The Transcripts, Transcripts
Visa Inc. (V) Management Presents at JPMorgan Global Technology, Media, and Communications Conference (Transcript)
Visa Inc. (NYSE:V) JPMorgan Global Technology, Media, and Communications Conference Transcript May 23, 2023 10:10 AM ET
Executives
Jack Forestell – Chief Product and Strategy Officer
Analysts
Tien-Tsin Huang – JPMorgan
Tien-Tsin Huang
Thanks. Thanks everyone for filling in here. Always a pleasure to have Visa with us. Jack Forestell has had the pleasure to come in. He’s the Chief Product and Strategy Officer. We are going to do a fireside chat and go through some of the topics that I have collected from the investment community. My name is Tien-Tsin Huang. I cover the payment sector and if we have time at the end, we will ask questions, but we have got a lot to get through. So, Jack, welcome.
Jack Forestell
Thanks for having me.
Question-and-Answer Session
Q – Tien-Tsin Huang
It means a lot to me to have you here. There’s so much to talk about on the product side. But I thought if you wouldn’t mind just kicking it off, you have got a great background. I was just saying I know you from running the merchant business and the merchant acquiring side and so you are such an important person to listen to given all the things that have gone on, on the merchant side, but of course, you moved on to product. You have got a big role now with leading up product and strategy. You are coming from Capital One, especially, I think, the background is fun. But tell us a little bit about your mandate at Visa. Maybe let’s start with that.
Jack Forestell
Yeah. Sure. Happy too, and good morning, everyone. Great to be here. As Tien-Tsin said, I am our Chief Product Officer and our Chief Strategy Officer. So with those responsibilities, I lead the teams that develop our corporate strategy, working hand in glove with our business units and our regional teams around the world, and then, I lead the teams that conceive of, develop and deliver our product road map for the company.
I have been at Visa for about nine years, as Tien-Tsin mentioned, doing a lot of different things, including running our merchant business, various aspects of product, and then before Visa, I was at Capital One for a little more than a decade. So great to be here.
Tien-Tsin Huang
Good. So I guess we will have to start out with some kind of macro question just to get it out of the way, if that’s a question. I know the U.S. It’s been very stable for a very long time here coming off the pandemic. Just a little bit of signs of slowing maybe, but international has been very, very stable. How does that impact your thinking around strategy both in the short- and long-term here?
Jack Forestell
Yeah. Given the seat I sit in, Tien-Tsin, I tend to think about our metrics medium-, long-term. It’s not that we don’t look at the quarterly stuff I do. But when I get our reporting and sort of rifling through trying to find that essential metric that can get to how are users using our platform on the consumer side, how are sellers using our platform on the seller side and how we are doing it, growing and expanding both the scope of the network and the usage.
The best number we probably publish along those lines, I think, is processed transaction growth. And if you look at that number, you can go back and look at it over the time series that we published for a very long time, you will see, we experienced the volatility that you would expect through the pandemic, the boost and then the lapping effects.
But since then, you go back to the middle of 2022 through the end of 2022 and on into 2023, what you will see is remarkable stability in that number and its sort of settling in right now at somewhere just north of 10%, which really reflects growth in the credentialing side, so more consumers carrying more Visa credentials globally, growth in the seller side, so more sellers joining the network, and more transactions happening per user on the network. So that’s the one I look at.
But, yeah, there’s a lot of volatility that happens in any given quarter in any given month, certainly recently. But even going way back in time, there’s always a fuel prices are rising, fuel prices are falling, they are falling right now, so we are seeing average tickets come down that influences our overall purchase volume.
We are lapping some effects of big tax breaks back or big tax refunds back last year at this time, a little shorter, a little smaller this time. So seeing some of that volatility, but underlying, the message is we are seeing real stability with the global consumer and the way they are engaging on our platform.
Tien-Tsin Huang
Yeah. And the beauty of that metric is it cleans out inflation and all these other factors that you just mentioned. So we do get a lot of questions, Jack, around all the stresses in the banking system, on this turmoil that’s going on right now with all the regional bank activity. What do you see, what does that mean and implications for Visa?
