The operator introduces the conference call and hands it over to Ms. Jennifer Como, Senior Vice President and Global Head of Investor Relations. She reminds listeners that the call is being webcast and a replay will be available. She also mentions that the presentation includes forward-looking statements and provides information on where to find additional information. Ryan McInerney, Visa's CEO, acknowledges the current situation in Israel and Gaza before discussing the company's performance.

Despite uncertainty and challenges in the macroeconomic environment, Visa had a successful year in 2023. Net revenues, GAAP EPS, and non-GAAP EPS all saw significant growth. The company also achieved milestones such as surpassing 7.5 billion tokens and signing over 500 partnerships with fintechs. There was also strong growth in merchant locations and tap to pay transactions globally. In the US, tap to pay penetration surpassed 40%. Additionally, Visa saw a 17% increase in revenue from new flows, with highlights including a 12% increase in commercial volume and a 70% increase in the number of banks using Visa B2B Connect.

In the fourth quarter, Visa Direct saw a 19% increase in transactions, reaching over 7.5 billion. Cross-border P2P transactions grew by 65%. The company's value-added services revenue also saw an 18% increase. Visa's top 265 clients used an average of 22 products, up 8% from last year. Overall, the company saw an 11% increase in net revenue and a 22% increase in GAAP EPS. Visa's clients value their people, products, value-added services, new flows capabilities, and brand. One example of this is their partnership with US Bank, one of the largest issuers in the US.

Visa has renewed agreements with various clients, such as FNBO and Secovi, and is engaging in consulting and co-marketing projects to leverage their NFL sponsorship. They are also expanding their partnership with Nequi in Colombia and offering targeted offerings for affluent customers in India through partnerships with fintechs like Appify and Razorpay. In the e-commerce space, they have renewed their agreement with Shopify and signed a new agreement for small business credit. Visa's value-added services are contributing to their success.

Visa's acceptance solutions, such as CyberSource, have been successful in helping clients innovate and grow. They have sold over 2,600 new acceptance services in over 100 countries, including partnerships with major companies like Costco and Alaska Airlines. In Asia Pacific, China Merchants Bank has renewed its use of Visa's risk management services and consulting services. In Latin America, Visa has expanded its processing penetration through partnerships with major banks, allowing for the addition of value-added services. Visa also continues to collaborate and provide solutions in the real-time payment space, recently becoming a certified service provider for FedNow.

Visa has announced that they will be processing FedNow payments and will soon begin processing RTP payments as well. They have also reached agreements with Citibank, IBM, and DBS to offer commercial card services in various countries. Visa Direct's reach has expanded through partnerships with Tencent, Paysend, and Shinhan Card, and they have added new use cases for small ticket B2B payments and bill pay. Banco RB in Brazil will also be enabling Visa Direct for cross-border payments in their corporate banking business.

Visa's brand strength has allowed them to sign agreements with Universal Destinations and Experiences, Fidelity Investments, Coupang, Saudi Airlines, and Etihad Guest for co-branded credit cards. They are also excited to activate their brand at the Paris 2024 and Milano-Cortina 2026 Olympic and Paralympic Games. Visa has been a proud sponsor of the Olympic Movement since 1986 and sees it as a great opportunity to promote their brand and engage with consumers and clients. They have also been building momentum in their European business and have recently had several successes.

Visa has expanded into seven new locations and doubled their workforce in the past five years. They have also increased their fintech relationships and capabilities through acquisitions. Visa Direct has seen a significant increase in transactions, and they have also increased their client penetration for value-added services. They have a strong pipeline of deals and expect to migrate millions of cards in the coming years. Despite macro uncertainty, Visa remains confident in their ability to manage and is focused on delivering for their stockholders. They recently announced a potential exchange offer program.

In the fourth quarter, Visa had a strong performance with growth in payments volume, cross-border volume, and process transactions. They also announced a $25 billion share repurchase program, showing confidence in their strategy and future potential. The board is evaluating next steps and engaging with investors. In Q4, global payments volume was up 9%, process transactions grew 10%, and cross-border volume (excluding intra-Europe) was up 18%. Net revenues were up 11% and GAAP EPS was up 22%. In the US, payments volume grew 6%, with credit and debit volume both up 6% and 7%, respectively. Card-present spend grew 3% and card-not-present volume (excluding travel) grew 9%. US process transactions growth was stable at 8%.

