Visa Inc.
Q3 2020 Earnings Call Transcript

Published: 28 Jul 2020

[Operator:]

Welcome to Visa's Fiscal Third Quarter 2020 Earnings Conference Call. All participants are in a listen-only mode until the question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host, Mr. Mike Milotich, Senior Vice President of Investor Relations. Mr. Milotich, you may now begin.

[Mike Milotich:]

Thank you, Jordan. Good afternoon, everyone, and welcome to Visa's third -- fiscal third quarter 2020 earnings call. Joining us today are Al Kelly, Visa's Chairman and Chief Executive Officer; and Vasant Prabhu, Visa's Vice Chairman and Chief Financial Officer. This call is being webcast on the Investor Relations section of our website at www.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 to the IR website.

[Al Kelly:]

Mike, thank you very much. The past few months certainly continue to be challenging and our focus has and will always remain on the well being of our employees, clients and the communities, in which we operate. Even with significant impacts to the economies around the world, many aspects of Visa's business have proven to be resilient and have continued -- and we've continued to invest to propel Visa's growth well into the future in consumer payments, new flows and value-added services. Today after discussing our results, I will then provide an overview of the ways COVID-19 is shifting the way consumers, businesses and governments want to pay and be paid and in turn how Visa is helping them. I will close with some notable deal highlights for the quarter that demonstrate how we continue to enable the movement of money globally. So to start our third quarter results. Net revenues in the fiscal third quarter were $4.8 billion, a decrease of 17% or 16% in constant dollars. All of the business drivers were significantly impacted by the pandemic. Payments volume this quarter declined 10% globally or 9% excluding China. Cross-border volume excluding intra-Europe, which drives our international transaction revenue declined 47% on a constant dollar basis, driven primarily by the lack of travel. Including intra-Europe volume was down 37%. We processed 30.7 billion transactions or over 337 million per day through the quarter on our network, a 13% decrease over the prior year. However, in each case, the business drivers improved each month throughout the quarter meaningfully for payments volume and processed transactions and only marginally for cross-border volume. In new flows, Visa Direct grew global transactions in the mid-60s year-over-year. And our value-added services revenue grew in the mid-teens year-over-year. We also effectively managed our expenses, which declined 5% but more importantly this was achieved without affecting investments in our primary growth initiatives. Our non-GAAP EPS declined 23%.

[Vasant Prabhu:]

Thank you, Al and good afternoon, everyone. As we did last quarter, we will provide a fair amount of color on the business trends we are seeing as we navigate through this unprecedented time. I'll begin with the key business drivers then review our financial results and close with some perspectives on the next quarter. Starting with U.S. payments volume. For the quarter U.S. payments volume declined 7%, a sharp decline from mid-April was followed by a V-shaped domestic spending recovery. Volumes declined 18% in April, before returning to positive territory in June. July volumes through the 21st are up 7%. This recovery was jump-started by the economic impact payments and enhanced unemployment benefits, helped along by pent-up demand fulfillment and accelerated by the relaxation of shelter in place requirements. Debit outperformed credit by almost 30 points. Debit spending was up 8% while credit spending declined 21% in the quarter. Credit spending recovered 21 points from a decline of 30% in April to a decline of 9% in July through the 21st. Debit spending bounced 30 points from down 5% in April to up 25% in July. The outperformance of debit versus credit is driven by several factors. Some of them are more likely to persist than others. First, the government's economic impact payments were directly deposited into consumers checking accounts benefiting debit. Second, in times of economic uncertainty, consumers have a propensity to shift spending from money they borrow to money they have in the bank. Third, as you know, there has been a significant shift to online purchases in almost every day almost every – in most everyday spend categories which favors debit. Fourth, affluent customers tend to use credit for discretionary spending in categories such as travel, entertainment and restaurants, which have been especially hard-hit by the pandemic. Fifth, the last tranche of economic impact payments as well as unemployment benefits in over 20 states were distributed via Visa prepaid cards, which lifted debit growth by several points in May and June. Finally, in the U.S. Visa Direct was up over 75% this quarter, due to strong growth in a variety of use cases ranging from P2P, to insurance payouts, to payroll. The significant growth in debit demonstrates the acceleration of the secular shift away from cash to digital forms of payment as a result of the pandemic. The COVID crisis has also significantly accelerated the secular shift to e-commerce. Card not present spend excluding travel has grown over 25% every week since mid-April, which is 2x the pre-COVID growth rate. Card present spending improved steadily through the quarter as reopenings went into effect from declining almost 50% in early April to declining in the high single-digits by late June, but there has been little improvement since. It is too early to tell what all the underlying causes of this recent stabilization are. Recovery trajectories for card present volumes are relatively similar across states. In terms of U.S. spend by category excluding Visa Direct, performance can be summarized in three groups based on COVID impact and the recovery we've seen to-date. Each group represents roughly a third of our U.S. payments volume. The first group includes categories, such as food and drug stores, home improvement and retail goods. These categories have consistently grown at or above their pre-COVID growth rates in the high teens or even higher every week since mid-April. The second group includes categories that experienced spend declines between 10% to 50% in April and had all recovered to growth by the end of June. These segments include automotive, retail services, department and apparel stores, health care, education, government and business supplies. The third group includes categories that are the hardest hit by this pandemic

