Visa Inc. (NYSE:V) RBC Financial Institutions Conference March 8, 2022 10:45 AM ET
Company Participants
Al Kelly – Chairman and CEO
Conference Call Participants
Dave McKay – President and CEO, RBC
Question-and-Answer Session
Q – Dave McKay
Well, good afternoon, everyone and thank you for joining us for our keynote session at our Annual Conference. Thank you so much for attending the conference and participating. Very important given everything going on the world, changes in the world to really, to get together and to talk about and try to understand and things happening around us.
I’m Dave McKay, President and Chief Executive Officer of RBC, and I’m very, very excited to welcome Al Kelly, Chairman and Chief Executive Officer of Visa to be our keynote Speaker and very, very excited, because there is so much going on, not only in the world, but in the world of payments. What’s the geopolitical role that payment is playing? How the shifts in society are affecting payments? The roll payments it’s going to play in the future of commerce and the future of our economies. How technologies impacting payments, moving money around the world as is a core capability of Visa and I couldn’t think of anybody better than Al to lead us through that discussion of change.
As many of you know, Al again as Chairman and Chief Executive Officer of Visa, he joined Visa Al in 2016 after fantastic career 23 years at American Express commenting as President of American Express I think from 2007 to 2010. You took the opportunity to lead digital media technology company, as Chairman and CEO, obviously a very different and exciting experience to build a small company and really helps you understand, and if you’re clients and the changes going on.
So, I think that was an incredible role, but is as so many of you know, Al is a huge giver to communities and participating communities as a Trustee of Boston College, as a Trustee, obviously of the Mother Cabrini Health Foundation and Chair of the Health Foundation and a Trustee of New York-Presbyterian Hospital, a Board of Directors of catalyst organization, which we’re also keen to participant in. And so we share a common bond there Al from a corporate leadership, community leadership, ESG perspective, you’re a leader in so many dimensions and I wanted to welcome you as our keynote speaker in today’s conference.
Al Kelly
Well Dave, it’s a real pleasure to be with you it’s always is. I wish it could be in-person. I think we’re actually going to see each other in-person in a few weeks. It will be great to do that, but I’m very glad to be with you and your audience today and talk about some very interesting things going in the world in general, in the world of payments as you said.
Dave McKay
Well, I’m really looking forward to our conversation. And why don’t we just start right there. There is a lot going on the world. A lot of change humanitarian crisis, a crisis none of us really thought it was going to happen. We’re in a bit of shock, as a society that this could happen. We’re being asked to play in the financial industry and Visa in particular a different role, you have operations in Russia, you have to deal with. Can you let us know from your seat kind of what you’re focused on and how you’re managing through this crisis and playing the role you’re asked to play?
Al Kelly
Well, Dave, I have to say really has upset the world in a huge way. And I think we’re only in the 11th day of this and has occupied my time pretty much 24/7. We have 155 employees in Ukraine and a couple of 100, 210 or so in Russia. So in the initial days our focus was pretty much exclusively on Ukraine and try to do everything we could to help our employees all of whom lived and worked in the Kyiv area and we have done some really terrific work with security firms that we have hired and we’ve been able to move about 50 of our people out of the country and they’ve gone to Mordovia, Romania, Hungry and probably the bulk has gone to Poland.
We have security in Romania, Poland and Hungary with Sprinter Vans loaded with supplies and within half mile of the border crossing points in those cases to help families once they’re extracted and we’re down to I believe as of this morning about 10 employees in the Kyiv area, with the balance to the West in different places, and we’ve been sending every day there is a cottage even in war cottage industries spur up and we have found mercenaries are willing to take vans of people and we’ve been getting to the western edge of Kyiv.
Unfortunately now men can’t move even, so up until about 48 hours ago we could help move a man at about half of our employees are men, half are women are actually, our Head of Ukraine is a woman who now is in Budapest, her husband remains behind.
You can’t – a man can leave the country of there between 18 and 60 we’re prior to about 48 hours ago they could move west, but, now there so many more checkpoints setup even on the edge of Kyiv that if a man is in the van, or the Sprinter bus, or whatever it is, there is a risk that the entire group will be turned back or stopped for – at a time, neither of which is good.
