2020 Investor Day Growing Consumer Payments Driving New Flows
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2020 Investor Day Oliver Jenkyn Chris Clark Growing Consumer Payments Charlotte Hogg Andrew Torre Eduardo Coello Ryan McInerney Driving New Flows Bill Sheley Kevin Phalen
Forward-looking Statements This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are identified by words such as “will,” “is expected,” and other similar expressions. Examples of forward-looking statements include, but are not limited to, statements we make regarding the opportunities for growth, our strategy, future operations and outlook. By their nature, forward-looking statements: (i) speak only as of the date they are made; (ii) are not statements of historical fact or guarantees of future performance; and (iii) are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from Visa’s forward- looking statements due to a variety of factors, including those contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019, and our other filings with the U.S. Securities and Exchange Commission. You should not place undue reliance on such statements. Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future developments or otherwise. Please see end of presentation for notes and disclosures. 2 ©2020 Visa. All rights reserved.
North America: Overview 364M Population Visa Scale Opportunity Cash & Check = 33% of PCE ~1B 1B+ Cards New Credentials Credentials Canada ~10M 10M+ U.S. Merchant Untapped Merchants Acceptance Locations $4T $4T Payments 76B Payments $4T Cash & Check Opportunity as a % of PCE: Cash & Check High (>50% cash & check) Volume Transactions Conversion Moderate (25%-50% cash & check) Opportunity Low (
North America: Key growth levers North American clients prefer Visa because of our brand, our platform and our expertise 19 / 25 Largest portfolios are primarily Visa >70% • We lead with the largest partners in North America Win rate in fintech deals Credentials • We are winning with fintechs Visa is opening up new acceptance in underpenetrated ~1M Annual new acceptance points 25+ segments and enabling new use cases Transit systems moving to tap to pay Acceptance Visa is driving innovation to make it easier to pay 300M U.S. tap to pay cards in force by EOY 2020 • In-store (tap to pay) Engagement • Online (click to pay) 83 / 100 Top merchants accept tap to pay 6 Sources: Nilson; U.S. Consumer Payment Panel Study; VisaNet Data; Visa Analysis. ©2020 Visa. All rights reserved.
Partnership strength: Leading partners choose Credentials Acceptance Engagement Visa and outperform peers Leading share with Visa partners outperform Visa partnership helps largest partners our clients grow Largest Visa Issuers vs. Visa Brand Premium 19 of 25 Largest North America Largest Competitor Issuers 10.7% portfolios1 (3-Year View)2,3 8 of 10 Largest U.S. issuers2 1.1 ppt Faster growth U.S. Spend Lift4 4 of 5 Largest Canadian Visa Consulting & Analytics credit issuers2 $65B Issuer volume New product design Risk optimization Digital marketing expertise 8 of 10 $1-1.5B Issuer revenue Largest North America Spend momentum analysis co-brands Notes: 1. Includes debit and consumer credit; 2. Excludes American Express and Discover; 3. Visa’s Top 5 U.S. Issuers by payments volume vs. Competitor’s Top 5 U.S. Issuers 2015-2018, excludes PIN debit; 4. Transunion analysis of their proprietary U.S. transaction database spanning over 310 million U.S. Visa- and MA-branded active credit cards showing spend lift (March 2017-March 2018 performance period), less Visa-calculated Costco effect; risk- 7 ©2020 Visa. All rights reserved. adjusted balance line is calculated on the full database of 310 million active cards whereas spend lift is calculated based on a subset of active credit cards where Issuers send monthly payment data to Transunion. Sources: Nilson; U.S. Consumer Payment Panel Study; Visa Consulting and Analytics Issuer Benchmark Study; TransUnion; Visa Operating Certificates; VisaNet data; Visa Analysis.
Fintech focus: Visa’s approach is successfully Credentials Acceptance Engagement driving growth U.S. consumers are Fintechs are choosing We are winning with embracing fintechs Visa because of our top partners >70% >70% Brand Strength Expertise and Trust of North America • Advice & consulting Win Rate1 Experience consumers used a • fintech app in 2019 Fintech Fast Track • Streamlined onboarding • Ecosystem partners • Simple commercial agreements Note: 1. Fintech win rate based on analysis of deals won as a percentage of total pool of deals over a certain size. 8 ©2020 Visa. All rights reserved. Source: EY Global Fintech Adoption Index, % of digitally active consumers that used a money transfer or payments application; Visa Analysis.
Expand acceptance: Driving growth with new Credentials Acceptance Engagement segments and use cases $570B $350B $165B $120B Rent1 Tuition Sports Wagering Micromobility Opportunity Size in New Use Cases: $50B $26B $17B $16B Unattended Crowd- Retail Parking funding Transit Note: 1. Data was researched by Euromonitor International plc for its client, Visa U.S.A. Inc. and its subsidiaries using industry standards. Euromonitor disclaims and excludes any and all liability for any loss 9 ©2020 Visa. All rights reserved. suffered by any party as a direct or indirect result of the use of any of the Extracts. Sources: Euromonitor Consulting 2019 Visa Rent Payments; Sports Legalsportsbetting.com; Barclays Research, 2019; IBIS World, 2019; Fundly.com; Euromonitor Merchant Segment Study, 2018; APTA Factbook, 2019; VisaNet Data.
Expand acceptance: Driving growth with new Credentials Acceptance Engagement segments and use cases NY MTA Momentum • 4,000,000 Visa taps in 8 months • ~60,000 Visa taps per weekday (on average) • ~30% stations enabled to date; full roll-out by end of 2020 10 Sources: Partner provided data; Visa Analysis. ©2020 Visa. All rights reserved.
Expand acceptance: Driving growth with new Credentials Acceptance Engagement segments and use cases British Columbia Edmonton Vancouver Laval Ottawa Transit Systems: Por tland Toronto Boston Live and in Planning1 New York 25+ New Jersey Chicago Philadelphia San Diego Dallas Honolulu Houston Tampa Miami Note: 1. NA cities currently accepting tap to pay payments or where transit agencies are planning next-generation payment systems expected to support tap to pay payments; map 11 shows only cities where next-generation payment systems are currently operating or have been publicly announced. ©2020 Visa. All rights reserved. Source: Public statements; Visa Analysis.
