoured the earth to find the best cloud-native, modular, API-driven stack that we could put to work against both those theses.

So to your question about Wells Fargo, this continues to be a need for large financial institutions around the world. We continue to believe that Pismo is the best platform out there both for core bank or for issuer processing stacks as our issuers kind of make this migration. And we're very proud of the partnership I mentioned with Wells Fargo, but we're also hard at work working with other potential clients around the world and hopefully have more to share with you over time.

And then in terms of where we report [indiscernible] Pawel is considered VAS, we reported and it shows up in revenue in the other revenue line.

And with that, I'd like to thank you for joining us today. If you have additional questions, please feel free to call or e-mail our Investor Relations team. Thanks again, and have a great day.

Thank you all for participating in Visa's Fiscal Second Quarter 2026 Earnings Conference Call. That concludes today's call. You may now disconnect, and please enjoy the rest of your day.

Guys, why don't we jump in? Thank you again for everyone for joining us. Day 2 of the Wolfe Fintech Forum. Really happy to have Visa with us. And Jack, I think I've had you on stage a couple of times before, but it's really great to have you back. Jack is the Chief Product and Strategy Officer of Visa. Also happy to have Jen from Investor Relations here. And look, if it's -- now it is about as great of a time to have you with us as any, just given the magnitude of change happening in our space. But there always is, but it seems like there's been more now than usual. And so first of all, thanks again for joining.

Thanks for having me. Great to be back.

We're going to get into the different changes in the industry and how it affects Visa or it doesn't. But before we do, maybe a quick update. You obviously see what the business is seeing in terms of trends. And so U.S. payment volume was up 8% in January, credit up 9%, debit up 6%. Overall, I think it was about 1 point better than calendar fourth quarter results and stable cross-border, generally speaking. Just tell me what this means about the current health of the consumer? And do you believe the K-shaped economy and we're hearing from others. Just what are you seeing out there?

Yes, sure. Again, thanks for having me. It's great to be back. Look, we're obviously living through some tumultuous times right now. But I have to say the watch words for the consumer driving out of the data that I'm seeing are stability and resilience. I mean you just rattled off some of the numbers. We're just seeing consistent growth performance quarter in, quarter out, month in, month out. I lead our product team and our strategy team, I sometimes focus on some different metrics than some of my colleagues. One of my favorites is processed transaction volume growth because to me, that's the most pure indication that we've got about how users are engaging on the platform.

And that number has been incredibly resilient and consistent on a broad global basis for quite some time. So look, there's a lot going on in the world. You might expect that to be changing the way consumers are behaving with respect to their spending patterns. Overall, we're really not seeing that. You asked about K-shaped. Look, I don't really see K-shaped. It's probably a little bit more letter E-shaped if I've got growth rates on the vertical axis, right? We're just seeing consistent levels. There's definitely a differentiation in the level of growth rate that we see across the spectrum. But it's a positive growth rate at the bottom end and it's a positive growth rate at the top end. And the gap between the 2 has been relatively consistent as far as...

Yes. We've actually heard that. I remember even Chris on the last earnings call was talking about how some of the more affluent are spending a little faster growth rate-wise, but consistent, right, across all the areas and they're all growing. All right. That's great color. Maybe just a quick follow-up would be with all the political turmoil going on in geopolitical in the Gulf region, et cetera. I mean, any impacts from -- on cross-border gas prices? How do you as a company think about that or FX volatility?

A few things I'll say on that. First of all, it's early days. Hopefully, this goes by quickly. who knows what's going to happen with -- like this one. We monitor this stuff very closely. We're always looking at the granular detail of the data with respect to how different corridors are doing with cross-border, how different categories are performing. You mentioned cross-border, you mentioned energy prices. We'll monitor those things.

What I would say, though, is it's worth remembering, we're incredibly diversified. We have countless cross-border corridors across the world that we are constantly looking at. So -- we'll see what happens, but I'm kind of looking at it on an aggregate basis and thinking if things are already diversified, [ payment ] gas, by the way, energy prices, we're seeing the volatility there. But overall, gas prices in the U.S. are a fairly small proportion of our overall purchase volume.

Okay. All right. Let's go into the more interesting topics, which I think is really what's everybody's minds. For what it's worth, I mean, as an analyst, we probably don't even field questions over too much concern over the fundamental growth of Visa. That's been consistent and been strong. It's mostly top-down questions, what is the regulatory environment going to look like? And how does that affect? But more recently, it's been agentic, right, or AI in general. And so just let's start there. I mean, you've said that agentic is the next wave of commerce, and you've said it's an opportunity. So just outline what this wave of commerce actually entails. I think a lot of folks are still trying to figure it out.

Yes. Darrin, I'd say I've been doing this payment technology thing for a really long time, 20-plus years. And I will honestly tell you, I have not stared into a bigger growth opportunity than what we have ahead of us in the development of the agentic web and -- agentic web broadly that then will turn into agentic commerce, turn into agentic payments. But I haven't seen anything like this since the dawn of e-commerce itself in the late '90s or early 2000s. We see it as a generative growth opportunity. And I want to make sure we try to get out of the zero-sum mindset, right? There's just too much of the, hey, is agentic a way that the existing pie is going to get sliced up differently? I don't think so.

This is about new business models, new transaction flows and increasing the velocity of money. And we're seeing it in very practical ways. I'll give you 4. Think about how agents can take friction out of payments. There's still friction in digital payments, right? We see fall-off rates on transactions. We see decline rates in transactions. Agents are going to be able to take the friction out of payments and transaction success rates are going to climb. When we see transaction success rates climb, we see payment volumes increase. Two, we're going to see what I call increased payment density. What do I mean by that? Think about a fixed amount of purchase volume or purchasing power split into a number of transactions. We've actually been seeing increasing payment density for a long time. Our average transaction size from 2015 to now has dropped 20% from around $55 to around $45. You might say, "Oh my gosh, that's great. Because at the same time, our number of transactions has tripled to $300 billion.

And so you're seeing the increased payment density, and it's coming from subscription purchases, streaming payments, gaming payments, creator, all these new use cases that have lower tickets and higher velocity. And we think agentic commerce is going to completely unshackle that, right? You think about an agent -- we can be kind of lazy, right? I'm buying a bundle of goods. I'm kind of at the same merchant. I'm buying all the stuff at the same time because I'm there. Your agent doesn't need to do that. Your agent is going to split that purchase into as many little purchases as it needs to. Streaming payments completely...

Find the best price, find the best product in 3 different locations.

Do you want to buy an hour worth of something, do you want to buy a day worth of something instead of a month or a year. So I really think we're going to see a significant increase in transaction volumes coming from that. Then we're going to see faster digitization of payments. There's still a lot of undigitized payment flows out there. My favorite here is B2B payments. There's an enormous amount of B2B payments volume left to be digitized and a lot of friction left. And when you think about onboarding suppliers, raising purchase recs, invoicing, paying, reconciling all that stuff, it's still painful.

Agents will rip that friction out and we'll see a massive digitization of B2B payments. We're doing some really cool work with Ramp, by the way. There's some stuff up on YouTube, if you wanted to take a look at it. But those guys are integrating AI agents for their business buyers with virtual Visa cards in hand. And it's basically an invoice to pay instantly with full-on reconciliation from the get-go. It's a really cool if you're into B2B payment.

They were just -- Ramp was here this morning actually talking about that to some degree.

And then I'll give you one more.

Yes please.

We're not takers on the agentic dystopia argument, right? Like every other wave of technology that has hit the payments ecosystem has generated growth. We've seen it with e-com. We've seen it with mobile. We've seen it with mobile cloud. We've seen -- and we see this the same way. The economic forecast that we're looking at consensus is anywhere from 80 basis points to 150 basis points of GDP growth coming out of the efficiencies at a macro level that we can gain from agentic. And we know that when we see GDP growth, that flows to PCE growth, and that just flows straight into our ecosystem.

All right. That's very encouraging. Look, on that note, I mean, we still -- despite everything you just said, and you answered some of it, but we still get questions about whether this means -- this is a good thing or a bad thing. Is Visa a winner or a loser in agentic -- maybe just articulate if there's anything else you can add on to specifically why Visa could win in this versus others that might also try to offer these offerings.

I think there's some lessons in history there. I'm not going to go dwell on it. But again, you think about the complexity of the transaction that came into existence at the advent of e-commerce, right? It was riskier. It was less identifiable. There was no means of having a physical identifier in place. We adapted our technology. We created new authentication mechanisms. We changed. It was a moment that was made for us. Same thing with mobile technology. We created tokenization. This is the same.

These transactions are going to be riskier. They're way more complicated. You've got an agent in the middle, the agent needs an identity. You need to secure that identity. You need to validate it. You need to collect more data in order to be able to ensure the security of trans -- all that stuff. And we're working on that. So in a way, this is made for us.

And maybe just for fun, I could bring it to life with an example. So let's say you were so compelled by my growth argument, Darrin, that when we're done here, you go hit Claude Code or Cursor or Codex, whatever your favorite coding platform is and start spinning up commerce agents because you want to realize the opportunity. At some point, like very quickly in your development process, you're going to have to equip your agent with the ability to buy things. And you're going to have to decide what you want it to use to buy things, right?

I would argue that you will want your agent to be able to easily connect to the sources of funds that your human has, Like, say, the -- 14,500 financial institutions that we are already connected to with Visa credentials that store most of the money that is used to buy things in a person-to-merchant context. And you're going to want to be able to use the credential everywhere where things are sold. maybe like at 175 million merchants that already accept Visa cards, right?

So -- by the way, you also want -- you want to keep your human happy. And they trust their cards. They trust that brand. They trust that security. They like their rewards. So I think you're probably going to default to card credentials as opposed to something experimental that has no acceptance footprint that doesn't have a lot of other stuff. You're also going to worry about security, right? Agency is great to automate things on behalf of a buyer and a seller. It's also a tool that fraudsters are increasingly using and things are getting more dangerous out there. And we process 300 billion transactions a year, almost 1 billion transactions a day. We use the data from those transactions to evaluate every single transaction in subsecond time with hundreds of parameters to make sure they're safe and they're secure.

You're going to want that, right? You're going to want our token technology that is able to bind the credential to your agent and identify your agent and carry the extra data payload you need. None of that exists in these alternate payment mechanisms.

And then lastly, you're going to want everybody to understand that this is a trustable payment method. And we spent decades building trust in our brand. And when we present the Visa brand in a payment transaction, the merchant trust it, the buyer trusts it, and the agents are going to trust it, too. So look, we're excited about this. Like this is opportunity of the -- like I said, of the order of e-commerce itself 20, 25 years ago.

Yes. No, it sounds like it. I've seen data points that Visa and if you look at Mastercard, there's a combined 450,000 attempts to hack data centers by fraudsters per day, believe it or not, on the networks that you guys have to pull back, which you do a good job doing, obviously. I can imagine how much that can increase with models and agents helping fraudsters, right? I mean -- so there's no doubt that security is going to be paramount here.

Can I ask you, I mean, how do the announcements from Stripe and OpenAI, it seems like they were trying to almost acknowledge that they have to work with the ecosystem. Stripe talked about using Visa tokens. OpenAI, I think acknowledge they're not doing as much as they thought in-house, right? And so how does that really change or impact your thinking on this at all?

Yes. I mean there's...

You probably knew this already, but how should we think about it?

Yes. Look, it's -- I mean, it's early days in agentic commerce, right? We've kind of started to turn the corner on consumers changing behavior from old search to agentic search and that terminating in a payment transaction or a purchase transaction at the merchant website. We still have a ways to go before you've got a more fully automated agentic purchase transaction. That's going to require standards. That's going to require a new form of interaction on the web. And so you're seeing this alphabet soup of standards start to propagate, right?

And it's -- in my mind, it's because we're moving from a web construct that had browsers driven by humans interacting by servers that were coded to be human readable to a place where what we really need is browsers driven by machines on behalf of humans with policy constraints on them. And then server side that is machine readable. And these standards need to exist to make the 2 machine readable sides work.

So we're seeing it at the web level with standards like model context protocol. We use that for our intelligent commerce platform to enable agents to connect to it. You're seeing it at the shopping level, right? Google's UCP and OpenAI's ACP, like those were standards to say, here's how you should share inventory data. Here's how a shopping mission should unfold. And then there's the payment standards. And that's where we come in.

And this is where some of the stuff you were talking about a moment ago is really relevant. Like we've been -- these things take time to bet in, but we published our -- these intelligent commerce specs almost a year ago, our trusted agent protocol that's about agent identity over the course of this summer. It takes time for these things to get adopted, but you saw Stripe announced that they are embedding Visa Intelligent Commerce into their processes. And that's our play. Like you go back to what we were just talking about, the compelling features of our platform as a payment scaler for agentic commerce are there. But if you want to use it, you're going to have to adhere to the standards. And those standards are going to embed and be interoperable with the web standards and with the broader shopping.

That makes sense.

And that's how you should think about it.

That's helpful, Jack. You mentioned micro transactions. You brought it up before in terms of more transactions also just as an opportunity. But there have been other players saying they think they can capture this. So just help us again with what is Visa's role here? And how do you think about pricing on this?

Yes. This is a fun one. I would say -- by the way, there's probably no platform in the world that has processed more low-ticket, high-velocity payment transactions than Visa. And we have adopted and adapted over time. Like have you ever tapped your Visa card to get on transit here in New York?

Sure.

It works pretty well. That didn't used to work. We had to modify our technology, different transaction payloads in there. We had to modify our pricing and commercial framework to make sure that worked. We've done that in transit. We've done that in vending. We've done that in parking. We've done that over and over and over again. And we just see this as the next one.

It's not a question of if we will do this. It's just a question of how we will do this. We've got a lot of experience in batching transactions. We could probably settle them straight through. We need to figure out like does a merchant recipient really want to receive $0.01 every couple of nanoseconds or would they actually rather have that batched up and receive a few dollars every few minutes. So those are kinds of things that we're working through from a technical standpoint. We've got a lot of experience doing this over a long, long time.

You definitely do. Yes.

And then the pricing thing, yes, I keep reading things that talk about our pricing as it relates to these transactions, but it kind of misses the point that we can actually configure our pricing, and we can create commercial frameworks that really work to make these transactions.

Even for small micro transactions, you can make it work?

Yes.

Okay. There's also a lot of talk about different protocols and really nobody better asked than you. I mean just what does each protocol do? And maybe help us understand your role in it, just to explain it. We get -- there's a lot of jargon out there and a lot of folks aren't familiar with it, so.

Yes. And I was talking a little bit about this a minute ago. It's the Alphabet suit. We need these standards. We really need to bed them in if the agentic web is going to work, if agentic shopping is going to work and if agentic payments are going to work. I -- to be honest with you, I don't know what standards are going to win at the agentic web level. I don't even know what standards are going to win at the agentic shopping level. But there definitely needs to be a common set. Think about how the Internet today works, right? We have HTTP as a set of standards. We've got DNS. We've got all these standards. They're open and they're interoperable, and it makes the web work and grow the way it works today.

This is just another evolution. So we need a set of standards that govern how agents interact and machines interact with each other. Our paramount concern is making sure that this functions from a payments perspective. And so we're very focused on that. We've been building and publishing standards for a very, very long time. This is kind of what we do. We like the standards that we created almost a year ago and the specs we created with Visa Intelligent Commerce and with our trusted agent protocol, but things are moving fast, and we're continuing to evolve and adapt those standards.

Okay. One of the areas that I know we and others are excited about is the value-added services that you should be able to provide around this opportunity, given all the data you have, tokenization capabilities. Maybe just help frame that opportunity that you see, at least for Visa to really play a big part in the VaaS around agentic.

Yes. You probably noticed our value-added services growth rates are...

Strong.

Good. They're strong. I'd tell you, part of the driver behind that is the attach rate of our value-added services to digital transactions is high, right? And it's because digital transactions are more complex, they are more risky and they need more full featured capability in order to work well. So back to agentic transactions, we're going to see a move toward an even bigger opportunity with respect to value-added services that we can bring to transactions.

I mean we bring fraud scoring. We bring authentication. We bring stand-in processing. We bring new data payloads. We bring controls and policy that agentic platforms are going to need to be able to govern these credentials when they're tokenized. We bring the tokenization service itself. We -- the decryption, like all of this stuff is all sort of under that rubric. So we see it as a big opportunity. And in a couple of ways. One, just the sheer volume of opportunity that I was just rattling off, we're going to be able to build more and more of these value-added services and build them into these transactions.

We're also excited about the use of AI itself. I mean we're early adopters in AI. We have the ability to actually screen hundreds of variables in sub-second time for fraud in our authorization stream, something we've doing for a long time, but that's because of AI, the precursor generations of AI to the ones we're seeing right now. So we're excited about not only the opportunity presented by agentic commerce, but the use of AI in our products themselves that will cause us to be able to ship at higher velocity with more sophisticated products.

So the fraud dynamic and the cybersecurity dynamic associated with e-comm, which is really even a higher level on agentic, is clearly an opportunity for you guys, right?

Absolutely.

And then when it comes back to the AI use in your own other just broad VaaS, again, you started touching on it in terms of the data itself being utilized, right, or the AI being utilized for better use of your product. But can you just expand on that again? I mean, where are you using it throughout VaaS to expedite the opportunities?

In fact one last thing, I'll come to that. I just want to mention back on the AI, VaaS thing, because I keep getting asked this question. It's the old -- is AI eating software? And a lot of our VaaS services are software. But I would pause it that software businesses that are rooted in network effects, proprietary data and data scale actually benefit from AI as opposed to have exposure to AI. And so again, 2/3 of our value-added services are attached to transactions in our core processing system, which means they're attached to that network effect, which mean they're attached to that proprietary scaled network data that we have.

So there's -- we're super confident in the resilience of those software-based value-added services that we have. Now you're asking what are some use cases and examples of where we are applying AI. I'm almost struggling to think of use cases where we're not applying AI. Yes, I mean, in the protect side of the business, we've been doing it for a really long time. But we're doing a lot more of it, but we're also expanding it into new use cases.

Rather than give you a list, I'll give you an example. We have a service we call Stand-In. And so issuers make their own authorization decisions in our network, but they often go down or they have outages, there are reasons why they cannot make a decision. And for a long time, we've had rules in place that issuers can configure. We allow them to configure those rules and say, if I'm down, authorize this, don't authorize that. We've used AI to create an intelligent adaptive version of that system that can effectively replicate what an issuer could do even if they were up. And that just continues to learn. So that's a cool example of the kind of thing that our data scientists and engineers are working on.

One of the things that we get asked about is whether or not agents are going to play a role determining what payment method is actually used. And it's actually perceived as an opportunity, but also a risk. I mean, what are your thoughts on that?

I say, I don't think agents are going to change the laws of supply and demand, right? So if you think about digital commerce, it's on the supply side, on the seller side, it's an incredibly competitive business. And the switching costs are super low. It's a very efficient market. And because the supply side has a lot of alternatives and switching costs are very low, the buying side of digital commerce has a lot of latitude in negotiating power. And so as it sits today, the buying side makes the determination about payment vehicle, right? That's just how it works.

Now enter agency. Agency will come first on the buying side to create all those efficiencies and take out the work on the behalf of the consumer and the buyer. It will also come on the supplier side. But imagine your agent goes out and it's trying to buy something for you and the agent comes back and says, Darrin, I got the thing. But now I need to go like buy some gold bullion or something. And by the way, you're not getting your rewards. I think you're going to get a new agent really quickly when that happens. And I think your agent is going to learn what -- within the parameters and policy that you set for it, what you want it to do, you're probably going to instruct it to use your card, maybe you'll do a little bit of optimization around that. But I actually think agency will be a multiplier effect on the existing model, which is buyer decides buyer has leverage.

Right. The consumer should be the one that's choosing what's done. Okay. And then another hot topic, obviously, that sort of connects to this is just what you're seeing in terms of demand for stablecoin. Just what are the greatest revenue opportunities for Visa around it? It does dovetail with questions we get about agentic sometimes because it goes back to the last question, whether folks are going to route it to stablecoins. But just generally, what are your thoughts there for a minute in terms of demand and opportunities for Visa?

Yes. we're very optimistic about stablecoins, too, but it's very different from agentic. Agentic, when you think about the way agents are evolving and the way they're going to integrate into shopping, they're working at the application layer. The change is very obvious as you as a user start interacting with an agent as to what's happening.

Stablecoins are infrastructure. This is not a solution in and of itself. This is infrastructure. It's really powerful infrastructure, by the way. And a lot of people don't sort of realize what the underlying bone structure of Visa is, I mean we operate a front-end messaging infrastructure that creates promises to pay in real time across our network. The actual movement of the money happens offline from that, and we use the same settlement infrastructure that everyone else in the world uses.

And I can tell you from firsthand experience, whilst we have done an amazing job reinventing the front end of money for the digital era to make it all feel so seamless and convenient that you can just forget about it and trust it. The back end of money, the settlement infrastructure feels like it did 20 years ago. It's brittle. It's not real time. It consumes a lot of liquidity, and it could use a lot of improvement. And we are huge believers that stablecoins can improve that underlying settlement infrastructure. That's the way we see it.

Now we then see opportunity for ourselves because we see ourselves as a bridge from that new settlement infrastructure that's going to start to permeate and propagate around the world to connecting it to that front end of money that's already functioning really, really well. I'll give you a couple of examples of the things that we're working on.

One, on the settlement side itself, we're starting to settle transactions in stablecoins on our own network. We created that capability about 6 or 7 years ago, by the way, at that point, no one cared. It was an experiment. But as we've gotten regulatory clarity in different markets, we started to open things up. So we opened it up first. We're in Singapore and Hong Kong. And now we've opened it up just in the last 6 months or so in the United States. And not surprisingly, we offer our clients the ability to settle with us 24/7, over weekends and relieve them of the collateral and liquidity constraints that, that old model creates, they're doing it. You go back a year, I said we did this 6 or 7 years ago, a year ago, we had almost no volume on this. We hit $4.5-plus billion in annualized run rate in the last quarter in stablecoin settlement volume.

So it's a real deal. that's the kind of boring back-end side. I get a little more excited when you start like connecting it to the front end. And there, we are starting to see, especially in emerging markets, a lot of use cases where consumers and businesses are coming into possession of stablecoins. Some of it's about dollarization of savings and deposits for citizens in countries with a lot of volatility. Some of it is just efficient payouts, right cross-border payouts. So I'm paying my gig economy workers in another country in 17 different places, I can do it with stablecoins really efficiently per the settlement thing.

The reality is once those businesses and consumers come into possession of stablecoins, they didn't want them because they like stablecoins. They wanted them for other reasons, right, the efficiency and effectiveness. Then what they want is to be able to use them just like they were fiat money. And that's where we come in. And so we've been supplying stablecoin-linked and stablecoin native card credentials. And that's what users want. They trust it. They know it. That's how they're used to paying. That's what they do. But who likes stablecoin-linked cards as a mechanism to enable stablecoin payments even more than consumers? Exchanges, wallets, fintechs, financial institutions...

We've been hearing multiple companies at our conference talk about stablecoin cards.

All these guys...

Now it's an opportunity.

If you think about it, put yourself in their shoes, you're custodying these stablecoins on behalf of your users and your users want to use them. You could go tell your user, give it a shot, try and spend your stablecoins on a wallet-to-wallet-based transaction where almost nobody accepts stablecoins and you've got to go through a hassle experience or you could say, look, I'm going to take Visa's trust network and place that on top of the stablecoins, you know it, you trust it, you know where you can use it. Merchants have to change absolutely nothing. And I don't have to worry about as the custodian of these stablecoins, building acceptance network, managing risk, managing repudiation post transaction. All that stuff just gets taken care of by the Visa stack. And by the way, they like the commercial model, too.

That makes sense. That makes sense. Last one, and then I'll take a couple of questions from the audience. But if you looked at all the different deals you've done and investments you've made over the last 1 or 2 years, what are you most constructive on? What are you most excited about in terms of investments or even M&A that you've done that's turning into some real fruit? And what do you need? Or what do you want to do in the next year or 2 that [indiscernible].

Yes. I mean we've been talking about a lot of it. I mean we are investing heavily in AI across the board. We talked about it in the context of the market-facing product set. But we've invested heavily in equipping our entire workforce from an AI standpoint. And on the product development and engineering fronts, we're just continuing to see the benefits from that. I mean in the early stages of AI coding tools, it was sort of a productivity enhancer.

You get a little bit of juice out of that. You can add a few more agile squads to your -- the most recent versions of AI coding tools are starting to create more discontinuous benefits. Like just a couple of weeks ago, one of our teams said, "Hey, I've got a concept, and I want to take this concept from idea to working prototype with documentation and code that I could expose publicly. And one team came in the office over the weekend. I think they had this idea like Wednesday, and they had code ready on Monday. This would have taken weeks or months in the past. And it's now sort of distilling down to a single team in days. I'm just like wildly excited about the output of that Yes, it gets back to like you were talking about the opportunity on the VaaS side of adding new features into our VaaS portfolio. Now we're starting to see the ability to invest all those -- all that productivity and throughput into new product development. Kind of creating a flywheel out of AI.

That makes sense, Jack. Guys, any questions from the audience? We have about 2 minutes, and that's -- there's one in the back, if we can get a mic.

Thanks Jake, I had a question about your BNPL Flex credential, right? I mean that seems like a pretty major shift from how you think about issuing. How are you seeing uplift and take-up both in the U.S. and outside of the U.S.?

Yes. We're seeing a lot of enthusiasm for Flex credential. We've been out there with it for a while now. the sales pipeline is incredibly full. But what I'm more excited about is we're really starting to see the implementations grow. We've got our anchor client, SMCC in Japan, continuing to see spectacular growth. We've got Affirm. We've got Klarna. We've got Emirates MDB in the UAE. So the clients are really starting to grow. But the more fun thing is like when you start to look inside of those portfolios that have launched, you're really seeing a lot of growth and engagement on the part of consumers.

So excited about the commercial momentum that we have on it. But I'm also just excited about it as a long-term new way to think about card credentials. You can almost think about the Flex credential as an identity credential, right? It identifies you and then has subcomponents of it that can do different things. You can fund in different ways. It's going to really relate, I think, back to agent and back to stablecoin in meaningful ways, too, because you can imagine having subcomponents of your Flex credential that are bound to agent identity so that you can create controls from within your Flex dashboard for all of your different agents that you've created tokenized credentials for. You can have subaccounts for different stablecoin...