As the week, last week when, I’d actually say it’s been crazy. I was in a week ago Sunday, I was actually in church and I normally don’t bring my phone into church. But, I did and I got a text message about 10 minutes in that I had to jump out and President Zelenskyy was trying to get a hold of me and that was the initial sign to me about the pressure we would feel relative to them try to pull every stop, they could to put pressure on the Russian government.
I would say that it was probably the middle to the back end of last week we’re focused more started to focus on Russia. And we drew three conclusions. Friday that ended up our decision on Saturday to suspend our business. One, was that it was getting increasingly difficult to operate in Russia, you and I were talking for what we started about the sanctions and some of them just aren’t very clear and they’re causing changes in operational procedures and technology that just was kind of a pain.
Secondly, frankly, we didn’t like what we’re seeing. This was a unprovoked invasion of our beautiful country, with beautiful people and we just couldn’t stand by, as we were seeing stories, probably one of the most brutal meetings, I’ve had in my career was talking to our Ukrainian employees last week ago today and they said they put pictures on the projected pictures on the screen of their homes or former homes, or homes of their parents or loved ones. It was just horrendous, but that was the secondaries and we were just horrified by what we’re seeing.
And thirdly, we decided to get out ahead of it. We think this thing is headed for another round of sanctions and in that case, probably a very disorderly wind out of our business there and we decided we would be far better off taking a thoughtful wind down approach to the business and therefore today as we sit here now three days after our announcement of suspension we’re working closely with our clients in Russia, settlement is working as it should it’s BAU, the Russian clients are doing the right things and hopefully I think they believe we’re doing the right things.
We’re now have a new focus which is on our 200 employees in Russia, 25 of those 200 have been the last 48 hours left Russia for other places, the predominantly Dubai at the moment as a kind of a staging as that’s our headquarters for our Middle East and Africa division of Visa.
So, we’re going to continue. We’ve had a couple of times a day calls and our number one element is to or focus is the care and treating and safety of our employees where we’re doing things that I never thought we’d have to do. We are standing by the life insurance in Ukraine which is no longer valid, because it’s a war.
We’re getting people life insurance and health insurance in the new countries. I was talking to woman last week, who’s got a three week old baby and left her husband behind and went to Poland, and we want to make sure that she was able to get to a pediatrician and facilitate that.
And we’ve dispatched lots of people to the area, leads to the surrounding countries to try to help. So, it’s been a very difficult to trying situation for all of us, and I’ve learned more about war than I ever knew before including the fact that it’s been slow to set up these humanitarian corridors that allow things people like the press and medics and people who want to leave the country and in fact, unfortunately, we’ve seen in the last 24 hours when cease fires are agreed to the Russians are not ignoring them and therefore people wondering and getting hit by bombs, it’s just that it’s a awful, awful situation and how long it goes on and where it starts and where it goes is anybody’s guess at this point, Dave.
Dave McKay
What an amazing heartbreaking story to hear about your employees and so many obviously, citizens being separated from their families and their loved ones and the stress and uncertainty in the loss of life. I’m not surprised having been on the Visa Board for, I guess it was eight years or seven years and seeing the culture of Visa as a Director, I’m not surprised with your leadership, the great humanitarian touch that you’ve applied to all your employees and to make sure that they’re safe and then obviously the complexity that you mentioned of implementing sanctions in a complex financial world with so many back doors, there is a great emphasis.
Our organization is the same way as we try to implement a range of changing sanctions in the countries that we operate in. Very much a strong operational focus to make sure we do everything right and correctly at the right time. So, I can appreciate you have much bigger global business, and even more complexity, but I understand what you’re trying to go through. Thank you for sharing that. And I think it’s really important to understand the depth with which CEOs and leaders are trying to make the difference in a very, very difficult situation and being put in difficult place.
Yes, maybe I’ll pivot a little bit. So, it’s hard to pivot from this topic obviously it’s really emotional topic, but there’s a lot going on pre-pandemic in a world of payments, the pandemic accelerated many trends, created some new themes around the future of money. And as you said many times and I talk about our payments business we’re in the money moving business and a money moving business is changing significantly.
So with that, open-ended question, I know you’ve got a lot of ideas around the future of money. Now how do you see the future money? What’s been accelerated by pandemic? And how do you help our audience, CEOs and investors understand future of money and the changing payments world?