Tap to pay: Frictionless way to pay in-store Credentials Acceptance Engagement Cash remains prevalent in the U.S. Tap to pay displaces cash Tap to pay drives ~20% Americans average Cash still accounts for transaction lift in mature 12 55% markets globally1 In the U.S. so far2 cash transactions of all transactions per month
Tap to pay: Frictionless way to pay in-store Credentials Acceptance Engagement Tap to pay in the U.S. is poised for take-off Issuer Side Merchant Side 145M tap to pay cards issued today 8 of the top 10 merchants accept tap to pay 300M tap to pay cards issued by the end of 2020 83 of the top 100 merchants accept tap to pay 17 of the top 25 issuers are issuing tap to pay cards 69% of F2F transactions occur at tap to pay merchants 13 Sources: VisaNet data; Visa Analysis. ©2020 Visa. All rights reserved.
Click to pay: Frictionless way to pay online Credentials Acceptance Engagement Today, guest checkout represents approximately half of digital card not With click to pay, it can be as present purchases and can involve 23 simple as two clicks steps, taking almost three minutes 14 ©2020 Visa. All rights reserved.
North America is Visa’s largest region and still has a huge runway for future growth North American clients prefer Visa because of our brand, our platform and our expertise • We lead with the largest partners in North America Credentials • We are winning with fintechs Visa is opening up new acceptance in underpenetrated segments and enabling new use cases Acceptance Visa is driving innovation to make it easier to pay • In-store (tap to pay) • Online (click to pay) Engagement 15 ©2020 Visa. All rights reserved.
Asia Pacific Chris Clark Regional President 2020 Investor Day
Asia Pacific: Overview 3.9B Population Visa Scale Opportunity Cash & Check = 48% of PCE 970M 768M China Cards Unbanked Credentials $2.1T $1.4T $1T India Japan 20M 100M+ Merchant Untapped Merchants Acceptance Locations $1.1T Southeast Asia $1.9T Payments 30B Payments $6T Cash & Check Opportunity as a % of PCE: Cash & Check High (>50% cash & check) Volume Transactions Conversion Moderate (25%-50% cash & check) Opportunity Low (
Asia Pacific: Key growth levers 20+ Wallet partners We are investing to rapidly grow Visa credentials with an Credentials increasingly diverse roster of clients 1B+ Users connected to these wallets We are opening up new acceptance in underpenetrated segments and enabling new uses cases 2.3x Acceptance locations vs. three years ago Acceptance Visa is making the payment experience frictionless to 41% Tap to pay penetration in 2019 increase consumer engagement – tap to pay is a key part Engagement of this strategy Up to 3.8x Transactions per active card for tap to pay users $4.5T Asia Pacific is a very diverse region and we operate in 46 Cash & check opportunity markets – our approach is tailored to each market and its across Japan, India and unique needs China 18 Sources: Public announcements and data provided by partners; Central Bank data; Oxford Economics; Euromonitor Merchant Segment Study, 2018; Visa Operating Certificates; VisaNet data. ©2020 Visa. All rights reserved.
We are partnering with market-leading wallets to Credentials Acceptance Engagement grow credentials and acceptance across Asia Pacific Visa offers wallets greater payment functionality to both consumers and merchants in their ecosystem Across AP India South Korea Thailand, Indonesia, Japan and Taiwan 20+ 164M Users 4 Key Markets Wallet partners 540M Users 16M Users For Taiwan: 16M Merchants $8B Payments Volume 1B+ 2.5M Credentials Users China Other markets underway 65M+ Merchants Indonesia and Southeast Asia 50M+ Merchants 155M App Downloads 420K Merchants Notes: LINE users represent Monthly Active Users, LINE Taiwan numbers represent LINE Pay Visa co-brand in Taiwan only. 19 ©2020 Visa. All rights reserved. Sources: Public information; Data provided by partners; VisaNet data; Visa Operating Certificates.
Tap to pay drives higher consumer engagement Credentials Acceptance Engagement through frictionless payment experiences Comparing tap to pay users vs. Tap to Pay Penetration (%) non-users: 96% AU Up to Asia Pacific tap to pay penetration2 85% 88% SG 3.8x Transactions per active card1 29% 41% 82% NZ 2016 2019 67% TW 60% Up to 1.8x 59% HK 47% Spend per active card 33% 37% MY Post tap to pay activation, 20% cardholders make: 11% PH 3.9x 4% 8% IN Transactions at fast food restaurants 0.1% JP Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 2.3x Transactions at grocery stores and supermarkets Notes: 1. Active card refers to cards with at least one purchase during analysis period; 2. Based on face-to-face transaction processed by Visa. 20 ©2020 Visa. All rights reserved. Source: VisaNet data.
India: Capturing the $1T opportunity Credentials Acceptance Engagement Visa is the credit and debit market share leader with strong momentum 19% CAGR 93% Driving credentials and acceptance through fintech partnerships • Google Pay: Tokenized credentials Transactions FY16 FY17 FY18 FY19 • Paytm: Debit, co-brand credit, tap to pay acceptance 20% CAGR Expanding credit access to large debit base 82% (50M+ credit cards vs. 800M+ debit cards in 2019) • Co-brand partnership with large consumer platforms (Amazon Pay, Ola) Payments Volume • Deploying installment payment solution FY16 FY17 FY18 FY19 34% CAGR Improving consumer engagement through frictionless 103% payment experiences • Market-specific solutions such as: Recurring payments platform Acceptance1 with BillDesk, Visa Safe Click FY16 FY17 FY18 FY19 • FY 2019 tap to pay penetration 14x vs. FY 2018 Demonetization Note: 1. Number of merchant locations. 21 ©2020 Visa. All rights reserved. Sources: Reserve Bank of India; VisaNet data; Visa Operating Certificates.
Japan: Capturing the $1.4T opportunity Credentials Acceptance Engagement Government’s cashless agenda Debit opportunity Significant growth since 2016… ePayment PCE penetration • Enable tap to pay, leveraging Government goal strong issuers and growing acceptance in everyday spend 31 11M 3x categories Issuers Cards Debit Payments 40% Volume & Transactions 24% • Maximize Olympic Games Tokyo • Large untapped opportunity: debit penetration
China: Capturing the $2T opportunity Credentials Acceptance Engagement Strong existing Partnering to scale Preparing for market entry business acceptance • Beijing Innovation Center • Leading share among • 18x traditional acceptance points to help tailor solutions international schemes in since FY 2016 7 of top 8 issuers representing ~120M cards in force • Growing penetration into new merchant segments and smaller cities • Partnering with large wallet platforms to drive a step change growth in inbound acceptance • Working with Chinese government to continue to • Growing fintech partnerships progress market entry efforts to facilitate new use cases 23 Source: Visa Operating Certificates. ©2020 Visa. All rights reserved.