[indiscernible] relationships with the consumer directly then? Do you see then some type of...

Yes. No, I wouldn't say that. I mean we're really offering tools to enable the issuer to expand the breadth and depth of the relationship that they have. Now -- and by the way, this goes back to the value-added services piece. Flex Credential, we offer it in 2 different ways. There's a sort of completely self-service way where we're just exposing API endpoints and an issuer can actually do everything I just said by consuming our API endpoints. But we also have a more full-service version where we're offering issuer processing. But the branding and the design of the experience is all the issuer.

Okay. I think we're going to stop there in time. Jack, thank you so much for joining us. Great presentation.

Yes. I really appreciate it..

Thanks for joining.

Thank you.

Guys, we have the CFO of Affirm up next in about 4 minutes or 5 minutes on stage. So stay in your seats, if you can. And thanks again.

Thank you.

Good morning, everybody. Thanks for joining us here this morning at the 2026 Morgan Stanley TMT Conference. We're really into the thick of things here on Tuesday morning. And so very glad to have Visa joining us as part of the program today. I'm James Faucette, Senior Research Analyst here at Morgan Stanley covering the fintech space. And as always, we're always happy to have the team from Visa join us and talk about things that are going on with really one of the strongest and best businesses that you can find.

But before we get started this morning with Jack Forestell, the Chief Product and Strategy Officer of Visa. I do have an important disclosure to read. Please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures.

So Jack, we get to talk about product, let's Visa.

That's always, I think, an underappreciated part of the business, I think, people tend to focus very much on like the outcome or what people are doing a lot of times, but there's a lot of work that goes into making the systems work. As the Chief Product Officer, how is the way Visa designs, builds and ships products, evolved over the last few years? And how do you anticipate it will continue to evolve?

Well, first of all, James, thanks for having me. Excited to be here with everyone today. And thanks for the kind words about product at Visa and my team and I toiling behind the scenes to make all this stuff work.

How are things changing from a product development? There is probably maybe an architectural answer to your question and then a product development process answer to your question. I'll start on the architecture side. If you think about Visa, in our earlier days, we were an infrastructure company. Our mission at that point was to lay down this hyperscaling payments infrastructure. Infrastructure that could connect to 14,000, 15,000 financial institutions, billions of consumers, 175 million merchants, 200 countries around the world, 150 currencies, all with almost no latency and unparalleled security. That's tough stuff from an infrastructure standpoint.

Now once we got to the point where we're perfecting the infrastructure, it's reaching scale and maturity at a level. That's when we turned our attention from an architecture standpoint, to the edges of the network. That connection point where companies large and small can connect to this hyperscaling infrastructure and access all that stuff that I just described. And we started to turn more attention to creating more richness at the edge of the network to enrich those transactions that run through the core of the network with more services, with more configurability, with easier connection for all of our clients.

So there was sort of an architectural turning point at some point over the last decade and several years where we went from spending the vast majority of our R&D on the core infrastructure itself to continuing to spend on that. But spending an increasing proportion on enriching the edges of the network.

Now when you're building infrastructure, think about it like infrastructure, it's got long chain cycles. You're very focused on the architecture, the infrastructure, the performance, the resilience itself. And that was kind of the development mindset that we had many years ago. When you shift to -- it's about building services at the edge. It's a shift in mindset to a more market-oriented, more client-oriented, faster iteration, higher shipping velocity kind of mindset. And so that's a cultural transformation in our product development engineering teams that we have been working on for a few years. I'm really excited about what we've been able to accomplish. We've got 1,000-plus dev squads at Visa that show up every day. And today, they're asking themselves, "What can I do for our clients today? How can I deliver."

Like we have a continuous improvement mindset. So we tell our dev teams like if you're not getting better, if you're not getting faster, if you're shipping velocity is not getting better. You're basically going backwards and you mention sort of forward-looking. As with many others, the thing that we're most excited about is the application of AI to our product development life cycle into coding itself. And we've embraced it from the beginning. We've seen benefits. But like many others, we're starting to see these discontinuous and disproportionate benefits with the recent improvements in agentic coding and agentic product development.

Super excited about it. I'm to give you an example. A couple of weeks ago, one of our squad said, "Hey, we urgently want to take something." That was a concept. I won't tell you exactly what it is because we haven't shipped it yet. It was a concept. And like why can't we take this concept and turn it into working code in a few days. We literally came in the office like on a Thursday, stayed over the weekend, small team and took this idea from idea all the way to prototype and working code by Monday. I mean that a couple of years ago would have taken multiple dev squads weeks, maybe months to get done. So we're way at the beginning, but really excited about the transformation, the potential it has to fuel more product development and more delivery in our business.

Yes. And it's really exciting because like I think a lot of times people skip over and even as you were talking about, skip over kind of like the infrastructure layer and kind of the perfecting of that. And that's kind of a point that I try to make with investors is like, okay, we can talk a lot about the applications that Visa is pursuing, et cetera, and a lot of the advantages they have, but it starts with that as a foundational element.

So I want to continue down this path of developing on new technology and AI, et cetera. But I'd be remiss if I didn't also ask, okay, so that's kind of your focus. But what's the environment that you see that you're operating in right now? What are you seeing in terms of consumers? Are their needs shifting in terms of payments? What's the trends that you're seeing in terms of even recent behavior?

Yes. With respect to consumer behavior and needs, a little bit more of the same, but continuous change. We're just continuing to see consumers expand the surfaces across which they want to discover and shop and buy, whether it's getting deeper and broader into social commerce, the greater economy, gaming, and now with the advent of agentic commerce, we're seeing a whole new type of shopping, a whole new type of transactions starting to come our way. At the same time, as the user, though, is expanding these horizons in the process, creating more complex, riskier transactions, the expectations for simplicity, seamlessness, security and trust are at an all-time high. And to be honest, we love it. It sets up for us, right?

The ability to deliver a complex transaction in a new environment seamlessly, securely and without risk, kind of what we do. Now with respect to consumer trends like data wise, we publish a lot of stuff. You read it all. I won't get into too much of it. The thing that -- a single metric that I tend to focus on the most is the growth rate in the transaction volume that we process.

To me that really gets to the heart of user engagement on our network, right? It strips out all the volatility that we see around the world, whether it's in travel corridors or average ticket size is a function of things that might be happening at a macro level. You really get down to how many users are using the network and are they using it intensely. And that number has been rock solid, stable for quite a long time, and we're continuing to see that stability forge on through the most recent quarters. And up until very, very recently, the consumers just powering through and using our network in the same way, they've been using it for a very, very long time, irrespective of what's going on out there in the world.

Got it. So agentic commerce, I mean, huge, huge topic. And I think it's starting to move beyond just a buzzword. Where do you see Visa as having a clear advantage and in what elements of agentic commerce? And what is your to do list to not only protect that but also look at other areas within the agentic landscape where Visa can deliver really compelling solutions.

Yes, James. I mean the first thing I'd say on this topic is we just see this as an enormous growth opportunity. I've been at Visa for a long time. I've been in payment technology for even longer, almost 25 years. I'm that old. I will honestly tell you I am more excited about the scale of the opportunity in front of us with agentic commerce. And anything I've seen in terms of technology transformation since the advent of the Internet and e-commerce itself. And if I had a word of advice for people, like don't get trapped into the zero-sum thinking trap. This is not zero sum. This is going to be a wave of growth just like previous transformations.

You go back to the advent of e-commerce. Back at the time, people talked about, obviously, there's all going to be substitution. People are going to stop shopping in retail. They're going to start shopping online. It's just going to move from one pocket to the other pocket. That happened to a large extent, but we -- with the benefit of hindsight, we can see that it was significantly additive to overall growth. We saw anywhere from 3/4 to 100 basis -- 3/4 of a percentage point to 100 basis points of GDP growth added year after year at that time.

And it also did something that really played to our strength. It created a new transaction type that again, as I was mentioning a minute ago, was more complex and needed more trust and more technical innovation in order to make it come to life. We didn't rest at that time. We changed our technology. We brought things over from the physical point of sale. We adapted them into the digital world. And we benefited massively from it.

You fast forward 10 years later, mobile and cloud, same thing, people said, "Oh, people are going to just do the same thing on their phone that they were doing on a desktop." No, we saw massive growth, we saw subscriptions, we saw streaming. We saw all kinds of new transaction types. And again, we didn't sit still. We created tokenization. We created mobile payments on device. We saw massive benefits from that. So I view this one the same. I think we're at the precipice of a whole new wave of growth in shopping, in commerce and payments.

We're going to see a lot of volume growth. And at a very practical level, we're already starting to see some of it, right? We've -- if you look at us, right, in one way, I see us going through a wave of what I would call increased transaction density, right? A relatively fixed amount of payment volume, but many, many more transactions. We've been seeing this for years. Over the last 10 years, our average transaction size dropped by 20%. It used to be around $65, it's about $45 now. You might say that's bad. It's not bad because alongside that, our numbers of transactions tripled. And the reason is, as we entered that cloud and mobile era, we started to see transactions getting reformed into the denser transactions, fewer of them -- fewer -- lower ticket sizes, higher transaction volume.

And think about how agents are going to act. Agents are going to unpack transactions, separate them into more individual transactions, get the right product at the right moment for the best value for the user that's sitting behind the agent going to be more transactions. Think about unshackling streaming transactions, subscription transactions, those are currently constrained by the humans that sit behind them when agents are transacting with agents those will be gone. So we see a massive growth in the number of transactions that we're going to see.

So I like that last -- I want to dig into that last comment that you made on agent-to-agent. Like as I sit, and in my world, and I think about the consumer and consumer behavior and tracking the way consumers have changed behavior over the years, I feel quite comfortable that even with the rise of agentic commerce, particularly when they're acting on behalf of a consumer, right? Like that Visa's role within that transaction, I feel like is in great stead. Not to say that there's not work to be done, and we can come back to that, but it's in great stead.

Where I have more uncertainty as in this world of agent-to-agent transactions. We've seen rapid growth in some of these platforms and environments enabled by things like OpenClaw, et cetera. It's own -- it's tending to gravitate towards its own payment protocol, I think, called x402, and you see a lot of different ways that different payment types can link into that, et cetera. What's Visa's role in those agent to agent transactions?

Like in my mind, I think about it as being like very, very small, potentially B2B type transactions, which seems like it should be an opportunity, but then you hear about stablecoins or crypto or other transaction methodologies, especially if we're talking about very small payments. Talk to us about what Visa is doing to operate in that environment.

Yes. I want to come back to a broader B2B in a minute, you mentioned it right there because we see that as another source of massive growth as we really start to see agent come to bear. But to answer your question more directly on agent. Agent, if you think about it, we, today, use our technology and we cryptographically protected token credentials that we deploy to enable unknown users, consumers and businesses to transact safely and securely with unknown sellers, right?

We create a knowledge and a trust of identity and a cryptographically protected secure linkage between those 2 parties so that we can transact. What's happening in agentic commerce is we're inserting a machine in the middle, another identity. So instead of client-to-server, it's client-agent-server. So now we have 3 parties in the transaction. We look at that and say, this is just a natural progression for us. Now we need to have an agent identity and an agent with a token provision to it. And what we've done is we've created a new protocol, the Trusted Agent Protocol that starts to define for the purposes of payments, how we will identify agents and register agents.

We can then take that very same familiar credential that we've been producing for many years in the form of a token and provision that token directly to the agent. The agent will then be able to use that token, having verified their identity to interact with other agents and other sellers. So from a technical standpoint, we see this as a super logical progression for us. You mentioned 402. I mean, for those of you who don't know, 402 is an Internet messaging standard that says, "Hey, when you try to access content or services on the web, you'll get a message back that says 402, need payments."

The x402 protocol is a protocol that's been developed by Coinbase and others to respond to that with a payment. And you're exactly right. There is no reason that we cannot respond to that with a tokenized card-based payment, that's exactly what we're working on and the kinds of innovations that the dev squads, I was talking about a minute ago are rapidly developing.

So let's talk about this Visa Trusted Agent Protocol for a second. What's the work that needs to be done to get the broader ecosystem to adopt that as an industry standard? Does the broader ecosystem need to adopt that as a standard? And how is the landscape evolving for agent authentication protocols, generally, while still trying to keep fraud rates low. And I guess one of the things I think about in a lot of these agent-to-agent transactions that we're seeing, examples of some of them are less than $0.01. And so on the 1 hand, there's the potential to, if you're a bad actor to scoop up a lot of fractions of a cent, right, like old superman plot line. But on the other hand, it's also not very big. So maybe you can figure out who the bad actors are pretty quickly and get rid of them. So like help us think through like the Visa Trusted Agent Protocol, its role where it should -- where you should be pursuing standardization versus not?

Let me start by sort of backing up a little bit from the Trusted Agent Protocol, and I'll get to it. I'll acknowledge that at this particular moment in time at the early stage of the development of the agentic web at that level. We are in a little bit of an alphabet soup with respect to standards, right, UCP and ACP and APT and all this stuff. I'd like to try to simplify and think of it as there's a set of standards that are going to be required at the agentic web level. Forget about shopping and payments just.

This new structure where you have client agent server is a different way of thinking about our web infrastructure, and we need new standards for that. So that agents can interact with each other across all use cases in ways that have standards associated with them. We've seen the model context protocol, for example, as a great standard that's enabled large language models and agents to be able to communicate and exchange data with each other there. You drop down to, well, then there's a shopping level. We need a new way for agents to be able to share information, for merchants to be able to share information about inventory for agents to be able to consume that for agents to be able to identify themselves. So at a shopping journey level, we need that. And you've seen standards like Google's UCP protocol that govern that.

And then nested within that, we need new standards for payments that can ensure safe and secure payments with the right data payloads. So that we can actually execute at the scale and the level of reliability with the level of security that we have for a long time. That's where Trusted Agent Protocol comes in. That's where our specs on Visa Intelligent Commerce come in, where Mastercard's agent pay specs come in. And look, we've been building payment specifications and standards for a really long time. We got a lot of passion about this and we take it incredibly seriously because it is about the ability to scale securely as you just described. And that's why we got out early with the Trusted Agent Protocol.

It's an open standard, by the way, that we developed and is intended to provide safe and secure standards for agents to be able to be identified within the context of the payment and to be able to convey user payment credential information as a function of that supported by us. It's supported by players like Cloudflare and Akamai, who host 9 out of the 10 top retailers in the world, it is supported by Mastercard, American Express and others. So we're incredibly excited about it. But moreover, I would just emphasize, we need standards. We're at an early stage of it. There are a lot of them out there. But we are maniacally focused on delivering and ensuring that those payment standards get adopted. I don't know if you saw but this morning, we just announced with Stripe that they are taking up our Visa Intelligent Commerce specifications and starting to deploy that into production as part of their own agentic commerce push. So this is what we expect to see. It's hard work. It takes a little while. So we've been working on that one for quite some time, but we're very excited to see it starting to take shape.

So let's start to bring this to the P&L a little bit. How do you think about the proliferation of AI being a potential threat or opportunity particularly for that BaaS component of the business.

The question of the day. Is AI going to eat software? Or at least eat software's growth rate, I suppose. Look, I'll say 2 things about that. One, we use AI, right? We embed AI into those value-added services products. We've been doing that for a very long time, especially in the risk management space. We've literally been using forms of AI for decades. The exciting thing for us is we're now with the next generation of AI in generative AI and agentic-AI able to start embedding it into a wider array of products and services. Think about things like disputes processing, and we're building agents to be able to take those activities on.

So our value-added services portfolio is going to grow. It's going to expand. It's going to get richer as a function of the AI that we're embedding in it. So AI is our best friend in terms of product development and the richness of features that we can add on top of that network stack we were talking about. But I'll say one more thing. I think I believe that businesses with network effects and proprietary data scale, are going to do really well in AI, because those things are very hard to replicate. I started at the beginning, talking about our journey in building our hyperscaling infrastructure.

That was decades to build almost 5 billion credential endpoints on one side of the network and 175 million merchant end points on the other side. We process 300 billion transactions a year. That's 900 million transactions a day that flow through this. That is an incredible richness of data. And all those value-added services. They're built on top of that embedded in connectivity and that data scale. And so we're much more focused on how do we actually use AI and bed AI to build more of these services and to make them even better. We're not terribly worried about someone coming in and displacing those services with AI-led version of their own.

Got it. So while we're on the value-added services topic and looking at kind of the economics there. Specifically, value-added services revenue grew 28% year-over-year in the first fiscal quarter of 2026 to $3.2 billion. And that was about half the overall revenue growth. And with that now approaching about 30% of total revenue. Remind us what the key growth drivers are and how Visa thinks about maintaining this growth rate? And in particular, are there things we should be sensitive to, such as pricing, international expansion, even onetime events like FIFA and Olympics this year.

Yes. Look, I know it's a big top line growth rate accelerated recently, but I continue to look at these businesses and say, I think, we can do even better. There are 4 businesses in there, by the way. There's issuer solutions, which are our services for the issuing and banking side of the house of the network. There are Acceptance Solutions for our acquiring and payment service provider and merchant side of the house. There are risk solutions and cybersecurity solutions that cover both sides. And then there's our consulting, advisory and analytics business. So all 4 businesses firing on all cylinders. But when you really unpack it and you start looking at, well, where are we relative to the TAMs that are available in each of those businesses. And even in the sub businesses, each of those businesses is in the low single-digit percentage of penetration of the opportunity that is in front of them.

So look, it's an $11 billion business. It's grown at 20% plus for 5 consecutive years. And we have seen some recent acceleration in the growth, but I don't think we're anywhere near that kind of plateau. I think there's so much more that we can do with these businesses. You're asking some of the bits and pieces around the edges in the short term. I mean, is there pricing in there? Yes, there's pricing in there. There's always pricing in there, but the fundamental growth rate that sits underneath are still really strong and robust. And yes, we have things like FIFA and the Olympics, that can cause a little bit of cyclicality. I mean this is a year when we have 2 of those events going on at the same time.

By the way, those are incredibly powerful platforms for us from a Visa branding standpoint. But we've got this great model where we can also extend those to our clients, and there's an enormous amount of appetite for our -- on the part of our clients for our marketing services and consulting support. And so you do see a little bit of a pop in a year like this. But to be fair, some of that is substitution because our marketing services team does an amazing job year in, year out, whether there's an Olympics or a FIFA or not. And so they're just doing a little bit less than what they otherwise would have been doing and focusing a little bit more on some of that stuff.

Got it. So I want to turn to another technology topic or technology-related topic that comes up a lot. And that's stablecoins. Can Visa be a winner with stablecoin and crypto generally? And what solutions do you bring to the table in that environment?

Yes. We're very excited about stablecoins. But I would say stablecoin is a little bit different than the AI thing we were just talking about. AI agents, they are software. They are an application. They work at that level. The change is relatively obvious. We are all interacting with it at a user level. Stablecoins and the blockchains they operate on they are infrastructure. They are not a solution in and of themselves. We think they're powerful infrastructure. And you may not think of it as the way, but if you think about Visa, we're a messaging platform in a way. We're exchanging financial messages across parties where we create trust, and we're creating promises to move value into pay. The actual movement of the money happens off-line from that. And we actually use the same infrastructure to move the money that everyone else does.

So we use the same national clearing houses, the same correspondent banking systems. And I would say it this way. I think we have collectively done an amazing job reinventing the front end of money as we all experienced it over the last 20 years. We have not reinvented the back end of money. It's still very brittle and very difficult to use. And so when we see stablecoin as a way that we can create real-time instant finality and settlement, we get excited because we're nearly like that. But it's not a solution itself, but it can be.

So that's where I think we come in where we get excited about the opportunity. We see ourselves as the hyperscaling bridge layer between this infrastructure and how it can show up as solutions. So we're working on a few different things. In the infrastructure side, we're enabling our clients to settle with us using stablecoins. So an issuer who's working at stablecoins can pay us in stablecoins instantly, 24/7, anytime they want. And an acquirer or a merchant who wants to get paid can get paid 24/7 anytime they want. So that's a game changer because prior to that, we've had to operate within the time windows of national clearinghouses, et cetera, et cetera.

But I get more excited when you sort of flip that to the user side right? And there, we're really starting to get a lot of traction, enabling stablecoin payments and stablecoin acceptance. Reality is there are lots of forces that are causing consumers and businesses to come into possession of stablecoins. It could be that they want to hold them because of currency volatility in their country. A lot of it's emerging market stuff, but it's growing. It's growing.

Here's the reality. There's no demand pull for consumers to use wallet-to-wallet stablecoin transactions for payments that I've seen. They love cards. They trust cards. They've been using cards for a long time. They don't want to learn new behaviors. Consumers love cards. But you know who loves cards in the stablecoin space even more than consumers, fintechs, exchanges, wallets and the banks who are custodying stablecoin value on behalf of consumers. They love the hyper scalability that we can provide them plugging their stablecoin customer into this ecosystem that I just described where the user can spend at 175 million merchants. Not only do they love that. They love the commercial model, too. And it's these factors that have gotten us to where we are, which is the vast, vast majority of stablecoin-based payments from a consumer to a merchant today, are done by a card .

We have more than 130 stablecoin-linked card programs around the world today in 40 different countries. And there -- we did another announcement this morning, and if you saw that. But our partner, Bridge, which is part of Stripe, currently, issues programs in 18 different countries around the world. We've been working with them. We announced this morning, we're going to expand that to 100 countries by the end of this calendar year.

So just quickly, like you talked about you Visa's stablecoin settlement has grown from about $2.5 billion annualized run rate in August 2025. It's almost $4.6 billion by the end of Q1 2026. What's driving that from your perspective? What kind of use cases?

Yes. I mean it is -- when you're talking meaningful triple-digit growth rates, which is what we're seeing in our stablecoin settlement volume. It's not 1 thing that drives that kind of growth. We've been working on this for 6 or 7 years, actually. We first created the ability to settle on our network in a stable -- with a stablecoin-like contract back in 2019 or '20. And we've been letting the rope out as we've gotten more regulatory clarity around the world. So in markets like Singapore and Hong Kong, we went a little bit sooner. In the U.S., we just started opening up this capability towards the tail end of last calendar year.

So what you're really seeing is a combination of we're bringing regions in parts of the world up. We're taking clients on board, new ones all the time. We have a really robust pipeline. And then we're seeing tremendous growth within any individual client who's doing this. So when you add all 3 together, new regions, new countries, new clients and the growth that's inherent in the clients that are already doing it, you get to significant triple-digit growth.

Got it. Last couple of minutes here, I want to finish up. It seems like we've been kind of working backwards from headlines to AI being the most recent, stablecoin and impact on value-added services. But an opportunity that you alluded to and that Visa has been pursuing for a long time is commercial payments or B2B payments. And in Q1, you indicated that, that grew about 10%, outpacing overall payments volume growth. What's driving the acceleration there? And just help us as we wrap up today, Jack, Think about the opportunity within B2B and what the things are that we should be paying attention to from an investor perspective?

Yes. We're super excited that we are where we are with the B2B growth rates relative to the rest of the business. We've been working hard on it. It's no surprise to us, and we hope and think we can sustain that. I'd say it's kind of 2 categories. There's a ground game aspect to this that we've talked about before, where we are just driving to convert more of that small- and medium-sized business spend. We're seeing wins all over the place. We recently posted wins with portfolios like Chase Sapphire Reserve for Business, Truist, Titan for Revolut is a really cool win for us.

Then we're going to large and middle market and virtual payables doing the same thing. Our Trip.com win is a great example of that, where we built something custom for the travel sector and surrounded that with incident and automatic reconciliation, rich data streams. We're able to pull something together that was just unique that won that deal. We're really excited about the travel sector, by the way, lots of growth there, and we're at the very beginning.

So that's kind of the ground game stuff. Separate from that, we're really excited about agentic and the potential that it represents. There is still so much friction in B2B payments from supplier onboarding to invoicing to reconciliation. And that has caused B2B payments to be way behind the consumer side with respect to digitization. We see the potential for agents to rip out that friction and really create smooth, straight through B2B payments opportunities. A great example of that is the partnership with Ramp, where we're now embedding AI, an agent, along with ramp into the buying process. So a buyer's agent can interact with vendor websites and web portals and pay instantly with single-use Visa credentials.

It's basically like invoice to payment with 0 friction all in the space. And so that's by the way, I mentioned it earlier, another significant contributor to how we think agentic is going to drive a lot of growth in the payment space overall.

Great. Well, Jack, that's all the time we have today. Thank you very much for joining us. Really appreciate it.

Thank you. Thank you.

Welcome to the Visa's Fiscal First Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would like to now introduce your conference to your host, Ms. Jennifer Como, Senior Vice President and Global Head of Investor Relations, Ms. Como, you may begin.

Thank you. Good afternoon, everyone, and welcome to Visa's Fiscal First Quarter 2026 Earnings Call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer; and Chris Suh, Visa's Chief Financial Officer. This call is being webcast on the Investor Relations section of our website at investor.visa.com. A replay will be archived on our site for 30 days. A slide deck containing financial and statistical highlights has been posted on our IR website.

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

Except as required by law, we do not undertake any responsibility to update these forward-looking statements. Our comments today regarding our financial results will reflect revenue on a GAAP basis and all of the results on a non-GAAP nominal basis unless otherwise noted. The related GAAP measures and reconciliation are available in today's earnings release and related materials available on our IR website.

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

Thanks, Jennifer. In our fiscal first quarter, we delivered strong financial results with net revenue up 15% year-over-year to $10.9 billion and EPS up 15%. Payments volume grew 8% year-over-year in constant dollars to nearly $4 trillion and process transactions grew 9% year-over-year, totaling $69 billion, demonstrating resilient consumer spending.

We continue to build and deliver innovations and scalable technologies across the Visa as a Service stack acting as a payments hyperscaler to enable anyone in the ecosystem to build, launch and scale money movement and payments businesses across the globe. Let me share some more detail on the recent progress we have made in the services and solutions layers of our Visa as a service stack. More specifically, in the evolution of Visa credentials, agentic commerce, stablecoins as well as in B2B and P2P money movement, issuer processing and risk and security. The core of our consumer payments business is the Visa Credential.