[Al Kelly:]

Mike, I think you're on mute. Mike, you're on mute.

[Vasant Prabhu:]

Al maybe we should turn to questions. Operator, why don't we move to questions?

[Al Kelly:]

So Vasant, I also understand that we had a technical issue that some people might not have heard the end of mine and the beginning of yours.

[Vasant Prabhu:]

Okay.

[Al Kelly:]

I'm looking for a little -- I was hoping Mike would give us a little direction whether we should summarize those points. Maybe...

[Vasant Prabhu:]

Mike is suggesting we keep going.

[Al Kelly:]

Okay. So maybe what I would suggest is that let me just quickly summarize what I said at the end and maybe you could talk a little bit about U.S. debit before we open it up to questions.

[Vasant Prabhu:]

Okay.

[Al Kelly:]

So what I said is that certainly the future is going to have uncertainty associated with it, but we continue to believe in our strategy and our growth prospects. Certainly, there were things that declined in the quarter

[Vasant Prabhu:]

Okay, Al. Yes. So I talked about why debit was outperforming credit. As you may have heard debit has bounced back about 30 points and is now growing at about 25% in the first three weeks of July whereas credit recovered by less than that and is still declining 9% through the first three weeks of July, whereas credit recovered by less than that and is still declining 9% through the first three weeks of July. I went through six reasons for that. I'll do those quickly. Economic impact payments going directly into checking accounts helps debit. In times of economic uncertainty, consumers do shift spending away from money they have borrowed, to money they have in the bank. Third reason, the shift to online has caused a lot of everyday spend categories to move to e-commerce, which has favored debit, because normally debit is used for everyday purchases. Affluent customers reason number four, tend to use credit for discretionary purposes like travel, entertainment and restaurants, which have been especially hard-hit in times like these. The economic impact payments this is reason number five, were distributed using Visa prepaid cards in 20 states, including the unemployment benefits which lifted our debit growth in May and June. And then finally, Visa Direct, which helps our debit numbers was up over 75% this quarter as a whole bunch of use cases performed really well. So I think, we'll probably stop there Al and take questions. I think we might have lost Mike, so we can take questions.

[Mike Milotich:]

Jordanne, are you there?

[Operator:]

Yes, I'm here Mike.

[Mike Milotich:]

Jordanne, if we can go into Q&A that would be great.

[Operator:]

Our first question comes from Lisa Ellis from MoffettNathanson. Your line is now open.

[Lisa Ellis:]

All right. Good afternoon, guys. Hopefully you can hear me I guess.

[Vasant Prabhu:]

Yes we can.