Jack Forestell
Yeah. I mean there’s obviously a lot going on and some really serious volatility and some significant failures happening in the banking industry. I guess, what I’d say, though, is it’s been pretty contained.
And when I look at us on a global basis, we work with 15,000-plus financial institutions. In the U.S. alone, we work with somewhere between 8,000 and 9,000 financial institutions and the volatility has been very concentrated in a small number of financial institutions with a fairly specialist set of circumstances.
So when — what we see and in thinking about the U.S. business, when we look at our client portfolio is a really robust set of national, regional and local banks where, again, just stable performance.
We haven’t seen effects on our payment volumes. We haven’t seen effects in risk to our system. Obviously, we are staring at it, we are looking at it, we are stewarding it, we are managing it. But right now, no significant change as a result of what we have seen in the headlines.
Tien-Tsin Huang
All right. Great. Now that’s the power of scale. Let’s talk about consumer payments then. I get this question a lot, Jack, and we just published our handbook looking at penetration and this question, do we see some pull forward in penetration during the pandemic? So how long do you think we have before there is this real conversation of, wow, there may be isn’t that much more penetration left. What’s the time horizon for you as you think about, not only in the U.S., but just some of these developed markets?
Jack Forestell
The cash conversion…
Tien-Tsin Huang
Back to basics. We have to go with the secular stuff.
Jack Forestell
Well, Tien-Tsin, I get why the question comes up. Like you started with, hey, we had an acceleration. The pandemic pulled forward conversion behavior. So consumers who were not using electronic and digital payments and using cash pulled forward. We definitely saw that.
So mathematically, I understand the question of, hey, if there was pull forward and the runway was this long, how much shorter did it get? I don’t want to be glib. But I will just tell you, we study this at the country level. We look at what’s happened from a cash conversion standpoint driven by us, driven by other networks, driven by other non-card payment types.
And I can tell you, yes, the runway got slightly shorter. But the runway was so long. There’s so much cash out there that the amount of pull forward that happened hasn’t substantially changed it from our perspective.
And you think about like even in mature markets around the world, think about Japan and Germany, two of the four largest economies in the world, still cash heavy, right? Think about Latin America, one of our fastest growing markets, up until very, very recently more than 50% of the volume that was running through Visa was ATM transactions, cash out transactions.
Now that’s flipped to a little less than 50%, but it’s only just a little less, right? We still have an enormous amount of runway in emerging markets, we still have plenty of runway in our mature markets, even here in the U.S. still lots of runway. So plenty left to do on the cash conversion side of things.
Tien-Tsin Huang
Agreed. Yeah. And it’s a common question, but I mean, yeah, that secular trend is your friend, as they say. Let’s talk about regulation, if that’s okay, before we dig into some of the products.
Jack Forestell
Okay.
Tien-Tsin Huang
No conversation here is complete without something on regulation. I always like to talk about, whether it was Al in this seat before and Joe, et cetera. But just where do you think the pendulum is with respect to regulation? Does it influence your thinking around product and I’d love to hear your thoughts on Reg II, but maybe just the bigger picture on regulation first.
Jack Forestell
Yeah. Certainly, we have gotten some more clarity on regulation here in the U.S. That’s actually helpful to us and it’s always difficult from a product development standpoint when there’s any degree of uncertainty at all. And so the Reg II clarification at least from my perspective was helpful and just to dig into that one for a second.
The Reg II clarification basically said all issuers must enable two unaffiliated networks on every debit card for the purposes of e-commerce transactions. That was very consistent with our understanding and our thinking, it was kind of our expectation and the direction of travel. Most issuers in the U.S. already do it and we do well in e-commerce transaction routing.
So it was consistent. We are going to see some more issuers come into compliance in the coming months. But if you think about — put yourself in the shoes of a merchant. I mentioned I used to run the merchant business, so I know what that’s like.
The decision about routing a transaction is a multivariate decision. It’s certainly about the price and any small price differentials that might exist. But it’s also really about the quality of the transaction, it’s about the likelihood of success of the transaction and it’s about the risk that’s inherent in the transaction.