It is much more than a physical card, it can be digital, in a wallet, online, mobile, it's the connection point to the Visa network on top of which we're able to layer all types of services, solutions and access, now totaling more than 5 billion Visa credentials. We have continued to enhance Visa credentials in a few important ways this past quarter, Tap to Pay, Visa Flex credential and Tokens.

Our Tap To Pay penetration has now crossed the 80% mark of all face-to-face transactions with the U.S. at nearly 70%. Transit acceptance remains a key enabler with our recent launches in San Francisco and more than 10 other systems globally this quarter. In our first quarter, we have continued to enable Tap To Pay use cases for the different form factors of the credential. For example, in Europe, we recently announced new digital wallet enablement of iOS wallets such as Klarna in 14 countries and Vipps MobilePay in the Nordics.

We also will soon launch a pilot in Italy with the domestic scheme Bancomat. In addition, we enabled Apple Pay for Visa cards issued in China for cross-border, face-to-face, in-app and online transactions. This spans 8 issuers representing nearly 60 million Visa credentials supporting the many Chinese consumers traveling or living abroad with more issuers coming soon.

Our Tap to Phone capability, which has helped to grow our acceptance locations to more than 175 million globally has added more than 20 new markets and more than doubled transactions in the last year. A second important area of progress enhancing Visa credentials is enabling multiple funding sources from one single credential with our Visa Flex credential. This past quarter, Block announced the pilot launch of a new Cash App Visa Debit Flex Card, which enables Afterpay as a feature for their customers to pay over time anywhere Visa is accepted and leverages Visa's DPS issuer processing solution for the debit component.

Globally, we have about 20 million Visa Flex credentials, just a small fraction of our total credentials but growing fast. They are offering funding sources such as debit, credit, multicurrency accounts, rewards, installments and more, and we expect to expand to more than 20 additional issuers this year. The third and maybe most revolutionary credential technology is the Visa Token. Our Token technology delivers a digitally native payment credential designed for the unique characteristics and needs of digital commerce.

We have more than 17.5 billion tokens globally, over 3x the number of physical cards, which means that the solution has been embraced broadly across the ecosystem. We continue to make progress on the tokenization of e-commerce transactions to our ultimate goal of fully replacing card-centric pan technology, further improving Visa's competitive positioning against cash, check and legacy forms of digital payment. We utilize a variety of tools such as incentives, sales-oriented case studies, performance compliance programs and enhancements to encourage tokenization and enhanced data sharing to make the e-commerce environment as safe as it can be.

Issuer enrollment efforts are underway across Europe, CEMEA and LAC as we expand the Click to Pay directory to enable credentials to be always digital. Globally, we have also been working with acquirers and payment facilitators to ultimately eliminate the guest checkout that occurs today, which we have reduced from 44% of all Visa e-commerce transactions in 2019 to about 16% in fiscal 2025. And among our top 25 sellers, it's less than 4%. This means that at our top 25 sellers of transactions now require only a simple click or biometric authentication and do not require a burdensome and error-prone form filling.

We continue to build new capabilities on top of our token service platform, positioning our credentials and tokens as the fundamental building blocks for the future of payments. One of those capabilities that is enabled with Visa Tokens is an important area of innovation, agentic commerce. Our Visa Intelligent commerce solution utilizes tokens and their configurability as the core underlying foundation for agentic payments. We're working to enable agentic commerce with more than 100 partners across the commerce ecosystem globally.

Over 30 partners are actively building in our sandbox with multiple agents and agent enablers running live production transactions and more partners expected in the future. Just this quarter, we expanded into B2B agentic payments with Ramp, streamlining corporate bill payments, enabling their business customers to capture cash back on card payments and optimizing working capital.

We also reached an agreement with AWS to make Visa Intelligent Commerce available on AWS marketplace to support developers building agentic commerce solutions connecting secure, automated payment workflows at scale through blueprints for workflows such as travel bookings or retail purchases. In our CEMEA region, Aldar, leading real estate developer, investor and manager is integrating Visa Intelligent Commerce to make reoccurring payments such as property service charges on their Live Alder app.

Our Visa Trusted Agent protocol continues to help define the connectivity and data elements required to bring trust to the agentic environment. In Q1, we announced partnerships with leading Internet security players, first Cloudflare and then Akamai, who collectively serve millions of businesses globally, including 9 of the world's top 10 retailers. In addition, we are building interoperability between key elements of Visa Intelligent Commerce and Google's new Universal commerce Protocol as part of our global effort to help ensure that Visa transactions are securely supported as different protocols evolve.

Our agentic solutions are live in the U.S. and CEMEA and we are initiating pilot programs in Asia Pacific and Europe. LAC is soon to follow where we have already begun token enrollment for agentic commerce with issuers. We believe that we are well positioned to be the infrastructure provider and key enabler in agentic commerce so that every agent interaction is trusted and secure. Like agentic commerce, stablecoins have tremendous growth and disruption potential but are still in the very early stages of adoption for payments use cases.

As new stablecoins and blockchains continue to emerge and show the promise of true utility, Visa's goal remains clear: build the secure and seamless interoperable layer between stablecoins and traditional fiat payments at scale across the world. This past quarter, we expanded our capabilities across several fronts. First, we added stablecoin card issuance in 9 additional countries in Q1 to surpass 50 countries worldwide, and payments volume continues to grow at a fast rate as we enable more consumers and businesses to spend stablecoins with Visa.

This quarter, we also expanded our stablecoin settlement capabilities with USDC into the U.S. improving speed and liquidity for banks and fintechs and providing interoperability to modernize treasury operations for our clients. And total stablecoin settlement has reached an annualized run rate of $4.6 billion globally as demand has grown among both stablecoin native and more traditional clients. We're finding that more and more participants in the payments ecosystem financial institutions, merchants, acquirers and consumer-facing technology companies are looking to develop and refine their stablecoin strategy.

As such, we recently launched our stablecoins advisory practice globally, where we are working closely with our clients, providing access to training, strategy and market entry planning and technology enablement. In addition to being a design partner with the Tempo Layer 1 blockchain initiative, we recently announced our participation in the testnet of Arc, a Layer 1 blockchain from Circle.

With both, we see Visa's role in supporting both transaction processing and delivering value-added services. Finally, we are piloting Visa Direct stablecoin payouts allowing platforms and businesses in the U.S. to send payouts directly to users or workers or employees stablecoin wallets. This innovation expands the reach of Visa Direct by providing creators, freelancers and marketplaces with a stable store of value and faster access to funds, even in markets facing currency volatility or limited banking infrastructure.

The stablecoin opportunity remains additive to what Visa is doing today, and we will continue to invest where we see the greatest demand on-ramps and off-ramps, settlement, money movement, consulting and other value-added services. We believe that Visa is well positioned as a global trusted technology provider to deliver a full stack of bank and enterprise-grade infrastructure that our clients need to build the future of their business on chain.

Stablecoin is just one way that we are enabling money movement. We also have continued to make enhancements in our Visa Direct and commercial solutions capabilities. In Visa Direct, we have continued to deepen relationships with existing partners like acquirer Nuvei, who has expanded their agreement to include Visa Direct to account in addition to card in more than 30 countries.

After initially enabling Visa Direct in 25 markets in 2023, and PayPal's Xoom recently expanded its Visa Direct cross-border reach to more than 60 markets. In our B2B or commercial solutions, we continue to create compelling purpose-built offerings with a number of our services. In Europe, we have expanded our partnership with Revolut to launch Titan in the U.K. an ultra premium card designed for high-growth companies that attracted thousands of business customer sign-ups on day 1.

Also in Europe, Edenred PayTech has chosen Visa as its strategic partner to expand across multiple B2B use cases with our solutions, including open-loop workplace benefits, open loop fleet and mobility, B2B travel, insurance payouts and procure to pay. Another area of innovation and expansion in the services and solutions layers of the Visa as a Service stack has been issuer processing. Visa has been in the issuer processing business for over 30 years. We have continued to invest in this space by enhancing DPS, but also through the acquisition of Pismo. Many issuers around the world are seeking to upgrade their technology stacks to ensure they can deliver for customers in a digital age.

Visa's issuer processing capabilities enable clients to have 1 connection to Visa from which they can access our other solutions and services such as network products, value-added services, tokenization, risk products and more. One of the 2 agreements I would highlight this quarter is Pismo's first commercial offering since the acquisition with Banco BICE in Chile.

In collaboration with expense management platform, Mendel, we will offer a business credit corporate issuer processing program for Banco BICE and their large and middle market B2B clients. The second agreement is Pismo's first fleet card offering with Finance Now in New Zealand. Visa will also provide fleet card issuance tokenization and risk services as well. We will continue to look for ways to invest in processing to both modernize and enhance payment systems globally and accelerate the adoption of our value-added services.

The final area I want to highlight is our risk and security solutions. As you know, we closed on our acquisition of Featurespace just over a year ago, and we have continued to invest in this platform to provide a holistic AI-driven solution for our clients before, during and after a transaction. Nets, part of Nexi Group in Europe, has chosen Featurespace to expand fraud prevention for 150 banks across Nordic and Central Europe regions, leveraging cloud hosting and advanced fraud models.

Another AI-powered solution, Visa Account Attack Intelligence was announced in 2024 in the U.S. to help clients prevent enumeration attacks which are when bad actors systematically initiate e-commerce transactions to obtain valid payment credentials. The results of this solution in the U.S. have been impressive, with over 60 billion transactions scored and nearly 600 million suspicious transactions identified in the last 12 months. We are now investing in its market expansion with launches in the rest of our regions where we are also seeing strong results.

In LAC, for example, in just 6 months, we have almost 90% of clients already activated and have prevented more than $10 billion of fraud. We have brought our network-agnostic risk solution, Visa Advanced Authorization, to more countries as well, including recently securing the business from Morocco's National Switch, Switch Al Maghrib to score all domestic transactions. We have also expanded our A2A risk solution Visa Protect for A2A to 2 more countries this past quarter, with half a dozen more planned by the end of the year.

Of course, these represent just a small set of examples. And throughout the quarter, we have developed many more solutions that will help us drive long-term growth. Collectively, all of our efforts produced 15% year-over-year net revenue growth with our growth pillars continuing to deliver very strong results. Commercial and money movement solutions constant dollar revenue grew 20% with 10% constant dollar commercial payments volume growth and 23% Visa Direct transaction growth.

Value-added services, constant dollar revenue grew 28% and represented around 50% of our overall revenue growth in the first quarter. These results and our feedback from our clients give us confidence that our strategy is working, and we are investing in the right capabilities to position Visa and our clients and partners for the future. Visa is delivering breakthrough innovations that redefine what's possible in payments as we enable our partners to achieve global scale quickly and securely.

Now to Chris, where he will discuss our financial performance.

Thanks, Ryan, and good afternoon, everyone. We had a very strong start to our 2026 fiscal year, driven by strong driver growth, a strong holiday season and continued execution of our strategy across consumer payments, commercial and money movement solutions and value-added services. Business drivers remain strong and relatively consistent with Q4. In constant dollars, Global Payments volume was up 8% year-over-year. Cross-border volume excluding intra-Europe was up 11%, and total processed transactions grew 9%.

Fiscal first quarter net revenue was up 15% year-over-year with the outperformance largely driven by stronger-than-expected value-added services revenue, lower-than-expected incentives and stronger-than-expected commercial and money movement solutions revenue. These 3 factors more than offset lower-than-expected currency volatility. First quarter revenue was up 13% in constant dollars.

EPS was up 15% year-over-year, better than expected, primarily due to stronger-than-expected net revenue growth. EPS was up 14% in constant dollars. Let's go into the details. U.S. payment volume was up 7%, with e-commerce growing faster than face-to-face spend, reflecting resilience in consumer spending. Credit was up 7% and debit was up 6%. The slight step down in U.S. [ PV ] throughout the quarter was driven by debit primarily as a result of a Visa Direct client moving the remainder of its volume to its own solution and a number of other small factors, including the loss of some Interlink volumes to the Capital One debit migration and severe weather that affected certain spend categories.

Growth across consumer spend bands remained relatively consistent with Q4, with the highest spend band continuing to grow the fastest. We did not see a deterioration in the lower spend band and across our volume, both discretionary and nondiscretionary spend remain strong. Honing in on the holiday season specifically, which we define as the period from November 1 to December 31. I would note a few items. In the U.S. consumer holiday spending growth was in line with last year, reflecting continued strength in retail, an improvement in fuel and some moderation in other spend categories.

Focusing on retail. Holiday spending growth was slightly better than last year, driven by strong growth in e-commerce, which continues to take on a greater share of consumer retail spend. In several key countries around the globe, we saw similar trends with consumer retail holiday spending growth up from last year, led primarily by e-commerce growth. First quarter total international payments volume was up 9% year-over-year in constant dollars, generally consistent to the growth we've seen over the past several quarters.

Now to cross-border volume, which I'll speak to in constant dollars and excluding intra-Europe transactions. Q1 total cross-border volume was up 11% year-over-year, consistent with Q4. Cross-border e-commerce volume was up 12%, slightly below Q4, primarily from lower growth in cryptocurrency purchases. Travel-related cross-border volume was up 10%, consistent with Q4. We saw continued strength in commercial volumes, and we started to see improvement in U.S. inbound from Canada.

With that as a backdrop, I'll move to discuss our financial results, starting with the revenue components. Service revenue grew 13% year-over-year versus the 9% growth in Q4 constant dollar payment volume primarily due to pricing and card benefits. Data processing revenue grew 17% versus the 9% growth in process transactions, primarily due to pricing, strong value-added services performance and higher cross-border transaction mix.

International transaction revenue was up 6%, [ below an 11% ] increase in constant dollar cross-border volume growth, excluding intra-Europe. Even with the favorable FX, we saw a much lower than expected volatility with additional negative pressure from mix and hedging. Other revenue grew 33% and primarily driven by growth in advisory and other value-added services and pricing. Client incentives grew 12%, lower than our expectations due to onetime true downs related to client performance and deal timing.

Now to our 3 growth engines. Consumer Payments revenue was driven by strong payments volume cross-border volume and process transaction growth. Commercial and money movement solutions revenue grew 20% year-over-year in constant dollars. CMS revenue was better than expected, driven primarily by our Commercial Solutions business. Commercial Payments volume grew 10% in constant dollars, consistent with Q4 and faster than Visa's overall payments volume growth, primarily due to strong client performance driven by both new wins and continued cross-border strength.

Visa Direct transactions grew 23% to 3.7 billion transactions, with strength in both domestic and cross-border. Value-added services revenue grew 28% year-over-year in constant dollars to $3.2 billion, driven by strength across all portfolios. Value-added services revenue growth was better than expected, primarily due to greater demand for our advisory and other services, especially in marketing services.

Operating expenses grew 16%, above our expectations, primarily due to an unfavorable FX impact from balance sheet remeasurement and higher-than-expected marketing from both timing of marketing spend and marketing services related expenses, some of which are associated with the stronger value-added services revenue I just mentioned.

Nonoperating expense was $4 million, better than our expectations, primarily due to investment income. Our tax rate for the quarter was 18.4%, slightly higher than expected due to the timing of the resolution of a tax matter. EPS was $3.17, up 15% year-over-year, with an approximate 1 point benefit from exchange rates and a minimal impact from acquisitions.

In Q1, we bought back approximately $3.8 billion in stock and distributed approximately $1.3 billion in dividends to our shareholders. We also funded the litigation escrow account by $500 million, which had the same effect on EPS as a stock buyback. At the end of December, we had $21.1 billion remaining in our buyback authorization.

Now let's look at drivers through January 21, with volume growth in constant dollars. U.S. payments volume was up 8% with credit up 9% and debit up 6% year-over-year. Our constant dollar cross-border volume, excluding transactions within Europe, total volume grew 11% year-over-year with e-commerce up 12% and travel up 10%. Process transactions grew 9% year-over-year.

Moving to our guidance. Now that a quarter has passed since our initial FY '26 commentary, I would note the following on our key assumptions. As we regularly say, we are not economic forecasters. So we're assuming the macroeconomic environment stays generally where it has been and consumer spending remains resilient. So no change. On pricing, we also have no material changes with the benefits of new pricing expected to be similar in magnitude as last year and the majority in the back half.

What that means from a cadence perspective is Q2 would see a relative step down in the year-over-year growth pricing contribution from Q1. On incentives, we had true downs and deal timing that helped in Q1 that we do not expect will carry into Q2. As such, this implies a step-up in the growth rate from Q1 to Q2 with Q3 continuing to have the highest year-over-year incentive growth rate and the full year remaining relatively unchanged.

On volatility, it has been much lower than we expected so far this year. And we are assuming that, that volatility continues at current levels for the rest of the year, implying a larger drag for the rest of the year than in Q1 and with Q3 having the toughest comparable to last year's higher levels.

We pulled these assumptions together on an adjusted basis, defined as non-GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentations for more detail. For the full year, we have no material changes in our expectations for our adjusted and nominal net revenue growth. We still expect our full year adjusted net revenue growth to be in the low double digits, reflecting an anticipated weaker volatility environment for the rest of the year that is offset by the Q1 outperformance and higher utilization of our products and services.

On the expense side, we have no material changes to our prior full year guidance and still expect adjusted operating expense growth to be in the low double digits for the year. As a result of Q1, our expectations for nonoperating expense are now between approximately $100 million and $125 million. On our tax rate, as a result of the claim of right tax benefits related to recent and anticipated legal settlements, we now expect our full year rate to be lower than we guided between 18% and 18.5%.

I should reiterate that we still expect our long-term tax rate to be between 19% and 20%. This implies adjusted EPS growth in the low double digits, albeit a bit higher in the range than previously guided, primarily due to the change in tax rate.

Moving to Q2 financial expectations. We expect Q2 adjusted net revenue growth in the low double digits. The primary reasons for the step down from Q1 net revenue growth include the lower contribution from pricing, lower volatility and higher incentive growth. We expect adjusted operating expense growth in the mid-teens, about 1 point above Q1 adjusted operating expense growth. This reflects the step-up in marketing-related expenses, primarily due to the Olympics and FIFA, and you may recall that Q2 last year had lower-than-expected operating expense growth due to timing.

Nonoperating expense is expected to be about $30 million. And our tax rate in the second quarter is expected to be around 16.5%, primarily as a result of the claim of right benefits I mentioned previously that we expect to realize in the second quarter. As a result, we expect adjusted second quarter EPS growth to be in the high end of low double digits. As always, if the environment changes, and there are events that impact our business, we will remain flexible and thoughtful on balancing short- and long-term considerations.

It's an exciting time in payments, and we're confident in our strategy and investments to fuel Visa's future growth. And now, Jennifer, I'll hand it back to you.

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

[Operator Instructions] Dan Perlin with RBC Capital Markets.

I just -- I wanted to dig in a little bit on the opportunities around value-added services, but specifically, around purpose-built offerings for events. So here, we're really talking about the Olympics and World Cup given that value-added services is a much bigger part of the business today than the last time that occurred.

Yes. So see if I hit the [ quarter ] question, Dan. So we -- first of all, let me start with the sponsorship assets that we have. They're obviously marquee sponsorship partnerships, talking about, for example, this year, FIFA, this year, Winter Olympics, global, very, very global in nature. And what we have through our sponsorships is the ability to pass through those rights to our clients and partners all over the world, and that's what we do.

Our value-added services sales teams go to market. They sit with our clients many, many months in advance of these programs, and they design programs that are bespoke and custom built for our clients to help them grow their businesses.

So for some clients, those might be advertising campaigns that we developed together with them in support of maybe a sweepstakes for their cardholders, things like that. For other clients, they might want to create client events for their private banking clients at one of the FIFA games in the U.S., Canada or Mexico. So in that example, our team works with them to build bespoke events, obviously branded for the bank or financial institution and those types of things. So it's a very busy time of year for us -- it's a very busy year for us. There is a ton of demand from our clients.

And the great thing about this is not only are we helping our clients, not only are we generating revenue from these services, we're deepening our partnerships with our clients. And so we get more renewals because of them, we get more business because of them. And so we feel really good about it.

Our next caller is Darrin Peller with Wolfe Research.

Maybe we just touch on what you're seeing strength and that's actually -- it seems like it's offsetting the lower-than-expected FX volatility such that you're able to maintain your full year guide for revenue growth. I know VaaS and CMS seems to be standing out pretty well. And just if I can just throw one more about capital return. Have you guys thought through any change just given where the market is placing valuations now over capital allocation, buybacks, maybe it is picking up a notch?

Darrin, yes, let me jump in. Value-added services, in particular, we saw in Q1 really great performance, strong execution strong client demand. Ryan talked about some of that around some of the events, but the strength was really quite broad-based. We saw strong growth year-over-year in all of the portfolios that we talk about, issuing solutions, acceptance, risk and security and advisory. The team continues to execute very well across that.

And so when we think about the performance and then, of course, CMS had a very high growth quarter as well, performing above what we expected. So when we think about the full year expectations, those are the moving parts that we talked about we said volatility -- Obviously, it's hard to determine where that's going to go. But given the persistent low that we saw in Q1, if we extend that throughout the rest of the year, that does provide for more downside than our original expectation, but that is being offset by strong performance that we saw in Q1. And the momentum that we have in the business that we anticipate will continue throughout the rest of the year, and those 2 become largely offsetting.

To your second point around capital return, as you know, Darrin, our approach to capital return and share buyback has largely been programmatic. We've executed on that very consistently throughout our history. But at the same time, we do take advantage when we see opportunities when we think the market is underpricing our stock, and we see an opportunity we'll lean in as well, and we'll continue to look for opportunities to do that as well.

Will Nance with Goldman Sachs.

I wanted to ask just the question on the regulatory environment. CCCA has been [indiscernible] there's quite a bit. Just if you could share your updated thoughts on how you're thinking about, I guess, the risk of the business from that potentially going forward as well as how you're thinking about recent conversations on the [ Hill ] and the likelihood of that becoming a reality.

Will, you cut a little out when you asked about the specific thing. Was it CCCA you mentioned or something else?

Yes, it was CCCA kind of affects implementation as well as recent conversations on the Hill and likelihood of passing.

Yes. So as you'd expect, we're very engaged on the Hill. We're very engaged with members. As you know, well, there's many things floating around. And we view it as our job to educate elected representatives on the impacts that the various policies that are being floated around could have. In the case of CCCA specifically, we've talked extensively in this call and other places about our view, and it hasn't changed. It's very harmful and it's just simply not needed.

So when I have a chance to talk to elected officials and the rest of my leadership team does, like they're listening, their understanding, these people don't live in our industry every day. So they do need the time to understand it. When we talk to them about why it's not necessary, we explain the competitive environment in this business, it is intense. We have new players entering all the time. We talk on this call about crypto, stablecoins, BNPL. Obviously, all the competition in the credit card and debit card markets, wallet players, A2A, we take them through and explain this competitive environment.

And we also explained why the market is working so well, and there's no need for government intervention. The second thing we explained to was just how harmful it would be. I mean this legislation would have far reaching negative consequences at a time when the economy certainly doesn't need that. Consumers and small businesses would see reduced access to credit, rewards would be eliminated entirely. There will be fewer credit card options. And by the way, weaker security protections, less innovation, all these things we explain why.

So I think this is going to be part of what we all do regularly because there's elections, you have new elected officials. They're very busy with lots of other things. And so we just have to continue to remind them of the impacts, whether it's CCCA or anything else for that matter.

Adam Frisch with Evercore ISI.

Nice results. Could you double click into the much better-than-expected growth in commercial and what you saw there if it was just a great quarter? Or did something unlock in a market with immense potential but I think previously, it was supposed to be a little bit more slow and steady. And then I would appreciate if you can provide just a quick perspective on spending trends around the world, maybe some color on what you're seeing in the major regions and to the extent you can some insight on affluent versus mass.

Chris, let me start a little bit on commercial from a business perspective, then you can follow up on the numbers and then you can hit the other question of [indiscernible] trends. Yes, I think what you're seeing in commercial is the results of the strategy we've been talking to you about now for -- really for a few years. And I think just a credit to our teams, like we've been shipping great product.

Our sales teams have been engaging with players all around the world, we've been winning. When we think about the commercial space, we've been talking with you all about 3 different types of opportunities, and we're having great success across all 3 of them. we talked about converting more small business and medium business spending. And what's an example, I'd point to there. I point to the Chase Sapphire Reserve for Business product. That was a portfolio win that we announced, a great product in the market that's doing exactly that.

And the second opportunity we talked about is scaling large and middle market card and virtual payables use cases. And again, that's an area where we've been shipping some great product and having some great client wins. I'd point to our Trip.com global virtual travel card issuing business. I think it's a great example there. And then the third opportunity -- the third leg of the strategy, and we've been talking to you all about is delivering product innovation and network flexibility to help our partners reach underpenetrated spend.

And I think it was maybe the last call or call before that, I mentioned our win at BMO up in Canada, where we launched our network-agnostic enhanced spend management capabilities with them, and that's going to allow them to really capture some of that underpenetrated spend. So I think it's the strategy, it's the results. We've been shipping great product, having great client wins like the ones that I mentioned. And then, Chris, do you want to pick up on some of the numbers .

Sure. I think Ryan covered CMS and BCS. So let me just hit on some of the questions you had around some of the regional volume numbers. So when we look at our international volume in total, which was 9% this quarter. That was largely in line with what we saw last quarter. And if you think -- which was 10% and if you think about the difference in that in Q4, we did see some idiosyncratic things that sort of help the international volume growth to be 10%.

And so when you normalize for some of those things, we see a lot of stability. As you click into each of these regions, some of these things do show up in some of the regional stories. So if I do sort of a tour around the world and give a little bit of a high-level commentary. In Europe, payments volumes are relatively consistent with Q4. We continue to execute well, and we're seeing the benefit of some of the wins that we've had there.

In CEMEA, also that was down maybe a couple of points from Q4, and that's being impacted by some of those idiosyncratic things that I talked about.

But still very strong growth. Very strong growth. Let me be very clear about that, one of our fastest-growing regions. But it was really related to the timing of promotional campaigns that we saw in Q4. And maybe the last one I'd call out is is AP as well. AP is growing low single digits, a little bit slower than Q4. But that was 1 that we also called out before in terms of timing of tax payments that we saw in Asia. And so when we normalize for some of these timing differences, we're seeing relative stability across international payments volume.

Sanjay Sakhrani with KBW.