Asia Pacific presents a significant long-term growth opportunity We are investing to rapidly grow Visa credentials with an increasingly diverse roster of clients Credentials We are opening up new acceptance in underpenetrated segments and enabling new uses cases Acceptance Visa is making the payment experience frictionless to increase consumer engagement – tap to pay is a key part of this strategy Engagement Asia Pacific is a very diverse region and we operate in 46 markets – our approach is tailored to each market and its unique needs 24 ©2020 Visa. All rights reserved.
Europe Charlotte Hogg CEO 2020 Investor Day
Europe: Overview 619M Population Visa Scale Opportunity Cash & Check = 32% of PCE 560M 53M UK Cards Unbanked Credentials $150B $580B Germany 16M 10M+ Italy Merchant Untapped Spain Merchants Turkey Acceptance Locations $600B $300B $180B $1.7T Payments 41B Payments $3T Cash & Check Opportunity as a % of PCE: Cash & Check High (>50% cash & check) Volume Transactions Conversion Moderate (25%-50% cash & check) Opportunity Low (
Post integration, Europe is a stronger business poised for accelerated growth Team Capabilities Clients Performance built our team enhanced our cultivated our realized greater financial in local markets capabilities client base benefits than expected +123% 100% +37% >2x Increase in Clients migrated to Increase in Profit ahead of acquisition client-facing staff VisaNet without incident client NPS business case 27 Source: Visa Analysis ©2020 Visa. All rights reserved.
Europe: Key growth levers Visa is partnering with fintechs in their efforts to digitize payments and reach the unbanked 85M Neobank customers by 2023 Credentials We are broadening into new verticals, including opening up transit opportunities across Europe 20% Growth in acceptance locations since FY 2017 Acceptance Visa is setting the pace in new authentication products as the European regulatory landscape is changing 2x Open banking service providers since 2018 Engagement We are deploying specific strategies tailored to trends in each key market $2.0T Cash & check opportunity across France, Germany, Poland, Spain, Italy and Turkey 28 Sources: ATKearney European Retail Banking Radar 2019; Registrations with National Competent Authorities in Europe, 2Q19 to 3Q19; Visa Operating Certificates. ©2020 Visa. All rights reserved.
We are making meaningful progress across Credentials Acceptance Engagement fintech segments Fintech Fast Track New end-to-end approach, shortening the onramp Category Country Fintech for fintechs to partner with Visa 46 UK Digital Banks Lithuania Switzerland Unbanked fintech deals Turkey Focus signed 84 XB Specialists Turkey Lending UK UK B2B Estonia active fintech pipeline Wallet France 29 Source: Visa Analysis. ©2020 Visa. All rights reserved.
Acceptance growth comes through expansion Credentials Acceptance Engagement across new segments, markets and payment flows Growth vector Success stories Acquirer Rallye – Small business campaign Reach small businesses 1 across Germany geared towards welcoming in key markets international payment schemes 20% growth Soft POS launch to accept tap to pay on any in acceptance Enable acceptance Samsung device locations since 2017 2 via new channels Expand to sectors Vending solutions to address payments UX and connectivity issues at >35K vending machines 3 in which cards are underpenetrated 70% tap to pay penetration Develop acceptance Electric vehicle solutions address UX and roaming payments across charging network 4 in segments with low card usage Note: First Data is now Fiserv. 30 ©2020 Visa. All rights reserved. Sources: Visa Operating Certificates; Visa Analysis.
Transit creates a ‘halo’ effect in tap to pay Credentials Acceptance Engagement enabled markets From the launchpad of London we are now enabling public transportation across the region London, Madrid, Milan, Rome, Edinburgh, Manchester, Florence, 2x Warsaw, Dijon, Prague, Glasgow, Gdańsk, Lodz... Greater increase in transactions by tap to pay TfL users 35 70% Higher growth Transit systems in spend by tap launched to to pay TfL users date Visa Ready for Transit program • Expert guidance to transit operators 40 Transit systems • Visa certification for third-party products in pipeline • Speed of delivery in close partnership with technology providers 31 Sources: VisaNet data; Visa Analysis. ©2020 Visa. All rights reserved.
We are well positioned as open banking Credentials Acceptance Engagement accelerates in Europe Authentication solutions already in market to Visa’s broad reach and connectivity to financial institutions support clients as they prepare for PSD2 & SCA put us in a strong position to scale open banking services App Developers 3D secure 2.2 Enhanced 3DS to manage SCA exemptions and improve UX Lending Visa delegated Allows issuers to “delegate” authentication authentication to a 3rd-party Brokerage / Banking Visa transaction Helps acquirers and merchants identify Financial Open Banking Consumer / advisor low risk transactions for SCA exemption Institutions Platform Business User Personal Finance Visa trusted listing Accelerates checkout experiences by “trusting” preferred merchants Business Finance Helping the ecosystem champion security Enabling the ecosystem to deliver secure without jeopardizing the consumer experience innovation to better delight consumers 32 ©2020 Visa. All rights reserved.
On the continent, we have market-specific Credentials Acceptance Engagement strategies to fuel growth over the next several years Germany Italy Spain Cash & Cash & Cash & Check PCE Launch Debit as a platform Check PCE As government incentives Check PCE for everyday use and for promote e-payments, Focus on cash innovation, including increase presence displacement in transit eCommerce, mobile and with clients to help and tourism $580B $600B $300B international them capture growth France Poland Turkey Cash & Cash & Cash & In advance of Paris 2024 With the help of the Check PCE Check PCE Check PCE Support issuers and Olympics, develop tap government Cashless fintechs targeting the to pay for public transit Poland initiative, build unbanked, build tap to and improve acceptance acceptance among small $220B $150B $180B pay and eCommerce of overseas cards businesses 33 Sources: Central Bank data; Oxford Economics; Euromonitor Merchant Segment Study, 2018; World Bank population statistics. ©2020 Visa. All rights reserved.