[Lisa Ellis:]

So I'm going to hit a topic you did not cover on the call. Al, question for you about big tech. The big tech companies are now facing elevated regulatory pressure obviously very present right now in the U.S. also in Europe related to some of their competitive practices. Can you comment on, how this regulatory scrutiny you see affecting one those firms' initiatives in payments? Like in particular, are there anything – any practices that they're doing that you at Visa or Visa would view should be scrutinized? And then also, do you view this sort of regulatory scrutiny on big tech as a plus for the payments ecosystem and for Visa or as potentially a negative? Thank you.

[Al Kelly:]

Well, Lisa as you might imagine, we have relationships with all of the companies that you would consider big techs. Some are a bit more extensive than others, but we certainly have relationships with all of them. I certainly can't comment and wouldn't comment on regulatory scrutiny that they are experiencing. But if it involves payments, and we can be helpful to them, or helpful to the government in either advocating or explaining what's going on we will jump into that. There was a case with a payment initiative that we had going with Facebook in Brazil in the last month, where we did just that as an example. I think that, these big techs are – certainly, have attracted lots and lots of users and have developed relationships with them. And some of those relationships are going to require money movement or payments capability. And we certainly want to be there, and be the partner to work with them on those particular things. And we'll leave it to them to figure out and deal with any of the regulatory issues that they're facing. And we're a phone call away, if we can be helpful. But I think in most cases, it's kind of up to them to resolve them. Jordanne, next question?

[Operator:]

Our next question comes from Matt O'Neill from Goldman Sachs. Your line is open.

[Matt O'Neill:]

Yes. Hi. Thank you for taking my question. I was hoping you could provide some anecdotal views on what I think is probably the next leg of the sort of secular catalyst here the sort of silver lining of this pandemic, if there is one which is obviously the e-com growth has been robust. But how are the bank partners and merchant partners sort of thinking about the move back into brick-and-mortar commerce in what will inevitably be a significantly greater demand for contactless payments? And then, if I could just have a quick unrelated follow-up. I was just wondering, if there's any update on the Plaid acquisition and any comments around the lawsuit there? Thank you very much.

[Al Kelly:]

Well, interestingly enough as you probably could see in some of our charts as card-not-present has – I'm sorry as card-not-present has started to work its way back it lagged obviously card-not-present it was impacted much more greatly by the pandemic. Card-not-present volumes have held up, so we're not seeing any declines there. And I think that what all issuers and anybody who's rooting for economies around the world to come back would love to see a situation where both card-not-present and card-present both bounce back and that bricks-and-mortar commerce on main streets and communities around the world continue to grow. I think the case for contactless Matt has been made. We have seen consumers and governments and merchants voting through their actions and contactless has had – or tap to pay had tremendous momentum kind of going into COVID. And if anything COVID had accelerated the momentum of tap to pay even in the United States, which we know has been further behind, but as I cited we've added 80,000 – or I'm sorry, our issuers have added 80 million credentials that are tap to pay-enabled in the first six months of the year. Something like 80% of the merchant volume is – that is occurring in the face-to-face world is occurring at terminals that are enabled for tap to pay. So I think it's going to just continue to grow everywhere around the world. And I believe that the COVID situation will help accelerate the growth here in the United States at a perhaps faster pace than it might have happened otherwise. As for Plaid –

[Vasant Prabhu:]

Al, I might add a couple of things. One crisis fosters innovation as you know. And if anything this has made more and more merchants focus on omni-channel commerce which CyberSource is very much in the middle of. And increasingly merchants are getting better and better at serving customers, seamlessly across bricks-and-mortar as well as e-commerce. It has also made a lot of categories that never used e-commerce become a lot better at e-commerce. And that's – you've seen that in a lot of everyday spend categories. You've seen that with restaurants. And more broadly across retail people have come up with more innovative ways like curbside delivery has been perfected in many ways. And that we think is going to be here with us, which is really a way where you order online but you may pick up physically. So you have one more delivery option, you can get it delivered after a day or two delay or you can get it right away by going and picking it up. So there's a lot going on. And I think the most important point that Al made was that even as we've seen card-present improve from minus 50 to minus high single-digits, card-not-present has stayed very robust continuing to grow at those mid-20s levels for quite a while now. So lots of changes underway.