I know you talked about VaaS a decent amount already, but just curious if that 28% growth this quarter can sort of sustain itself for the remainder of the year? Or do you think there's some specific factors in the quarter that drove the strength and that may not reoccur. And then just, Chris, you mentioned that there were some expenses that were higher as a result of the stronger VAS revenue growth. I'm just curious, is that a variable component? Or can that be leverageable in the future?

Let me try to address it. Yes. Just building on what I said earlier about the strong start to the year in VAS. Obviously, we don't guide to growth pillars, but a lot of the things that we've talked about, Q1 being 28%, that is above where we expected it to go in, but it's also in line with the momentum that we've seen. We've seen growth in the [ 25%, 24% ], mid-20s for some period of time. It's really a reflection of -- similar to what Ryan was saying about CMS, it's a reflection of the fact that we're executing against our strategy.

We're investing behind it. We have a clear strategy and a clear addressable market that we're going after. The teams are certainly doing a really, really great job about that. Some of the things also just to tie into some of the other conversations we've been having, the first question is around events. And this year is a unique year that we do have 2 events, both FIFA World Cup and the Olympics.

We've talked about how that's going to benefit marketing services, in particular, which lands in sort of the other revenue line. That is a business where clients are super excited to engage with us and activate and have access to these sponsorships and we're excited about that. But that does also contribute to some of the revenue -- some of the expense reasoning that we talked about. And so let me talk about that real quick.

So with those 2 big events, from an expense standpoint, we see a little bit more quarterly variability this year than a normal, let's say, a typical year. When we went into the year, we said the expense associated with these 2 events will be in primarily peaking in Q2 and Q3. And so therefore, as we look at sort of Q1 and Q2, we do think half 1 expense is a little bit higher than half 2 as a result of that. But it really is associated with incremental revenue that we're capturing related to these 2 events. And so we're happy to do that. And obviously, clients are thrilled as well.

Andrew Jeffrey with William Blair.

I wanted to ask a question on the Flex credential, which is really intriguing. And recognizing it's very small as a percent of your total credentials today, could you maybe sort of frame out growth trajectory for us. Is there a point in time when you think about Flex really bending the growth curve for Visa? And I'm just trying to dimensionalize what it can mean over the next, say, 3, 5, 7 years for your revenue growth.

It's still early in the development of Flex. I talked about some of the wins we had this quarter and others. I also talked, I think, in my prepared remarks about some of the expansion opportunities we have in the pipeline. Clients are very excited about it. Like if you just step back for a second, we think about the Flex credential like the Swiss Army knife of payments. Like it's got multiple funding options that are all packed into one card. And that resonates with different players across the ecosystem. You look at a SMCC in Japan who -- they're more of a traditional bank and they launched this product to bundle credit, debit, rewards, et cetera, all into one product.

I've mentioned on this call in the past, BNPL players like Affirm and Klarna and now, as you heard in my prepared remarks, Block who are able to take BNPL offerings that they used to have to go build out merchant by merchant by merchant around the world, which is obviously very difficult, time consuming and costly. Now they can offer their users a Visa Flex credential and they can go use the BNPL offering anywhere where Visa is accepted, which is all over the world and kind of goes on and on.

So in terms of like the growth impact it's going to have, we're still early in the sales cycle, like you said, these numbers at this point are small in the context of our $5 billion credentials. But when you look at other things that we've done like tokenization, when you look at Visa Direct, you look at some of the other innovations that we brought to market, we follow a similar strategy and path build great product, get it out there in the ecosystem and then go at it year after year after year to ultimately help serve our clients and grow the business.

Tien-Tsin Huang with JPMorgan.

I wanted to ask on the issuer processing side, if that's okay. Just I heard some good wins in DPS like Block and you talked about the the Pismo expansion. So it just got me to thinking, how much have you invested in both of these assets from a tech perspective, especially. It feels like there's some momentum on the processing side. And maybe can you discuss if the [ TAM ] has changed around issuer processing, I'd love to hear just an update on that. .

Tien-tsin no change in the TAM. It's enormous. I mean you think about the opportunity, every bank on the planet except a few needs to go through the process of modernizing their tech stack, whether that be debit issuer processing, which is where DPS is focused in the U.S. in a more narrow place. But more broadly, their whole entire issue processing stacks in their core banking stacks.

And yes, we've been -- we've definitely been investing product and engineering resources into both. I think we've been shipping some great products in both, which is what's driving the wins, both with more traditional financial institutions and with fintechs like you referenced. And Pismo specialty, our thesis when we bought Pismo was that our clients were facing big decisions on how they could modernize their tech stacks and ultimately move into the cloud. And that's what's proving out is we're having great sales interactions with financial institutions all around the world.

And when we're able to take them through the Pismo capabilities and show them that it's cloud native, provides issuer processing, core banking, it does it for all products, debit, credit, commercial, current accounts, DDAs, et cetera, we're getting a lot of uptick. Now these are long sales cycles. A bank kind of changing out its core banking infrastructure, moving from on-prem into the cloud, like these are big decisions they take time. And we knew that going into buying Pismo and we'll continue at the sales cycle, continue to ship great product on it, and we're very excited about the space.

Ramzi Elfa with Cantor Fitzgerald.

I wanted to ask about your commentary on stablecoins of $4.6 billion of settlement. It's a small number, but it's ramping seemingly quite quickly. Do you expect more growth in stablecoin flows to be related to settling consumer retail payments? Or do you see the bigger opportunity for Visa on sort of the disbursements money movement side of things? And just 1 quick point of clarification for Chris. You said there was some pressure on cross-border revenues from low FX, [ low ] hedging and mix. What did you mean by mix?

Yes. So let me just try to frame this. I think the short answer is the latter, but let me unpack that. In terms of stablecoins, the areas where we see product market fit are generally the areas around the world with significant TAMs and areas where we're actually underpenetrated today. What is that? So one is it's countries around the world where there's high currency volatility or hard to access U.S. dollars.

And we've had great success issuing Visa credentials. I think I said in my prepared remarks, I talked about this now in more than 50 markets around the world. to provide on an off-ramp for stablecoins. And that's an area where there's great product fit, product market fit. The second area where we see good product market fit is around cross-border, whether that's remittances at the consumer level or whether that's B2B payments or even B2C payments for disbursements, another area of opportunity, another area where we're generally underpenetrated another gigantic TAM.

And then coming back to the beginning of your question, we're seeing a lot of interest, as you noted, the numbers are still small in the big scheme of things, but the growth rates are very high of settlement on our network with stablecoins. When we have partners that settle on our network with stablecoins, they're able to get access to 7-day a week settlement, for example, because with stablecoins, we can settle on Saturdays, and we can settle on Sundays, even when correspondent banking is not generally available. And that creates more liquidity for our partners and clients, they're able to get access to [indiscernible] flows, faster.

In the case of some instances where they might otherwise have to hold collateral during a weekend. They don't have to do that. So yes, I mean, we're very excited about the opportunities. I guess just to be very clear about it, to the beginning of your question, we don't see a lot of product market fit in developed digital payment markets like the United States or like the U.K. or Europe for stablecoin payments.

As I said before, in the U.S., if a consumer wants to pay for something using a digital dollar, they have ample ways to do that today. They can pay from their checking account or their savings account, it's become quite easy to do. So we don't see a lot of product market fit for stablecoin payments and consumer payments in digitally developed markets.

Ramsey, I'm going to tackle the second part. I'm glad you asked the question about the commentary, the prepared commentary on international transaction revenue. And that's the first place I'd start, I differentiate because of the way you asked the question, you said cross -- pressure on cross-border yields. International transaction revenue does not equal one-to-one cross-border revenue, cross-border revenue lands in all of our service lines. It lands -- it contributes to the 15% growth we saw across the business, contributes to the 17% growth in data processing. And it also obviously contributes to the international transaction line.

And I will say when we look at the cross-border business in total, obviously, the volumes have remained strong and stable. This business remains high yielding and very profitable. And so it remains a very healthy business. Now to your specific question around the commentary around the difference between international transaction revenue, I called out 3 things. I won't go through them all, but the first one and the biggest one was volatility and we talked about sort of the low currency volatility. And the second one was mix, which is the one that that you've talked -- that you brought up.

So as we've talked about mix in prior quarters. And really, this is talking about the composition of yields across our business, different clients, different products, different regions have different yields. And as growth rates across these different items vary, then it can have a mix impact. This quarter, the one I'd note is Visa Direct, which continues to grow fast and also very profitable but typically has a lower yield than carded transactions. So to the extent Visa direct cross-border transactions are growing faster than carded, then that's going to mix the yield down. And so that's an example of mix.

Dan Dolev, Mizuho.

I just have a follow-up on the Pismo update. It sounds like it's off to a really good start, and you're making a lot of progress. Ryan, can you maybe update us on how Pismo is trending in terms of wins with large versus small banks? And how much bigger do you think Pismo could be in 2 to 3 years? Because it sounds like it's a great business here, and you're making a lot of -- getting a lot of traction.

Yes. Thanks, Dan. Yes. As I mentioned, we remain very excited about it. The large versus small bank question, it's really both. The smaller players tend to be the fintechs. The other part of our thesis when we bought Pismo beyond what I said earlier was fintechs are limited in their capabilities that they have to drive international expansion in many markets around the world.

Often, a fintech will grow up in 1 country and then want to expand. And what they quickly run into is a challenge. They can't find a technology partner that can help them scale for the next 5, 10, 15 countries. So on the smaller fintech side of things, that's where Pismo has been a great fit, right? Because it's cloud native, we're able to move with fintechs and help them expand broadly around the world. By the way, that helps the fintech. That's great news for Pismo because it drives revenue, but it's really good news for Visa because we're able to help more fintech scale more broadly into markets that are underserved with Visa credentials.

So it's a real win-win-win in that sense. On the more traditional financial institutions and the bigger banks, as you referred to them is, it's more about kind of engaging with clients on this journey that they're embarking on, moving from on-prem legacy technology stacks to the cloud. And that's traditional processing, that's for core banking. And what we're finding is that when these big sophisticated, large clients really dig through the Pismo capabilities, they're extraordinarily impressed and they find what we found, which is when we found Pismo that it really is the best cloud native issuer processing and core banking stack on the planet.

All right. We'll take a 1 more question, please. .

And our last caller is Harshita Rawat from Bernstein.

I want to ask about tokens. As you said, they've grown to over [ 17 billion ], 3x the number of cards you have. We know the authorization rates and fraud reduction benefits, which are meaningful [indiscernible] agentic capability. My question is, how does this proliferation of token and the benefits it brings changes the conversation you have with your issuer customers and merchants and merchant acquirers. Does it further change the nature of those conversations from network fees to the value of bringing, and I know there could also be more opportunity for pricing for value here.

Thank you. As I mentioned in my prepared remarks, we're in the progress that we've made with token and excited about the opportunities that we have to ultimately meet our goal of 100% tokenized transactions. I want to -- before I answer your question directly, I want to go back to something I alluded to earlier. To get to the point where we are right now, with 17.5 billion tokens and 50% plus of transactions, it has been a multiyear journey. Our teams in countries around the world have had to go client by client, both the issuers and the acquirers and merchants as you asked about, get them to embed the tokenization into their tech stack, help them understand the value of it.

And do that work for many, many years, which has led us to where we are. The nature of the dialogue, both with issuers and especially with merchants and acquirers has been great. if you're a retailer, a big or small, like your #1 goal is more sales. And when we're able to show the sales uplift that tokenization provides, it's a real aha moment. The other thing that is very much on the minds that you alluded to of merchants and acquirers all around the world is fraud reduction.

And when we're able to show them the impact that tokenization can have on their fraud rates, they're very impressed. So what we're doing right now is we're just continuing that journey. We're engaging with merchants and acquirers and issuers on case studies and showing them the impact, like I described in my prepared remarks. We're really focused on merchants who have large store credentials [ cards on file ] And we're showing them the benefits of converting those cards on file to Visa tokens. We're focused on guest checkout.

I mentioned in my prepared remarks, the enormous progress we've made reducing guest checkout, but it's still 16% of Visa e-commerce around the world. That means 16% of the transactions, our customers aren't as delighted as they could be if those were as simple as a tap or a biometric authentication using a Visa token. So we're working with those merchants to try to put in place the Visa token solutions to improve those user experiences. And we're also focused on new markets, bringing tokens to new markets, both with issuers and acquirers in places like Europe and CEMEA and Latin America. So we're excited about the progress, but we still have a lot of work ahead of us, and we're very focused on it.

And with that, we'd like to thank you for joining us today. If you have additional questions, please feel free to call or e-mail our Investor Relations team. Thanks again, and have a great day.

Thank you all for participating in Visa's Fiscal First Quarter 2026 Earnings Conference Call. That concludes today's conference. You may disconnect at this time, and please enjoy the rest of your day.

All right. Good morning, everyone. Thank you for joining us. We are glad to have with us today, Oliver Jenkyn, the Group President at Visa. We also have joining us and making the trip here to Arizona, we have Jennifer Como, Head of Investor Relations; and Jared Haftel, also part of the Investor Relations team. So before we get into anything, we just want to say thank you for traveling here and being such a big part of our conference to all 3 of you.

You're welcome. Great to be here.

All right. So I think the investment community has gotten familiar with Oliver over time, but I just want to give a little bit of context here. So as I mentioned, Group President at Visa. He's been at the company since 2009. He joined having come over from McKinsey at the time.

For context, Visa is organized with 5 regional Presidents, all of those report into Oliver, as do the teams that lead the global merchant relationships, the global client relationships, the global digital partnerships and the global deal negotiations. So it's a lot of purview under Oliver, and we're really glad that he took time out of his schedule to join us.

So again, thank you, Oliver, and we can get going into an update on Q4 trends, if you don't mind.

Yes. So if I could summarize Q4 trends, our fiscal Q4 trends, and then I'll give a little bit into our fiscal Q1. If I had one word, it would be stable; if I had 2, it would be stable and strong. So again, the trends for Q4, as we said in our Q4 earnings: relative stability in income growth, relative stability in consumer balance sheet, relative stability in employment, which is resulting in relative strong, stable growth for us.

I think our growth was 8% in the U.S. on payment volume, 10% in the last quarter on international. I think we were, I can't remember it, 11% or 12% on cross-border. So good last quarter. And then on this quarter, our first fiscal year quarter, because we're October 1 fiscal year, as you know, we did at earnings talk about the first 3 weeks in October, which was sort of more of the same.

I think it was 7% to 8% on U.S. growth. I think it's about 11% on cross-border for those first 3 weeks of October. And what I'll just say about sort of an update to now, if you look at our fiscal Q1 quarter-to-date from October 1 until November 30, it's very similar trends to what we reported for those first 3 weeks of October. So very stable, good numbers. And of course, that includes the beginning of the holiday season, which, again, is stable and strong in terms of growth. So that's what we're seeing; in a word, stable.

Great. And that applies to both the U.S. trends and also, just to clarify, the cross-border as well?

Yes. U.S., the numbers for October 1 through to November 30, quarter-to-date, Q1 quarter-to-date, stable for U.S. PV and cross-border PV.

Excellent. That's a great update. Glad we got that covered. Let's move on to the next topic, which is the MDL settlement. So plenty of discussion around this. I think it's worth just putting a little context around it and what the implications are for Visa in the broader payments ecosystem.

Yes. We're really happy to have reached an agreement earlier this month or last month along with Mastercard in MDL. As you know, MDL has been going on for near 20 years, and so we're pleased to have that behind us finally. I won't go through all of the details of it, but just at a high level because it is important, but at a high level, merchants will receive important financial relief.

They'll have valuable flexibility and options in how they accept payments. From an interchange point of view, there will be a 10 basis point reduction in effective average interchange in the U.S. for 5 years. Rates will be capped at current rates. We cannot raise them for those 5-year period of time. And for standard consumer credit cards, so the nonpremium consumer credit cards, those rates will be capped at 125 basis points. So that's interchange.

And then on surcharging and honor all cards, there'll be greater flexibility for merchants that choose to surcharge regardless of whether they're surcharging anyone else. We just made it easier for them to surcharge if they so choose. And on honor all cards, in credit, there was already a rule that enabled consumers to decide if they want to take debit or credit at Visa that was already split.

But now within credit, merchants can decide whether they want to take commercial credit cards, premium consumer credit cards or standard consumer credit cards, that'd be a choice they have to make. And there's also a merchant education program.

In terms of implications for all of this. I mean, it's definitely more -- its financial relief and more flexibility for merchants. How it unfolds, we'll have to wait and see. It's just important to note though that when merchants decide how to make their payment choices, they think about a lot more than just economics.

They think about safety, security, reliability, disputes, chargebacks, brand, trust, there's a whole wide range of things that they take into consideration. And so we feel really good about our ability to compete in the space as we always have. But these are important adjustments and we'll be focused on it. I guess the one last thing I should say is the legal process will continue through FY '26. So the actual rolling out of this, we'd expect to be more of an FY '27 event.

All right. I think that covers it well. All right, let's move on to an exciting topic, which is agentic commerce. So you've had many announcements recently, partnerships, announcements. Maybe you could just talk a little bit about maybe some of the assets that Visa has and can bring to the agentic world, whether it's tokenization, identity, security, your value-added services portfolio, the list goes on. And then maybe add a little bit more on how Visa's approach to this topic is differentiated.

Yes. Great question. More fun to talk about agentic than legal settlements. But listen, I think agentic is going to be a very positive thing for Visa. We feel really good about agentic commerce and the possibilities that it brings. And I'll just maybe start with my simple summary of what we've unveiled in agentic and how we think about it.

So if you had your phone -- I'll steal your phone for a second, if you had your phone -- this is sort of a simple summary of it with what we announced in Visa Intelligent Commerce at our product drop this summer. If you had your phone and you opened, for example, ChatGPT and you had that usual ChatGPT interface, imagine -- again, this is hypothetical, imagine there's a little button at the top. You hit that button and that button says shop for me.

Same UI of ChatGPT, a little button that says shop for me. When you hit that button, 3 things happen. The first thing is you load a credential into ChatGPT, so it has a way to pay for you, authenticated tokenized secure domain control. The second thing you do is you personalize it to you and so you give it a data token on my past transaction behavior, my past purchase behavior, maybe I put some of my family stuff in there. So it's not just an LLM looking out of the world of what it could buy, it's actually looking back into my brain of like what would Oliver buy in this situation because I've given it that history.

And the third thing that happens is you put controls around it. So if it's under $100 in these merchant categories, go ahead and buy it. If it's in these merchant categories, fashion and travel, let me look at it before you actually hit buy. If it's in these merchant categories or above $1,000, you do not have permission to buy for me.

So you put controls around it. And then when you use ChatGPT, it's not just telling you how many escalators there are in [indiscernible] it's actually able to go and shop for you. And the way to think about it is, if you ask your kid to go down to the store to get something for you, you have to give your kid a way to pay. They know to not get the full fat milk, they know to get the skim milk because they know you.

And you know that they -- you tell them that they can't go buy chocolate and cigarettes with the money that you gave them, they've actually just got to go buy the milk, right? So those are controls that you're giving to an agent as if you were to child. And so that's what we announced Visa Intelligent Commerce.

And what's happening in that space is the sandbox is open, people are piloting, we've got issuers and PayFac and acquirers. The LLMs are in there working with these APIs. We also announced merchant side protocols, a trusted agent protocol, so that it's merchant-facing protocols because for the first, whatever, 20-plus years of digital commerce, bots or agents were a bad thing and we're constantly trying to stop them.

Now agents are showing up, and it's a good thing. So we need sort of cryptographic protocols so that when an agent shows up, the merchant knows, okay, this is someone that I recognize and I've seen before, this is someone that has an intent to purchase and this is an agent with whom I can exchange payment credentials. So we have protocols to enable the sort of separation from good agents from like bad bots and those are some of the protocols.

Other protocols have been announced AP2, ACP and others, and we'll have to work through. They're all trying to do the same thing that's work through making sure there's a good way for that to happen.

And if I could just say one last thing as to how we think about agentic: If you go back in the history of payments, it used to be face-to-face commerce. You showed up in a store and you had a Visa card. Then e-commerce showed up and we set protocols and standards for how it would work and e-commerce was great for us and for consumers and merchants.

Then mobile commerce came around, different set of protocols, different set of standards, different set of security. We set those protocols and procedures in place, and that went nicely. And now agentic is sort of that next phase. And so what we're focused on is the standards, the protocols, the risk, the fraud, the trust to make sure that there's that next wave of growth in agentic. And we're super excited about it, and we're doing the hard work now to make it so. Not nice PowerPoints and presentations, but the really hard work to sort of weld it into the system of how agentic commerce will work going forward.

All right. I appreciate bringing it to life for us with what it's like for the consumer. All right, somewhat of a related topic: tokenization, monetization. So this is a big one in the investment community. So tokenization, I think it's a pretty much a consensus view here. It is good for the payment ecosystem, right?

It reduces fraud. It increases authorization. It is a win-win. I don't think that's really even disputed. But what investors are often looking to learn more about is how Visa's approach to monetizing this capability has evolved and how we can think about what these tokens are doing and how Visa will be compensated for that?

Yes. Well, just to further solidify the tokens are good if there's any doubt. We've been at this for over a decade. We were at 1 billion tokens in 2020, 10 billion tokens in 2024, I think we're at about 16 billion tokens right now. About half of our digital commerce transactions are tokenized. Our goal is to get to 100% tokenization.

And the reason it's proliferating is because it's good. It increases approval rates by 5 percentage points, which is huge. It reduces fraud by over 35%. These are like no-brainers in terms of how a payment system would operate. And so we'll continue to push to getting to 100%.

And in terms of the benefits to us of tokenization, and there's multiple of them. First of all, just better transactions in the digital world results in more transactions for us, more usage and Visa being more prevalent and predominant in digital transactions just because it works better, and we get all the benefit from that volume and that lift and the sort of central role that we play.

Two, there's also, what I'll refer to as, value-added services around tokens. And so there's life cycle management of tokens, there's account updaters when your card changes and you've got a consistent token. So there's players like Booking where they use these value-added services, and we signed a deal with them recently where they're going to use these token-based value-added services in I think the number is over 60 markets around the world because they can use the functionality of the token to get access to these value-added services to complete transactions.

And then, of course, as is always the case, how we price our fees and interchange to continue to incent the adoption of tokens in the ecosystem in a way that's beneficial to all the actors, but also enables us to price the value for the service that we're providing in tokenization is something that we've made some changes to, and we'll continue to make changes to token pricing to price the value that we're bringing and to price for the new features and functionalities that we'll continue to bring. So a lot of opportunity in this space for, again, merchants, PayFac, issuers and for us as well.

All right. Excellent. We're going to go to another one that's a big topic in the investment community, which is value-added services. So it's -- we talked about this actually a little bit on the last earnings call, but it's definitely a standout. A few years ago, the business was about 20% of revenue and growing 20%. Now it's approaching 30% of revenue and growing even faster, right? So the contributions to your growth are even larger. So would you have expected this business to perform this well? And how should investors think about this business going forward?

Yes. I love value-added services, and it has got a long, long, long runway for future growth. It's really fantastic for us and for the folks that are purchasers of value-added services. But let me just give a little bit of context for why we're pushing on an open door here.

Keeping up in payments is really hard for our clients because payments isn't moving money from A to B. That's really easy. Payments is auth, clear, settle, security, liability, chargeback, dispute, resolution, digital platform investments, cybersecurity. It's all the stuff that's wrapped around a transaction.

And it's really hard for our clients to keep up with all of those investments. I'll give you a quote from a CEO of one of our most important clients, who shall remain nameless. We were in a meeting and this CEO said to me, "I have 15 major projects in my development queue right now." And as you know, the binding constraint is usually not OpEx, it's usually like actual development capacity.

So I have 15 major projects in my development queue right now for payments. He said, "I only want to do 5 of them. Five of them will differentiate me, the other 10 I have to do just to keep up, just to keep up, and they're not going to differentiate me." And the CEO said, "Why don't you do those 10 for me? Do them once, do them world-class, give them to me through APIs or through the endpoint connections we've got, and I'll purchase them from you. And then I'll take my resources against these 5 or other parts of my bank, and I'll focus on what's differentiating me."

And this was a CEO of a bank who did a lot of this stuff himself and the bank did a lot themselves. And [indiscernible] several years ago. And that was really the beginning of this idea of like we can do it once world-class. By the way, I think also in the meeting I said, "Well, let's talk about those 5 things that are differentiating because I think we can help with those as well." But it opened up a whole new level of conversation in value-added services.

And the growth has not stopped. In our Investor Day, you would have seen we talked about some growth numbers by geography. I think we talked about Continental Europe, the Nordics and Japan, which are like 20%, 30%, 40% VAS growth. We talked about the growth rates across the 4 business units. You got advisory, you've got risk and identity services, you've got issuing solutions, you've got acceptance solutions, all growing from like mid high teens into the 30s, and they're going to continue to do so.

And just like I love all of the business lines. Advisory is the most natural. We're sitting with clients. We're talking about their business. And at Visa, we have the smartest people in the world on payments working for us. And we just shifted the conversation and said that sounds really important, let us help you with that, be it consulting, be it marketing services, be it managed services.

Risk and identity, I fly around the world talking to clients, it's like all I do. And I would say 95%-plus of the conversations I have, have a conversation about risk and identity and it ends with how can you help me? I need help.

Issuing solutions and acceptance solutions on the other side of the ecosystem, these are deep infrastructural partnership, very sticky relationships that we have with clients that were a very natural extension. All of these business lines have wonderful long-term growth. We feel great about all of them.

And so I think VAS is really exciting, I think, for you guys to look at. But from a revenue and a client point of view, we're just -- we're pushing on an open door. This is deep demand from our clients. It's much more pull than push, and I think it's going to continue for a long time to come.

All right. Perfect. Well, a related topic is value in kind incentives, and we appreciate that that's not only related to value-added services, but it seems to be a topic that's been a little bit more prevalent over the last few years. So we want to dig into really 2 things. One, has anything changed around this topic of value in kind incentives over the last, call it, 3 to 5 years?

And two, can you just talk about sort of the win-win associated with this in terms of maybe deepening relationships with clients or driving experimentation with new services. Anything that you can just help us become smarter on this topic?

Yes. I think cut and paste the passion I just had for VAS and apply it to VIK as well. I'm just as passionate about the long-term potential in VIK. But maybe just a little bit of context. So if you think of -- just so we're level set on exactly what VIK is.