Al Kelly
Well, I think it probably important to go backward to inform the future a little bit. I’ve been in and around this business now for over three decades, and if I look at the period from say 1985 to 2010 that 25 year period, it was basically credit and debit cards, co-brands, you and I both saw as a period by huge focus on accounts receivable where people were doing. It started with the 90 days, it’s 0% and I think it ended up there were some people 24 months 0% balance transfer offers, but this last 12 years from 2010 or 2011 to 2022, has seen much more change than the 25 years before that facilitated by all kinds of things.
Starting with governments. Governments become much more active in payments, some of it might be deemed more of a hassle in terms of some of the regulatory attention. But, frankly governments have also been positive catalysts. Modi’s decision in November of 2016 to demonetize in India, what caused massive chaos, probably about a month, but it really was moved catapulted a fairly rapid development of our payments in India in that period over the last six years.
It’s amazing amount of change in and we were the market leader in the market in India before that demonetization and we remain the market leader, and we’ve been able, it’s a case of all boats rise. The reality is that certainly new competitors have come in, because the market become much more attractive, but it’s been very good for our business as well.
Well, first governments are focused on trying to lead by example where they’re trying to put their subsidy programs, stimulus programs, et cetera in a more of a digital format and some of the countries besides the ones you and I live in, where there is big gray economies are trying to rid of that grey economy by forcing more digitization and using debit cards and prepaid cards in a much better, better way.
But, we’ve also in this period of time see the emergence of fintechs, and I’d like to think that Visa was the first rate fintech story coming into the marketplace as a public company only in 2008, but there’s been all kinds of other advances in terms of new ways to pay that have changed the landscape of what we see in the world as well.
So, I think that it’s a really interesting time in payments. Now that said the pandemic has been a bit of a big game changer. It has greatly, probably by years accelerated cash digitization, tap to pay has grown tremendously as people feared touching money.
So, now 70% of the face to face transactions around the world in kind of a crazy situation in the market that’s been the furthest behind the United States, but because the United States has also obviously been impacted by the pandemic, it’s accelerated now.
You asked about 20% face to face, New York City is 45% of face to face transactions or tap to pay. So, it’s really accelerating. We saw seven countries just in the last quarter increased tap to pay penetration and face to face transaction by more than 10 points. So it’s pretty dramatic to see what’s happened.
A few other things, before the pandemic credit volume and debit volume would grow within 100 to 200 basis points of one another. What we’ve seen during the pandemic is we saw this huge separation, debit never went negative and credit went big time negative and we saw in some months and quarters as much as a 40 differentiation between debit card growth and credit card growth. Similarly, we saw ecommerce take off and as a result card-not-present grew much more and never went negative than card present volume.
So, what we’re seeing now starting, I’d say last June is really a terrific recovery. Card present and credit have come back, but really not harming debit or card-not-present in any pronounced way. We just did an 8-K last Wednesday night, so I can about some very current data with you and your audience. So in February, the U.S. total payment volume was 145% of 2019 levels up 5 points from January. Credit was at 135% of ’19 up 7 points in January, but card-not-present was still 154% of 2019.
We saw increases in card present and card-not-present categories that have been stressed during the pandemic, fuel, travel, entertainment were all up over 8 points. If you look at what’s been happening in cross border, you saw market start to open, the U.K., France, Spain, Portugal, Thailand, Singapore all examples of markets that in the last 45 days or so have either eased or completely eliminated restrictions.
And so, that’s facilitated cross border starting to come back. By the way the recovery did hit this bump in the road from mid-December to mid-January called Omicron. So, there was a disruption. We actually saw volumes actually died during that four or five-week period, but they’ve really started to come back, If you look at February cross border volume was 112% of 2019. Card-not-present cross border is a 169% of 2019 and travel hit 81% of 2019. So travel is still down.
Cross-border travel was the biggest loser in the pandemic. If we go back to April of last year it was running 40% of 2019 by June, it was 50% ’19, by September it was 60% of ’19 and we actually predicted it would get to about 68% in the quarter ended December 30, but it actually got up into the 70% to 75% level and then it dipped again during that omicron 4 or 5 week bump to below 60%, 70% but it ended up in February, up 81%.