[Al Kelly:]

Matt, let me address your Plaid question. It's still pending regulatory approval. And we certainly are expecting to close by the end of the calendar year and are doing everything we can to comply with any request from the regulators that are looking at it. We are as excited about the Plaid acquisition today, as we were back in January, when we made the announcement. And we really believe we got the asset we wanted. And all of the various benefits that we have articulated in prior calls we believe are still there. Everything from the depth of their integration with fintechs, the fact that they are most attracted to a lot of fintechs that they're positioned in terms of how far along they are we believe they have the best team. And we see it as the best way to integrate into Visa. So we're – we remain very excited about Plaid and hopeful to close by the end of the year.

[Mike Milotich:]

Next question please, Jordanne

[Operator:]

Our next question comes from Darrin Peller from Wolfe Research. Your line is now open.

[Darrin Peller:]

All right. Hey, guys. Thanks. Just a couple of quick ones. First on the fourth quarter, fiscal fourth quarter comments. Just to clarify I think you guys are saying that the – just the lag effect of services versus prior quarter volume would impact that line by four points. But I guess we're just wondering if the – just given the trends we're seeing on transactions processed flattening out, shouldn't those trends be enough to offset that when it comes to growth in fiscal Q4? And then Al just bigger picture, when we think about the services, all these other value-added services you guys are doing well with I mean, do you see these sticking around post-COVID in terms of the demand you're seeing for analytics and potentially the card-not-present service fees or CyberSource?

[Al Kelly:]

So why don't I let Vasant answer the first piece and I'll come back and address the second piece?

[Vasant Prabhu:]

Sure. So if you look at the various lines on the revenue line, service fees as you indicated and as we told you in the comments are known already. They're going to report service fees based on our volumes in the third quarter. And the volumes in the third quarter was hopefully the low point. And as we said had we not done a lag, our service fees would have been down 11% and total net revenue would have been down as you said in that 4, 4.5 range. So that is going to happen. That's a known fact. And even if volumes improve on the domestic front and transactions improve, the service fee number isn't going to change next quarter. So that's locked in. So when volumes do improve which we expect will be the case on domestic volumes and transactions, transactions revenues will definitely go up. Value-added services revenues will definitely go up. But the other thing that goes up is the contra-revenue line incentives. Incentives will go up to reflect the higher volumes because we don't book incentives with a lag. Incentives will go up but the benefit of that revenue from the higher incentives we won't get on the services line – service fee line, we will get it on – we will definitely get it on the processing line. So there's something of an offset there. I just want you to be aware of that. But the biggest variable is going to be cross-border. If there's a change in trend in cross-border and it improves then that would be the single biggest reason to expect Q4 trends to be better than Q3, recognizing that you've got pressure going in the other direction from the service fee lag. So there's some complexity created by these things because of the turbulent times we're in. We've tried to help you with it. And hopefully, we can help you some more if you like answer more questions later on.

[Al Kelly:]

And Darrin on your second question, I'm very bullish on what's going to happen with value-added services in a post-COVID world. First of all two-thirds of our value-added service is a platform-type services, CyberSource issuer processing risk and fraud. The need for those is going to continue. And if anything the volumes and transactions that will run through those will go up. Where we've seen some declines are in travel-related card benefits which is going to get better as travel comes back. We've also waived some fees because of the pandemic. And once we're past the pandemic, we won't waive those fees as readily, so that volume will go up. Travel-related benefits will go up, as I said, as travel comes back. So I see value-added services being very well positioned coming out of COVID and feel very good about the contribution they'll make and how they'll continue to diversify our revenue profile over time.

[Vasant Prabhu:]

Yes. I think the other things to add there, three of our largest value-added services we think are going to sustain their growth which has already accelerated. Our issuer processing business, which is directed towards debit. Debit has become the engine for cash conversion right now. Debit growth rates as you saw are 25% in the first three weeks of July. So as long as debit growth rates are at an accelerated level, the issuer processing business will clearly have high growth rates. CyberSource always benefits from the shift to e-commerce. And now with their focus on omnicommerce, CyberSource clearly is benefiting from the shift. And then finally our risk and fraud services, certainly benefit as things move more to e-commerce which is where fraud is an area that we can really help a lot on. So they're reasons to believe that higher growth rates can sustain post-COVID.