We have thousands of agreements with our partners around the world on the issuing side, acquiring side, PayFac, where we've got incentives that we're paying them for aligning our interests. And what VIK essentially does, it takes a portion of those cash incentives and it converts it into VIK. Think of it as essentially like coupons that clients can then use to buy services from us. It's a small portion of the incentives, but when you put them across all the deals, it's a material amount, and that's then VIK that they can use to purchase services from us.

It's incredibly valuable for a few reasons. One, it ensures that our clients always have resources to invest in the business. When you do some of these deals with the client, the CFO of the institution will take that money and take it to the bottom line, and then we'll be doing a 5-year partnership with someone and they have no money to invest. VIK ensures that there's money dedicated to growing this business, which is in the best interest of the payments team. That's one.

Two, it results in real deep partnerships because as soon as that agreement is signed, the next conversation is what we'll be working on together? How can we work on those things together?

The third thing is it results in very sticky relationships, much more substantive conversations. And the fourth thing is that when you've got this VIK, it really incents the exploration of trying new types of VAS or CMS products or new types of implementation. So it can be very valuable in actually driving things forward in our business.

So having VIK is a wonderful opportunity. I think there's a lot more sort of sell-in of VIK potential for us for years to come, and there's going to be much more active utilization of that VIK going forward. And just to sort of level set, VIK -- as excited as I am about it, VIK is a small percentage of overall incentives and VIK is actually a small percentage of VAS revenue.

I mean they're important numbers, but in the broader scheme of things, they're still relatively small, so there's a lot of upside. But VIK is very, very exciting for us and very exciting for our clients as well. So again, pushing on an open door in a really positive way for years to come.

Excellent. Well, you touched on this topic a little bit. It's a nice segue into the next topic, which is incentives. So on the last earnings call, Visa mentioned that in fiscal year 2026, you expect to renew about 20%-ish of your payments volume. That's somewhat similar to last year. Maybe you could talk about, one, how investors should be thinking about incentives and incentives growth. But more importantly, maybe call out what might be different in those incentives discussions with your clients today versus maybe 3, 5, 10 years ago?

Well, let me hit on the specific question first, and then I'll talk more generally about incentives. I've been -- in my role, I've been on the front line negotiating our partnership agreements with clients for 1.5 decades. So I've got the real arc of time of how things have changed. And I think in a sentence, I'd say as much as things have changed, they stayed the same, by which I mean the things that we're talking about, the investment areas that clients want to put money against, the protections that they want, like the specifics that are within a contract, those change, they've changed markedly over the years.

But the actual level of competition, it's a highly, highly competitive market. The sort of core structuring of those incentives, the reason they exist and the alignment of priorities, that's the same as it was when I started in 2009, like the fundamentals of that partnership agreement and the movement of money in incentives is relatively similar. The things we're incenting and the protections they want are different.

So again, as much as things have changed, they stayed the same. Highly competitive market, but it's not like there's some sort of step change difference. It's more just what we're negotiating on. Now just to back up for a second on incentives.

The reason incentives are so important is there a way for us to ensure that we're aligned with our clients on what's most important, not just when we're negotiating a deal, but on a rainy Tuesday afternoon in February, 2 years after the deal is signed, you need to have incentives so that you're waking up working on the same things and prioritizing the same thing.

Saying nice things when you sign a contract is not enough. And incentives ensure that, that motivation is aligned and the interest are aligned between parties. So it's a very, very powerful tool that is in the best interest of us and our clients.

You mentioned the 20% renewing this year. That sounds right. I must admit I haven't looked at that. I've got my pipeline, and I just -- when you're running a marathon and you're in mile 2, you're not thinking about what mile 21 is going to look like. You're just managing your pipeline. You're talking to clients, you're working it through.

But it feels right because our deals are usually 5 to 7 years. That's our usual tenure. We definitely have some that are 10. We have some that are shorter, but 5 to 7 years. So being around 20 sounds right. I will just say it doesn't make that big a difference for me as the guy that's responsible for them because you're renewing partnerships when they come up and when clients want to change what they're focused on, and it's just managing the pipeline and working it through. But I think that number has got to be about right. But incentives are -- it's a very powerful tool, and it really aligns us and our clients in an important, important way.

I should say one last thing, housekeeping thing. My partner, Chris Suh and I, our CFO, we spend a lot of time on incentives. We have thousands of incentive contracts, and we put a ton of time against forecasting the incentives, making sure we've got them right, and it's really one of the most important things that we do, not just at the beginning of the year and every quarter, but throughout the year.

But I just have to say that there can be shocks one way or the other across these thousands of contracts. They're like onetime shock. So we do our best to get it right. It's a major focus for us, but sometimes it can like slide one way or the other just based on shocks that are existing in Argentina or the Ukraine or something like that, which can impact those incentives in a quarter.

All right, great. Well, Oliver, we are pacing great here. We've got about 5 minutes left and 2 questions. One is on market models and one is on the cross-border capability. Let's see if we can hit both of them. On market model. So at the Investor Day, you spoke about 4 market models, cash rich, high potential, high potential challenger and digitally mature. Can you talk a little bit about those models and what you're doing particularly well today?

Yes. Those are -- I love the market model. So let me just take a second why this is so important. Again, we operate in 200 countries and territories, rolls up into 24, 25 clusters, that rolls up into 5 regions, and we run our business geographically by those regions. However, if you're Indonesia and you neighbor Australia, and you're both in the Asia Pacific region, you don't have that much to talk about.

Trust me, I've been in the room while they're at a client conference, they literally -- they end up talking about cricket. And so they don't have that much to talk about because Australia should be talking to the Nordics. Australia should be talking to Canada to the U.K. Indonesia should be talking to Egypt, to Pakistan, to El Salvador.

Those are the ones that are in a similar stage of development. So we run the company by geography, but we complement it with these market models. And it's something that's very unique that a global company like Visa can provide. We do that for our country managers and our local leaders. We also do it for our clients. So we're connecting in client forums CEOs of these organizations so they can actually talk to people around the world who they might not have a lot of common with broadly, but on payments are in a very interesting stage of market development.

And so we leverage that in a very, very powerful way. And again, it's something uniquely that Visa can offer to our clients, we feel great about it. I love all of the market models. And I think about it as like managing a portfolio. Cash-rich is like seed, it's like Series A, it's like you're planting seeds in sub-Saharan Africa that will drive growth in the long term.

You've got challenger markets, which are wonderful markets like India and Brazil, but there's a unique challenger be it a Pix or UPI, NPCI, RuPay, where how we compete and how we partner is unique and different, and those markets need to be talking to each other. You have high potential like Japan, like Germany, like Mexico that have all the infrastructure that is required for growth, but they still have over 50% of their transactions in cash on legacy infrastructure. And then you have fully developed markets like the Nordics, like Australia.

And how we build product and how we go to market has to be different for those considerations, not because they're all in Asia, but they're all in Europe. It's a very powerful way to actually run our business from a marketing point of view, from a government engagement point of view, from a product development point of view. And so we use it quite actively.

In terms of the one I love the most, I love them all. But I got to tell you, as I travel around the world, the one that really stands out for me is high potential. Like when you go to Japan and Germany and Mexico and you just look at -- it basically looks like the United States 25 years ago from -- just from a payments point of view, no broader commentary than that from a payments point of view.

There's so much cash. There's so much infrastructure, sophisticated institutions, sophisticated citizens, there's just huge, huge growth ahead. And so I feel most excited about high potential. But I really think about the market models as like a portfolio of different stages of investment for our future. And it feels great that we've got all of those stages because I plan to be here for a while, and I want all of these to grow over time, and we need all of them.

Right. Last question to bring us home here. So the cross-border capability. So Visa's cross-border acceptance, you've got trust, settlement, banking relationships, licenses, globally you've been doing this for a long time, it's a really challenging thing. We, and I think many investors, consider to be a real moat for the business and something that would be very challenging for others to replicate.

But given some other local networks, can at times attempt to build this out, maybe via partnerships. Maybe you could just talk about just how challenging it is to build out this cross-border capability and a little bit of the difference between kind of having it on your own versus doing it via connecting with other local networks?

Yes. It's a great question. I think sometimes we take for granted how incredible this is. So let's just think about it for just one second. You can go anywhere in the world online or in person anywhere in the world, you don't know the merchant, merchant doesn't know you. The merchants bank doesn't know your issuing bank, different culture, different language, different currency, different time zone. You have literally nothing in common with any of this institution, and you can complete a transaction as if it's a coffee shop down your street.

No one knows anyone else. The only common thread through that, that they trust is Visa, the brand, the trust, the rules, the economics, the fact that there's disputes and protections if anything goes wrong, that's what enables that. It's incredibly difficult to build, buy or partner to achieve. It's incredibly difficult. And we take it for granted because we've built it, but it took decades for this to be built.

And I think it's truly unique. And so if you think of other folks trying to partner their way into this, it's really hard. What's the economic model going to be? How is dispute resolution going to be? Who's going to deal with the protections if anything goes wrong? How is technical interoperability going to work? How do I know that the brand has the acceptance? How do I know that they're going to be able to show up and use that product if it doesn't happen to work at that place? What if the merchant doesn't know it? It's just really difficult.

I think building a patchwork of this international connectivity is strategically really interesting and could look good on PowerPoint. But having lived and breathed it for all the time I've lived and breath it, it's brutally difficult. And the only reason that we and Mastercard have been able to do that has been at it for decades and one person was in control to say what the rules were and if you want to do this, here are the rules.

It's very difficult to do in the partnership model. And so I do think it's an enormous moat for us. But said more positively than moat, it's just a wonderful value creation that we've introduced literally to the world to enable cross-border digital or in-person commerce to be as easy as, again, going down your local street and buying a coffee. So there'll be competition on these things for sure, and we welcome the competition, it makes us better, but it's hard. It's really hard.

All right. Well, Oliver, I have to say it's been a real pleasure having you here. It's the first time we ever had a chance to do this.

Pleasure. Thank you so much.

I want to thank you, again, for making this trip and taking time out of your schedule as well as Jennifer and Jared for being here. Again, thanks on behalf of everyone at UBS for being such a big part of our conference.

Thanks, everyone.

Welcome, everybody. Thank you for being here for the Visa fireside chat. I'm Jason Kupferberg, the payments processors and IT services analyst here at Wells Fargo. And I'm very excited to have with us Chris Suh, CFO of Visa, of course. And we've got a lot to get through. We've got 35 minutes. We're really happy that you're here. And I'll start with congratulations. Congratulations on, I guess, we got to call it the proposed settlement, long-running merchant litigation. I know it's not done, done yet, but hopefully, the second time is a charm because we had a proposed settlement last year.

But just take us quickly for those may be a little bit less aware, just high-level terms and how that differs a little bit versus the last settlement. And just any kind of potential next steps from here? And then I have maybe I have a follow-up or 2 on it.

Sounds good and hi, everyone. Thanks for the time today. Thanks for coming to hear about what's happening at Visa. Okay. So starting with the settlement, the proposed settlement, there are a number of moving parts. I'll try to lay this out sort of from end to end. As you know, Jason, last week, it was early last week, we did announce that we've reached a proposed settlement with merchants in the U.S. Now as you said, Jason, this litigation has been going on for actually over 20 years. And we have been very focused on reaching a resolution. The proposed settlement provides for meaningful relief, more flexibility and options for merchants to control how they accept payments from their customers. At a high level when compared to the prior settlement terms, the new settlement offers a more significant interchange reduction and more flexibility and control around 2 topics surcharging and honor all cards.

Now without going through everything in a great amount of detail, let me just hit a few high points and then talk about implications and next steps. So I think those are the things that you asked about. So first, when it comes to interchange reduction, the topic of interchange. The proposal lowers U.S. average combined credit effective interchange rates by 10 basis points and also then provides merchants with rate certainty. In other words, U.S. posted credit interchange rates will be capped for a period of 5 years and credit interchange rates associated with the standard category of credit cards would be capped at 125 basis points for the term of the agreement. So those are the 2 sort of key elements in interchange.

The second point around flexibility and options around surcharging and honor all cards. What that means is merchants will have more options to surcharge even when other credit networks aren't being surcharged. And secondly, they will have more flexibility around honor all cards, which means they could choose to accept cards along distinct categories, and that's commercial, premium consumer and standard consumer.

And then third, we're going to make merchant education programs broadly available to merchants of all sizes in the U.S. that addresses payment acceptance and cost management. So those are kind of the big elements in terms of the structure of the agreement.

Now what are the implications? I think was your other question. Well, obviously, it's early. We are ways away from any sort of implementation. But clearly, it will be cheaper for merchants to accept credit cards, and they will have more flexibility around these terms that I talked about. So flexibility and control around on or all cards and surcharging. But when they make these choices, I mean, clearly, merchants think about other things besides costs. They think about the experience that their -- they want for their customers. They want the customer experience. So the -- it's not just about cost. They consider reliability, safety, flexibility, speed, trust. They think about the customer experience, the customer UX, all the innovative things that Visa has done. And so they have choices to make. And clearly, merchants have chosen and have benefited from working with Visa for a long time, and we believe they'll continue to choose Visa.

Final thing in terms of next steps. So next steps, like I said, it's early. We think the litigation process will take through the course of FY '26. And so any implementation would likely be in FY '27 in terms of supporting the approval process, we, along with Mastercard, have filed an affirmative brief with additional details. The mediator in this case, who knows the case well has also filed the support declaration and of course, we all stand ready to address any questions or concerns raised by either the court or the merchants in this case. So those are sort of the next steps. To summarize, we're very pleased to have reached this proposed settlement, one that offers meaningful value and flexibility and options, as I talked about. We're going to be very focused on reaching the approval process, and we believe Visa remains very well positioned to compete in this new environment.

Are pretty much all of the rewards cards in that "consumer premium category?" Or maybe you can just talk a little bit about how the categories were created.

So I have seen some stories written about like sort of the distinction calling it rewards cards versus non-reward cards. And that's generally a fair construct, but I will say there are some rewards cards even in the standard category as well. So it's not exactly delineated in rewards versus nonrewards. They're just standard tiers, premium tiers and of course, commercial.

And the honor all cards and the surcharging changes there, is that also got the 5-year term on it? Or is that more indefinite, if you will, vis-a-vis the interchange changes.

Those aren't -- that's not capped by the same -- that's not capped by the same term as the interchange changes.

Okay. So we should consider that to be indefinite for the time being, at least. Okay. Okay. Understood. Okay. Great.

Well, that was a mouthful, I get it. It's important to get it all out.

Yes. No, I appreciate it because I know there's some nuances there. So let's just talk about the core consumer business. I mean I know like pretty much every year when we see you, it's always about the macro, right? So you guys had made some comments on your last earnings call, what you saw through the first 3 weeks of October. Maybe you can catch us up on what's going on because there really do seem to be a lot of cross currents of data points and you even had a very big retailer this morning talking about some softness. What is Visa seeing on the ground and maybe talk about domestic versus cross-border and travel, et cetera.

Okay. Yes, let's try to cover that. And I'm going to start with Q4 just because it's...

Yes, get the context right. Great.

Yes, the context. If I go back Q4 -- we reported Q4 in third week of October, my uber message, obviously, we had a strong Q4 financially. But underneath that, if you look at all the metrics and the KPIs that we report on, we did see broad-based strength and stability. And I call it broad-based because you can sort of go through categories. Obviously, the drivers were healthy, payment volumes were healthy and stable to Q3. Transactions were healthy and stable to Q3. But as you click down into the category. So we see discretionary spend, nondiscretionary spend, both being stable or better than Q3. Categories like fuel and travel, retail goods and services, all healthy. And then again, further clicking down so credit was up relative to Q3. Debit was up relative to Q3. Even commercial was up relative to Q3, not just consumer. Card present, card not present, both up relative to Q3. So pretty broad-based.

And then again, clicking further, average ticket sizes were stronger in Q4 than in Q3. And if you look at spend by -- spend -- what we call spend band, which is high spenders versus medium spenders versus low spenders and you look at the spend volume that happens in each of these spend bands, that was also very stable with high spenders driving more of the growth as they have throughout the course of the year. But again, all spend categories being stable to Q3 and Q4. And so strong quarter and very, very stable. We tend to be very data-driven on these things.

Obviously, we see the headlines as well and recognize that there's a level of consumer uncertainty that is out there, but the data would indicate health and stability. And then we sort of overlay that with the macro elements. Of course, we're not macroeconomists in that sense, but we look at the jobs data and the employment data. We look at personal wage growth and stability there. They'll get personal balance sheets. They seem to be stable and healthy. And so that all adds up from our standpoint. We have exposure to the broadest set of spend. And so maybe we're unique in that -- from that point of view. But that adds up to the simple statements that we made around stability and consumer resiliency. So that's sort of looking back.

Now looking forward, when we talked about October, you sort of look at all that data and we said through the 21st of October, when we reported earnings, we said we shared a number of statistics around transactions, around U.S. payment volumes, around cross-border data. And I'll also say that all those have remained consistent through the full month of October as well. Now the one thing you also asked about cross border and I should touch on that, cross-border as well, like along this theme of stability, cross-border, if you look at cross-border volumes in Q3 and Q4, also very, very identical, right, 11% growth in Q3, 11% growth in Q4, e-commerce cross-border 13% Q3, 13% Q4 and travel 9% in Q3, 10% in Q4. So ticking up a little bit as we saw strong commercial travel volumes and a little bit of benefits of holiday timing and some of those are some of the things. But again, I would characterize that all as strong and healthy. And so looking forward through all of that, that gave us the confidence again, to put out a strong guide for Q1 and for FY '26.

Okay. So stability and resilience, name of the game. It sounds like that's continuing which is good to hear for sure. So let's actually talk about your guidance for fiscal '26. One of the things that we got some questions on in the aftermath of the earnings call was, okay, low double-digit constant currency revenue growth, like that looks really solid, maybe even a little bit better than some people thought you might guide to. OpEx growth is being guided at the same level as the top line. So optically on the surface, it would look like, okay, maybe margins aren't going to really expand in fiscal '26.

And Visa has never been a company that's managing to an operating margin percentage number, we understand that. But just talk to us about some of the investment priorities underlying that low double-digit OpEx for fiscal '26. And then just your philosophy about generating positive operating leverage in the business over time more generally.

Right. I might even just start with the last question first. And then I'll come back to it. We'll circle, but if I think about you mentioned we've never really had an operating margin target per se, but we have been very focused on 2 things, many things, but 2 things in this particular case. One is driving client success and, therefore, top line growth, volume growth and revenue growth; and two, operating the company in as disciplined and effective way as possible. And when we do both of those things right, it generally has translated to the industry-leading margin profile that we have today. So I'll start there with sort of an umbrella state, but then we'll sort of come back to. It really is one of the most exciting times, I think, in our industry in terms of innovation. The pace of innovation is, if anything, it's speeding up.

If you just sort of look and listen to and read the headlines around topics like stablecoin and agentic commerce. That's 2 examples of things that are really happening and exciting the industry. There are more ways to pay and be paid than ever before, right? And I think we've done a really good job of continuing to make sure Visa remains the best way to pay and be paid. And so it is, a, an exciting time. It's a very dynamic time in the industry. We have more -- because of all the things I just said, we have more opportunity to invest in our long-term growth than ever before. And given our position of strength, I think it's a great place to go do that while still continue to do all the things that I talked about, which is drive top line growth and drive operational efficiency.

What are we investing in? Just to give you a flavor. And I'll tie this a little bit back to the very sort of thorough discussion we had at our Investor Day in February because a lot of this sort of builds on that. And you've seen it now become even more topical. I just -- I mentioned stablecoin and Agentic. Those are 2 areas that we've been very front-footed about our investment, stablecoin just a few examples here. We have over now 130 card issuance programs for stablecoin across 40 countries. We are settling -- we're using it for settlement operations. It's now at a $2.5 billion annualized run rate, which is a big number, but also a small number relative to our total payments volume.

But what's notable is that's 2.5x bigger than it was just in August. And so we're seeing sort of this very steep curve of adoption on stablecoin settlement. We've launched things like the Visa Direct stablecoin prefunded pilot. That's an example where we think there's a interesting product market fit around cross-border money movement. Those are a couple of examples. Agenetic Commerce, when we announced in April, the day after earnings, April 29, in fact, we held an event in San Francisco, called the Product Drop. We talked about our vision for agentic commerce. I think we were one of the first to go talk about it before it became sort of the topic of the day.

And on that day, we talked about Visa Intelligent Commerce, which is really a set of APIs, along with a marquee set of partners that are really going to enable us. But as you can imagine, this takes real work, and we've been working real hard at it and investment. But it's not just these 2 sort of shiny objects with consumer payment, value-added services, CMS in all those areas, and I'll again point you back to Investor Day, we talked about affluent and cross-border priorities. We talk about innovation with things like Flex Credential, how we're going after the very big TAM in CMS and value-added services across product execution, sales execution, all of those things, again, requiring investments.

So lots of surface area, lots of interesting things. We're in a great position to go invest after these things. And I think to protect and to grow our long term -- grow our business long term, I think it's the right thing to do. And then finally, of course, coming back to sort of the running the company in a disciplined way, I get -- we totally get that it requires that we continue to be really disciplined to deliver the profit growth that shareholders expect from Visa, and I'm confident we'll be able to do that.

Track record is definitely there. So let's go back to the Investor Day in February. You guys presented us with a longer-term financial framework, part of which said the value-added services, the VAS business plus the commercial money movement business collectively kind of 16% to 18% growth projection there. As best we can tell in fiscal '25, you were a bit above that. I think I'm going to call it 20% plus. My words, not yours. I know you don't explicitly disclose that. But nonetheless, would love to get your perspective on what kind of surprised you to the upside when you reflect on the past fiscal year? And is a 20% kind of neighborhood realistic for VAS plus CMS as we look into fiscal '26.

Yes. Super happy and excited and pleased with what's happening with our 2 growth pillars, VAS and CMS. Without giving the aggregate number, VAS grew 23% in FY 2025 and CMS grew 15%. And VAS, we do disclose the number. It's now $10.8 billion in FY 2025, which is about 27% of our business. And so rapid growth, meaningfully faster than other parts of the business and going really well. If I really think about like they're very different businesses, as you know, but they share some common like DNA elements of like how we're going about driving growth. If you think about structurally, big growing addressable markets where we're in a very good position to compete for, and we have relatively small share today, focused on clear product road map, strategic prioritization and going back to the last conversation and focused investment behind it.

And so these aren't necessarily ingredients unique to value-added services. That's like the formula for how you do it, right? You go after big growing TAMs and you do it in a focused way and you invest behind it. And we're doing that. And so it's working as evidenced by the growth that we've seen over the last couple of years. And so I'm not surprised -- use the word surprised. I'm not surprised by any of that. I'm just glad to see it working, and we're going to continue to invest and really prioritize all the things from product truth to all the way down to sales execution. And I think we've continued to do that, and we're excited. We don't guide specifically on these growth pillars, but the momentum and the execution is clearly quite good, and we'll continue to go after it.

So let's drill down on VAS a little bit. You guys did a pretty deep dive at the Investor Day, which I know was definitely appreciated by the investment community. Take us through the major buckets and kind of the relative growth trends, if you would kind of among them right now? And then I'm going to take you with a couple of follow-ups on VAS after that.

Yes. Let's start by defining what it is. It's obviously not one thing.

Exactly.

We categorized it along 4 portfolios primarily. And as I mentioned, $10.8 billion in FY '25. In our Investor Day in February, we actually broke out the 4 portfolios. We gave the revenue size, which I'll repeat, which is from FY '24 and we also gave like a 3-year '22 to '24 CAGR. And so just to give you a little bit of flavor for what this is and it's $24 now. The biggest portfolio is issuing solutions, which for its name sake, it's their services, products and services toward our issuing clients. That was about $3.5 billion in FY '24, growing in the mid-teens over the 3-year CAGR.

Secondly, acceptance solutions, which, again, similar, but on the other side of the aisle for acceptance on the acceptance clients. That's about $2.5 billion growing in the low teens, if my memory serves me correctly. Third is risk in advisory services -- or sorry, risk and security services, advisory is next one, risk and security service. That's about $1.5 billion and it's growing in the low 20s over that period. And then the fourth one is advisory and other, and that's consulting, marketing services and some other things that go in there. That was $1.3 billion, growing in the mid-30s. So the fastest -- smallest growth -- smaller portfolio growing the fastest. So you can see it's a breadth of things that go from issuance clients, acceptance clients, clients that span, Visa and non-Visa. If you think about what risk solutions are and then, of course, advisory and other. It's a broad business and they're all growing $1 billion plus, growing at double-digit plus.

How has your like your sales and your go-to-market motion behind those various buckets of VAS revenue. How has that evolved? Because I feel like when Ryan became CEO, there was a bit more of a conscious lean in. And obviously, you came in subsequently, but maybe you can take us behind the scenes on that a little bit? And how on a day-to-day basis, you're really attacking the opportunity?

Sure. I'll characterize it a few ways. We have evolved. If you think about going back predating me, of course, but we went from having kind of one monolithic, at least the way we described it one business to talking about there's obviously lots more to it. But really saying, okay, these are some unique growth opportunities that we see along value-added services and around our commercial and money movement solutions started by building the organizational design around it, selecting leaders. At that time, it was Antony Cahill, who's now the CEO of Europe, the President of Visa Europe. And today its Andrew Torre, but Antony for value-added services and Chris Newkirk to run our commercial and money movement solutions.

They brought the focus, as you can imagine, in terms of strategy we -- and for product and product and sales. And so when I talk about sales execution, it really begins with that, like do you have a clear strategy? Do you know what you're doing and who you're going after and why? And what's your unique value proposition? Then that translates into unique product differentiation. And so not only have we created these organizations, we've actually dedicated product and tech resources and development cycles to be focused on these individual cycles.

And then, of course, now you've armed your go-to-market people, your salespeople with both a clear strategy, a clear product differentiation and the things that they can then go do what they do best, which is engaging with clients. And so we've evolved the go-to-market side. For value-added services specifically at Investor Day, we talked about specialist sales as a place. We have 450 specialists now in the VAS business, and that's an area that has been an area of investment.

