Visa’s tap-to-pay transactions increased 40% YoY in Q2, while 60% of all its face-to-face transactions (excluding the US) were tap-to-pay. More than 50 markets have increased tap-to-pay limits, including 26 European countries, Canada, Australia, and New Zealand have also increased their tap-to-pay limits. 9 out of the US’ top 10 issuers are participating in tap-to-pay transactions, there are now 175 million tap-to-pay cards in the US, more than any country. 

Payments volumes in the US dropped dramatically in the second week of March as the lockdown came into effect, volumes declined 28% by last week of March. US payments volumes are down 19%, debit is down 6%, and credit is down 31%. Visa’s payments volumes grew 5% globally and 7% including China, with over 500 million transactions per day. Cross-border payments fell 2%.

Opportunity in e-commerce and replacing cash

Visa sees opportunity in e-commerce growth and cash displacement, as social distancing norms will continue even after lockdowns end, and people will prefer payment methods that minimise contact. “People are buying more goods online that they earlier went to the store for, such as furniture, electronics, in some cases apparel,” CEO Al Kelly said on the investor call.

E-commerce is a “very, very positive thing for us,” Kelly said, “because cash isn’t a competitor in that space. So the reality is that we get a lot higher share from those transactions that go to e-commerce than we get in the face-to-face world,” he said. 

I think there are some permanent changes. Now, whether gaming stays up at the level it’s at as people are finding things to do while they’re sitting home, I suspect that will come back down a bit. But I think in general, ecommerce will explode coming out of this. — Al Kelly 

“The aversion to cash could be persistent, which means that even in face-to-face transactions, the penetration of digital forms of payment could be growing in a permanent and structural way faster than it might have prior to the crisis,” CFO and vice-chairman Vasant M. Prabhu added.

Lisa Ellis from MoffettNathanson asked the executives if they foresee any new regulations or initiatives around digitisation of payments. While government are interested in digitisation as much as any business, “it could be possible that they start looking at pricing in the marketplace”, Kelly said. “I continue to believe that pricing should be set by markets and not by governments. I think markets do a far better job of doing it than governments do, and I would say that specifically as it relates to interchange, there’s a tremendous amount of value delivered by our bank partners in terms of the credit they extend to enable buying, to the services they provide, to the servicing they provide, to the fraud they provide, to the risk services they provide, and rewards that they provide.” 

“Any action that would disrupt any type of recovery during a pandemic like this would be foolish and potentially very damaging,” Kelly added. 


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Recovery of biz depends on many factors: ‘In the final analysis, this is a health crisis’

As for economic recovery, normalisation of business will depend on city and county-level decisions on reopening, which kinds of businesses will reopen, and how consumer behaviour will change, Kelly said. It also depends on how willing people will be to engage in activities where social distancing may be harder to execute like dine-in restaurants, mass entertainment, hotel stays, and airline travel. “When borders reopen, consumer confidence in venturing beyond their geographic zone of comfort,” he added.

In the final analysis, this is a health crisis. As such, consumer behavior and the pace of normalization will be significantly influenced by the availability of testing, advancements in therapeutics, and ultimately a vaccine.

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