[Mike Milotich:]

Next question, Jordan.

[Operator:]

Our next question comes from James Friedman from Susquehanna. Your line is now open.

[James Friedman:]

Hi, thank you. Al in your prepared remarks you shared some P2P growth characteristics. You were going kind of quick there. I -- that disclosure was new at least to me. But I was wondering if you could repeat what you said and also at the same time share some use cases about how you're seeing the P2P applications develop?

[Al Kelly:]

Well what I said in my remarks was that P2P is up almost 80% in third quarter and in Latin America -- that was in the United States I'm sorry up 80% in the third quarter. And in Latin America there we saw progress with two different apps -- P2P apps in Peru where we saw a nearly 400% increase in transactions in Q3 over the prior quarter Q2. We've got this tremendous track record of working with P2P providers. And as we said in the past, we were heavily skewed toward the United States and Russia. But we're -- and where we have relationships with most of the big P2P providers; Square Cash, Venmo, Zelle etcetera, I think that now we're seeing our P2P capability through our Visa Direct platform becomes something that people are looking to us for as P2P applications are developing in other countries around the world.

[Vasant Prabhu:]

Since we had some issues earlier we'll run longer. So we'll probably go for at least 10 minutes past the hour.

[Operator:]

Our next question comes from Craig Maurer from Autonomous Research. Your line is open.

[Craig Maurer:]

I was hoping Vasant, you could comment on if we see cross-border -- the cross-border recovery continue to stagnate into next year and domestic volume continue to pick up intra-Europe cross-border continue to pick up where should we be thinking about incentives as a percentage of gross revenue going? What's the risk to next year in terms of upside from that percentage? And then perhaps, Al maybe a comment or two on the renewal of the Durbin Amendment version 2 or 3 whatever we're at this point and EPI in Europe? Thanks.

[Vasant Prabhu:]

Yes. In times like these I think it's not easy to make long-term projections clearly. In terms of cross-border and its recovery yes it's possible I suppose that it remains sluggish. It all depends on borders reopening. Wherever borders have been opened or the restrictions have not been significant, we've seen some pretty quick recoveries. So to the extent that there are borders reopening, it may not be globally but there could be corridors opening up as we're already hearing Australia, New Zealand you've seen that it's mostly open across the EU. It's starting to open in other geographies within regions. So it's not black and white, I think in terms of the cross-border recovery. You could see some changes in travel patterns because of how countries open up. But if cross-border remains depressed certainly the mix won't help us. And that will cause the percentage of incentives to gross revenue to stay higher than what you might call -- what it would might have been normalized mix of earnings -- of revenues. The other factor that's influencing it is probably most acute in the fourth quarter which is the service fee lag. Normally our service fees from one quarter to another don't have such significant swings because our business tends to be quite stable, so that service fee lag effect will moderate. So I think the best way to describe it is, it will probably normalize from the levels you see in the fourth quarter. It will certainly normalize because of service fee stabilizing. It will probably normalize some because the cross-border business will recover in corridors, but we'll wait and see how fast cross-border normalizes.

[Al Kelly:]

Let me address your other two questions you asked about Durbin. Visa is fully compliant with all the requirements of the Durbin Amendment. And we don't have any rules or requirements or other restrictions that inhibit a merchant's ability to select their routing decisions make the routing decision of their choice. And merchants are free and often do route to various unaffiliated networks enabled on a debit card. So that would -- I think we're in good shape as it relates to Durbin. EPI, we have a history of dealing with either regions or groups of countries or countries developing their own scheme or intra-market network. It's something that we're very, very used to dealing with. We do know though that developing a network is not an inexpensive thing to do and it's not a onetime investment. You have to continue to push and invest and innovate and be creative to stay ahead as it relates to all the elements of security, fraud prevention, risk, authentication etcetera. And so we will continue to monitor and engage constructively with regulators and banks in Europe on EPI. But on the other hand, we're going to continue to invest heavily behind our various networks to make them as good as they could possibly be. And we will be continuing to focus on making sure that our clients know the benefits that they can obtain by doing business with us and running on our networks.