The second thing I'd point to is also because we're Visa, we have access to rich data, and we use that data to really optimize products and services, understand what our client needs are. We have long-standing client relationships. And so part of that -- part of what the salesperson is armed with is the ability to really reason over a very rich set of data and engage our clients in a positive way. And then the third thing I'd point to is sales excellence. So sales plays, compensation, of course, models. This is how sort of the sales organization works.

We've incented -- in some cases, aligned the incentives from the regional leadership to the specialists and in some cases have dedicated incentives for our salespeople. And so if you think about, again, product growth, strategy, sales execution, all of that has to kind of work together for us to get to the end results that we have. And of course, the vast results have been very good if that's the best evidence of that. So that's where we are in that evolution.

As we look into '26, it's going to be a big year for sports fans. We got the Olympics. We've got FIFA World Cup and Visa is always part of the sports world. And I think our impression and maybe you guys have talked a little bit about this, is it can actually create some vast revenue opportunity. Can you maybe give us a couple of examples of that? And I mean, does this rise to a level of materiality in the context of your guidance for fiscal '26.

We're really excited. As you said, we have a long history, whether it's the Olympics or now, in this case, with FIFA and World Cup, both happening in the same year with the Winter Olympics and World Cup happening. Very exciting year. There's a reason we're in these sponsorships. There's incredible excitement around the world around World Cup, 104 matches, I believe, 16 cities, 3 countries. involved in global fandom, not just in the U.S., obviously, this event is happening in North America. And so there's probably extra excitement this year here locally, but it is truly, truly a global event. We're not just excited, obviously, fans around the world, but our clients as well. And so let me talk about how an event like World Cup impacts our business in multiple ways.

The one that maybe people are less familiar with because it's in the VAS business and it's in sort of the advisory and other part of the business largely is marketing services. And so we've built a business where we can leverage the sponsorships that we have, in this case, World Cup to really work with our partners to create experiences, do many things. We have over 70 clients now engaged with us on marketing services for World Cup and FIFA. We have 100 more in the pipeline. What do we do? What is marketing services?

In this case, I'll give you a couple of examples. We could leverage the FIFA and World Cup brand to co-advertise, advertise with our clients. We could help them issue cards using the FIFA logo. We can create unique experiences at these events that the clients could then even host their own clients. We could do -- there's an interesting advertising campaign that we've done with a client in -- an Italian client of ours. And you can go Google it. It's using complete generative AI, we created an advertising campaign. It was downhill skiing through the cities of -- through the streets of Italy, and it turned out great. And so there's all these things that we can do activating marketing services. That's one.

Two is cross-border travel. Obviously, whenever there's a big event like this, that is a draw for a big audience. We do anticipate more travelers coming into the cities from globally, and that helps us our business from a cross-border perspective. So that's certainly another way that we think about the business. And so it affects our business in multiple ways. We're excited about this. That is embedded into the FY '26 guide. So as we shared our first guidance on FY '26, it was for low double-digit growth in FY '26. We think the marketing services will be spread throughout the year a bit because clients are activating throughout the course of the year. And of course, the cross-border volume will happen more along June and July when the concentration of when the matches take place. But exciting year for the business and for FIFA and for World Cup -- and for Olympics, that is.

Yes, for sure. All right. Last one on VAS, I am going to jump over to CMS. Just the topic of value in kind, I know has come up a bit more maybe over the past year. And maybe you can just talk us through a general example of how VAS effectively then ties into that client incentive line just to make sure everyone is clear on the accounting as well as kind of the business strategy behind that?

Okay. So value in kind, I'll just refer to it as VIK, that's sort of the acronym VIK. So what is it? Let me just start back way up because I think some are familiar with it, some maybe are not. When we structured deal with one of our commercial clients, they're often incentives involved. And in some of those cases, a portion of those incentives are then structured as VIK or value in kind. So that form -- and what VIK is effectively a form of a credit or a voucher, I guess, in some sense, that they can then use on products and services back with Visa. It's good in many ways, good for us, it's good for the clients. For the clients, it is a focused tool that they can use to reinvest in the business, to reinvest in their card business or whatever business that the client is working to continue to grow, and Visa has a whole host of services that can help them grow. For us, it's a great way to -- it's a very sticky relationship.

It deepens the relationship with the client. We know that when they activate and use their VIK, their satisfaction with Visa goes up and -- and so -- and it displaces cash as a form of incentive. So it's a sort of a win-win on both sides. We can help our clients grow. It can help Visa for all the reasons that I just stated. The second part is then, how does that run through our financial statements. I think that was part of your question?

Yes.

So when a contract is designed and let's say, a contract is 5, 7, 10 years, and there's a portion of VIK that's embedded in those terms and that contract is completed. That will then land in our RPO as disclosed. The contract will also stipulate terms by which -- how they could use that VIK. And so it might be -- it's a 5-year deal, let's say they get a certain amount each year or it may be performance-based and so you hit certain milestones, you earn a certain amount of VIK. And so as they earn it in either of those 2 ways, then it moves off into our balance sheet, and we record an -- it moves to our balance sheet as a deferred liability. And then it shows up as an incentive in our P&L in that quarter or that year as an incentive line item. So that's how it moves from RPO to the balance sheet and to not expense and contra revenue in this case.

And then thirdly, as the clients then use the VIK on products and services, that would be revenue and if there's any expense associated with it, it would be an expense in that period. I will maybe make final 2 points. It is not the majority of our VAS. It does not solely linked to that. They could use that VIK for a breadth of services. So it's not just VAS. And certainly, it's not the majority of our incentives either. It's a small percentage of incentives. It's a small percentage of total VAS and it's a really great tool that we think has ecosystem benefits for both us and our partners.

Yes, kind of a win-win. Good, good. Let's talk about commercial. So we thought it was interesting in the fourth quarter, your commercial volume growth actually accelerated pretty significantly the year-over-year growth rate. I think it accelerated by about 300 basis points to 10%. I think it had been a while since you guys were at double digits. And you had a couple of calls. I think there were some new wins ramping, et cetera. But I mean, do you feel like that was an anomaly in any way? Or I know you don't formally guide on this metric, but do you feel like just on a sustainable basis, maybe the run rate is improving because of certain factors?

Listen, here's how I would think -- I'll give a little bit of a big picture comment and then get into the details. So we've long articulated that we think commercial money movement, which really has this commercial volume, that part of the business in Visa Direct, that there's a big opportunity for CMS and why we're so excited about it. We've thrown some very large numbers out there, $200 trillion of payment volume opportunity, of which we have very small share today. And I talked about all the things that we're doing to invest behind strategy and product and whatnot.

At Investor Day, Chris Newkirk outlined how he's going after this growth in this part of the business, Visa Direct separate, but in the commercial volumes, and it's good to see it working. Like we've long anticipated that this should be growing faster than our consumer payment volumes in total. And so then going to Q4, yes, it did see. We did see an improvement to 10%, getting to double digits faster than consumer payments volume in the U.S. globally, good to see. Now -- and we did give like reasons for it. We were lapping some losses as well as some additional wins as well, primarily leading to that as well as strengthen cross-border and some other things that benefited that line. And so from quarter-to-quarter, you may see a bounce around for things like that. Wins and losses do have short-term impacts, but we're really confident that the trajectory and the long-term growth opportunity here is available for us to continue to execute against.

And Chris, in our -- in the Investor Day went through how we're going after SMB, how we're going after lower mid-market, large and sort of the LMM space, how we're doing it through innovation like the virtual payables. We had a number of wins we talked about on this last earnings, Trip.com as an example of this virtual card -- virtual travel card, which is really exciting for us. And so there's a lot going on in the business. We're excited about it. We're happy to see it follow through on volumes, and we'll continue to keep you updated.

Okay. That sounds good. And I do want to finish up on Visa Direct, we have 1.5 minutes left, and I have 2 questions. So let's see if we can get through them both. The first one is just on the Visa Direct transaction growth. It was really robust for collectively F '25, I think it was up 27%, but Q4 had deceled a little bit. So any call outs there or anything we need to be mindful of as we think about trajectory on that metric in fiscal '26.

Okay. Very quickly, if you look at the -- over the span of the last couple of years, we see that Visa Direct went from growing healthy to growing really healthy, like 40% plus, and we talked about it at the time, it was the onboarding of a particular client in one of the regions. We're anniversarying that onboarding. I'd say, we're still a quarter away to anniversarying the very high growth that we saw 23% in Q4, as you noted. I think we'll get through that by the time we hit the second half of this year, still healthy underlying business for sure.

And then just on the yields you talked about it at the Investor Day, but $0.09 to $0.10, I think you had said and just -- because I know that the use cases are evolving. So is that going to have implications for yield?

$0.09 to $0.10, I've got 30 seconds, so let me try to do the fast version. I mean, the way to think about yield is -- I mean, yield is obviously very, very important and we focus on it. But it is -- it's a mix equation at the end of the day. And so yields can be impacted by corridors, cross-border versus domestic. It can be impacted by client-specific factors. If you have one client that's growing faster with a different yield. Certainly, regions have different outcomes. And so if I zoom out and look at it, I think yields have been very healthy and stable. It can change because of some of the mix factors and we see that from quarter-to-quarter, but I'm actually feeling really good about the overall economics of the Visa Direct business too.

Great. Feel good about. Yes. Perfect. Well done. Thank you, Chris. Really appreciate it.

I appreciate it. Thank you all.

I'll get started.

Well, welcome to day 2 of our conference. Again, I'm Sanjay Sakhrani. I lead the consumer finance and payments equity research team at KBW. To kick off the second day, I'd like to welcome Chris Suh, CFO of Visa. Chris has many years of executive experience across industries. Prior to joining Visa in 2023, he served as CFO of Electronic Arts, Microsoft Cloud and AI Division and the Head of IR at Microsoft. So thank you, Chris, for taking the time to speak with us today and come all the way from San Francisco. And Jennifer came up the elevator bank a few floors to our conference. So thank you for making the trip.

So maybe we start with the biggest topic of the week, which is the recent merchant settlement announcement. Could you walk us through the timing, key terms and the implications for Visa and other players in the ecosystem? The concession to the honor all cards seems pretty meaningful given that's been a key value prop for the networks historically, and they've been very protective of it. How might that impact the competitive balance in the marketplace as it relates to merchants steering away from premium cards? Loaded question.

A lot there. First of all, thanks, Sanjay, and thanks, everyone. Thanks for joining us and giving me the chance to give you an update about what's going on at Visa. So there was a lot there in that question. So bear with me, there's a lot of moving parts. And so I'm going to give you sort of the full -- a more fulsome answer. Earlier this week, on Monday, we did announce that we've reached a proposed settlement with merchants in the U.S. As many of you know, this litigation has been going on for over 20 years, and we've been very focused on reaching a resolution. So the proposed settlement provides merchants in the U.S. of all sizes with meaningful relief, more flexibility and options to control how they accept payments. When compared to the previous settlement terms, the new offer, the new current proposal offers a more significant interchange reduction and more flexibility and control around surcharging and honor all cards.

So I can't and won't be able to go through all of it in detail, but let me just try to hit a few of those high points. First, with regard to lower interchange. So the proposal provides for a reduction in interchange for U.S. combined average effective credit interchange rates by 10 basis points for a period of 5 years. In addition, merchants will now have interchange rate certainty, which means for U.S. posted credit interchange rates, they'll be capped for a period of 5 years and interchange rates associated with the standard tier of credit card categories will be capped at 125 basis points. That's one. Two, with regard to more flexibility around surcharging and honor all cards. But what does that mean? That means merchants now have the option to search -- more options rather, to surcharge even when they're not surcharging other payment networks. And two, merchants will have the option to accept -- choose to accept U.S. credit cards along distinct categories, and that's commercial, premium consumer and standard consumer.

And then third, we've introduced merchant education programs covering payment acceptance and cost management made available to merchants of all sizes in the U.S. Okay. So those are sort of the highlights in key terms. Now you asked about implications and how to think about all of this. Well, it is early days, and we're ways off from implementation. But a, it will be cheaper for merchants to accept credit cards. And two, they will have more flexibility options and choices. And we believe as merchants make choices, they really care about the customer experience for their customers as they make payments. And so they think not only about cost, but they think about safety, security, reliability, speed, trust, the brand, the customer experience, the UX, industry-leading innovation. They consider all these things.

And when they do consider all these things, they understand and have benefited from accepting Visa, and we believe they'll continue to choose to accept Visa. Now where are we in the process in terms of next steps? We do expect the legal process to continue through the end of fiscal 2026, which means that any implementation would occur in fiscal 2027. To support the approval process, we, along with Mastercard, have filed an affirmative brief with additional details. The mediator in this case, who knows the case very, very well, has also filed a support declaration. And certainly, we all stand ready and ready to respond to any questions should they arise or any objections should the merchants have any, we'll respond quickly and effectively. So there's a lot there. To sum it up, we're very pleased to have reached this proposed settlement, one that provides meaningful relief to merchants in the U.S., additional flexibility and options to control how they accept payments. And we're very focused on the approval process. We believe Visa will continue to be well positioned to compete in this new environment.

Just one question I asked within the series of questions I asked on steering. Just how do you think about merchants and steering? Do you think that will become prevalent? I know they've been able to do it in certain facets recently -- before this. So could you just talk a little bit about that?

Yes, it has been an existing practice. Like I said, it's early, and we'll have to see how it all plays out. But we do believe that they understand the benefits of accepting Visa and for all the reasons that I talked about from safety and security to the actual customer experience. And we believe that our value proposition is strong, and they'll continue to choose to accept Visa cards.

Got it. Okay. We're going to shift gears and talk about the fourth quarter results. It seems like the consumer continues to be resilient with some variability by segment. Any updates relative to the last few weeks? What are the 1 or 2 leading indicators that you guys are looking at, either internal, external to gauge the health of the consumer and the trajectory?

We talked about Q4. Just to start there a little bit. We referred to the consumer as resilient in Q4. We've used that word actually throughout the course of FY '25. And if you look at sort of how broad-based that resiliency reflected in Q4, it was evident. It was discretionary spend and nondiscretionary spend were both up from Q3 to Q4. Categories like retail services, retail goods, fuel and travel, all steady or improved from Q3 to Q4. But it was also, again, broader-based, card-present, card-not-present, credit, debit, both up from Q3 to Q4 and average ticket sizes were actually improved as well into Q4. And so we look at the breadth of the business.

In addition, we talked about spend bands. So from your highest spenders to your lower spenders, the growth rates have remained quite steady from Q3 to Q4 with, again, the higher spending categories driving more of the growth, but again, steady from Q3 to Q4. And so resilient, right? How do we then interpret that when we look forward? We reason over that data. And then we also obviously are mindful that there's signals that consumers are a little bit more uncertain. We're mindful of that. But then again, we look at some of the macro data, jobs, the environmental jobs and employment, wage -- personal wage growth, personal balance sheets all remaining relatively steady and healthy. And so as an update, through the month of October, when we look across our key drivers, and that's U.S. payment volumes, cross-border payment transactions for the full month of October is very consistent with what we saw through the 21 days of October that were reported alongside our earnings in a month ago.

And so again, no surprise given all the data points. You asked about leading indicators. And we look at all of those KPIs that I just talked about. They're not so much leading as they are coincident, I guess. And so as we look across that, we always start by saying we're not macro economists. We're not going to try to predict what's happening from a macro perspective, but all that data and the stability and the resilience of that data gives us good reason to anticipate that underlying performance and underlying economy will remain steady and strong, and that's what's assumed in all the sort of guidance that we gave for Q1 as well as FY '26.

Okay. Well, that's encouraging. Maybe we could drill down on cross-border. Its resilience as well has been impressive given this complex macro picture. We've also gotten some data from some smaller players in the industry on just choppiness in travel. I'm just curious how you think about its resilience and the sustainability of these trends.

Yes. It has been resilient, as you called it. We saw resilience again throughout all of FY '25. And over the last 2 quarters, if you just look at the numbers, right, total cross-border growth ex intra-Europe, 11% Q3, 11% Q4. E-commerce cross-border, 13% in Q3, 13% in Q4. And travel cross-border, 9% Q3, 10% Q4, so ticked up slightly in Q4, really based on stronger commercial volumes, commercial travel volumes and some timing in CEMEA related to holidays. And so again, through the last 6 months, last half of FY '25 and really throughout the course of the year, we've seen strong, steady, resilient cross-border volumes. Now sustainability, the best -- I have an opinion on it, of course, but I think the best way is the way that we approach all problems like this. We are data-driven. We look -- we try to analyze sort of what we see. So what do we see in the data? And how do we sort of analyze the trends?

We can kind of break it down along some of the categories that I just talked about. So if I look at e-commerce, cross-border e-commerce. Pre-COVID, it grew faster than travel. Post-COVID, it's growing faster than travel. It's stayed in the low teens pretty consistently. That's been a strong performer and has continued to be so again, pre and post-COVID. It was about 1/3 of the business pre-COVID. It's actually 40% of the business today. So the faster-growing part of cross-border growing is a bigger share of the business. So that's structurally good.

Travel has bounced around from high single to low double. We see a little bit more variability with cross-border travel, again, ahead of the pre-COVID levels. And so when you sort of add that together, however, travel, whether it comes back to pre-COVID levels or not, structurally, we have the benefit of more of the business being weighted toward the faster-growing e-commerce. But obviously, we'll have to wait and see to see how all the travel.

Things like we have some exciting things in the horizon like FIFA, which will attract, I think, travelers into -- World Cup, that is, which will attract travelers into North America, and we'll continue to watch -- be very watchful about cross-border, but we do see it as a resilient and sustained strong driver of our business.

That's great. I mean that was going to be my other question. Just 2026 FIFA World Cup is going to be in North America. And you guys do think it's a major catalyst for inbound travel. And that inbound travel into U.S. is kind of more profitable, right, in cross-border?

Yes. We have talked about it being a strong yield corridor. I mean, here's how I think about World Cup and FIFA. We're obviously -- we partner with FIFA on across a sort of a broad category. There's incredible excitement. I think there's 100-plus matches, 16 cities, 3 countries involved, excitement from consumers clearly, but also our clients. And so we already have 70 clients engaged with us on marketing services related to World Cup and FIFA. And so we could leverage the World Cup and FIFA brand for advertising, for co-branding. We can help them launch branded credit cards. We can also create very unique experiences at the events for our clients to host their clients. And so there's a number of marketing services that will be great for the business in FY '26. And then, of course, we are anticipating an influx of fans to come watch football -- I was about to call it soccer, but football matches for our global audiences out there throughout the course of this year.

Now that's all embedded, both the marketing services and the cross-border volumes are embedded in the guide for FY '26 that I did provide with the cross-border piece, the match is really happening in June and July. And then with Marketing Services, we anticipate a little bit more even spread throughout the course of the year because clients are activating it both before and after.

All right. Moving on to VAS growth, value-added services. It's been quite strong in the low to mid-20s, now represents almost 30% of total revenues. Can you just talk about what's driving the strong outperformance, new products versus old?

Yes. Very proud of where we are with our VAS business, big market opportunity that we've articulated a very clear strategy, and the teams have been executing really well. It's reflected in the growth number that you just quoted. And in fact, we've seen some acceleration of growth in the back half of the year, 26% and 25% over the last 2 quarters. Now we did also acknowledge that some of that's benefiting from the timing of pricing in FY '25. But regardless, even ex that, the business has continued to execute really well and deliver strong growth. So check, it's -- the business continues to execute really, really well. Your question is around like sort of new and what's driving it?

And maybe just let me clarify. Like I think we get a lot of questions about the durability.

The durability, got it.

And so I think everyone sort of assumes like it's just growing off a base and you're constantly evolving the product set to add new products. So maybe you could just talk about how that sustains the growth.

Yes. Let me try to address together with an example. Let's talk about what we saw in the fourth quarter. And each quarter, we kind of highlight some of the things that are driving our business. In the fourth quarter, there's probably a good example that kind of maybe illustrate some of the things that you're asking about VAS. So, in Q4, again, we had a very strong VAS quarter, and we talked about the drivers. We have 4 portfolios within the VAS business, each over $1 billion and each growing healthy. One of those portfolios is issuing solutions. That's a business that -- where we have products and services really targeted toward our issuing clients. And we talked about that as a driver of performance in the fourth quarter. And if we just click into that, I think that might help sort of solidify or make concrete some of the examples. So what drove issuing solutions?

Well, there was 2 things that we called out, both network products and card benefits. But what are network products? Here's an example of 2 network products. So we have Visa stop payment service, for example. That's a service that helps consumers by helping them basically turn off recurring or installment payments on behalf of the consumer, so they don't have to go through sort of the sometimes difficult process of canceling like a subscription. So that's a service. For example, that's a network product.

Another one is stand-in processing, Visa stand-in processing. So that -- in the event that an issuer can't process goes down and can't process a transaction, the service actually smartly reasons over that transaction and decides whether they should accept or process that transaction. Therefore, the sale is not lost. And so those are 2 examples, network products that are doing really well. And you can see they're very sticky. They're related to the Visa transaction. Card benefits, which is another sort of big business within Issuing Solutions, it's really all about rewards and people love their reward cards.

As we've seen consistently, we have a platform called Visa Infinite. We partner with many issuers who really take advantage of the benefits that they're able to use and differentiate their product against other rewards cards. We saw -- we named a couple this last quarter, Scotia Wealth Management, Truist on their business premium. Those are both Visa Infinite products. There's more and more interest in that product as well. And so those are 2 different ways to think about like drivers of the business. They are Visa transactions and premium cards in force, which both are very sticky sorts of things. In terms of sustainability then, just to kind of finish that thought, a, it is -- there's a close relationship in the issuing portfolio, for example, to Visa transactions, as I talked about.

We are executing really well. And our sales and go-to-market forces also have access to what we call value in kind. And so in many cases, clients have already earned these incentives that they often use and like to use against value-added services. And so those are just some examples of why I think the business against this very large $520 billion TAM that we've articulated as well. And so again, big opportunity, strong execution, good products and services. And that's just one portfolio. If you look back over the course of the last couple of years, I think in each quarter, we've talked about acceptance. We've talked about risk. We've talked about advisory and other. And so across the breadth of the business, value-added services is doing really, really well.

Yes. You guys are involved in a lot more than just moving money around, it seems, a lot of people just think of it one dimensionally. I guess maybe we could double-click a little bit on Pismo. It's something you talked about on the last earnings call. And it's a newer acquisition that you guys made on the card issuing processing side. So could you just talk about how that business compares to your legacy business, which is debit processing? And then how will it help you sort of expand in value-added services and your value props to banks?

Great.

So let's first start talking about sort of our 2 services that are in this space that you're referring to. So you talked about our -- you called it our legacy debit processing business. DPS, it's been a very successful business. In the U.S., it is our traditional issuer processor for debit, primarily in the U.S. And so that's been a successful business and has done really well. And then there's Pismo, which we closed that acquisition just less than 2 years ago now. And what is Pismo? Well, Pismo is cloud native. It's a modern tech stack. It's issuer processing, core banking. And it's not just debit, but it's credit, it's prepaid, it's -- and debit and commercial. So it's multiproduct, and it's global, so outside the U.S. as well.

So you can sort of immediately see how those 2 businesses kind of complement each other, one being debit in the U.S., the other being cloud native and multiproduct and global. If you think about like what -- which kind of tells you why we were interested in it, right? Like it really began with the customer journey. Customers are telling us as many banks and clients were thinking about their digital transformation, they looked to Visa and said, "Hey, can you help us along that journey? We're looking to modernize. We're looking to partner with a company like Visa on the core tech banking stack." We looked around the world and of course, found Pismo as what we view to be the best-in-class from a product standpoint. So those -- that's how it came together. It's been, like I said, just under 2 years.

We're expanding globally. We talked about the 5 countries, 4 region expansion in FY '25. The client interest is very high. And the 2 -- from a go-to-market standpoint, these 2, again, do complement each other quite well. We're able to offer DPS as a sort of traditional issuer processing service and DPS around the world and Pismo around the world as well. And then I think your last question is sort of like how does that then pull through more VAS. I think there's -- we think of it 2 ways, right? We think of it as both traditional issuers and, I guess, digital native issuers for digital native banks, they could be faster to adopt and implement our solutions with Pismo. So it's just less friction in that.

And for traditional banks who I referred to earlier talking about their interest in becoming more digitally transformed. And as they do so, Pismo is often a great solution for them as well. And so I think it resonates with both. And I think in both cases, any time that we have an opportunity to engage with clients in a deep, deep way, we have the opportunity to provide a more expansive set of services across our VAS business. And so I think there's stickiness there as well.

Okay. Maybe we can then just like think about the financial picture of value-added services, VAS. Maybe you could talk a little bit about the margin profile of that business relative to the core payment processing business and then just the scalability and the interplay between these 2 businesses.

I talked about all the reasons why I like value-added services from a strategy and product and customer standpoint through the lens of -- through my lens, right, through the lens of a CFO, it's a great business, right? Because from a revenue standpoint, it's high growth, highly recurring. It's -- there's a strong relationship to the transaction. I could talk about that here in a second. But -- and transactions are -- have as much recurring like sort of features as most true like classically recurring businesses. And so it's highly recurring, it's high growth, and it is high margin. And the best evidence of that is that you look at the size and scale of the business today, it's $10.8 billion in FY '25, 27% of our total revenues.

You talked about the diversification, right? There it is, 27% of our total revenues are value-added services. And we've grown to that size and scale, and it hasn't been a drag on Visa margins to date. And so again, sort of evidence, I guess, of that -- the nature of the business. Well, why is that? We've talked about sort of the different profiles. If I click into what drives each of these 4 portfolios, I think that is insightful perhaps. I talked about issuing solutions already. That's really driven by Visa transactions. The other portfolios are acceptance solutions, which are driven by network transactions, both Visa and non-Visa and risk and security solutions, same network transactions, Visa and non-Visa. And then the fourth portfolio being advisory and other, which is largely marketing services. That's really driven by engagements. And those engagements often drive -- help clients grow faster. And then -- so there's like this virtuous benefit if they're growing faster and being more successful, that is good for Visa as well.

And so if you look across the business, 3 of the 4 portfolios are very much attached to the core processing transaction, whether it's Visa or outside. And then like I said, the fourth one has both a direct and indirect benefit. So as you look across the portfolios, it really is high-growth recurring and very high margin. And so we have 4 portfolios, all over $1 billion a piece, all growing double digits, healthy margins. They're really a powerful driver of revenue and profit growth at a scale that would exceed benchmarks, I think, of most SaaS companies that sort of trade on recurring revenue. Plenty of opportunity in front of us and a really good business and excited to continue to try to execute well against it.