And if you think about the capabilities that we deliver through tokenization, our real-time fraud scoring capabilities, our authentication capabilities, we really like our capability set and we think it’s part of the reason why we do so well in transaction routing in the e-commerce space. So we are — we anticipated it. We are set up for it. We don’t see any near-term impacts from it. But, obviously, we are going to keep an eye on it and stay very, very close to it.
Tien-Tsin Huang
I mean we take it for granted, right? We always talk about dial tone quality and sort of the fraud aspect of it and the payment guarantee. I mean, are those some of the examples, maybe just to dig in on what you just said that you get with Visa?
Jack Forestell
Yeah. Absolutely. And I mentioned some of those things.
Tien-Tsin Huang
Yeah.
Jack Forestell
Our tokenization capability, we know brings increases in authorization rate, it brings significant reductions in fraud. We couple that with our real-time fraud scoring capabilities. I mean our ability to take an AI-based fraud model scoring literally of hundreds and hundreds of different variables and deliver that in real time in less than 20 milliseconds to a merchant to help them or an issuer and a merchant to help them make those decisions is, I would say, unparalleled too. Yeah, it’s absolutely a big part of the equation.
Tien-Tsin Huang
Good. So let’s stay with e-comm. We had Dan from PayPal here yesterday. We talked a lot about advanced checkouts. Sure no doubt and we just did a survey recently as well, Jack, talked about how much white space is left for guest checkout. I am always surprised by how big that number is. So I did want to ask you about Click-to-Pay and how that fits and how that compares with the PayPals and some past initiatives around Click-to-Pay and reducing that friction, it feels like there’s still a lot of white space left, but tell us what your vision is here?
Jack Forestell
Yeah. Look, Tien-Tsin, I think, you nailed it. We are on a mission to eliminate the friction from digital payments and it’s actually gotten better through the period of the pandemic. The share of e-commerce payments, digital payments that are happening via Card-on-File, you probably all experienced it.
You might use the same merchant more often. You placed a Card-on-File. When you go back and you revisit that, that experience is actually pretty friction-free. So we have seen the proportions change a little bit.
Tien-Tsin Huang
Yeah.
Jack Forestell
But the white space of guest checkout, as you put it, is still big and it is still full of friction. And that’s what we have pivoted Click-to-Pay to attack. We want — when a consumer shows up and starts entering a card number or those name and address, email credentials, Click-to-Pay can take over and populate, look — hit the Click-to-Pay directory and populate that information for the user on their behalf.
We are working with 50 different enablers, companies like Adyen in 25 different markets around the world. We have got about 19,000-plus merchants live with Click-to-Pay Now and we are working hard to get it out there.
Tien-Tsin Huang
So is there a time line that we should think about this — seeing this more in our day-to-day experience?
Jack Forestell
Yeah. I mean, we are working on it as we speak. So there’s definitely a network effect to it and network businesses always take time. We need to get merchants embedding the experience into their checkout processes. We need to work with our bank partners to get their consumers aware and enrolled in it. So it’s going to take a little bit of time. But, yeah, you should start to see it more and more in the coming months and weeks.
Tien-Tsin Huang
Okay. Good. So maybe bridging to omni and physical world a little bit. I know Tap-to-Pay has been a big topic, it’s crazy. I still remember Blink back in the day around Tap-to-Pay. I know the history was always, Jack, that, right, Tap-to-Pay contactless. It would drive more throughput back to your processed transaction comment to start with. So what have you observed, has there been any difference here? I think there’s been a nice step up, especially in the U.S., any surprises in terms of behavior and follow-through?
Jack Forestell
Well, we have been on this journey for a while now, and look, we know Tap-to-Pay is just simply the best way to pay. It is so simple, so easy. It’s delightful for consumers and for merchants alike. There’s tremendous transaction success. And I’d say, we have been on the journey for a while. We are at a point where about 75% of our transactions are Tap-to-Pay at this point.