[Mike Milotich:]

Next question please, Jordan.

[Operator:]

Our next question comes from Tien-Tsin Huang from JPMorgan. Your line is open.

[Tien-Tsin Huang:]

Hey thanks. I just want to ask on the spread in U.S. debit and credit I know you went through it a couple of times Vasant. But it's wider than what we saw in 2008, 2009. So is there a way to try and quantify how much of the debit outperformance we can attribute to secular versus stimulus benefits? And curious, also, I just want to make sure any impact on yield differences between the two products. I don't think so, but just wanted to make sure.

[Vasant Prabhu:]

Yes. There are some modest yield differences depending on parts of the world and so on. I don't think you should view that as a huge factor. In terms of the reasons that might stick as we go ahead, I think we went through five reasons. One, the economic impact payments and unemployment benefits being distributed on Visa prepaid cards, clearly, that's linked to the crisis and probably is not something that will continue. Affluent customers putting off some discretionary items like travel entertainment and restaurants, which has hit credit in particular, that probably normalizes over time, so that you can attribute to COVID. The propensity for people to spend money -- spend the money they have versus money from -- borrowed money that is something you do see in times of uncertainty. And then, some of the economic incentive impact payments going into checking accounts, clearly, has helped debit. But there's a few others that are clearly sticking. The fact that Visa Direct is still going very strong, that has been helping debit for a long time and we'll continue to do that. The fact that debit has become the mechanism for cash conversion to digital in everyday spend categories and in just about -- in most categories, which have seen a big increase in e-commerce has benefited debit, I think some of that sticks. So I think the best way to describe it is that, the acceleration of cash conversion has disproportionately helped debit and that is most likely going to stick.

[Al Kelly:]

And Tien-Tsin, it's Al. I would only add that I think the -- if I look back, same observation you do about the 2008, 2009 time frame. But e-commerce is just much, much bigger and it just appears that people who are doing card-not-present e-com non-travel are using their debit cards much more than their credit cards.

[Mike Milotich:]

Next question, please.

[Operator:]

Our next question comes from David Togut from Evercore. Your line is open.

[David Togut:]

Thank you. Good afternoon. Could you parse out some of the drivers of the 36% decline in international transaction revenue yield? I imagine a lot of that's just the big drop in cross-border travel. But if you could help us think through the drivers in terms of how much might be inter-European versus debit? And how should we think about international transaction revenue yield going forward?

[Vasant Prabhu:]

Yes. So I think it's very important to continue to point people to the decline of cross-border volumes, excluding intra-Europe volumes. The decline was roughly -- was 47% in cross-border constant dollar volumes excluding intra-Europe. So the revenue decline is, roughly as you can see, in line with that. The reason being that -- and if you look at total cross-border volume that includes intra-Europe. Intra-Europe looks more like a domestic transaction. In fact in our international revenue line, the contribution from intra-Europe transactions is very small. The international revenue line is driven almost entirely by volume excluding intra-Europe. Now there's a few other things there that can have an impact. Exchange rate shifts can. Changes in currency volatility can. So that explains -- and then, some small changes in mix in terms of which corridors are doing better than others, because of some yield differences across corridors. But that explains the 44% decline in revenues versus the 47% decline in volumes ex intra-Europe. But as you can see watching that volume line ex intra-Europe is the best indicator and that's what you should focus on.

[David Togut:]

Got it. And just as a quick follow-up, could you just comment on the 10% growth in processing transaction yield year-over-year and thoughts going forward?

[Vasant Prabhu:]

Right. There's two factors driving it. One is that, cross-border transactions have held up a little better than cross-border volume. So the mix has helped a bit, because cross-border transactions for processing have a higher yield. And the second is we have value-added services and some acquisitions in that line. And as you heard, value-added services are growing in the mid-teens in that line. So those two things have helped data processing yields go up.