If I had to like take at one part of earnings, it would have been expenses, which were somewhat elevated. Could you just talk about maybe sort of what was driving that higher? I mean are you guys investing? Obviously, the FIFA event this year. And maybe you could just talk a little bit about that.

Sure. It's a very dynamic time in our industry, a really exciting time. The pace of innovation, as we could all see, is very fast, perhaps even accelerating. If you -- some of the topics of late around things like stablecoin and agentic. Clearly, there's a lot of interest and innovation and investment happening in Visa and also in the entire ecosystem. And so I do think it's important as we think about preserving our long-term growth aspirations that we continue to be at the front center and continue to invest in these things.

So it's not like some structural -- our guidance for FY '26 is that revenue and expenses kind of grow generally in line. And that's not a structural reason. I think it's our responsibility to continue to invest in the ecosystem. And so let me give you maybe some flavor of some of the things that we're investing in. I mentioned already stablecoin and agentic. These are hot topics, I guess.

We're going to talk about them.

Yes. Yes, they're certainly hot topics. But some of the places we're investing, like in stablecoin, 130 card issuance programs already across 40 countries. We have stablecoin settlement that's now at an annualized run rate of $2.5 billion, which is 2.5x higher than it was just from August. So it's rapidly increasing. We've launched a Visa Direct pilot with stablecoin, right, as well. And so those are just examples. Agentic commerce, we introduced Visa Intelligent Commerce back in April. We were early. I think we were one of the first to come to market to really talk about that with a list of marquee partners. We've already are transacting live transactions there, piloting those. And so agentic commerce is certainly an area. But I would even point us back to what we talked about at Investor Day.

We went through a whole list of things of priorities that we're going after, whether it's on the consumer side, affluent and cross-border marketing partnerships with FIFA and F1, thinking about going after -- in CMS, going after SMB and LMM on the VAS side, all the products and services as well as go-to-market and sales engineering. So there's just an incredible set of opportunities that are exciting to us, and we think will continue to drive our long-term growth that we're going to continue to really be front-footed about. I would say maybe the final point just to close on it, though, is we totally get it, like we understand that what's important is not just investing, but being very, very good stewards of that investment. I think we've done that in the past. And I think it's incumbent on us to of course, take some bets, right?

And when you take bets, some of them are going to work and some of them are not. And we have to be responsible to really double down on the things that are working and course correct on the things that are not. And it's not lost on us that it's very important that we continue to be mindful of shareholders and their interest and continuing to make sure that we're being disciplined in that and delivering profit growth that matters to shareholders very much. And so not lost on us by any means.

You guys have executed. Maybe we could talk a little bit about pricing because that's going to impact Q1 and FY '26 as a whole. Could you just walk us through that and how you calibrate your pricing to ensure you're compensated for value?

Okay. So let me talk a little bit specifically about what we said for FY '26 and then maybe expand on that a little bit just to think through the structure of your question. So in the first guide that we gave for FY '26 just a month ago, we said for the full year FY '26, the benefit, the contribution from pricing will be similar to what we saw in FY '25. And the timing of the implementation of new pricing will also be similar, meaning back half loaded. So new pricing in FY '26 back half loaded. That was the case in FY '25 as well. And so then if you do the math on how that sort of plays out through the course of 2026, from a quarterly contribution standpoint, it's a little bit more uniform because of the 2 years pricing timing with Q1 being the largest beneficiary from a year-over-year standpoint.

So we do think the growth will be highest for us in Q1. So that's the guidance for FY '26. Now zooming out a little bit, maybe just talking about philosophy and our overall approach to pricing as well as our overall approach to pricing in FY '26. So the words we've used -- I've used frequently is that we price to value, which means we regularly introduce -- make adjustments to pricing as we introduce new products, new services that will benefit our clients, merchants or make the ecosystem better or stronger. And we do this -- we can do this in multiple ways, and we do this by adjusting fees up or down in some cases, or we could also provide incentives via fees or interchange that encourage adoption of new practices that, again, strengthen the ecosystem and benefit the ecosystem.

So in FY '26, one of the focus areas has been -- is e-commerce. And so for e-commerce, we've taken a good look, and we've introduced -- we've revised pricing associated with some e-commerce fees and tokens that really encourage the adoption of more authenticated tokens, encourage more sharing of data and again, strengthen the overall ecosystem. So our approach has been from a global basis, we've adjusted fees associated with authenticated tokens and enhanced data as well as some of the most value-added -- sought-after value-added services associated with tokens.

And then secondly, in the U.S., we're actually lowering interchange for merchants who opt into both enhanced data and the token services as well, and that brings down the total cost, and so that's our approach on e-commerce for FY '26. When we do this, we think that there's -- it will really benefit e-commerce. And when we do that, it brings down overall fraud, which has the benefit of saving billions of dollars for merchants in the ecosystem. And so that's our approach to pricing in '26.

Wonderful. Maybe we shift to stablecoins and agentic commerce. Those are 2 topics of significant discussion of late and obviously, meaningful areas of investment for Visa, as you mentioned. Could you just talk about the commercialization aspect of it and how quickly it evolves? Like how quickly do you think it contributes to Visa?

I mean my disclaimer to start is it's early on both these topics, even though they are taking up a lot of conversation, interesting conversation. But when I say it's early, it's also like recognizing that the pace of innovation is pretty rapid. I talked about the one example I gave in terms of pace was the stablecoin settlement, which has gone up by 2.5x since August. And so you could clearly see it's rapid innovation happening. So let's talk about maybe each. I talked already a little bit about stablecoin, right? So where we think about like the different vectors of stablecoin issuance -- we talked about the 130 card programs, 40 countries.

We've also been involved in crypto and stablecoin even before stablecoin existed for a while. Since 2020, now we've enabled about $140 billion of crypto and stable transactions across our network. That's about $100 billion associated with purchasing -- using Visa credentials, purchasing of crypto and over $35 billion in consumers using or customers using Visa credentials to spend their crypto and stablecoin. And then the issuance programs that I talked about. So from that sense, we're already monetizing it, right, because that follows traditional card economics. And so you think of all that volume that has run across the network -- runs through the network. I talked about settlement as potentially an unlock for us and for clients to make that more efficient. We're piloting, as I talked about, Visa Direct prefunding model for stablecoin. There's sort of many other vectors that we're looking at.

And so it's continuing to evolve very quickly. We're excited about stablecoin. From that standpoint, we think of it as an opportunity certainly. And so we'll continue to invest there. Agentic, it just goes back again 6 months at our product drop event in April, the introduction of Visa Intelligent Commerce, which is really a set of APIs that enable this thing called agentic commerce. They're AI-enabled cards, authentication, tokenization. It's AI-powered personalization, which is really enhancing our data tokens to make it with permission, a more personalized experience for you. And then it's really AI-specific payment instructions that really allow that transaction to happen, controls, rules around like fraud and disputes and things like this.

More recently, we've introduced our trusted agent protocol, which really deals with how the agent then deals with the merchant and enables that to happen in a trusted way. And so it's early days. A lot of partners have gotten on board since we started talking about it first in April. I think a lot of -- everyone is sort of talking about it. We're seeing some live transactions, but I think it's even earlier days on the agentic side. But we view both as great opportunities and the role that Visa plays in the ecosystem. I think we can continue to be a leader in both.

So like the bull case for stablecoins is quite disruptive to your model, quite frankly, when you think about it, I think a lot of the bulls talk about cross-border consumer and B2B payments, which are very profitable businesses for you guys. How does Visa think about potential cannibalization of that business with stablecoins? And why do you think it's positive?

Yes, we do think it's positive. And so let me just start there. We do think it's positive. And if you really look at -- we look at it in a couple of different ways. The first place I'd start is to say, if you look at the product market fit for where stablecoin has the most compelling use case, they're often in places where access to U.S. dollars is difficult or their fiat local currency is very volatile and -- or in some cases, cross-border money movement, particularly in the B2B side. And if we look at sort of all those scenarios, there are places where Visa doesn't have great penetration today. And so from -- to your question around sort of cannibalization, it's more white space opportunity, if anything. And so that's how we look at it.

I mean, if you think about sort of the cross-border scenario that you described, like at the end of the day, again, is there a compelling consumer use case? Is there a problem that wants to be solved? There's a -- we have -- as travelers, as a consumer travels cross-border, are they going to -- they love their cards. There's almost 5 billion of them out there today, and there's a vast acceptance network, 150 million merchants globally that accept the cards work really well. They love their cards. We just don't think that there's a compelling use case there, but there are ones that are. And also, coincidentally, like if you look at where stablecoin may have the most sort of traction, they're in markets that are earlier in their digitization of payments. And as they adopt -- if there's an accelerated adoption of stablecoin in those markets, it actually will accelerate the digitization of payments. And when that happens, that's actually good for Visa as well. And so we'll be a participant in that.

And so when we just look across the universe, access to digital dollars, which is what stablecoin is, it's not really a problem for a lot of the world. They can access U.S. dollars just fine. But when they can't, then stablecoin maybe becomes more compelling. And in those cases, I think Visa has a strong value proposition as well.

Okay. Great. A couple of questions left that I have. One is, as agentic commerce evolves, what do you think Visa's greatest leverage is to win share in that market? I mean, I guess if you fast forward and we now have these aggregators of information that are now throwing out bots, I mean, can they then circumvent the payment in your mind and move volume away from Visa?

Yes. I mean, can and should and will, I guess, maybe those are the ways that I would think about it. Listen, I think there's 2 ways. Obviously, a lot is left to be solved and a lot of questions and a lot of things to continue to -- will progress and be worked on. But 2 things. One is the value and the power and the importance of the network, both in traditional sense, human to human and in the future, agent to agent as well. The network plays an incredibly important role around trust, around security, around rules and governance and compliance, like how do you deal with returns? How do you deal with disputes and fraud and chargebacks and how do you set the rules of governance that all the participants can play. I think Visa and the scale, right, the 5 billion cards or the almost 5 billion cards and the acceptance network that I referred to. And so all those things, I think, are really quite important to transactions in the agent world as well.

We'll continue to play a very important role in that, a. And then b, if I think about, again, sort of our leadership in product and innovation. I referred back to our product drop in April. But I think that's just evidence, we were thought leaders in this space. We started talking about agentic commerce with a marquee set of partners very early. We've been in AI for decades, right? Like our products and services have been deeply infused with AI for generations. I think that just shows again that we continue to think of our role as a thought leader and as a product leader, and we've executed really well, and we'll continue to take a leadership position, which I think is important. And there's no right to win, but I think we're in a great position, and we're very happy to continue to invest in these areas.

Well, I think we've run out of time, Chris. This was great. Thank you.

Welcome to Visa's Fiscal Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time.

I would now like to turn the conference over to your host, Ms. Jennifer Como, Senior Vice President and Global Head of Investor Relations. Ms. Como, you may begin.

Thank you. Good afternoon, everyone, and welcome to Visa's Fiscal Fourth Quarter and Full Year 2025 Earnings Call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer; and Chris Suh, Visa's Chief Financial Officer.

This call is being webcast on the Investor Relations section of our website at investor.visa.com. A replay will be archived on our site for 30 days. A slide deck containing financial and statistical highlights has been posted on our IR website.

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

Our comments today regarding our financial results will reflect revenue on a GAAP basis and all other results on a non-GAAP nominal basis unless otherwise noted. The related GAAP measures and reconciliation are available in today's earnings release and related materials available on our IR website.

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

Thanks, Jennifer. We finished fiscal full year 2025 with strong financial performance and ever-growing obsession for our clients and a sharp focus on innovation as we build the future of payments. Fiscal fourth quarter net revenue grew 12% year-over-year to $10.7 billion, and EPS was up 10%, resulting in full year net revenue and EPS year-over-year growth of 11% and 14%, respectively.

Total full year payments volume was $14 trillion, up 8% year-over-year in constant dollars and process transactions totaled $258 billion, up 10% year-over-year. Our financial performance and growth demonstrate how Visa has become a hyperscaler, enabling anyone that wants to be in the money movement or payments business to build on top of the Visa as a Service stack. You may recall the layers of the stack, the foundation layer, the services layer, the solutions layer and the access layer. Throughout 2025 and most recently in Q4, we have intensified our investment in innovation.

Today, I want to highlight Visa's progress with our clients and the ecosystem at large, across the Visa as a Service stack, starting with the foundation layer. At the foundation of the stack is our global connectivity, our network and our network of networks that enable global commerce and money movement. In full year 2025, we expanded our network of networks in three important ways.

First, more connection points. Visa's network of networks now has approximately 12 billion end points, that's about 4 billion cards, bank accounts and digital wallets each; second, more settlement currencies, we are adding support for 4 stablecoins running on 4 unique blockchains, representing 2 currencies that we can accept and convert to over 25 traditional fee at currencies; and third, we have begun deployment of the next generation of VisaNet, the core processing platform in our Visa as a Service stack. It offers a cloud-ready micro services distributed modular architecture that uses open languages and technologies, enabling easier scaling, configuration and faster feature deployment.

Over half of the new code base was built with the assistance of generative AI, improving development speed, security and maintainability. We have specific modules in market today with plans to roll out additional modules and markets.

The next level of the Visa as a Service stack is our services layer, which encompasses the building blocks of our core capabilities, including credentials, tokens, authentication, risk management, fraud detection and more, which we've turned into discrete modular components. We grew the number of Visa credentials by $270 million this year, and we continue to sign many deals this past quarter to drive further growth.

I'll share a few regional highlights. We are pleased to have renewed our nearly 60-year relationship with Barclays in the U.K. and the U.S. across their millions of customers in consumer and commercial issuing and acquiring and enabling increased focus on value-added services utilization. In the U.S., Visa continues to be the exclusive payment network for the Southwest Airlines co-brand program and we will soon be expanding our relationship into a co-brand debit offering, providing customers a new way to earn Rapid Rewards points on everyday purchases.

In Latin America, We won the new Scotiabank Wealth Management credit card issuance with our Visa Infinite product across 7 countries. And in Mainland China, one of our largest clients, China Merchants Bank, has renewed their long-standing relationship with us as we continue to upgrade China's Magstripe dual-branded cards to contactless EMV chip cards.

Moving to tokens, we now have over 16 billion Visa tokens, up from 10 billion just in May of 2024. We continue to increase the amount of Visa tokens globally in pursuit of our ultimate goal of 100% of e-commerce transactions tokenized. We continue to enhance our risk management capabilities, including Visa scam disruption which proactively detects scam activity at the network level that no single issuer, acquirer or a merchant could see alone and leverages AI, enhanced merchant monitoring external intelligence feeds and our global expertise. Just a year since launch, we have worked closely with our clients and law enforcement to dismantle more than 25,000 scan merchants representing more than $1 billion in fraud attempts.

Our stablecoin platform is another key component of our services layer. Since 2020 we facilitated over $140 billion in crypto and stablecoin flows, including Visa users purchasing more than $100 billion of crypto and stablecoin assets using their Visa credentials and spending more than $35 billion in crypto and stablecoin assets using Visa credentials. Within this, we see particular momentum with stablecoins. We now have more than 130 stablecoin-linked card issuing programs in over 40 countries. And in Q4, stablecoin-linked Visa card spend quadrupled versus a year ago. We expanded the number of stable coins and blockchains available for settlement and monthly volume has now passed a $2.5 billion annualized run rate.

We are starting to enable banks to mint and burn their own stablecoins with the Visa tokenized asset platform, and we are adding stablecoin capabilities to enhance cross-border money movement with Visa Direct. In September 2025, we announced a stablecoin prefunding Visa Direct pilot targeting banks, remitters and financial institutions seeking faster, more flexible ways to manage liquidity, and there is much more to come in this space.

The next level of the Visa as a Service stack is our solutions layer, a comprehensive portfolio of solutions where we have taken the componentized capabilities from the services layer and invested in and enhanced them to create new features and capabilities we deliver to a broader array of customers and partners. If we look across our growth levers in this layer, I would note progress in a number of areas.

In consumer payments, Visa Intelligent Commerce integrates Visa's token technology with authentication and predictive analytics empowering partners to deploy secure, personalized digital commerce experiences. And I'm pleased to announce that we are now powering live agentic transactions and recently released a merchant agent toolkit to make it easy for developers to embed our solutions into workflows and agentic processes.

Just 2 weeks ago, we announced the Visa Trusted Agent Protocol, a framework that enables safer agent-driven checkout by helping merchants verify agents and avoid malicious bots. And since it's built on existing messaging standards, minimal integration is required for merchants.

Next, our Visa Flex Credential continues to gain momentum enabling consumers to access many underlying funding sources with a single credential powered by Visa token technology. For example, the Klarna card launched in 15 European markets building on its success in the U.S. where it had over 1 million sign-ups in less than 3 months, and they will expand to even more markets soon. Our Visa Flex pipeline is strong, and we now have more than 20 signed clients in more than 20 countries across all regions, including our first Visa Flex announcement in LAC with [indiscernible].

Our Visa Accept Solution enables even the smallest of sellers to accept card payments with just a Visa debit card and an NFC capable smartphone. Our first live launch of Visa Accept was in Srilanka, which represents an opportunity to bring an estimated 7 million sellers onto the Visa network most of which are informal sellers who primarily transact in cash today. And this is just our first launch. We are targeting 25 countries across several regions where we expect to launch Visa Accept soon with even more expansion to follow.

Our Visa Pay Solution connects any participating wallet to any Visa-accepting seller worldwide, local or international, in-store or online. We are pleased to now be processing live Visa Pay transactions in 4 markets across AP and EMEA, including our recently announced market launch in the Democratic Republic of Congo.

In addition, we have a pipeline with more than 70 clients to expand across more markets in 2026 and beyond. Rounding out consumer payments is tapped to everything. 79% of all face-to-face transactions are taps, up 8 percentage points this year with the U.S. at 66%. Our transit initiatives contributed to this expansion, and this year, we enabled more than 100 new transit systems to now total approximately 1,000 systems globally, delivering 19% year-over-year growth in transactions.

In Europe, BBVA recently launched BBVA Pay, enabling tapping from an iOS device for all Visa cards within their banking app. They also have enabled customers to use AI to create their own personalized Visa cards starting in Spain.

Tap to Phone which provides an easy, low-cost method for micro sellers to begin accepting card payments or large sellers to add additional mobile terminals, has now passed 20 million transacting devices more than doubling since last year with strong growth across all regions.

And Tap to Add Card launched a little over a year ago, has strong adoption as consumers and our partners see the value of a simplified, more secure customer experience where a simple card tap to a mobile device can add a Visa credential to a digital wallet. Since Q3, we have doubled the count of issuers participating globally to more than 600 across all regions resulting in the service being live for more than 1.4 billion Visa credit and debit cards around the world.

Shifting to CMS and starting with Visa Commercial Solutions, our full year 2025 commercial payments volume grew 7% in constant dollars to $1.8 trillion. This was helped by targeting specific segments including business owners and online travel agencies. In the premium card segment, we supported Chase with the launch of Chase Sapphire Reserve for business on Visa Infinite, and expansion of the Sapphire Reserve product line. The Sapphire Reserve for Business Card is designed to meet the needs of business owners by elevating their travel experience and offering premium benefits and value towards business services to help fuel their growth.

And also in the U.S., we are excited to have partnered with Truist to launch the Truist Business Premium Visa Infinite Card, a premium credit card designed for small businesses with meaningful annual spend. They are the first super regional to do so in this country. Our purpose-built travel solution offers virtual card credentials automated reconciliation and rich data.

We recently won Trip.com's global virtual travel card issuing business, which will be issued through their fintech TripLink, in our traditional carded business, our global network agnostic enhanced spend management capabilities have helped us to expand our partnership with BMO. We recently won new commercial issuance and BMO will offer our spend clarity for enterprise tool to their corporates in the U.S. and Canada. Our unique FX capabilities enabled us to win a de novo issuing relationship with ICICI Bank for India's first corporate ForEx prepaid card, targeting both SMBs and large corporates to meet foreign exchange payment needs for business travel.

In fact, in India, the Visa SMB cards have doubled since 2020 and now total more than 10 million helping us to grow total commercial cards to 340 million worldwide.

Moving on to Visa Direct, which reached 12.6 billion transactions in full year 2025 and up 27% year-over-year. Our push to account and wallet funding capabilities continue to help us to expand cross-border payouts. We signed with KCB in East Africa, where they will use Visa Direct to account for 8 corridors across the more than 30 million individual and business customers.

Touch 'n Go eWallet the largest wallet in Malaysia with more than 24 million users will leverage Visa Direct to enable tourists to fund their wallets across 8 corridors. And [indiscernible], a leading remitter with the largest branch network in the Kingdom of Saudi Arabia, expanded on its Visa Direct to card usage to now include Visa Direct to account.

And our interoperability capabilities unlocked through our YellowPepper acquisition enabled us to renew with Yape and Plin, securing our position as the leader for interoperable transactions in Peru.

Now moving to value-added services. where we have seen our innovations across issuing acceptance, risk and advisory continue to power our growth. We have achieved our goal to expand Pismo offerings to clients in more than 5 countries across 4 regions in 2025. In the fourth quarter, we signed our first Pismo deal for a stable coin linked card with notice pay in Europe.

In Acceptance Solutions, our Token Management Service, or TMS, provides a single network and payment service provider agnostic integration to simplify token adoption access and management for merchants and acquiring clients. This quarter, we signed with Booking.com for TMS and account updater across more than 65 markets deepening our presence in the online travel platform space. Many of our risk and security solutions are also network agnostic.

Let me highlight a few points of progress. Visa Advanced Authorization evaluates more than 400 unique attributes in a few milliseconds, and this quarter, Banco diners in Ecuador deployed our network agnostic solution to score both Visa and non-Visa transactions, the first bank in LAC to do so.

Our award-winning product, Visa Protect for A2A is delivering value with AI. Our pilot in Brazil scored nearly $500 billion of our bank partners [ PIKs ] volume over a 6-month period and identified over $90 million of fraud, which could have been prevented with a detection rate of more than 80%. We believe Visa Protect for A2A can play an important role in Brazil by providing real-time fraud monitoring on PIKs, helping to reduce fraud for our bank partners and ensure a safer payment experience for buyers and sellers.

Our most recently acquired risk capabilities from Featurespace are being sought after by our clients with more than 100 closed client deals since January. And our advisory services continued to deliver revenue and deepen our client relationships across Visa. In Consulting, we estimate that we help clients realize over $6.5 billion of incremental revenue as a result of delivering almost 4,500 engagements during the year, including Gen AI and stable coin engagements.

In Marketing Services, our flagship sponsorships include the FIFA World Cup 2026 in the U.S., Canada and Mexico as well as the Olympic and Paralympic Winter games in Milano Cortina. We are already seeing significant interest from our clients as they seek to offer unique cardholder experiences and build their brand in addition to helping drive issuance, acceptance and engagement. One Olympic and Paralympic related marketing example was our first large-scale campaign created using generative AI tools for Intesa Sanpaolo which showcased a ski race down the streets of Italy's seaside villages. We already have over 35 clients engaged with us for marketing services for the 2026 Olympic and Paralympic Games and more than 70 for the FIFA World Cup 2026 with more than 100 already in our pipeline.

The fourth and final layer of the Visa as a service stack on top of the foundation layer the services layer and the solutions layer is the access layer. The client entry point to access Visa solutions. We take an open partnership approach and seek to provide value by enabling access to our Visa as a Service stack through multiple integration methods, including custom integrations, programmatic access via APIs and structured data exchange through our Model Context Protocol or MCP server.

We remain the payments platform of choice in full year 2025 with more than 700 billion API calls across our more than 3,700 endpoints. And we recently launched our MCP server, providing access for AI systems to interface with our Visa Intelligent commerce APIs. Our open, flexible access layer enables anyone whether a small business, a tech partner or a global bank to build on top of the Visa as a Service stack and operate at scale instantly.

In conclusion, you can see our intense focus on innovation is delivering results for Visa and our clients. The Visa as a Service stack has positioned Visa to be a hyperscaler for the payments ecosystem. Our strong fiscal year 2025 performance is a result of our products resonating in the market and our commitment to our clients every day.

I want to thank our more than 34,000 employees around the world who will continue to obsess about our clients and work tirelessly in 2026 and beyond to deliver value through the Visa as a Service stack to our clients and across our partner ecosystem. We live in remarkable times and payments as technologies are converging to reshape commerce. And at Visa, with our clients, partners, sellers and consumers we are keeping our focus on innovation and product development, positioning Visa to lead this transformation.

Now to Chris, where he will discuss our financial performance and outlook for 2026.

Thanks, Ryan, and good afternoon, everyone. Building on the momentum we saw through the first 3 quarters, we had a very good Q4 to finish the year with continued strong and stable business drivers. In constant dollars, global payments volume was up 9% year-over-year, improving slightly from Q3. Cross-border volume excluding intra-Europe, was up 11% and total processed transactions grew 10%, both relatively stable to Q3.

Fiscal fourth quarter net revenue was up 12% year-over-year, better than expected, primarily due to value-added services revenue commercial and money movement solutions revenue and a benefit from FX. Fourth quarter net revenue was up 11% in constant dollars. EPS was up 10% year-over-year in both nominal and constant dollars, better than expected, primarily due to better-than-expected net revenue.

Let's go into the details. Total international payments volume was up 10% year-over-year in constant dollars in Q4, generally consistent with Q3. Of note, we saw acceleration in Asia Pacific of approximately 2.5 points on a constant dollar basis, driven by timing effects and a modest improvement in Mainland China.

U.S. payments volume was up 8%, slightly above Q3 with eCommerce growing faster than face-to-face spend. Credit and debit were both up 8%, reflecting resilience in consumer spending.

When we look at quarterly spend category data in the U.S., we saw a broad-based strength, including improvements in retail services and goods, travel and fuel. Both discretionary and nondiscretionary spend were up from Q3. And growth across consumer spend bands remained relatively consistent with Q3 with the highest spend band continuing to grow the fastest.

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

Q4 total cross-border volume was up 11% year-over-year relatively stable to last quarter, with eCommerce up 13%, and travel improving sequentially to 10%. eCommerce remains strong as it has for the last 8 quarters now, and still represented about 40% of our total cross-border volume. Travel spend continued to grow above pre-COVID levels. The slight step-up from Q3 was led by a combination of factors, including increased commercial volumes, helped by our efforts in virtual card and some improvement in CEMEA outbound due to holiday timing.