But to give you a sense of the momentum, in the U.K. which opened its borders if, you look at the fourth week of February the last week of the month volume inbound into the U.K. was 30% higher than all of January, and similarly in the U.S., if you look at just the last week of February volume was up 10% in that week versus the entire month of January.
So, we’re now thinking cross border is going to get back up as high as 90% of 2019 levels and I should say Dave it’s extremely inconsistent in terms of around as you look at it around the world that the corridor that is the biggest winning corridor around the world and we don’t have a major concentration in any one corridor. But, the one that’s really exploded is U.S. to Mexico. It’s been running 160% to 180% of 2019 levels, but if you look at the long-haul into Asia from Toronto or from New York or from London to whether it’s Beijing or Tokyo it’s running kind of closer to 30% of 2019 level.
So, that’s kind of – that’s probably the extreme is kind of 30% in down to some of Asia to about as much as 175% to 180% into Mexico. So, again I personally think that despite this war that is taken place that the recovery is going to continue. I think people are going to continue to want to travel. There’s two years of being locked up is just at least a couple of months or a year or 18 months too lot and I think people want to get out to restaurants, they want to get out to see relatives they want to go see places. They want to go ski. They want to go to play golf, they want to go to the beach.
So where does this take us? Well one of the big things that’s also changed during this time is this many, many more ways to pay, whether it’s wallets, installments, better said is buy now, pay later, crypto. And the reality is that for us at Visa we think this is all good. A lot of people come and talk about it being very disruptive to us. There really just new ways to pay and we want to make sure that we’re leaning in and taking kind of a diagnostic view. I think ultimately the consumer should decide who wins and losses.
I don’t think RBC or Visa should be deciding who wins or loses. We should put out options as you often do at RBC and we try to make sure that we accommodate all of those options. I don’t, I’ve personal views on buy now, pay later talk, we can talk it or not talking about it, but we’re leaning into it. Similarly, and we’ll come back to talk about crypto, personal views about crypto, but I put all those things aside, our job is to lean and facilitate and ultimately decide what the consumer wants.
In short, the future of money is digital, more inclusivity and more diversity. If I was to really summarize where I think the future of money is going you can dig into any of that, that you want me to elaborate on.
Dave McKay
There’s a lot there, and if you’re comfortable I love to get your views on buy now, pay later, because I know I get asked that question by investors, all the time and the Bank CEOs would love to hear, but I know there’s a number of stats that you track from the beginning of the pandemic through and really gives us a pulse and the change, but also pulse on the economy. The first step was the percent of merchants and businesses at zero revenue that you tracked from its trough to where it is today would be interesting, if you have that handy?
And then to your point about reach and expanding the pie and debit and card-not-present and online, I think you have a stat number of first time online e-commerce users is significant driving that expanded pie. Do you have those kind of stats top of mind and I know you track them?
Al Kelly
I can talk about, I don’t have exactly, but I can certainly talk about them thematically. So, we were very concerned about the impact on the small businesses. We’ve always been big small businesses and I know you and I’ve talked about how important they are not just to business but, they’re important to society, every bedroom communities, will have main street’s and they don’t just want a bank and a gas station on that main street.
They want all kinds of other types of stores often or just local entrepreneurs and even before the pandemic, these businesses were being hit hard by the emergence of Amazon and other big gorillas. And then during the pandemic, we found that, if you were not omni ready and you were not flexible in new business model, you went out of business, if you are a small business.
You had to have a website. You had have the ability to take orders online. You had the ability to at least facilitate take out or pickup at curb maybe not even in the store, yet potentially the ability to deliver and if you plain and simple just did not have that flexibility or unfortunately the manpower. If you and I lose people, it’s a bummer.
But, if you have 10 employees, and you lose 2 of them, it’s a lot more than a bummer it’s 20% reduction in your workforce overnight and you mentioned working for a smaller organization, that’s one of the things I’ve really realized Dave is how they can be impacted, if somebody – because same things happen where they have a death in the family or a women is going to have a baby or somebody just did this great resignation decides to just bow out and resign.