Germany: A new approach to penetrating Credentials Acceptance Engagement a nearly $600B cash & check opportunity Through a refreshed strategy, we are creating ...and our efforts are beginning to deliver, a flywheel for future growth... laying the foundation for growth 3X increase in market staff 68% Visa Debit share of new cards issued Increase Attack with brand Debit Visa Debit 80%+ awareness Acceptance locations that are tap to pay enabled Deliver in-market DPS Expand acceptance 60% Clients using Value Added Services to drive loyalty and usage issuer processing 34 Sources: Oxford Economics; Visa Analysis. ©2020 Visa. All rights reserved.
Our strategies will accelerate growth across all of Europe Visa is partnering with fintechs in their efforts to digitize payments and reach the unbanked Credentials We are broadening into new verticals, including opening up transit opportunities across Europe Acceptance Visa is setting the pace in new authentication products as the European regulatory landscape is changing Engagement We are deploying specific strategies tailored to trends in each key market 35 ©2020 Visa. All rights reserved.
Central Europe, Middle East and Africa (CEMEA) Andrew Torre Regional President 2020 Investor Day
CEMEA: Overview 2B Population Visa Scale Opportunity Cash & Check = 74% of PCE 360M 680M Russia & Eastern Europe Cards Unbanked Credentials $600B Middle East 5M 60M+ Africa $700B Merchant Untapped Merchants Acceptance Locations $1.2T $480B Payments 19B Payments $2.5T Cash & Check penetration as a % of PCE: Cash & Check High (>50% cash & check) Volume Transactions Conversion Moderate (25%-50% cash & check) Opportunity Low (
CEMEA: Key growth levers Visa is partnering with fintechs, neobanks and wallets to enable new payment experiences 200M+ Potential credentials with wallet partners Credentials We continue to accelerate growth by enabling new types of merchants and distributors 27% Increase in acceptance in the last year Acceptance Visa is leading the evolution to seamless and secure commerce through tap to pay 52% Growth in tap to pay penetration over last year We are helping governments meet increasingly complex payment demands 12+ Government partnerships launched or planned Engagement Visa is co-creating customized value propositions for unique market and segment needs 65% Share of affluent spend in CEMEA We are partnering with leading players in Sub-Saharan Africa 2/3 of people 15+ without a bank account 38 ©2020 Visa. All rights reserved. Sources: Global Monthly Tap to Pay reports, Oct-18 and Sept-19; World Bank Global Findex Database, 2017; Projections based on Visa Operating Certificates; VisaNet data.
Visa is the partner of choice for fintechs, Credentials Acceptance Engagement delivering Visa credentials to new users Visa’s Fintech Fast Track Program provides a one- stop platform for new Issuing credentials with Supported by an players to establish open fintechs, neobanks and ecosystem of enablers loop wallets / capabilities digital wallets and funds / accelerators and scale their offerings Fintech Progress >75% deal success rate1 31 partnerships 4 investments 12 fintech launches Examples of partnerships Note: 1. Deal success rate based on analysis of deals won as a percentage of total pool of deals over a certain size. 39 ©2020 Visa. All rights reserved. Source: Visa Analysis.
Transforming Visa go-to-market and solutions Credentials Acceptance Engagement to grow acceptance with merchants Go-to-market approaches Examples of recent efforts and partnerships 1 Grow F2F acceptance in the SME segment by partnering SME acceptance across 10 African markets ~27% Increase in acceptance with new distributors and Low-cost terminals in South Africa locations in the last year traditional acquirers 700K+ Enabling terminals for Visa acceptance New POS 2 Expand eCommerce Gateway for Chat Commerce outlets acceptance by enabling new and innovative use cases eCommerce acceptance in Nigeria 400K+ New QR / Build new value propositions Microlending to merchants USSD / Soft 3 for acquirers and merchants POS outlets 40 Source: Visa Operating Certificates; Visa Analysis. ©2020 Visa. All rights reserved.
Leading the evolution of seamless and secure Credentials Acceptance Engagement digital commerce through tap to pay Highest Visa region #10 Russia - 83% In F2F tap to pay penetration ~16% #1 Georgia - 96% 52% Increase in active Growth of tap to pay penetration in cardholder CEMEA over the last year spending from tap to pay CEMEA F2F tap to pay penetration Enablers Very High (>80%) activation High (50%-80%) Moderate (20%-50%) Tokenization >200% in 2019 Low (
Driving innovation, new use cases and Credentials Acceptance Engagement payments volume with local switches Examples of partnerships Key partnership components New Value Visa on New products Tokenization Added mobile flows • Launch of Multicurrency Prepaid with The Saudi and services Services Tailored Investment Bank to all government employees payment • Enabling domestic eCommerce with Saudi Payments solutions $8.2B opportunity size of government purchases1 • Rollout P2P, Tokenization and Mobile Apps with HPS Value Added domestic switch in Morocco Services Only 4% use mobile phone to access a bank account Local • Building domestic infrastructure in South Africa processing 22% YoY growth in Visa transactions Ecosystem • Digitization of payments and financial inclusion in Cote d’Ivoire development 59% of people unbanked 12+ launched or planned government engagements and partnerships with local switches Note: 1. Based on total value of government B2B purchases in 2019. 42 ©2020 Visa. All rights reserved. Sources: World Bank Global Findex Database, 2017; Euromonitor; VisaNet data; Visa analysis.
Delivering customized solutions for Credentials Acceptance Engagement sophisticated and affluent cardholders Affluent consumers drive outsized impact Visa continuously updates and tailors offers for Visa’s business in CEMEA based on customer preferences and needs Examples of recently launched product benefits include: Affluent drives 30% of Visa CEMEA volumes Free Unlimited Free Visa Airport airport internet luggage airport fast-lane Travel transfers abroad wrapping check-in Affluent cards see ~15x higher cross-border spend vs. other cards1 Dining City taxi Premium Online Cinema discounts trip grocery retailer discounts ~65% Lifestyle discounts offers offers Visa holds share of affluent spend2 Customer awareness of benefits drives 25% higher card spend Notes: 1. Affluent cards considered to be Visa Platinum, Signature and Infinite; 2. Calculated based on World Bank reported international travel and tourism expenditures from KSA, 2017. 43 ©2020 Visa. All rights reserved. Sources: VisaNet data; Visa Analysis.