In the third quarter, there was an increase in payments volume growth, driven by higher gas prices and stable consumer spending across all segments. In international markets, payments volume grew by 11% and cross-border volume increased by 18%, with strong growth in most regions. Cross-border e-commerce spending grew by double digits, while travel-related spending increased by 26%. The travel volume index for cross-border transactions improved by 5 points from the previous quarter and remained strong in most regions, except for Mainland China. Outbound travel volume from the US also remained strong.

In the fourth quarter, US inbound travel recovery and a strong dollar led to increased revenue growth for Visa. Service revenues and data processing revenues grew due to business mix, pricing, and card benefits. Revenue growth for international transactions lagged volume growth due to declining currency volatility. Across the three growth engines, consumer payments, new flows, and commercial volumes saw strong growth, with Visa Direct transactions increasing by 19%. Operating expenses increased primarily due to personnel expenses and FX, but non-operating income benefited from higher interest rates.

In the fourth quarter, the company's GAAP tax rate was 16.9% and non-GAAP was 17%, with a tax benefit related to the extension of US foreign tax credit regulations. GAAP EPS was $2.27 and non-GAAP EPS was $2.33, up 21% from the previous year. The company bought back $4.1 billion in stock and distributed $928 million in dividends to stockholders. For the full fiscal year, net revenues increased 11%, with GAAP EPS up 18% and non-GAAP EPS up 17%. FY 2024 is expected to be a normal year, with the company resuming pre-COVID guidance practices and providing quarterly updates. In the first three weeks of October, US payment volume was up 5%, with debit and credit both up 5%. Process transactions grew 10% year-over-year.

The paragraph discusses the key assumptions and expectations for the company's financial outlook. These include a 19% growth in constant dollar cross-border volume, no recession in the economy, and no impact from regulations or student loan repayments. The company expects low double-digit growth in overall payments volume and cross-border volume, with a moderate improvement in cross-border travel volume. The financial results will be presented on an adjusted basis, with a 1-point drag from currency fluctuations.

In FY 2024, incentives are expected to grow slightly less than in the previous year, while new flows and value-added services are expected to grow faster. Adjusted operating expense is expected to grow in the high single-digit to low double-digits, with a favorable tax rate and expected growth in non-operating income. Overall, adjusted EPS is expected to grow in the low teens with some FX drag. The growth rate may vary between the first and second half of the fiscal year, with higher growth expected in the second half. This is due to factors such as cross-border volume, currency volatility, and incentives.

The company expects to have higher expenses in the second and third quarters due to the Olympics, but the tax rate will be lower in the second half due to expected one-time tax benefits. The first quarter is expected to have the lowest growth rate, with an improvement throughout the year and the fourth quarter having the highest growth rate. The company expects high single-digit growth in net revenues and expenses, with a slight impact from currency fluctuations. The tax rate is expected to be between 19.5% and 20% in the first quarter. Results for the first quarter and full year 2024 will exclude acquisition-related costs and amortization of acquired intangibles.

The company Visa has announced a $25 billion share repurchase program and a 16% increase in their quarterly dividend. They are confident in their ability to manage their business through any changes in the market and deliver value to their shareholders. During the Q&A session, they were asked about their guidance for the upcoming fiscal year and they stated that they expect low double-digit growth in both payments volume and processed transactions. They also believe that value-added services and new flows will continue to be their main growth drivers.

The speaker discusses the structure of the company in 2023 and how it will remain consistent in 2024. They also address a question about Asia-Pacific's slower growth and attribute it to lapping strong COVID ramp and softness in certain areas. The speaker also mentions the resiliency of other regions outside of North America and Asia. The tax rate for the company in the long-term is expected to be around 19.5% to 20%, based on the current mix of tax jurisdictions and potential tax increases in certain parts of the world.

