Visa Inc. · NYSE:V
Visa — Investor Day (March 2010)
54 slides from Visa's investor day presentation, Mar 11, 2010
Slide 1: 2010 Investor Day
2010 Investor Day March 11, 2010
Slide 2: Global Prepaid Solutions
Global Prepaid Solutions Brian Triplett Head of Global Prepaid Products
Slide 3: Product and Services Strategy
Product and Services Strategy Goal: Drive growth of Prepaid products Products across all core segments with an Processing & Services emphasis on the underbanked Local • Expand core business in the U.S. Market • Extend to key countries Clients Focus Brand internationally • Integrate and innovate with
Slide 4: Prepaid Value Chain
Prepaid Value Chain Issuer Program Network Issuer Distribution Consumers – Corporations – Governments Processor Manager Network switching Account mgt, Manage funds, Runs programs, Retail sales and Role services, reloads, network access, provide BINs, product mgt, merchandising acceptance and custome
Slide 5: Prepaid Global Expansion
Prepaid Global Expansion More than 10,000 programs totaling over 135 million active Visa cards across 110 countries… …Prepaid continues to be the fastest growing form of payment for Visa for the sixth consecutive year Note: As of October 2009 Visa Inc., and Visa Europe 5
Slide 6: Visa U.S. Prepaid Volume Trends
Visa U.S. Prepaid Volume Trends Period Total CY05 84% 2009 CY06 75% CY07 69% 2008 CY08 74% CY09 84% 2007 2006 2005 CSV Source: VisaNet Note: Total Volume (CSV) = Payments Volume + Cash 6
Slide 7: U.S. Estimated Industry Opportunity
U.S. Estimated Industry Opportunity Prepaid Opportunity ($ Trillions) 2009 U.S. prepaid segment estimated at $2.0 trillion 56% or 4.7% $2.3 $1.1 trillion is the projected CAGR cardable opportunity $2.0 Category growth projected at 4.7% compounded annual growth $1.3 Leading segments as percent
Slide 8: Leader in Major Prepaid Categories
Leader in Major Prepaid Categories Visa measures leadership not in individual programs but by breadth of reach and depth of our relationships • Gift: 57% Visa share compared to Amex 28%, MA 15%* • Government Disbursements: 71 programs in 39 states • General Purpose: distribution in 90,000 retail loc
Slide 9: Industry Awards and Recognition
Industry Awards and Recognition Annual PayBefore Awards recognize Visa and our Partners’ contribution to prepaid across all major categories • Best Government Program: US Bank Visa Reliacard • Most Innovative Program: US Bank PayID card • Best General Purpose: Walmart Visa MoneyCard • Best New Gener
Slide 10: Differentiated Prepaid Innovation
Differentiated Prepaid Innovation Comprehensive product portfolio, network enhancements and operational support Products Consumer Corporate & Government Employee Benefits Platform Services Partial Authorization Auto-Substantiation Advanced Authorization Visa AuthorizeFirst Visa ReadyLink Network Ser
Slide 11: Visa ReadyLink Load Innovation
Visa ReadyLink Load Innovation National retail reload network with over 50,000 participating locations Immediate availability of funds Introduced ability to reload through ATM’s Q3 2009 Q4 2009 Q2 2009 Q4 2007 Q3 2007 Q1 2008 Q4 2008 Q1 2009 Q2 2008 Q3 2008 Active Merchant Locations Quarterly Load A
Slide 12: Partial Authorization Success
Partial Authorization Success Improves customer and merchant experience by easily enabling split tender at the point-of-sale Developed and introduced first by Visa (April 2005) In major merchant categories, increased approvals by up to 44%, decreased NSF declines up to 82% Over 45,000 locations with
Slide 13: Prepaid Innovation and Integration
Prepaid Innovation and Integration 13
Slide 14: Focus for 2010 and Beyond
Focus for 2010 and Beyond Growth: With a focus on the underbanked, accelerate expansion in the U.S. and lay the infrastructure for expansion in key geographies around the world Innovation: Open new channels of distribution with an emphasis on commercial and government segments Partnership: Different
Slide 15: Global Commercial Solutions
Global Commercial Solutions Darren Parslow Head of Global Commercial Product Strategy 15
Slide 16: Product and Services Strategy
Product and Services Strategy Goal: Provide differentiated, innovative payment Products solutions to enable commercial spend capture Processing & Services • Grow the core to drive revenue growth • Expand platform to new geographies Local Market • Penetrate commercial opportunity via products that ac
Slide 17: Global Commercial Opportunity