Again, it’s a pain for you and me. It create some frustration but ultimately for the small business owner, it’s even more defined. So what Dave as referring to is we started tracking in the early months and we were just see big increases in merchants that had previously or businesses that had previously given at least multiple transactions in a day, or week, month whatever and how many went to zero, and it was pretty frightening.
I hear estimates that upwards of 50% of the restaurants in Manhattan, where I’m today closed over the course of this last two years. I was starting to Dave before we came out about San Francisco where we are headquartered, and I was out there a couple of weeks ago and this city is really pretty dead, lots of businesses out of business and a lot of companies have been brought the employees back and very, very difficult.
So, we saw it get better. I haven’t seen numbers in the last couple of months, but it was started to come back and obviously we’re seeing new entrances as well Dave. The second thing you asked me about was?
Dave McKay
Number of first time ecommerce users – that’s the kind of acceleration of the pandemic.
Al Kelly
It’s been amazing, particularly in the U.S., Europe and Latin America. And let me give you an example of how it would impact. So Latin America up until about three quarters ago and this is goes back in history for a long time. Use of debit cards to get cash exceeded the use of debit cards to purchase items and in the last three quarters, we’ve seen a 6.5 point swing. So, it gone from 49% of the volume was to buy goods and services with the debit card, last quarter was 55%, which is these kinds of swings are that’s huge, Latin America is pretty good sized region for us.
And by the way during this time, cash grew 10%. So, a lot of that is because millions of people in Latin America for the very first time during the pandemic went online to start to shop and try as you might you can’t get cash or check stuffed into your iPad or your phone, you’re going to use the digital credential and that was one of – that first time using that adoption of e-commerce literally is starting to change that the overall dynamic of an entire region there has been more cash centric than digital centric.
I think, that’s telling. In the United States, we saw in the last year or 20% increase in the number of people who activated in ecommerce for the first time, and we saw increases in the average basket or the average ticket price, if you will. And I’ll make one last point on this, which is one very interesting during the pandemic is that we’ve seen average ticket go up, and that’s a factor of two different things.
One is the debit cards have been increasingly used in ecommerce, but the baskets are bigger. So, people are instead of running to the supermarket and buying three things, and then go in the next day buy three things, people are getting online and putting overall order in it’s a bigger ticket.
But, the other thing that’s happened is because people millions and millions of people around the world are not going to the office at all or as much as before, we’re losing all those low-ticket transactions where you buy a cup of coffee in the morning and then may be by a bagel or pick up a sandwich at lunchtime or pay for your ticket for the bus or the train or the subway. So we actually saw average ticket price for both debit cards and credit cards rise during the pandemic. I expected to normalize as we start to see people come back to the office.
So, I was hearing this morning on the radio that, because of the Russia situation is going to obviously further impact fuel costs that would put pressure on people like you and me another CEOs in that in the audience where employees are saying, well, it’s too expensive and nervous about getting on mass transportation. So, I need more flexibility to stay home, even more. So, it’s going to be addressing how that this element actually plays out over time, Dave.
Dave McKay
Hold that thought because I would love to get to the future work and we got that’s fascinating. So, you’ve got such a pulse and command of what’s going on the economy and you touched on the transit payments that’s expanding, so expansion of the universe of digital commerce started well before the health pandemic. But as you said, so many people are getting more comfortable with the frequency of use and the necessity of using online commerce our basket size are increased, range of products are increasing, due to form factors P2P obviously.
We don’t have a lot of time left, and I got a couple of topics I really want to get too. So, I’m going to pivot to crypto. And certainly a lot of discussion, you started stake a space in the crypto arena and wallets. I’d love to get your take on how you define the crypto space and the role Visa is going to play in the short and long term?
Al Kelly
So, I divide crypto first into three categories, what I call digital gold, which is non-fee at based crypto, where Bitcoin would be the star of the show. Second is Stablecoins where it’s a crypto currency that is actually backed by a reserve currencies somewhere in the world. And then thirdly, Central Bank digital currencies, which are obviously all over the map, with China being out front there, but in some countries really nowhere and others somewhere in between.