Partnering with leading African players on Credentials Acceptance Engagement credentials, acceptance and engagement Credentials Sub-Saharan Africa Market-at-a-Glance 18.4 Median age vs. Engagement 30.3 globally Acceptance 2.4x Higher annual population growth than global ~3% Card PCE penetration (excl. South Africa) 2/3 of people 15+ without a bank account 46% of the world’s mobile money users Sources: World Bank Development Indicators; Euromonitor Soci-Economic Indicators; Central Bank data; Oxford Economics; Euromonitor Merchant Segment Study, 2018; World Bank Global Findex Database, 2017; GSMA State of 44 ©2020 Visa. All rights reserved. the Industry Report on Mobile Money, 2018.
CEMEA has huge growth potential driven by bringing new consumers and sellers in the financial system Visa is partnering with fintechs, neobanks and wallets to enable new payment experiences Credentials We continue to accelerate growth by enabling new types of merchants and distributors Acceptance Visa is leading the evolution to seamless and secure commerce through tap to pay We are helping governments meet increasingly complex payment demands Engagement Visa is co-creating customized value propositions for unique market and segment needs We are partnering with leading players in Sub-Saharan Africa 45 ©2020 Visa. All rights reserved.
Latin America and Caribbean (LAC) Eduardo Coello Regional President 2020 Investor Day
LAC: Overview 630M Population Visa Scale Opportunity Cash & Check = 65% of PCE Central America and 478M 212M $465B The Caribbean $280B Mexico Cards Unbanked Credentials Brazil Andean $680B 12M 50M+ and South $600B Cone Merchant Untapped Merchants Acceptance Locations $413B Payments 14B Payments $2T Cash & Check Opportunity as a % of PCE: Cash & Check High (>50% cash & check) Volume Transactions Conversion Moderate (25%-50% cash & check) Opportunity Low (
LAC: Key growth levers Visa is poised to capitalize on the rapidly developing digital ecosystem and grow credentials through fintechs and enablers 62% Smartphone penetration in Latin America 18M Innovation is driving Visa issuance on previously proprietary Credential opportunity Credentials local networks currently on local schemes $535B Visa is displacing cash by growing acceptance, embracing Visa cash volume – digital platforms and improving the consumer experience 1.3x payments volume Acceptance 12 ppts Increase in domestic Visa’s growth in domestic processing will diversify revenue, processing penetration accelerate digital deployment and improve client performance in last 5 years 2x Engagement Visa takes a customer-centric approach to increasing Tap to pay penetration engagement through improved experiences growth last year $40B Brazil is a great example of how Visa leverages our deep market Payments volume knowledge and client understanding to deploy unique, opportunity from focused cash conversion efforts customized solutions by market and segment 48 Sources: GSMA Intelligence; World Bank; IBGE; Bacen; Visa Operating Certificates; Visa Analysis. ©2020 Visa. All rights reserved.
Rapid digital adoption drives new opportunities Credentials Acceptance Engagement to deploy Visa credentials Visa is partnering with enablers like 22M ~2 months on Regional SuperApp users average to set up new issuer Launched by that make it quick and easy for…. Paraguay white label ~50% of issuer clients issuer wallets Banks Wallets Neobanks Fintechs 84% of Visa credentials Uruguay multi-issuer wallet enabled …to issue digital credentials 49 Sources: Client statements; Visa Analysis. ©2020 Visa. All rights reserved.
Innovation is driving Visa issuance on previously Credentials Acceptance Engagement proprietary local networks Chile As payments innovation Partnership with Banco Estado accelerates, local networks 12M 60% 37% look to partner with Visa to deliver value to their cardholders cards converted of the total of POS debit to Visa Debit debit cards transactions • Tokenization • Click to Pay • Fast Funds Top Caribbean issuers that own local networks are transforming proprietary • Installments closed loop portfolios from a cost center to a revenue center via Visa partnership 50 Source: Superintendencia de Bancos e Instituciones Financieras; Visa Analysis. ©2020 Visa. All rights reserved.
Converting cash on Visa credentials to the Credentials Acceptance Engagement point of sale is a unique growth opportunity Visa approach Cash represents 1 Work with new acquirers and payment facilitators ~300K >50% of LAC’s PCE to expand acceptance New merchants reached since initial Visa partnership in 2017 2 Improve the consumer experience at POS Tap to pay Click to pay $535B in cash was withdrawn on a Visa credential in 2019 3 Educate the ecosystem 4.4% Lift in number of transactions due to merchant and cardholder campaigns in Peru 51 Sources: Euromonitor; Oxford Economics; World Bank; Millward Brown Brand Lift Study; Visa Operating Certificates. ©2020 Visa. All rights reserved.
Visa increased domestic processing penetration Credentials Acceptance Engagement in LAC by 12 ppts in the past five years Domestic processing wins in the past 5 years Domestic processing benefits: Mexico: First issuer live for Enhances and diversifies Visa authorization transactions revenue on core payment flows Guatemala: 93% of authorization transactions Puerto Rico: 76% → 100% Accelerates Visa’s digital innovation of credit transactions Colombia: 100% of Rappi transactions Improves Visa client performance Peru: 16% → 86% of through Value Added Services authorization transactions Argentina: 0% → 80% of transactions, 100% expected by 2020 Facilitates deployment of new flows Uruguay: 0% → 40% of authorization transactions 52 Source: Visa Analysis. ©2020 Visa. All rights reserved.
A commitment to understanding the end Credentials Acceptance Engagement consumer has deepened engagement Visa initiatives Affluent Revitalization +14% +20% affluent account growth domestic and cross-border payments volume growth Strong consumer engagement drives Tap to Pay 2x ~50% partnership with Deployment tap to pay penetration of F2F transactions in clients and in one year Costa Rica and Chile mutual growth Visa Loyalty Solutions: 49 89% 45% clients are using customer redemption of reward My Rewards the platform and satisfaction rate points by registered Platform 33 clients in pipeline users 53 Source: Visa Analysis. ©2020 Visa. All rights reserved.