With that as a backdrop, I'll move to discuss our financial results. Starting with the revenue components. Service revenue grew 10% year-over-year versus the 8% growth in Q3 constant dollars payments volume, primarily due to card benefits and pricing. Data processing revenue grew 17% versus the 10% growth in process transactions, primarily due to pricing and higher cross-border transaction mix.

International transaction revenue was up 10%, below the 11% increase in constant dollar cross-border volume growth, excluding intra-Europe, primarily due to mix, partially offset by exchange rates.

Other revenue grew 21%, primarily driven by growth in advisory and other value-added services and pricing. Client incentives grew 17% in line with our expectations as we lapped onetime adjustments from Q4 of fiscal '24.

Now to our three growth engines. Consumer payments revenue was driven by strong payments volume cross-border volume and process transaction growth. Commercial and money movement solutions revenue grew 14% year-over-year in constant dollars as we lap the onetime adjustment we saw in Q4 FY '24. CMS revenue was better than expected, driven primarily by our Commercial Solutions business.

Commercial payments volume grew 10% in constant dollars, 3 points above Q3 growth and faster than Visa's overall payments volume growth primarily due to new portfolio wins and the lapping of certain portfolio losses with strong client performance, especially in cross-border.

Visa Direct transactions grew 23% to 3.4 billion transactions with strength in both domestic and cross-border. Value-added services revenue grew 25% in constant dollars to $3 billion, driven by issuing solutions, advisory and other services and pricing. Value-added services revenue growth was better than expected, primarily due to issuing solutions, both in network products and card benefits.

Operating expenses grew 13%, and above our expectations due to a larger-than-expected FX impact and higher-than-expected personnel expenses as a result of deferred compensation mark-to-market, which as a reminder, is EPS neutral. Excluding those two factors, adjusted operating expense growth would have been as expected.

Non-operating income was $29 million higher than expected due to investment income from the deferred compensation mark-to-market benefit that offsets the expense I just mentioned and higher returns on our investments.

Our tax rate for the quarter was 18.8%, in line with expectations. EPS was $2.98, up 10% year-over-year with minimal impacts from exchange rates and acquisitions. In Q4, we bought back approximately $4.9 billion in stock and distributed $1.1 billion in dividends to our shareholders. We also funded the litigation escrow account by $500 million, which has the same effect on EPS as a stock buyback.

At the end of September, we had $24.9 billion remaining in our buyback authorization. With a strong finish to the fiscal year, our full year net revenue grew 11% to $40 billion, and EPS grew 14% to $11.47. Full year 2025 CMS revenue growth was 15%, and value-added services revenue growth was 23% on a constant dollar basis. In a year marked by a significant step-up in uncertainty around the globe, we delivered strong results above our expectations. As we think about 2026, our guidance philosophy holds. We give you our best perspective based on current information.

So let's get into the guidance details and a quick note when I reference 2025 and 2026, I am referring to our fiscal years.

First, let's cover our underlying assumptions for net revenue growth. As we regularly say, we are not economic forecasters. So we're assuming the macroeconomic environment stays generally where it is today and consumer spending remains resilient. On key business drivers, we are assuming no material change from the Q4 2025 growth levels in 2026. On pricing for 2026, we expect the benefits of new pricing to be similar in magnitude and timing as in 2025, with the majority going into effect in the back half. When you combine that with the 2025 pricing timing, this implies a relatively uniform contribution each quarter with Q1 seeing the largest contribution.

On incentives, we expect around 20% of our payments volume to be impacted by renewals this year, which implies incentive growth generally similar to 2025, with Q3 having the toughest comparable to 2025. On volatility, we expect volatility throughout the year to be generally consistent to where we exited Q4, which implies a drag for the first 3 quarters, with Q3 having the toughest comparable to 2025.

We pull these assumptions together on an adjusted basis, defined as non-GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentation for more detail.

In 2026, we expect full year adjusted net revenue growth to be in the low double digits. On a nominal basis, we expect an approximately 0.5 benefit from FX, which implies nominal net revenue growth that is generally consistent with fiscal 2025, which was 11%.

We have an exciting year with the Olympic and Paralympic Games in Q2 and the FIFA World Cup in Q3 and Q4. I'll speak to expense in a moment, but as far as net revenue impacts, we expect the benefit from value-added services to be spread throughout the year as our clients will utilize our solutions in the buildup to and during the events.

In terms of quarterly variability of net revenue, two items I would call out. First, we expect Q1 to have the highest year-over-year net revenue growth rate, primarily due to the timing impact of our FY '25 pricing actions. Second, we expect Q3 to have the lowest year-over-year net revenue growth rate, primarily due to the lapping impacts of strong volatility and lower-than-expected incentives in Q3 of 2025.

Now moving to expenses. We expect to continue our significant investments in our Visa as a Service stack across consumer payments, commercial and money movement solutions and value-added services in FY '26. Let me share a few examples.

Within consumer payments, we will enhance our cross-border and affluent offerings, scale recently launched products and expand our stablecoin capabilities, in addition to utilizing our marketing dollars for both the Olympics and FIFA to amplify the Visa brand. Within CMS, we'll focus our investments in specific commercial vertical opportunities and build out new Visa Direct product capabilities focused on cross-border money movement. And within VAS, we'll invest in our product development as well as our sales engineering teams to deepen customer engagement and shortened deal cycles.

In addition, we're also investing in our AI efforts, in fact, every leader at the company has AI targets to drive efficiencies that we intend to invest back in the business to further our differentiation, competitive advantage and drive long-term growth.

We currently expect to grow adjusted operating expense in the low double digits, consistent with our net revenue growth. As we think about the cadence of spend, we expect Q2 and Q3 to have the largest year-over-year growth rates as a result of marketing expense related to the Olympics and FIFA.

Now moving to non-operating income. The nonoperating income we've had for the past 3 years has been a function of cash balances, interest rates and onetime items. In 2026, based on current interest rate forward curves, we now expect nonoperating expense of $125 million to $175 million.

Now to our non-GAAP tax rate. You may recall that we've historically estimated our long-term tax rate to be between 19% and 20%, and this remains unchanged. In both fiscal 2024 and 2025, our actual tax rate was below 18%, helped primarily by our geographic mix of earnings and certain onetime benefits, such as the resolution of tax matters and positions taken on certain taxes. In 2026, we still expect to be below our long-term tax rate. When we incorporate our current tax planning strategies, we expect the tax rate to be between 18.5% and 19%, up from 2024 and 2025, primarily due to the absence of onetime benefits.

On capital return, the Board has declared an increase to our quarterly dividend by 14%, and we intend to return excess free cash flow to shareholders through buybacks. All of this results in our adjusted EPS growth to be in the low double digits.

Moving to Q1. Through October 21, with volume growth in constant dollars, U.S. payments volume was up 7%, with credit and debit both up 7%. Process transactions grew 9% year-over-year. For constant dollar cross-border volume, excluding transactions within Europe, total volume grew 12% year-over-year, with eCommerce up 14% and travel up 11%.

Now on to our financial expectations. We expect Q1 adjusted net revenue growth in the high end of low double digits. We expect adjusted operating expense growth in the low double digits. Non-operating expense is expected to be about $15 million. And our tax rate in the first quarter is expected to be around 18%. As a result, we expect adjusted first quarter EPS growth to be in the low teens. When we look on a nominal basis for net revenue growth in Q1 we expect an approximately 0.5 point benefit from FX. And for our expense growth, we expect an approximately 0.5 point drag from FX and a 1 point impact from acquisitions, which taken together result in nominal net revenue and expense growth that are more matched at the high end of low double digits.

As always, if the environment changes, and there are events that impact our business, we will remain flexible and thoughtful on balancing short- and long-term considerations.

Visa's underlying business continues to be healthy and the growth opportunities are significant, together giving us conviction as we make investment decisions to build the future payments to drive compelling net revenue and earnings per share growth.

And now, Jennifer, I'll hand it back to you.

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

[Operator Instructions] Our first question comes from Sanjay Sakhrani with KBW.

Like the utmost, it's very strong. I guess when I think through some of the assumptions that are embedded in it? I know, Chris, you talked about assuming the macro is stable. But we've heard some of your competitors talk about choppiness in the economy, different spending habits, especially for consumers? Have they been trading down on discretionary items. I mean have you guys seen anything like that? And sort of how does that factor into your outlook?

Sanjay. Yes, we have great momentum exiting FY '25, and that's the underlying assumption as we go into '26 for another strong year. But let me address some of the specific points you've made about questions you had around sort of I guess, spend and the strength of the macro economy. I mean if I just zoom out a little bit, really one of the real strengths of our business here, Visa is the diversification of our business. And so we have the broadest exposure to credit to debit, our volumes are comprised of everyday spend, the special occasion spend, nondiscretionary, like fuel and groceries and discretionary items like travel or holidays, good services, consumer commercial. And so really some of the broadest spend categories that you can imagine.

And what we do is we remain data-driven and across this broad and diverse set, the growth across our spend bands has remained quite consistent all year and it was again in Q4 with higher spending cardholders driving more of the growth. And that's consistent with what we see across the U.S. economy. And so that all gives us good reason over that data to say that consumer has remained resilient. That is our -- that is what we saw in FY '25, and that is our assumption going into FY '26.

James Faucette with Morgan Stanley.

Great. I really appreciate all the work that you guys are doing on new initiatives, et cetera. One that's quite topical, obviously, is all things agentic commerce. And I know you've had some recent announcements on that topic, can you paint a picture for us like the role that you expect Visa to play in agentic commerce transactions and ramp and kind of milestones we should expect to see in its development.

We see considerable opportunity in agentic commerce. But just to put it in context, when we had the first wave of digital commerce with eCommerce, we set the standards, we led the product development and Visa was a significant beneficiary. Then you saw a second wave of commerce, which was mobile commerce. And again, Visa was the leader in terms of standards, in terms of product innovation, in terms of the capabilities enabling that to happen. And we've been a big beneficiary. You've seen that both in people buying things on their phones, but also using their phones to buy things, especially with Tap to Pay.

And now in this third wave of agentic commerce, we've been leading in terms of our role of setting the standards I think one great example of that is Visa Intelligent Commerce, where we put out a set of capabilities for AI-ready cards, leveraging tokenization, AI-powered personalization, leveraging our data token service. We put out a set of standards with payment instructions that are going to allow customers like you and I to easily set spending limits and conditions to provide clear guidance for agent transactions. And also our payment signals, which are going to share those data payloads in real time with Visa, enabling us to help set transaction controls, managed disputes and chargebacks and those types of things.

So I think that's a great example of the leadership role that we're taking in agentic commerce. And then just 2 weeks ago, we announced the Visa Trusted Agent Protocol. The Visa Trusted Agent Protocol is meant to really ensure that merchants know when an agent is coming to buy something on my behalf. It is actually a real agent that I have authorized to make purchases on my behalf. And I think what differentiates the Visa Trusted Agent Protocol is two things.

One is it's open. It's an open set of standards, and we think that an open framework is critical to drive mass adoption in the way that's needed for agentic commerce. And the second is it's easy to integrate. We built it on existing web infrastructure so that it's going to be easy for merchants to integrate into existing messaging standards and get up and running quickly. So those would be two examples. We're very excited about it. We think it's a significant opportunity for Visa and for everyone involved in the ecosystem.

Jason Kupferberg, your line is open, from Wells Fargo.

I actually wanted to ask a follow-up on agentic topic of the day. I'm just curious to get your perspective on when do you think we start seeing material volumes across the industry from agentic commerce. Obviously, there's still some important security considerations to be addressed. And I would also love your perspective on to what extent you see agentic as more of a substitute for traditional e-commerce versus being additive to the TAM of the overall payment industry?

Jason, let me address the second part of your question first and then the first part. On the second part of your question, I think the base case is it continues to accelerate the adoption of e-commerce and mobile commerce as we all know it. I think there's an upside case on that where you could actually see users buying from a much larger and more diverse set of merchants than they do today in traditional e-commerce, given the power of these agents and their ability to go out and search the world's inventory based on whatever it is that you prefer for your agent. That might be value that might be priced, that might be inventory that might be speed of delivery and so on and so forth.

I think that could ultimately result in consumers buying more things for more merchants, which ultimately means more transactions on Visa. I also think there's a significant upside in the delivery and the relevance of our portfolio of value-added services for the entire ecosystem, especially as you said, they have to work through a number of things that involve potential fraud and disputes and chargebacks and things like that.

Right back to the first part of your question, listen, it's still early days. And I think what you're likely to see in the evolution of agentic commerce is not different or dissimilar to what we saw in e-commerce. I think early on, you're seeing consumers use these agents and these platforms for discovery. They're shopping. They're looking for what might be available for any given gift I'm trying to buy or any closing item that I might try to buy. But then I might jump to the actual merchant site to make the purchase. Then the next step of what you're starting to see is the integration of the buy capabilities into that shopping journey, we're just starting to see that in the marketplace today. We've been working on that many, many months with the ecosystem.

And then I think the ultimate kind of user experience and the promise of agentic commerce will be truly empowering agents to go out to search for things on our behalf and ultimately make purchases and buy things without human intervention. That we haven't really seen in the marketplace today, but we're working very hard with the platform players to ensure that the capabilities are in place to enable that.

David Koning with Baird.

Great job. The data processing yield was up a lot, and I know that was explained somewhat, but I'm wondering, is some of that due to VAS, the biggest part of VAS outside of others probably in data processing. And I guess the question is, is there a sustainability to big yield growth in DP given VAS just keeps building? I guess that's the question.

David, I'll take this one. So yes, as you pointed out, data processing revenue, 17% versus the 10% underlying transaction growth. The factors I called out in my prepared comments was around pricing and mix. And those were the two biggest variables. As you know, we implemented new pricing in FY '25 in the second half of the year. That's really benefiting in Q3 and Q4, and that will benefit into Q1, as I talked about as well.

In terms of mix, now what does mix mean? Mix does across our business, different products and services, different clients in different regions, can have different varying yields. And obviously, through the course of any quarter, we see different growth performance across any of those particular elements that will drive different yield outcomes.

So in this particular quarter, with data processing, we did see faster growth in higher-yielding cross-border regions, and that's what contributed to the acceleration that you saw in between transactions and revenue in data processing.

Darrin Peller with Wolfe Research.

I just want to follow up one more time on AI and then a bigger question on the new VisaNet rollout. So first, just to be clear on AI. I mean, do you see your suite of services is a big part of what's being offered by other payments ecosystem partners? And how much are you going to participate in some of those [indiscernible] in terms of fraud versus others?

And then just I know we talked to Ryan, you talked about VisaNet rollout, the new rollout. And just help us understand what that can mean for product development or velocity and how it positions the network for things like agentic commerce or stablecoins going forward.

Darrin, short answer, long answer. Short answer is yes and yes. But let me dive into both of those. On kind of agentic commerce, I think you've seen from us really over the course of the year is Visa doing what we do, which is when there's new technology, new platforms emerging take a leadership role in establishing kind of the way that payments can work most efficiently and most effectively for buyers and sellers, and we're doing that in the agentic commerce space today.

And I think to the first part of your first question, yes, you should assume that we're doing the work to build the infrastructure, the operating regulations and rules, the processes to enable a lot of the things that you're seeing kind of in the marketplace today.

As I said on the earlier question, I think it was Jason, it's still very early days. You're going to see a lot of announcements, you're going to see a lot of things coming out what ultimately is going to help kind of agentic commerce achieve its promise is collaboration, collaboration among all of these various ecosystem partners that make e-commerce and mobile commerce and all of these things work today, and you should expect us to take a leadership role that we're taking.

On the next generation of VisaNet, so this has been something we've been focused on as we continue to invest in our stack. We've deployed the next generation of VisaNet, which is our core processing platform at the base of our stack.

And the answer to your second question is, yes, as well. It allows us to ship product more quickly. It allows us to adapt to ecosystem changes more quickly. It allows us to adapt to regional and country-specific requirements more quickly. Here too, it's early days. We've just begun the deployment of it, but it's a very exciting milestone for us. And ultimately, we think it will be great for the ecosystem and our partners.

Rayna Kumar with Oppenheimer.

I noticed in Latin America, there was a slight deceleration in volume versus last quarter. Anything you can call out there?

Sure. Yes. In Latin America, we did see a bit of a slowdown. It still grew strong but it was slower than we saw in Q3. And the biggest single contributor I would point to is the moderating inflation that we've seen in Argentina. But overall, across Latin America, it remains a high-growth region, and we're very pleased with the performance.

Ken Suchoski with Anonymous Research.

Maybe just one more on agentic commerce. I was wondering if you could talk about some of the differences and similarities between Visa's Trusted Agent Protocol and Stripe's Agentic Commerce Protocol? I mean, anything you could talk about in terms of what layer is the value chain you're tackling and how you're offering is differentiated versus theirs?

And then maybe just talk about the broader tokenization opportunity and your leadership are there with over 16 billion tokens and just how the agentic commerce ecosystem will leverage that.

Yes. On the second part of your question, tokenization, I think, is the critical building block that ultimately will help Agentic commerce reaches promise. And if you go back -- I know you asked about the trusted agent protocol, but if you go back to the Visa Intelligent Commerce set of products and standards that we put out, tokenization as a platform is what enables the bulk of that functionality. And ultimately is what's going to enable us all to have safe, secure trusted transactions with agents on our behalf. So tokenization critical building block of that.

And as you noted, with kind of 16 billion Visa tokens embedded across the ecosystem, the technology, the standards are well known, well adopted globally in countries all around the world, both on the seller side of the ecosystem and the issuer side of the ecosystem, which is ultimately why it will help scale our standards.

As it relates to the Trusted Agent Protocol, and I'll go back a moment to what I said to -- a couple of questions ago. Ultimately, what's going to make this all work is collaboration. And so I think you're seeing a lot of different players across the ecosystem, whether it's Visa or other networks or acquirers or PSPs or platforms start to put out their capabilities and standards.

And again, here, too, I think it's where the Visa Trusted Agent Protocol can form a base layer for everyone to build on and everyone to ultimately leverage. And what we're -- the reason we're excited about the Trusted Agent Protocol scaling is the two things I mentioned. One is it's an open standard; and two, it is designed to be inherently lightweight and easy for merchants, especially to integrate to.

[ Bryan Keane ] with Citi.

Just kind of two quick parter. Just thinking about holiday sales growth rate this year versus last. There's some expectation that maybe holiday sales will be a little bit weaker in terms of growth rate. Just how is Visa thinking about that? And then secondly, just cross-border growth versus e-comm versus travel, any differentiation kind of what we've seen on trend line as we go through this fiscal year?

Okay. I'll take both of those. In terms of the -- the upcoming holiday quarter, I've provided our guidance for Q1. It is for a strong Q1, carrying the momentum that we saw coming out of Q4 with strong and stable underlying drivers as well as benefiting from the pricing from a year ago. And so when you add that all up, it makes for a resilient consumer, a stable macro environment, and the resiliency that I talked about across spend bands as well. And so we are anticipating a strong quarter going into the holiday -- our fiscal Q1, the holiday quarter that we see.

In terms of cross-border, your second question was really around sort of the mix. At the total level, we shared our numbers. It's been stable. It's been a good strong number, 11% growth in Q3, 11% growth again in Q4. As we click down into the categories of eCommerce and travel, eCommerce has been strong. continued to be strong and steady, 13% in Q3 and 13% in Q4. Travel did improve a point from Q3 as we talked about previously as well.

So the thing that I would call out, though, is that when you add that all up, total cross-border growth continues to be above the trend that we saw pre-COVID. And part of the reason for that is that the e-commerce part of the mix of the volume is bigger. It was about 1/3 of the business pre-COVID. It's about 40% now and continue to grow at a faster clip than travel. And so should that trend continue, we'll continue to see a bigger weight toward the e-commerce side of the business. But all in all, again, if you zoom out strong and stable cross-border trends, and we'll continue to see how they perform through the rest of the year.

Harshita Rawat with Bernstein.

I want to ask about stable coins. As the dust is settling a bit, both the passage the GENIUS Act, it increasingly appears that what was initially thought as a risk to be that [indiscernible], in fact, be an opportunity in case by the money movement, merchant acceptance in certain markets and services. Ryan, you talked about the momentum in stablecoin-linked cards. This quarter, Visa Direct kind of announced a new stablecoin prefunding option. The number of things you're doing here I guess my question is, what are the most tangible areas of opportunities as it relates to stablecoins in the coming years, maybe in cards, ETF, [indiscernible], et cetera?

We've seen it as an opportunity for a while now. And the short answer to your question is we see opportunities in issuance in modernizing our settlement network. I think I talked about some of the opportunities we've captured with our Pismo platform. As you said, we're leveraging stablecoins and cross-border money movement. We announced the Visa Direct prefunding work. We're minting and burning on behalf of our clients with the Visa tokenized asset platform. We've been working with our clients in our consulting business with stablecoins. I mean the list goes on and on.

But just stepping back, as I've said, the areas where there's product market fit for stable coins in the world are the areas where there's significant TAMs and largely where we're underpenetrated. And that's emerging markets and that's cross-border money movement. And we are -- we have a deep product pipeline focused on putting products to market against both of those areas of opportunity. And cross-border money movement broadly, whether that's remittances or B2B or gig economy payouts or the like.

So we definitely see it as an opportunity. We have targeted a significant portion of our product road map to capture that opportunity and hope to talk to you more about some products that we're bringing to market in the future.

We're going to take a few more questions, so we are going to go a little over. Just want to get in few more.

Andrew Schmidt with KeyBanc Capital Markets.

I appreciate the stack discussion. That was a good one. Maybe I could ask about the Asia Pac improvement. Chris, I know you mentioned timing in China improvement. But if we could peel back the layers there and maybe talk a little bit more about what's going on and whether that improvement is sustainable, that would be great.

Yes. Thanks, Andrew. As I talked about in my prepared comments, we did -- we were pleased to see the improved results 2.5 points and the things that I noted improvement in Mainland China and some smaller but idiosyncratic sorts of things around timing those will normalize its way out. All in all, we're pleased with the momentum in China and in -- across AP in general and think that, that is going to continue to be an important growth opportunity for us. And so when we zoom out from all of that, I think AP is on a directionally a good track.

Tim Chiodo with UBS.

Great. You talk a little bit about the evolution of the growth algorithm just looking at it numerically, it looks like the biggest change really is, a few years ago, not too long ago, value-added services was about 20% of revenue growing in the high teens, and now it's approaching 30% of revenue and growing in the mid-20s. So the growth contribution has stepped up at least 20 basis points, if not closer to 300 basis points.

And part of that has been we've seen the RPO tick up over the years. And even this year, the RPO has been up roughly, give or take, 30%. And I was hoping you could talk a little bit about that RPO. What's been driving that roughly 30% growth? I appreciate part of that is valuing time incentives, but maybe dig into that and other drivers of the RPO.

Yes. Why don't I take the first part of the question, and then Chris, you can take the second part of the question. Tim, I think you summarized it very well. And I think if you go back to Investor Day, and you look at kind of the growth framework that we laid out and the strategies that we laid out, by the way, both for VAS and for CMS and you jump forward to today, we're delivering in market those strategies, and we're delivering the results that I think we laid out in that framework that come with those strategies, and you summarized it pretty well on the VAS side of things. Chris, do you want to talk about the...

Sure, sure. Tim, I think you know this. Obviously, the RPO constitutes many things but included in that is what you've asked about previously, which is value in kind. This is an important lever for us. When we are able -- it represents a form of incentive that the clients can then use to drive value for themselves, and it's good for our client engagement and continues to drive value to Visa. Sometimes in value-added services, there's been other parts of the business. Now it doesn't drive sort of the majority of value-added services, but it is an important lever. And I think it's an area where we'll continue to see clients really take advantage of it.

Tien-Tsin Huang with JPMorgan.

All right. Let's close it out. I got -- I'll ask about investments and OpEx, if that's okay. Just thinking about growth and OpEx being in line with revenue I'm curious if there's anything to share on that. Is Visa just being opportunistic with spending or perhaps it's a structural issue as you scale different layers in your service stack and some of those are less mature. Just trying to better understand incremental margins and how that might be changing?

Sure. Tien-Tsin, as you know, as we've said in the past, explicitly, we don't manage our company to a margin target, at least not in the classical sense, but we do focus on many things. We focus on growing volumes with our clients. We focus on driving revenue across consumer payments, VAS and CMS, and we also focus on running our business as efficiently and as effectively as we can. And part of that is balancing the investments that we make for short-, medium- and long-term return.

And when we do this well, as we have, we continue to deliver the financial performance that you've seen, which is strong growth at margins that lead the industry. So I would say in terms of where we're investing now as we talk about '26, I would point you back to actual our Investor Day back in February, we laid out a pretty extensive view of the, a, the big opportunity that we're going after, the massive addressable opportunity; and two, the clear strategies, the things that we're going to go do to go capture that opportunity. And so across our industry as things continue to move as fast as they are. You've heard a lot of the conversation even today around agentic and stablecoin. We think it's important that we continue to invest in these opportunities from our position.

And if we do so, we'll continue to deliver on the growth framework that we outlined at Investor Day, which means we'll deliver compelling profit growth and drive strong shareholder returns.

And Tien-Tsin, the only thing I would add on what Chris said is I don't ever recall being so excited about the opportunities ahead of this company. And I don't ever recall being so pleased with how well our teams have lined up our product pipeline, our go-to-market sales motions, our client teams, the things that we talked about today, whether it's agentic, stablecoins, Visa Pay, Visa Accept, tapped everything, the great momentum in the VAS business, the great momentum in Visa Direct, the great momentum and results we're seeing in Visa Commercial. It's just an extraordinarily exciting time for the company, and I'm just super proud of the investments that everybody is making across the place.

So I appreciate that question. I appreciate everybody's questions. Jennifer, back to you to close.

Yes. And with that, we'd like to thank you for joining us. If you have any additional questions, please feel free to call or e-mail our Investor Relations team. Thanks again, and have a great day.

Thank you all for participating in Visa's Fiscal Fourth Quarter and Full Year 2025 Earnings Conference Call. That concludes today's call. You may disconnect at this time, and please enjoy the rest of your day.