As it relates to crypto therefore, what are we doing? Well, first and foremost, we’re just facilitating purchase. Now, not every bank is comfortable doing it, but the amount of particularly Bitcoin to a lesser degree Stablecoins, that were purchased during the last two years, it’s actually quite incredible. Combined with the, I guess people sitting at home really drove people to their computers and drove up the interest in crypto. I think crypto benefited from the pandemic, because people are there. Interesting enough, the only entertainment category that did anything during the pandemic was gaining online was up like 200% what it was before.
So, first and foremost, we’re facilitating the purchase of cryptocurrencies. Secondly, we’re creating a utility for them. So, as it relates to Stablecoins, so we partnered with over 60 crypto Stablecoins providers where they’re putting Visa cards in their wallets, allowing people to convert – from convert their crypto back to fiat and therefore, be able to use that our Visa card to shop anywhere that Visa is accepted around the world. And so that’s the second thing we’re doing.
The third thing that we’re doing is enabling financial institutions and fintechs to be able to offer customers the ability to buy, trade and custody crypto through a relationship that we have with the first federally chartered crypto bank in the United States. The fourth thing that we’re doing is working on settlement. Tonight like every night we settle in, I think it’s 26 different currencies and we’re now working on settling in crypto, again it will be Stablecoins, not something like a Bitcoin.
And then lastly, we’re working with central bankers around the world to make sure that anything that happens is in a private-public partnership, obviously if the Central Bank believes that they should have a digital Canadian dollar that’s their wisdom is that’s the case, they still should be using RBC as their partner to facilitate the use of that and the network on which that’s used and we’re trying to make sure in our role that we play in the larger ecosystem that frankly, everybody stays in their swim lanes, because as you well know Dave the ecosystem is what it is, because a lot of players by different, but important and integrated parts and that needs to be true of our crypto.
I don’t know where Crypto is going to go. It certainly feels like a great application in emerging markets where cash is dangerous and there aren’t a lot of options for acceptance. I don’t know what role, it really plays in Canada or the U.S. to be perfectly honest, I’ve actually asked the Fed in the United States what problem are we trying to solve, and it’s not clear to me what that is. I’m not sure it’s 100% clear to them as well, and you could see, you might have seen this morning, I haven’t got a chance to read it yet, but President Biden signed some executive letter trying to quote unquote rate in crypto and I don’t know where all of that’s going to lead as well, but similar to wallets, similar to buy now, pay later we want to be there and lean in and help our clients in any way we can to understand it to debate how it might be used, et cetera.
So, we’re going to continue to lean in, while decide actually, as I said, the consumer will decide whether it makes any sense of that.
Dave McKay
No, I think you framed it really well. You’ve got an asset class that will continue to be an asset class someone wants to buy and hold it for value, you’ve got a Stablecoin that’s backed by a more stable monetary sources and you’ve got the Central Bank currencies. And I appreciate your pitch for banks. We certainly communicate with that to a number of central banks that to lend money you have to store money and if you’re disrupted by the Central Bank and the storage of money and I don’t think they’re ready or society is ready for them to be the lender of record in economy.
So, however we approach and whatever problem we’re trying to solve with Central Bank digital currency has to leverage the existing financial system or else we have a major reordering of our economy trying to us of a dangerous. So, it’s a really important point that I wanted to make sure as impressed upon our audience.
I’ve got a couple of ways, I can go here in our last few minutes, but you did touch on how important small business was to our economies and to our communities and having led one and worked in one, but having support them and served them, but when we get to ESG and talking about social good and earning our license to operate is catalysts. I think you’ve really want to talk in it. I’d love you to talk about what you’re doing around helping small business to digitize and some of the work you’re doing in Africa, and you really trying to make a quantum difference from some of the learnings in the trends that you saw during the pandemic, your commitments to helping small businesses are really impressive. I’d love to get your thoughts on there?
Al Kelly
So in ESG in general, we’re obviously doing internal things that are important ranging from, we’ve gone to a 100% renewable at – each 70% of our buildings are lead certified, et cetera and all of that’s important to do and we’ll continue to do. We’ve made a commitment to be Net Zero by 2040. But, I think to your question there’s two other areas where we’ve been focused. One is helping small businesses become digital, educating them, providing tools for them.
