Visa (V) Q4 2016 Results
Charles W. Scharf – Visa, Inc.
The global economy is not improving
“On the negative side, the global economy is not improving. Geopolitical tensions are high. The U.S. election is a wild card, and we continue to watch the impact of Brexit. But Costco and USAA meaningfully improved volumes, with USAA being an important contributor to revenues in the U.S., while Costco far less so. Cross-border volumes are both lapping decreases and have improved, and we will have a full-year benefit from Europe, which as I said, is performing as expected.”
40% of merchants are accepting chip cards
” give you the update on the numbers in terms of almost 65% of the credit cards and 45% of the debit cards, 1.6 million merchants, which is about 40%, are accepting them. I think this is a – it is – it’s a lot of work, for sure. It’s progressing along a timeframe, which is faster than we’ve seen in any other part of the world when they have moved from mag stripe to chip. We’ve said this I think last quarter or the quarter before, this is – today it’s the largest chip card market in the world, even though we still have a long way to go. And we – and you can just – you see the meaningful impacts on the reduction in fraud when chip-on-chip exists.”
China timing is uncertain
“In terms of costs related to China market entry, the timing remains uncertain. We had assumed we would be much further along at this point when we talked to you last year. It is our intent to move very fast to set up our processing infrastructure once we have greater clarity from the PBOC around timelines for their decision for granting licenses. At this point, it is difficult to know for sure what costs related to China market entry will be incurred in fiscal year 2017. We have made some assumptions in our outlook and will update you as we learn more.”