In the upcoming fiscal year, there will be a decrease in growth due to expected benefits in the second half of the year. However, the current run rate is as estimated. In terms of Visa Direct, the company is focusing on cross-border remittances, bill payments, earned wage access, insurance disbursements, and P2P transactions in new geographies. Visa Direct is now the largest money movement network with 8.5 billion endpoints, 3 billion cards, 3 billion accounts, and 2.5 billion digital wallets. The company will continue to invest in expanding the network and working with enablers to introduce new use cases.

In this paragraph, the speaker discusses the company's recent success in the commercial and B2B sectors, specifically in terms of partnerships and expansion into new verticals. They also mention their focus on making their products easier to use and investing in partnerships that have been announced in the past. The speaker highlights WEX as an example of a successful partnership.

The speaker discusses the importance of increasing processing market share, as it allows for the delivery of more value-added services and higher earnings. They mention Colombia as an example of a country where they have made progress in this area.

The speaker discusses the company's focus on unlocking processing opportunities in various markets, particularly in Latin America, Europe, and Asia-Pacific. They also touch on the impact of COVID-19 on cross-border travel, with potential for growth in Asia and the United States. The company has made assumptions for the coming year but acknowledges the uncertainty of the current situation.

In the paragraph, the speaker discusses the growth of the travel industry post-pandemic and how it has exceeded pre-COVID levels. They also mention the healthy growth of their company, with CyberSource being a particularly successful asset due to recent investments in omni-commerce and risk management capabilities.

The speaker discusses the success of their company, driven by understanding their clients' needs and making investments accordingly. They have been able to sell their products successfully in various markets, thanks to their clients' positive experiences. The company also addresses the potential impact of Reg II and their proactive efforts to mitigate any adverse effects.

The speaker discusses the potential impact of changes to the debit interchange rate in the US and the company's ability to compete in regulated and unregulated markets. They also mention their resilience and strong business model. The speaker then mentions that they have not seen any impact on their guidance for FY 2024 and will keep investors updated on any developments. A question is then asked about the potential benefits of tokenization on authorization rates and the speaker responds by saying that their partners have been able to drive higher rates and they are confident in their ability to drive incremental transactions.

The speaker clarifies that tokenization technology is used to protect issuers, merchants, and consumers, leading to higher authorizations and lower fraud. They have crossed 7.5 billion tokens and are in 198 markets, with 14 billion token transactions in the fourth quarter. This platform has been invested in for many years and is now scaling globally. They have seen an average 4-5% increase in approval rates and a 30% reduction in fraud. This has led to 7.5 billion tokens in the ecosystem, providing benefits to issuers and consumers. The speaker also mentions further enhancements, such as using Fido biometrics and enabling multi-device authentication for merchants. In terms of incentives, the company is assuming slightly slower growth than fiscal 2023, but it is not specified if this is in terms of dollars or percentage of gross revenue.

Chris Suh, Chief Financial Officer, clarifies that 2024 will be a more normal year for the company, with a slower growth rate in incentives compared to 2023. They have provided formal guidance for net revenue and will continue to do so. They have not given guidance on the percentage of growth, but they track the net revenue yield, which has remained stable. Next question is from Tien-Tsin Huang from JPMorgan, who asks about the deal pipeline and how it compares to a year ago. Ryan responds that there is good energy at Money20/20 and the pipeline feels similar. He also mentions that the credential side is up 7%.

Ryan McInerney, speaking at Money20/20, says that Visa has a strong pipeline to support high single digit growth in fiscal 2024. He mentions recent wins with clients and partnerships, such as Citi, US Bank, and Shopify, as well as feeling good about the growth generated. In regards to the CFPB's proposed rule for open banking, McInerney believes it will be a positive development for Americans and a catalyst for growth in the US.

The speaker discusses the potential for Americans to use their own data in digital tools to improve their financial management. They mention the success of their Tink business in Europe and their interest in expanding it to other markets. They also mention the importance of understanding regulatory expectations in the US. The speaker then addresses a question about the cash digitization opportunity and expresses continued excitement about it globally, despite competition and the presence of cash and checks in developed markets like the US.

The speaker discusses the continued use of cash and checks in the developing world and the potential for growth in the digital payment industry. They express excitement about the potential for increased credential usage and acceptance, particularly among smaller merchants. They also thank listeners for joining the conference and invite further questions.

This summary was generated with AI and may contain some inaccuracies.