Visa is well positioned to capture rebounding Credentials Acceptance Engagement economic growth in Brazil Grow credentials Expand acceptance Deepen engagement New significant wins Focused cash conversion 500K taps in the first 6 months and renewals by delivering efforts in ~200 unique, superior value underpenetrated cities to 400K tap to pay cards to clients reach ~$40B opportunity1 issued in Rio 96.5% retention of new users + Opportunity 40 new players enabled 60K new merchants in the last 18 months in the last 12 months Note: 1. Incremental payments volume if targeted regions reach average penetration, assuming 60% Visa share. 54 ©2020 Visa. All rights reserved. Sources: World Bank; IBGE; Bacen; Visa Analysis.
Substantial growth opportunity exists in LAC from converting cash and expanding our network Visa is poised to capitalize on the rapidly developing digital ecosystem and grow credentials through fintechs and enablers Credentials Innovation is driving Visa issuance on previously proprietary local networks Visa is displacing cash by growing acceptance, embracing digital platforms and improving the consumer experience Acceptance Visa’s growth in domestic processing will diversify revenue, accelerate digital deployment and improve client performance Engagement Visa takes a customer-centric approach to increasing engagement through improved experiences Brazil is a great example of how Visa leverages our deep market knowledge and client understanding to deploy unique, customized solutions by market and segment 55 ©2020 Visa. All rights reserved.
Driving New Flows Ryan McInerney President 2020 Investor Day
Our new flows expand our total addressable market by extending our reach into new use cases through a Network of Networks Consumer Payments New Flows Value Added Services Grow the two-sided network Expand our Network of Drive utilization of our by expanding Visa credentials Networks to capture new services to help our clients and acceptance points and sources of payments and grow profits and deepen our driving user engagement money movement between partnerships individuals, businesses and governments 57 ©2020 Visa. All rights reserved.
The market opportunity in new flows is 10x the cash and check currently in consumer payments $185T B2B B2b B2C P2P G2C $120T $5T $30T $20T $10T • SME, T&E, Fleet, • Merchant • Insurance • Friends and • Government Purchasing Settlement • Payroll Family Benefits • Receivables, • Marketplaces • Gig Economy • Remittances • Tax Refunds Payables • Alternative • Cross-border Lending 58 Sources: McKinsey Global Payments Map and Visa Analysis. ©2020 Visa. All rights reserved.
We think about new flows in two broad groups in terms of customer needs and use cases $65T $120T Lower value, higher velocity flows Higher value, lower velocity flows P2P B2C Card-based Cross-border $20T $30T $20T $10T B2b G2C Domestic AR / AP $5T $10T $90T 59 Sources: McKinsey Global Payments Map and Visa Analysis. ©2020 Visa. All rights reserved.
Visa Direct with Earthport meets the needs for the $65T of lower value, higher velocity flows for consumers and small businesses $65T Lower value, higher velocity flows P2P B2C $20T $30T B2b G2C $5T $10T 60 Sources: McKinsey Global Payments Map and Visa Analysis. ©2020 Visa. All rights reserved.
Visa Direct with Earthport meets the needs for the $65T of lower value, higher velocity flows for consumers and small businesses $65T Lower value, higher velocity flows P2P B2C Visa Direct $20T $30T B2b G2C $5T $10T 61 Sources: McKinsey Global Payments Map and Visa Analysis. ©2020 Visa. All rights reserved.
Unique solutions meet the needs of higher value, lower velocity flows from commercial clients $120T Higher value, lower velocity flows Card-based Cross-border $20T $10T Domestic AR / AP $90T 62 Source: McKinsey Global Payments Map and Visa Analysis. ©2020 Visa. All rights reserved.
Unique solutions meet the needs of higher value, lower velocity flows from commercial clients $120T T&E, Higher value, lower velocity flows Purchasing, Small Business, Virtual Card-based Cross-border $20T $10T Visa B2B Connect Partnerships Domestic AR / AP $90T 63 Source: McKinsey Global Payments Map and Visa Analysis. ©2020 Visa. All rights reserved.
In today’s discussion, we will cover the new flows opportunity in each segment Visa Direct - $65T Commercial Solutions - $120T Bill Sheley Kevin Phalen P2P B2C Card-based Cross-border $20T $30T $20T $10T B2b G2C Domestic AR / AP $5T $10T $90T 64 Sources: McKinsey Global Payments Map and Visa Analysis. ©2020 Visa. All rights reserved.
How do you want to get paid? Visa Direct 65 ©2020 Visa. All rights reserved.
Key takeaways Large market opportunity to digitize P2P, B2C and small business flows Proven business model operating at scale Premier real-time payments platform built on global reach and processing infrastructure Growing partner ecosystem and supply chain to accelerate growth Investing in the future to ensure Visa Direct remains the money movement network of choice for faster disbursements around the world 66 ©2020 Visa. All rights reserved.
Visa Direct enables clients to deposit funds into recipient accounts for consumers and small business, addressing $65T in new flows Pull Transaction Push Transaction eCommerce Checkout ATM Withdrawal Insurance Marketplaces In-App Purchases Point of Sale Transactions On Demand Merchant Settlement To be the best way to pay and be paid for everyone, everywhere 67 Sources: McKinsey Global Payments Map and Visa Analysis. ©2020 Visa. All rights reserved.
Visa Direct powers trusted “open money movement” ecosystem Payout Enablers Global Endpoints Single operational Ubiquitous, real-time connection efficiency money movement Acquirers Cards – Debit / Credit / Prepaid Processors Bank Accounts Gateways Wallets Banks Direct Global platform for Commerce Platforms real-time payments Scaled, global Network of Networks distribution channels Trusted, “Open” Network Marketplaces Card Networks Mobile Earthport – ACH / RTP Messaging Member Banks Payroll Regional Networks ERP 68 ©2020 Visa. All rights reserved.
Visa Direct is underpinned by Visa’s secure and reliable global payments network Global Reach Risk Management Processing Capabilities • Over 200 countries and • Trusted network of institutions • Visa settlement territories with new program reviews • 160 currencies • 99% coverage of banked • Real-time watchlist screening consumers and small business1 • Enhanced reconciliation • Transaction limits reporting • 130 countries enabled for real-time payouts • Activity monitoring • Disputes / exception handling • 75 countries enabled for • Real-time authorization • Full API Suite real-time cross-border payouts • Tokenization • Message translation Note: 1. In 88 countries. 69 ©2020 Visa. All rights reserved. Source: Visa Analysis.