So outside of the U.S., we have seen it play out and we know that when users convert to tap to pay, they become more engaged. Most recent numbers I saw were from studying it in the U.S., where a debit user who moves from mag stripe or chip over to Tap-to-Pay spends an extra $65 a month and has two extra transactions a month. So these are like real effects that we have seen globally as we have seen those numbers ramp up.
Now that — we are at 75% overall. We are still only — the numbers escaping is down around 30% in the U.S. So we have got work to do. We are hammering on transit systems, which is one of the keys to get that unlock that daily use of the Tap-to-Pay.
The high frequency transactions, grocery, convenience stores and other spot where we are spending a lot of time, vending, those places that really get the consumer used to it and comfortable with it and then you tend to start seeing it spread out.
We are already, by the way, at a place where 80% of the transactions that are happening in the United States are happening in an environment where it could be a tap transaction. So we have also got some work to do with awareness on the seller side and the consumer side. I mean I find myself standing behind people at checkouts saying, no, you can tap it, just tap. But that’s probably not a scalable way, so we are investing in other ways on the awareness front, too.
Tien-Tsin Huang
My kids are doing it. My kids are doing it…
Jack Forestell
Great to hear.
Tien-Tsin Huang
Speed people up through the line. But, okay, well, that comes back to the whole penetration even in developed markets like the U.S., right? There’s still potential for…
Jack Forestell
So still a long way to go…
Tien-Tsin Huang
more improvement, I think, is the takeaway. Okay. I guess, we should talk about new flows. I talk a lot about consumer payments. That’s what I grew up with.
Jack Forestell
Yeah.
Tien-Tsin Huang
So new flows is still growing with a two in front, 20%-plus percent. I know Visa Direct catches a lot of attention. The most common question I get from investors is really around FedNow and real-time payments and Pay-by-Bank and what does that mean for Visa, what does that mean for Visa Direct. So is it possible for you to maybe go through those? Why they are similar, different, this push payment concept.
Jack Forestell
Yeah. Of course. Well, let me start with, you mentioned real-time payments, FedNow.
Tien-Tsin Huang
Please.
Jack Forestell
Look, we are at a place where most countries around the world have either already or are in the midst of investing to modernize their national payments infrastructure, their ACH infrastructure and the U.S. is absolutely no different.
So investments in TCH real-time payments, FedNow real-time payments in our view are a good thing. We need modern financial infrastructure in the United States. It will be good for the banking industry. It will be good for consumers. It will be good for everybody involved. It’s going to take some time.
And in terms of use cases, what we have seen, and again, we have seen this play out in a lot of different markets around the world as the new infrastructure comes online. What I’d say on use cases is, it all depends on what problems remain to be solved in the market that you are looking at.
So there are certainly markets around the world where penetration of financial inclusion in some parts of the population is low or penetration of long-tail merchants and micro-merchants is relatively low for digital payments. In some of those markets, when RTP comes online, it can get used to help solve those problems.
In other more mature markets, where those problems have already largely been solved, markets like the U.S., a lot of the European markets, we tend to see the center of gravity flow a little bit more into the B2B use cases, commercial use cases, invoicing in places where there’s still a lot of friction left in the system. So that’s just a little background how we think about the evolution of RTP depending on the situation the market is in.
And then you come to the Visa Direct. I mean Visa Direct, it’s — we like to — I mean, I think, of it as a little bit of a Swiss Army knife for high velocity and lower value payments. So if you need to get money from A to B, it could be P2P, it could be business to consumer, it could be government to consumer, it could even be me-to-me, so me to my own account…
Tien-Tsin Huang
Right.
Jack Forestell
…in smallish sizes at high velocity, Visa Direct is the way to do it. It is just the gold standard right now, certainly, in this market. We have got 60 different use cases up and running across 2,000 different programs. So it’s a little difficult to sort of reconcile those 60 use cases in 2,000 programs, how will that play out as FedNow and RTP start to stand up, because those actually haven’t happened yet.
Tien-Tsin Huang
Okay.
Jack Forestell
We have these use cases already up and running. And look, the service is reliable, it is resilient, it is robust, it comes along with the Visa brand, it comes along with the Visa levels of security that I have been talking about in terms of the investments that we make overall.