Global Commercial Opportunity Commercial Consumption Expenditure (CCE) Index Measures Business-to-Business and Government Spending 2008 Global CCE $90.2T USD 5% Government LAC 6% Europe 45% Large 35% Business CEMEA Small 8% Business 19% Asia Pacific US Medium 32% 26% 23% Business Small 18% Business
Slide 18: Global Commercial Opportunity
Global Commercial Opportunity Commercial Consumption Expenditure (CCE) Index Measures Business-to-Business and Government Spending 2008 Global CCE $90.2T USD 5% Government LAC 6% Europe • Addressable by 45% Large 35% cards: ~10% Business CEMEA Small 8% • Addressable by new Business 19% platforms: TB
Slide 19: Global Commercial Leadership
Global Commercial Leadership Visa is the commercial segment leader with 43% volume share 2009 Global Commercial Card Volume by Brand Visa Europe MasterCard 10% 22% Discover <1% Closed-loop Diner’s Club Fleet 5% Visa Inc. 1% 33% 43% JCB Amex 1% 26% China UnionPay 1% Source: Packaged Facts, December 2
Slide 20: Global Commercial Performance
Global Commercial Performance Visa Commercial product volume has delivered over 20% growth over the last 10 years Visa Inc. Commercial Volume 1999 – 2009 CAGR = 22% $318B Large/Middle Market 10-year CAGR = 17% Small Business 10-year CAGR = 27% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 S
Slide 21: Commercial Innovation Milestones
Commercial Innovation Milestones 1989 2001 2006 Launched industry’s Launched Visa Launched Signature first Purchasing Card Information Source Business premium card for the U.S. Government web-based reporting 1999 2005 Launched Commercial Introduced Program Card for Middle Market Optimization 1997 20
Slide 22: Global Commercial Product Portfolio
Global Commercial Product Portfolio Segment Small Business Middle Market Large Corporate/Multinational Government Core Products Specialized • PerformSource Products • Payables Automation Vertical Cards • Multinational Program • Commercial Prepaid Visa IntelliLink Reporting Data and Compliance, Fraud
Slide 23: Small Business Products
Small Business Products Delivering compelling value propositions to meet the financial needs of small businesses Small Business Products SGA1 Type of Spend COGS2 Cash Flow Premium Business Business Credit 3 Convenience Business Debit Control Low Target Spend High Notes: ¹Selling, general and adminis
Slide 24: Small Business Innovation
Small Business Innovation Visa Business Network (VBN) • Help small business owners connect and achieve goals Visa SavingsEdge • Radio and digital advertising support with merchant mentions promoted through online channels Convenience Acceptance • Enable acceptance via emerging payment and technology
Slide 25: Large/Middle Market/Government Products
Large/Middle Market/Government Products Meeting sophisticated requirements of large companies through core T&E and purchasing platforms Large/Middle Market/Government Sector Products Spend Visibility • Middle Market One Card and Control • T&E Cash Flow – Multinational Program Management – Central Tr
Slide 26: Large/Middle Market/Government Innovation
Large/Middle Market/Government Innovation Vertical Solutions • Targeted industry and geographic solutions to drive commercial payment spend capture - Meetings Card - Visa Cargo - Visa Agro - Distribution Card Visa PerformSource • Optimization tools and benchmarking to drive adoption of industry best
Slide 27: Visa IntelliLink Platform
Visa IntelliLink Platform Visa IntelliLink Spend Management • Global solution that provides spend visibility, insight and control - Information reporting - Expense management - Non-card spend integration - Consolidated multinational management Visa IntelliLink Compliance Management • Fraud and misus
Slide 28: Global business-to-business network for financial supply chains
Enabling increased control and efficiency over financial supply chains through global business-to-business network Invoice Processing Invoice Payment Trade Finance * Syncada is a joint venture between Visa and US Bank 28
Slide 29: Global Processing and Acceptance
Global Processing and Acceptance Marc Luet Head of Global Processing, Acceptance and Advisory Services
Slide 30: Processing Strategy
Processing Strategy Goal: Deliver processing services and Products solutions that drive Visa’s product Processing & Services and acceptance growth • Drive increased number of transactions Local over VisaNet Market • Deepen client relationships by expanding Clients Focus Brand into the processing val
Slide 31: What is Processing?