Visa Direct enables dozens of new use cases and flows... Visa Direct Set-plays Attacking the Market in a Structured Way Example use cases 1 Vertical Market Strategy P2P REMITTANCE INSURANCE 2 Customer-focused Solutions GIGM WAORRKKEETRP LPAACYEOSU T S PAYROLL, WAGE ACCESS 3 Strategic Investment Direct 4 Enabler Readiness A L T EMRANRAKTEITVPEL LAECNE D S ING SMALL BUSINESS R E M IETRTPA N C E 5 Product Sales & Marketing 70 ©2020 Visa. All rights reserved.
...with end-to-end ecosystem support for Visa partners Solution Consulting Performance, Risk and Business Enablement and and Innovation Compliance Monitoring Commercialization Support 71 ©2020 Visa. All rights reserved.
Visa’s network effect enables fast growth and global operating scale Visa Direct Performance Fiscal Year 2019 Visa Direct vs. Visa Debit Payments Volume Growth Programs 250 Visa Visa 130M Payments Volume Growth Active Users Direct Debit 2B From First Year Transactions Visa Direct: Quarterly Run Rate 2x faster 11 B 68 B growth than Debit $ $ Years Post-Launch Q4 2016 Q4 2019 72 Sources: Visa Historical Reports; Visa Operating Certificates; VisaNet data. ©2020 Visa. All rights reserved.
P2P REMITTANCE INSURANCE Visa Direct enables dozens of new use GIGM WAORRKKEETRP LPAACYEOSU T S PAYROLL, WAGE ACCESS cases and flows Direct A L T EMRANRAKTEITVPEL LAECNE D S ING SMALL BUSINESS R E M IETRTPA N C E 73 ©2020 Visa. All rights reserved.
P2P: We have made significant progress in the $20T P2P segment 100+ P2P programs and counting are powered by Visa Direct globally 7 of 7 of major global players are active or launching with Visa Direct >100% Visa Direct YoY growth rate for P2P programs 74 Sources: “’Yape’, app del BCP, alcanzó el millión de usuários,“ Publimetro, 2019; VisaNet data. ©2020 Visa. All rights reserved.
Cross-border: Remittances started to go live in 2019 and will expand significantly in 2020 75+ countries enabled for real-time cross-border payouts 5 of 7 top global remitters live or implementing Visa Direct 50% of MoneyGram’s Visa Direct service users are first time MoneyGram customers Multichannel pay out to cards and accounts across the globe 75 Sources: MoneyGram press release; VisaNet data. ©2020 Visa. All rights reserved.
Insurance: Enabling a digital claims experience 9+ insurance segments: health, auto, life, property, pet, casualty, homeowner, disability, disaster ~60% surveyed customers believe payments took longer than they thought it should 5 of 10 top P&C insurers partner with Visa Direct Toughest moments made better with real-time claim payouts 76 Sources: Visa Direct Research, J.D. Power 2017 U.S. Auto Claims Satisfaction Study; “What types of insurance do you need?” Motley Fool, 2019. ©2020 Visa. All rights reserved.
Gig Economy: Drivers, freelancers, contractor payments $4.5T total global gig economy estimated spending 57M Americans working in gig economy 70% of Postmates driver deposits are made using Instant Deposits powered by Visa Direct Providing on-demand workers with on-demand pay 77 Sources: Staffing Industry Analysts (SIA) US Gig Economy, 2019; Visa Digital Disbursements Consumer Preference Study, 2017; Visa and Postmates data. ©2020 Visa. All rights reserved.
Payroll: Early wage access driving payments innovation and new payroll solutions for employees 78% of U.S. full-time workers are living paycheck to paycheck 95% of employees are interested in working for an employer who provides earned wage access 400% Visa Direct YoY growth rate for payroll programs Helps employees access their wages early when they need it 78 Sources: 2019 Earned Wage Access Insights; Accenture Research; VisaNet data. ©2020 Visa. All rights reserved.
Marketplaces: Visa Direct plays an important role in facilitating payouts for small sellers $2T total spend on top 100 online marketplaces 3-5 days is the average time a seller waits for access to their proceeds ~30% of Mercari sellers have enrolled in Instant Pay with Visa Direct Providing earnings to online sellers faster than ever Sources: “Top Online Marketplaces 2018,” Digital Commerce 360; “The Merchant’s Guide to Instant Credit Card Processing, Instant Deposits, & Getting Your Funds Fast,” Merchant 79 ©2020 Visa. All rights reserved. Maverick, 2020; “5 Challenges of Selling Via Cross-Border Marketplaces,” Pitney Bowes.
Small business: Visa Direct is helping small businesses better manage cash flow with faster settlement and loan disbursements Seamless integration with a platform small businesses already use every day 61% of small businesses report that cash flow is a regular concern 79% of small businesses want faster settlement
ERP platforms: Enabling Visa Direct for payouts to individuals and small businesses Visa Employee Digital Expense Reimbursement $35T the size of the Global B2C and B2b disbursements market 85% U.S. firms planning to make real-time payments integral to their operations within 3 years 430K customers across 175 countries on Oracle platform Digitizing and simplifying employee expense reimbursements 81 Sources: McKinsey Global Payments Map and Visa Analysis; Making real-time payments a reality study, Pymnts.com, 2020; Oracle Investor website. ©2020 Visa. All rights reserved.
Key takeaways Large market opportunity to digitize P2P, B2C and small business flows Proven business model operating at scale Premier real-time payments platform built on global reach and processing infrastructure Growing partner ecosystem and supply chain to accelerate growth Investing in the future to ensure Visa Direct remains the money movement network of choice for faster disbursements around the world 82 ©2020 Visa. All rights reserved.
In today’s discussion, we will cover the new flows opportunity in each segment Visa Direct - $65T Commercial Solutions - $120T Bill Sheley Kevin Phalen P2P B2C Card-based Cross-border $20T $30T $20T $10T B2b G2C Domestic AR / AP $5T $10T $90T 83 Sources: McKinsey Global Payments Map and Visa Analysis. ©2020 Visa. All rights reserved.
Businesses and governments make $120T in payments globally for the purchase of goods and services $120T Card-based Cross-border Domestic AR / AP $20T $10T $90T • Distributed • Security, reliability • Operational efficiency employee spend • Speed • Linking payment to data Needs • Expense tracking • Rich data about the payment • Fraud controls • Geographic reach • Reconciliation • Transaction data • Payment visibility • Digitization of paper Primary • T&E, Purchasing, • Visa B2B Connect • Partnerships Small Business, Solutions Virtual 84 Sources: McKinsey Global Payments Report and Visa Analysis. ©2020 Visa. All rights reserved.