And it’s up and running and it’s available, you can use it now at scale. So we are pretty confident in our Visa Direct capabilities even in the face of the launch of new RTP capabilities and that’s what we have seen around the rest of the world.
Tien-Tsin Huang
Good. I mean, look, TCH has been around for like five years and FedNow is finally coming and so we have — Visa Direct has been out in the wild for quite some time, but…
Jack Forestell
Yeah.
Tien-Tsin Huang
… I appreciate you, we are asking, we will keep watching them, but it feels like we have got some time to go before…
Jack Forestell
Yeah. It will be a little while.
Tien-Tsin Huang
We can call it any changes. I think maybe building on that, Jack, with thinking about new flows and interoperability, Visa+ was sort of an interesting…
Jack Forestell
Yeah.
Tien-Tsin Huang
… launch and with PayPal, you have been using it to interconnect between Venmo and PayPal leveraging Visa+, which I thought was interesting because that could be sort of intercompany. But talk to us about Visa+ and this idea of true network of networks, interconnections and it does feel like you are getting a little bit closer to the consumer. So talk to us about where you are and how close you are to get to the consumer to effectuate this?
Jack Forestell
Yeah. Visa+ is a lot of fun. We just launched it just weeks ago. I think of it as a new type of credential, bear with me.
Tien-Tsin Huang
Okay.
Jack Forestell
I think virtually everyone in here probably already have, might actually be in possession right now of a Visa credential. It’s represented by a 16-digit number that starts with a 4 and that enables you to pay and with Visa Direct, it also enables you to get paid.
Visa+ is the creation of a Visa+ Payname, which is a new type of credential that can be more intuitive for the user than a 16-digit number. It can be personally identifiable and a little bit more memorable for the user.
And it is a credential that you could use to pay, but maybe more importantly, get paid. So Tien-Tsin, imagine, I needed to pay you and you wanted me to pay you with Visa Direct. You could give me your 16-digit account number, but you probably wouldn’t be that comfortable doing it. But you might be very comfortable giving me your secure Payname and that’s what Visa+ is all about.
And the first use case that we are really going after solving is one that you just described, which is there are several closed loop wallet environments out there and there’s a real problem to be solved. If I am a part of one of those closed loop wallets and you are a part of another one and I need to pay you, it’s actually really hard to do. There’s no good way to do it. It isn’t full of friction.
But with Visa+ and that Payname construct, it’s as simple as, as I just said, you share your pay name with me, I send the money to you, it shows up in real time in the balance in your wallet from my wallet.
So by the way, it’s also pretty early days. We are in pilot mode, we are going to learn a lot, we learn a lot from our clients, we learn a lot from our users, we will develop it, we will enhance it and we will really see how it goes, but we are excited about it.
Tien-Tsin Huang
I need to think of a clever Payname.
Jack Forestell
Grab it before it’s gone.
Tien-Tsin Huang
Yeah. I could make a joke about it, but I am not ready to do it in front of this audience. Good. So I think I would imagine there’s some good demand for this. We heard already from PayPal, I guess, should we expect this to be sort of a step function or incremental in terms of additions, whether it be wallets or other account based systems?
Jack Forestell
Yeah. I mean, look, I don’t want to get too far ahead of ourselves.
Tien-Tsin Huang
Yeah.
Jack Forestell
We have got to prove it out and make sure that it’s got resonance and traction with consumers and our clients, assuming that it does. I am hopeful that we get more and more participants on Board. You think of it as an open platform play, right?
It really creates the ability, if you expand it and imagine it in its ubiquitous form for end users to be able to seamlessly move their money, move their value to the place that they want it to be. If they want it to be in their PayPal account, they can get it there. If they want it to be in their bank account, they should be able to get it there, too. So that’s the vision, but again, super early days.
Tien-Tsin Huang
No. It’s fine. It’s fine and needed. So glad to see that and learn more about it. So let’s shift to value-added services. Again, growing very fast, 20%-plus, and thematically, we have been seeing this a lot and I sort of blame it on software coming into payments, right? We are really pushing more towards ARPU and value-added services. But with Visa’s data and scale, it makes a ton of sense to do more on value-added services. So big picture, how would you rank or tell us more about the pieces that are really driving it and where is the growth potential going forward?