[David Togut:]

Much appreciated.

[Mike Milotich:]

Next question, please.

[Operator:]

Our next question comes from Dave Koning from Baird. Your line is open.

[Dave Koning:]

Yeah. Hey, thanks guys. And I guess following up on that last question, you said that the ex-intra-Europe volume down 47% but 44% revenue decline. Is that gap going to change much? I know FX volatility probably helped a little bit in Q3 to make revenue a little better than the volume decline. But are there any other kind of yield factors in there other than FX volatility to think about?

[Vasant Prabhu:]

The variables that can make a difference there, first of all the 44% to 47% is a relatively small delta. There'll always be some differences between the two. They won't match each other precisely. But you're right, currency volatility is one factor. Another factor would be mix. Certain corridors can have better yields than others. So if the recovery of cross-border favors higher-yielding corridors, you can have something of a difference. But other than that, it should track pretty closely to volumes, ex intra-Europe volumes.

[Dave Koning:]

Okay. Well, thank you.

[Mike Milotich:]

And Jordan, we’ll take one last question.

[Operator:]

Our last question comes from Harshita Rawat from Bernstein. Your line is open.

[Harshita Rawat:]

Hi. Thank you for taking my question. Al, can you expand upon your recent conversations with regulators and governments? Now on one hand some merchants are lobbying for lower fees in this crisis and I understand that's not a new phenomenon. But then there are very real benefits of digital payments, especially in this current environment. So just – can you just talk about how your conversations with regulators and governments are evolving in this crisis? Thanks.

[Al Kelly:]

Look, I think like many people governments are finding themselves in uncharted territory here. And they're all well intentioned trying to figure out the right things to do. Our biggest piece of advice to governments as it relates to core payments is to do no harm at the moment. I mean, right now I think the less amount of moving parts, as we're fighting through this pandemic is the best answer for everybody. This is not a time for any kind of changes. Governments are also increasingly talking to us in terms of looking for information that we have in terms of trends, because they're trying to understand what's happening in their economies. And in many ways, we could get them real-time picture of what's going on faster than they can get it themselves. And the last thing, I would say is that, there's a lot of interest in the form of governments to become more role models in terms of what they want to see in their countries from a digital adoption point of view. And so as they are – have genned up stimulus programs, unemployment programs, thank-you programs, and all kinds of other things, they're looking to Visa to help advise them on how they could distribute funds digitally as opposed to cutting checks. So, I think my view at the moment is that governments have – are being very, very thoughtful and reasonable in terms of what they're saying, and they're also being good listeners. And so, we're going to continue to do our job to provide them with whatever information they need and to provide them with whatever advice and counsel we can provide to be helpful to them both in their role as governments, and setters of laws as well as in their role as potential clients for various Visa services. Before we close out, one of the things I gather that did not – when we had a little blackout with – in terms of the transmission was I did before I closed make a comment about the race situation in the country and around the world. And I'd like to just cite that again. For four centuries, Black and African-American women and men have experienced incredible forms of social injustice and discrimination. And it's offensive, it's frustrating and it's unacceptable and it has to stop. At Visa we've committed to do our part. We recently announced the next steps in our journey to drive inclusion and diversity across our company. We announced a number of actions, including the establishment of a Visa scholars and jobs program. But very importantly, last week we announced that we're committing to increase the number of underrepresented U.S. vice presidents and above by 50% in the next three years and increase the number of underrepresented U.S. colleagues within Visa overall by 50% in the next five years. We want to do our part to eradicate the social injustice in the world. It's way past time that that has to be the case. With that, thank you to everybody. Mike, did you want to –

[Mike Milotich:]

Yes. Thank you, Al. So yes, once again, I apologize for the technical challenges. We will make sure that the replay that's on our website as well as the transcript reflect everything. And if you have additional questions of course feel free and reach out to us here on the Investor Relations team and we're happy to help you. So, thanks so much and have a great day.