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Visa’s Q1 2025 shows solid volume growth across consumer credit/debit and cross-border, fueled by holiday spending and strong travel trends. Visa Direct and Commercial B2B continue to expand, with cross-border playing a growing role. Value-added services are a standout, driving new revenue and deepening client relationships. The company remains bullish on tokenization, AI-driven fraud capabilities, and account-to-account innovations. Overall, Visa anticipates continued growth—helped by strong partnerships, expanded capabilities, and a favorable macro environment in most regions.

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Central Thesis & Overall Results

• Visa reported a strong fiscal Q1 2025, with net revenue of $9.5B (up 10% YoY) and EPS up 14%.
• Key metrics all improved from Q4: Payments volume +9% in constant dollars, Cross-border volume (ex intra-Europe) +16%, Processed transactions +11%.
• Growth engines remain: Consumer Payments, New Flows (e.g., Visa Direct), and Value-Added Services (risk, data, consulting, and more).

What’s Interesting

• Token adoption is surging: 12.6B tokens issued (+44% YoY), covering one-third of Visa’s face-to-face and e-commerce transactions. Tokenized transactions show +6 percentage points higher approval rates and ~30% lower fraud rates.
• Cross-border strength is broad-based, with e-commerce (card-not-present ex travel) and travel each up 16% YoY. Travel in particular accelerated +4 percentage points from the prior quarter.
• Tap to add card (one-tap provisioning to mobile wallets) is used in ~60% of U.S. Visa consumer cards, significantly reducing provisioning fraud vs. manual entry.
• Visa Direct crossed 10B transactions in the past 12 months. While cross-border Visa Direct is still a small portion of overall cross-border volumes, it is growing faster than domestic Visa Direct.
• A2A (account-to-account) solutions are a rising focus: Visa is expanding “Visa Protect for A2A” to fight account-to-account fraud on real-time payment networks like Brazil’s Pix and the U.K.’s Pay.UK.

Key Points

1. Consumer Payments
   • 4.7B Visa credentials issued (+7% YoY) and widespread tap-to-pay adoption in markets like Japan (44% penetration), Argentina (78%), and the U.S. (57%).
   • Numerous issuer renewals worldwide: ICBC in China, ICICI/SBI/Kotak in India, Bank of New Zealand, Santander in Argentina/Uruguay, BNP Paribas in Europe, RBC in the Caribbean, etc.
   • Strong co-brand partnerships: e.g., Times Black ICICI card in India, Alrajhi Bank/Marriott co-brand in Saudi Arabia, EGYPTAIR co-brand, etc.
   • Renewals and co-brand deals reflect Visa’s strategy to deepen relationships, win market share vs. local networks, and drive usage in both developed and emerging markets.
2. New Flows (Visa Direct & Commercial)
   • Visa Direct (P2P, payroll, gig payouts, remittances) processed ~3B transactions in Q1 alone (+34% YoY).
   • Partnerships like X Money (to move funds between X user wallets and bank accounts), DoorDash (virtual commercial credit cards for shopper payments, plus Dasher payouts via Visa Direct), iFood in Brazil, OCBC in Singapore (wallet-to-wallet cross-border), and more.
   • Commercial volumes grew +6% YoY in constant dollars. Strength in cross-border B2B and corporate T&E helped, plus new vertical expansions (healthcare, gig economy, etc.).
   • Real-time, push-based payments are gaining traction, adding incremental volume beyond traditional card swipes.
3. Value-Added Services (VAS)
   • Up 18% YoY in constant dollars, driven by consulting/marketing services, issuer solutions, risk services, and acceptance solutions.
   • CyberSource gateway adoption among acquirers (emerchantpay in Europe, Bancard in Paraguay, Fiserv internationally, etc.) and use of CardinalCommerce for authentication.
   • Risk & fraud: Visa Protect for A2A rolling out, acquisition of Featurespace to further enhance real-time fraud prevention across various payment types.
   • Clients increasingly buy end-to-end solutions—processing, fraud detection, data/analytics—which delivers incremental revenue on top of Visa’s core transaction fees.

How Everything Interconnects

• Consumer Payments benefits from rising adoption of tap-to-pay and e-commerce. That drives more credential issuance and creates more demand for Value-Added Services like fraud protection and tokenization.
• New Flows expansions (e.g., Visa Direct) often rely on or integrate with VAS offerings (risk and compliance tools, currency services) to handle cross-border complexity.
• Co-brand and renewal deals often bundle VAS, tokenization, Visa Direct services, and commercial solutions—strengthening overall client relationships.
• AI and Fraud Tools (like Featurespace) are integrated across consumer payments, new flows, and value-added services, providing an interlinked ecosystem of offerings.