Jack Forestell
Yeah. Well, before I dive into pieces.
Tien-Tsin Huang
Yeah.
Jack Forestell
I would say, you are spot on. I mean there’s — the value-added services business plays a number of different important roles for us and I will go through at least four, okay? One, it actually helps us work with our clients to grow their business. And so forget about the services themselves for a second. We are mostly developing value-added products and services that are generally in the payment space that we can use to work with our clients and actually make their business stronger, better, grow faster, which then accrues value back to us as their network partner, because we are starting to see stronger consumer relationships, seller relationships on their side and more transaction volume pulling through. So stronger customer relationships, or sorry, growing our client’s business is something we probably don’t talk enough about when it comes to value-added services business.
Two, it creates connectivity and just a stronger set of relationships, more retentive value with our clients. We are at a place now where about 50% of our clients are using five-plus value-added services, about 30% or third maybe are using 10 value-added services.
So you can imagine, as those points of connectivity are happening, those services are contributing to growth in our client’s portfolios. That’s bringing us together more closely and creating more of that retentive value.
The third one is the, obvious, where they also create new products and new lines of business for us that drive revenues on a standalone basis and can contribute to the diversification of our revenue portfolio.
And lastly, they also provide a platform for us to develop services that, yes, we can deploy for Visa transactions, but increasingly we are also deploying for non-Visa and non-card type transactions. So there’s a whole set of reasons that we believe the value-added services business is incredibly important to us.
So, sorry, let me now get to your actual question, which I think was, well, what’s — how is the portfolio doing? And we structured the value-added services business by a couple of client segments and then a couple of vertical focuses.
So we have a segment that is about our FI and issuing clients and it’s a set of services that we developed there. We have a acceptance business unit that works with the acceptance and enabler side of it along with merchants directly and then we have a vertical focus on risk, security and identity. And then we have our consulting team that sort of pulls it all together and leverages all those services along with the core and works with our clients to optimize their business.
And Tien-Tsin, I would say, across the portfolio, it’s all doing pretty well. So I hesitate to stack rank how things are going. I might say, look, there are parts of the portfolio that are closer into the core. So within that issuer bucket, there are sets of services that are very close in to VisaNet.
Think about us offering card controls or stand-in authorization capabilities for our issuers or even enhanced reporting and settlement and reconciliation in the financial operations of our banks. Those are continuously in demand.
We still have a lot of upside there in selling those services in markets where the penetration rates are still very low. It’s a little more mature in some of our larger markets, but lots of runway to sell those services in outside of our more mature markets.
The risk product set, also very much in demand. We have had a little bit of a tailwind in the risk product part of our business, particularly in Europe, with some of the regulations around strong customer authentication that required issuers and merchants alike to improve their security in the e-comm space and our products and services have been vital in actually making that happen.
So those are a couple that are kind of near in on the payment side. And we have got our issuer processing business and our scaled merchant gateway business. Those are big scale standalone businesses in their own right that transcend Visa transactions.
They are part of that play that I was talking about, where we can deliver beyond Visa and beyond card-based transactions and then as I mentioned, we wrap it all together with the consulting side of the business.
And increasingly, on the consulting business, we are also pushing into what we call managed services, where we are working with clients to take work off their hands or place Visa professionals inside those client organizations.
It could be in running some of their fraud risk functions and capabilities or it could be in executing on product integrations to help them get to market faster with some of the other pieces of our value-added services and core business.
Tien-Tsin Huang
Good. Now that’s a good summary. So I am just curious, so very clear on the issuing side, things like stand-in processing DPS where that will be in there. Where would tokenization fall, would that be included in value-added services?
Jack Forestell
Yeah. It’s a good question, because it’s a little tricky one. I mean, I think of tokenization, as I was describing Visa+ as another credential. Tokenization is like the next generation of our credential infrastructure. It is a secure and programmable credential.