We’ve also been leveraging our foundation, especially in places like Southeast Asia and Africa and parts of South America to help uplift, small businesses which by the way, Dave increasingly outside the United States are women owned and minority brought and it’s a well-known fact that access to capital for women and minorities is less than men and people who are white and we’ve got to break that down. We believe at Visa that it’s critical that the what our estimate is that there is 1.7 billion people on the face of the earth, who were outside of the financial mainstream and we want to bring them into the financial mainstream.
The last thing we’re doing which is kind of interesting is we’re creating a set of eco-benefits and we’re rolling them out in Europe first, where somebody can have the ability to understand, based on your buying what their carbon footprint, their individual carbon footprint is. We’re looking at a form of plastic that’s recyclable.
We’re looking at people being able to buy carbon offsets on their issuer card to reduce their that carbon footprint that they calculated where, in some cases, working with issuers to facilitate in essence kind of the cashback program, but the beneficiary would it be the card member, but it would be a donation to an environmentally sensitive organization.
So, there’s a whole bunch of things that we’re trying to do, and we’ll continue to do in this space. I think there is much, much more to do and especially in the area of what they cost Scope 4 which is climate for good, which is in its early days, but something we’re very committed to try to do our part in.
Dave McKay
And it also those are – that’s fantastic on the green side. We’ve also committed from what I understand, maybe holding it wrong – that really help digitize a significant number of businesses global?
Al Kelly
We made a commitment to digitize 50 million small businesses around the world in three years and after the first year we’re a little bit ahead of pace. So, it’s something that in our 125 offices around the world in 81 countries it’s a big focus for us and that’s where it starts. It starts on the ground as you know Dave this payments business is money movement business, funds movement is a very local business and it’s different by country based on traditions and rules and history and frankly, the level of innovation of the banks and the technology of the banks that are there and the size of the fintech community. So locally it’s a real rallying cry for our people to try to help small businesses digitize.
Dave McKay
I’ll try to sneak into emerging trends, which I hope forms of future session like this. This is been awesome. Quantum computing and IoT any thoughts to timing?
Al Kelly
Yes, look, I think Quantum computing still a ways out, which is in some ways good. I’m worried about the bad associated with Quantum computing as well as the good. Unfortunately as my Risk Officer constantly reminds these that the bad guys have equal access to the same technologies we do and the view is I haven’t been fully study this that Quantum computing can really break out much of the encryption algorithms that we have today that help protect us.
The Internet of Things, I’m very excited about. We just actually introduce something called Visa Acceptance Cloud, which is moving all of the technologies, all the intelligence up built into a terminal into the cloud and allowing for a very dumb terminal at the point-of-purchase.
And I think that’s going to be – it’s going to be really helpful in emerging markets, to be helpful in developed markets, where there might be a free market in a local suburb of Canada or suburb of New York or our street vendor selling food today doesn’t have – can’t afford to have this POS terminal. But I also think when we think about IoT and the ability to buy from your home or from a gym, take a gym class and as gyms gets smarter, there’s going to be so many IoT applications that I think that the Visa Acceptance card will help facilitate.
So, I think IoT is without question going to come. I think it’s just a matter of the pace of it and the breadth of it over time.
Dave McKay
And to the benefit of Visa, it’s going to explode where goods and services are exchanged.
Al Kelly
It’s going to bring them out to many, many more endpoints.
Dave McKay
Exponentially, they’ll change our economy and Visa is poised to be at the middle of that. I’ve got about four more topics. But, we’ve ran out of time. Thank you for your insights from all the work you’re doing to help keep our society safe and thank you again for the care and compassion you’re leading in. And the work you’re doing to help our country’s impose sanctions and bring water to our society, that is really meaningful work. I’m going to thank you for showing that.
Your vision for the future, how you track the economy, you’re command and the change of payment factors, you’re at the center of all economies and just your views on crypto to IoT to obviously cyber security we didn’t push quite as hard today. Thank you. Thank you for being our keynote speaker. Great insight, and I really appreciate you’re doing this today.
Al Kelly
Dave, it’s always a pleasure to be with you. I enjoyed it as well and I hope your audience got something out of it. And I look forward to doing it again and I certainly look forward to see in a couple of weeks. So, thank you, and thank you to everybody.
Dave McKay
Be well. Thanks, again.
Al Kelly
Thanks. Bye-bye.
Dave McKay
Bye now.
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