Card-based and cross-border flows represent 25% of the volumes but 75% or more of the revenue opportunity Addressable Payments Addressable Revenue Volume Opportunity ($T) Opportunity ($B) Key Focus Areas to Drive Growth 120 70-100 Drive growth in established 1 Card-based Solutions 20 card-based business Cross-border 10 Systematically execute Domestic AR / AP 2 strategy to scale Visa B2B Connect 90 Test and learn in domestic 3 non-card B2B payments by adding value beyond the transaction 85 Sources: McKinsey Global Payments Report and Visa Analysis. ©2020 Visa. All rights reserved.
$20T in B2B payments can be addressed with higher-yielding card-based solutions Card-based opportunity is as Card-based Cross-border Domestic AR / AP large as consumer payments cash $20T $10T $90T digitization • Distributed • Security, reliability • Operational efficiency opportunity employee spend • Speed • Linking payment to data Needs • Expense tracking • Rich data about the payment • Fraud controls • Geographic reach • Reconciliation • Transaction data • Payment visibility • Digitize paper Primary • T&E, Purchasing, • Visa B2B Connect • Partnerships Small Business, Solutions Virtual 86 Sources: McKinsey Global Payments Report and Visa Analysis. ©2020 Visa. All rights reserved.
We are the B2B leader with $1T+ of Payments Volume $1.1T CY 2019 B2B Products Enabling Platforms Payments Volume Visa Business Small Business CY 2018 B2B Payments Volume ($B) 980 Visa Corporate T&E, Purchasing Visa Business Reporting 657 486 Virtual (single use) Visa Compliance Management Visa Data Analytics Fleet Visa Fleet Visa Mastercard American Express 87 Sources: American Express and Mastercard company filings. ©2020 Visa. All rights reserved.
We are enhancing our leading position by focusing on four areas to capture this $20T opportunity Geographic Streamline Expansion and Accelerate Extend to Drive Digital Acceptance New Verticals • Accelerate client onboarding • Build on leading position in • Eliminate friction • Enable additional vertical- consumer to target specific use cases • Expand use cases through markets with nascent • Grow straight through provisioning to mobile wallets processing – Government commercial volume – Travel • Improve user experience • Ride broader trend in • Simplify virtual card – Gig economy through mobile, expense markets moving from acceptance and drive – Healthcare management, reporting cash to digital industry standards • Enable through global APIs • Adopt local solutions • Support flexible leveraging global interchange 88 Sources: McKinsey Global Payments Report and Visa Analysis. capabilities ©2020 Visa. All rights reserved.
$10T in cross-border flows represent a lucrative and largely untapped opportunity $120T Card-based Cross-border Domestic AR / AP $20T $10T $90T • Distributed • Security, reliability • Operational efficiency employee spend • Speed • Linking payment to data Needs • Expense tracking • Rich data about the payment • Fraud controls • Geographic reach • Reconciliation • Transaction data • Payment visibility • Digitize paper Primary • T&E, Purchasing, • Visa B2B Connect • Partnerships Small Business, Solutions Virtual 89 Sources: McKinsey Global Payments Report and Visa Analysis. ©2020 Visa. All rights reserved.
Visa B2B Connect enables high value, low volume cross-border transactions directly between banks Existing Network of Bilateral Relationships Visa B2B Connect Multilateral Network Payments routed through bilateral correspondent bank Single multilateral connection to all relationships, passed through a varying number of intermediaries network members with transparent timeframes, costs and payment data using distributed ledger technology Originating Originator Intermediary Beneficiary Beneficiary Bank Bank’s Bank(s) Bank’s Bank Correspondent Correspondent Key Benefits: Lack of visibility Fees Difficult to predict costs or Fees accumulate at each • Speed, often same day know when payments arrive step in the process, including • Payment transparency / visibility correspondent bank and Slow speeds • Rich data travels with payment to third-party service fees Average cross-border enable effective reconciliation transaction takes 3-5 Payment data loss • Payment finality business days Inconsistent processing between • Efficient liquidity management banks can result in payment Lack of liquidity data loss and transaction errors Due to separate accounts 90 Sources: Accenture; Juniper Research; Banking Circle; Glenbrook-Earthport, McKinsey; SWIFT data; Visa Analysis. ©2020 Visa. All rights reserved.
Visa B2B Connect: Building a new network Today 2020-2021 2022 Availability • 71 markets • +30 more markets Network scale achieved Network integrators Network size • Engaged with 100+ • Expand delivery outside of Visa B2B Connect network banks globally • Direct: +40 banks • Through integrators: +60 banks Status • Begin transacting • Expand use cases (e.g., trade) • Grow to 1 million transactions 91 ©2020 Visa. All rights reserved.
Capturing the $90T in large enterprise AR / AP payments Will require Card-based Cross-border Domestic AR / AP extending $20T $10T $90T beyond payment execution • Distributed • Security, reliability • Operational efficiency employee spend • Speed • Linking payment to data Needs • Expense tracking • Rich data about the payment • Fraud controls • Geographic reach • Reconciliation • Transaction data • Payment visibility • Digitize paper Primary • T&E, Purchasing, • Visa B2B Connect • Partnerships Small Business, Solutions Virtual 92 Sources: McKinsey Global Payments Report and Visa Analysis. ©2020 Visa. All rights reserved.
For AR / AP domestic B2B payments, we have to address pain points beyond payment execution Buyer Money Movement Supplier • Supplier onboarding • Buyer onboarding Key Characteristics: • Procure goods / services • Payment acceptance Before payment strategy Lower revenue • Receive and process invoice 1 opportunity for • Financing and payment • Supplier financing and payment timing timing payment • Issue invoice • Determine payment type execution and initiate payment 2 Pain points and Payment complexity extend • Payment execution: check, ACH, wire, RTP, beyond the cash payment • Record payment made in • Receive payment After payment ERP / accounting system • Reconcile payment to Large enterprises invoice(s), record in ERP / accounting system currently pay only 1bp for payment execution 93 Sources: McKinsey Global Payments Report and Visa Analysis. ©2020 Visa. All rights reserved.
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