So again that 16-digit number that you all have in your pocket is slowly getting replaced by a dynamic token that is secured by cryptography and that can then be programmed and bound to function in certain ways with specific use cases. So at that level, it’s really core to who we are and what we do as a payment network.
That said, it also represents an opportunity on the value-added services side. There are services like push provisioning those credentials. There are services like enabling those credentials to be programs so that can provide the visibility for an issuer client to enable their customers to see where all of those credentials are with Card-on-File merchants and turn them on, turn them off, enable them for certain types of transactions and not.
And then, of course, we also have a capability that we manage under a brand we call Token ID, which are a whole set of tokenization capabilities for non-card applications, so think payment account tokenization in the RTP space. So, yes and no, it’s a core part of what we do. We don’t tend to monetize the core Visa token directly.
Tien-Tsin Huang
Got it.
Jack Forestell
Where we see that is, the monetization comes from the enhanced authorization rates and the reduced fraud that we get in the network and the take up that we get on those tokens. By the way, I think we are at 6 billion tokens placed right now, which is somewhere close to 90% higher than it was a year ago this time.
And that growth is becoming — is coming because of that enhanced performance and we like the model that we are using to monetize that right now. That said, we do think, as I was describing, there’s a whole host of value-added services that can come along with the tokenization capabilities that we are deploying.
Tien-Tsin Huang
Okay. Good. No. Thanks for going through that. When I see 6 billion and these big numbers, it’s just hard to fathom some of it. But I also recognize it’s a big change from a credentialing and infrastructure standpoint, which is why I wanted to ask it.
Jack Forestell
Yeah. It’s been quite a journey. I mean, in the nine years that I have been at Visa, we started from zero. And zero to 6 billion even in the space of nine years is — has been breathtaking and a lot of fun.
Tien-Tsin Huang
No. It’s a big lift. So we are — I have a bunch more questions. We have 2 minutes left. I thought maybe just we should probably close it out. So I know there’s so much more to talk about. We are at a tech conference here. There’s so many things I’d love to pick your brain on. But what do you think is not talked about enough, what am I not asking you about as you are sitting here thinking about tech trends in the world in front of us?
Jack Forestell
Well, something you are not asking about, but I can’t say it’s not talked about enough, because I am guessing it’s probably talked about in every room at this conference is AI. And I am incredibly excited about the burst of activity that’s really starting to unfold in the generative AI space, really just in the last six months.
And part of the reason I am excited about it is AI is in our DNA. We have actually been harnessing the power of AI in some way, shape or form going all the way back to the ‘90s. We were using heuristic models and neural nets before it was cool and we have built our own AI and deep learning platform on which we train all the sophisticated fraud and risk management models that I was talking about.
But we have focused a lot of our attention in the AI space on what I would characterize as predictive AI, the use of deep learning to predict the next data point in a series, whether a transaction is fraudulent, whether I am who I say I am.
Generative AI is about actually generating new data sets and predicting a whole new data series and there we just see enormous amounts of potential on a number of different dimensions. I mean, like many companies, we see the transformative potential of creating stronger efficiency within our company and helping our clients do the same, whether it’s customer service, anomaly detection, cybersecurity, we believe there’s massive application of generative AI to those spaces.
We think generative AI can make payments better. The very models that I talked about, we have got 60 different AI based models already in production today. We think there are overlays of generative AI that can actually make those models perform better in orchestration with one another.
And then who knows what the world holds in terms of new product development? But it seems almost obvious that the process of shopping and discovery, and ultimately, commerce is going to be transformed by AI and contextual AI and we are going to make sure that we are ready for that with the best possible embedded digital payments capabilities when that happens and I think it’s probably going to happen pretty fast.
Tien-Tsin Huang
Yeah. No. It feels that way, especially on the transactional side. Well, hopefully, we will get a chance to talk to you about it very soon on the next session.
Jack Forestell
Great.
Tien-Tsin Huang
Jack, thank you for the time. Appreciate the conversation.
Jack Forestell
Thank you. Yeah. Thank you all.
Tien-Tsin Huang
Yeah.