What is Processing? Processing is comprised of three components: network, issuer and acquirer processing Payments Value Chain Acquirer Network / Issuer Merchant Acquirer Issuer Consumer Processor Switch Processor Acquirer Processing: Network Processing: Issuer Processing: • Merchant set-up and ongoi
Slide 32: What is Processing?
What is Processing? Processing is comprised of three components: network, issuer and acquirer processing Payments Value Chain Acquirer Network / Issuer Merchant Acquirer Issuer Consumer Processor Switch Processor Currently Acquirer Evaluating Processing: Network VisaNet Processing: DPS & VPS Issuer
Slide 33: VisaNet Overview
VisaNet Overview VisaNet is a centralized and modular payments network, providing three essential functions in one complete, flexible package Transaction Processing Risk Management Information & Analytics • 130 million transactions every day • Protect against: • Transformation of data to business in
Slide 34: DPS Overview
DPS Overview Debit Processing Service (DPS) is Visa’s issuer processing provider in the U.S. to provide processing services to support Visa brand product strategies and strengthen key client relationships Global Acceptance Authorization Volume (billions) (1998 – 2009) 14 12 The Complete Debit Soluti
Slide 35: VPS Overview
VPS Overview Recognizing the strategic and financial importance that DPS proved to be in the U.S., VPS was formed in 2008 to serve as the issuer processing provider for international clients Strategic Rationale for Creation of VPS • Expansion into value chain outside U.S. • Support product developme
Slide 36: Global VisaNet Penetration
Global VisaNet Penetration Outside the U.S., Visa faces network processing challenges Processed Transactions (Billions) 39.9 37.0 FY08 FY09 ~100%: U.S. >50%: Canada, Australia, <50%: Russia, Japan, 0%: China, Mexico, India, Brazil GCC South Korea 36
Slide 37: Global VisaNet Penetration
Global VisaNet Penetration Outside the U.S., Visa faces network processing challenges Processed Transactions Alternatives to VisaNet (Billions) 1. On-us transactions 39.9 37.0 2. Bi-lateral arrangements 3. Domestic / 3rd party networks FY08 FY09 ~100%: U.S. >50%: Canada, Australia, <50%: Russia, Jap
Slide 38: Acceptance Strategy
Acceptance Strategy Goal: Accelerate the electronification of commerce Products • Increase acceptance locations in targeted Processing & Services geographies and merchant categories • Drive usage by delivering a superior customer Local experience at the point of sale Market • Enhance value of networ
Slide 39: Acceptance Across Segments
Acceptance Across Segments Country Development Lifecycle High Tipping Point: Acceptance ubiquity Other Emerging makes plastic Bill Payment (utilities, rent) preferred payment method Lower-ticket (convenience stores, QSRs) Card Payment Volume as % of total Everyday Spend (grocery, gas, drugstore) PCE
Slide 40: U.S. Priority Segments
U.S. Priority Segments Although the U.S. is a sophisticated market from a payments perspective, there are still several large segments for Visa to grow acceptance Category Key Tactics • Partner with top financial institutions Debt Repayment • Develop usage programs with partners • Create consumer aw
Slide 41: Global Priority Segments
Global Priority Segments Everyday spend is a focus across most priority countries but tactics vary based on market conditions Country Priority Segments India Retail, Bill Pay, Insurance Acceptance Levers Russia Grocery, Petrol, QSR, Bill Pay • Acquirer / processor infrastructure Brazil Grocery, Petr
Slide 42: Visa Corporate Strategy
Visa Corporate Strategy Vision: The world’s best way to pay and be paid Mission: Accelerate the electronification of commerce Grow participants of network: Issuers, acceptors, cardholders, new users Grow usage of network: Drive brand preference, expand channels, increase processing penetration Turni
Slide 43: Building on Trust: Securing the Payments System
Building on Trust: Securing the Payments System Ellen Richey Chief Enterprise Risk Officer 43
Slide 44: Payment System Risk: The Mission
Payment System Risk: The Mission Sustain stakeholder trust and business growth by promoting the integrity and security of the payment system Visa Risk Framework Strategic Legal & Financial Operational Risks Regulatory Risks Risks Risks Internal Data Security Payment System Security Compliance & Inte
Slide 45: The Center of Electronic Payments
The Center of Electronic Payments Protecting the payment system is a shared responsibility among participants Acquirers 16,000+ financial institutions Issuers Merchant Card Processors Processors 62 billion total transactions* $4.4 trillion in total volume* Merchants Cardholders * Source: Visa Inc. d
Slide 46: Controlling Fraud through Innovation
Controlling Fraud through Innovation Terminal Visa has led in developing Placement and CVV innovative solutions: First Fraud • Risk tools Detection Global Fraud to Sales Rate • Standards and oversight System • Education and partnership EMV Co First Commercial Chip Security Advanced Authorization CAM
Slide 47: Payment System Risk Strategy
Payment System Risk Strategy Maintain Trust in Visa Payments PROTECT RESPOND Stop thieves Mitigate impact from stealing of threats and vulnerable data attacks PREVENT PREVENT Stop thieves Eliminate re- from using usable data stolen data Partner with Clients & Stakeholders 47
Slide 48: 2010: The Security Challenge
2010: The Security Challenge Fraudsters have evolved their business models and migrated between channels, products and geographies Criminals continue to adapt and challenge the system • The number of compromise incidents involving cardholder information has grown globally • Stakeholder costs are inc
Slide 49: Protect the System
Protect the System Lead the industry in protecting vulnerable payment data Standards Education Tools Oversight • Data Security • Training and • Device and • Incentive • Application Consulting service testing Programs and Device • Implementation • Analytics and • Requirements Security guidance Report
Slide 50: Respond to Threats
Respond to Threats Minimize the impact of threats on stakeholders through early identification and advanced event management Identify Analyze Mitigate Tools & • Consumer Alerts • Point of • Proactive Alerts Solutions • Fraud ID systems Compromise Tools • Authorization Solutions • Zero Liability Prog
Slide 51: Prevent Attacks
Prevent Attacks Reduce the incentive for criminals to steal data by eliminating re-usable data from the system Only the Authenticate • Signature/PIN • Challenge-Response legitimate Participants • Passwords customer can • One time pass-codes initiate a transaction • CVV/CVV2 • Smart Cards Data can on
Slide 52: 20/20 Vision
20/20 Vision The Future of Payments Security 1 Dynamic Authentication: allowing merchants to focus less on security and more on commerce 2 Powerful Security: among stakeholders who retain vulnerable data 3 Intelligent Response: to shut down fraud and put criminals behind bars 4 Solutions that Engage
Slide 53: Questions and Answers Session
Questions and Answers Session Brian Triplett Darren Parslow Marc Luet Ellen Richey
Slide 54: 2010 Investor Day
2010 Investor Day March 11, 2010 54