Jack Carsky - Head, Global Investor Relations Byron Pollitt - Chief Financial Officer Charlie Scharf - Chief Executive Officer.

Tim Willi - Wells Fargo Bob Napoli - William Blair Tom McCrohan - Janney Capital Markets Tien-tsin Huang - JP Morgan Bryan Keane - Deutsche Bank Darrin Peller - Barclays Jason Kupferberg - Jefferies Sanjay Sakhrani - KBW Craig Maurer - CLSA Ken Bruce - Bank of America Merrill Lynch Smittipon Srethapramote - Morgan Stanley Glenn Greene - Oppenheimer Chris Brendler - Stifel Nicolaus Glenn Fodor - Autonomous Research Andrew Jeffrey - SunTrust Robinson Humphrey.

Welcome to Visa Inc.’s fiscal Q1 2014 earnings conference call. [Operator instructions.] I would now like to turn the conference over to your host, Mr. Jack Carsky, head of global investor relations. Mr. Carsky, you may begin..

Thanks, operator. Good morning, everyone, and welcome to Visa Inc.’s fiscal first quarter 2014 earnings conference call. With us today are Charlie Scharf, Visa’s chief executive officer, and Byron Pollitt, Visa’s chief financial officer. This call is currently being webcast over the internet.

It can be accessed on the Investor Relations section of our website at www.investor.visa.com. A replay of the webcast will also be archived on our site for 30 days. A PowerPoint deck containing financial and statistical highlights of today’s commentary was posted to our website prior to this call.

Let me also remind you that this presentation may include forward-looking statements. These statements aren’t guarantees of future performance and our actual results could materially differ as a result of variety of factors.

Additional information concerning these factors is available in our most reports on Forms 10-K and Q, which you can find on the SEC's website and the investor relations section of Visa’s website.

For historical non-GAAP or pro forma related financial information disclosed in this call, the related GAAP measures and other information required by Regulation G of the SEC are available in the Financial and Statistical Summary accompanying today’s press release. This release can also be accessed through the IR section of our website.

With that, I'll now turn the call over to Byron..

as always, we remain committed to returning excess cash to our shareholders. To this end, we repurchased a total of 5.5 million shares during the quarter, at an average price per share of $199 and change. This leaves an outstanding open to buy of 4.2 billion. Now let’s turn to the numbers.

I will cover our global payment volume and processed transaction trends for the fiscal first quarter, followed by our results through January 21. I’ll then cover the financial highlights of our first fiscal quarter. Global payment volume growth for the December quarter in constant dollars was 11%, modestly below the September quarter’s 13%. The U.S.

grew 8%, and international grew 15%. More recently, in the U.S., through January 21, payment volume continued at 8%. Drilling down further, U.S. credit was 10% in both Q1 and through January 21, compared to 11% in Q4. Similarly, U.S. debit grew at 7% in both Q1 and through January 21, compared to 10% in Q4.

Global cross-border volume delivered a solid 12% constant dollar growth rate in the December quarter, up modestly from the 11% rate in the September quarter. The U.S. grew 11% and international 13% in constant dollars. Through January 21, cross-border volume on a constant dollar basis grew 10% with a U.S. growth rate of 9% and international 11%.

Transactions processed over Visa’s network totaled $16 billion in the first fiscal quarter, a 13% increase over the prior year period. The U.S. grew 9% while international delivered 26% growth. Through January 21, processed transaction growth was 11%.

Now turning to the income statement, net operating revenue in the quarter was $3.2 billion, an 11% increase year over year driven primarily by solid growth globally in both domestic and international transactions and as mentioned earlier, negatively impacted by a 2% FX headwind.

Moving to the individual revenue line items, service revenue was $1.4 billion, up 9% over the past year, and was driven by solid global payment volume growth. Data processing revenue, $1.3 billion, up 13% over the prior year quarter, based on solid growth rates in Visa processed transactions, both in the U.S. and internationally.

International transaction revenue was up 11% to $891 million, reflecting an ongoing broad-based strength in cross-border volume. Total operating expenses for the quarter were $1.1 billion, up 3% from the prior year. Given earlier discussion on the cadence of marketing spend, we expect expense growth in Q2 and Q3 to be somewhat higher versus Q1.

Operating margin was 66% for the first quarter, ahead of our yearly guidance of low 60s, but consistent with our expectations. We expect Q1 to be our lowest quarter for operating expense in fiscal 2014. Our effective tax rate for Q1 was 32.4%. Capital expenditures were $120 million in the quarter.

At the end of the quarter, we had 634 million shares of class A common stock outstanding on an as-converted basis, and the weighted average number of fully diluted shares outstanding for the quarter totaled 639 million.

Finally, as noted earlier, our full year guidance metrics for revenue growth, client incentives, operating margin, EPS growth, and free cash flow remain unchanged. And with that, I’ll turn the call over to Charlie..

Everywhere You Want to Be, which is a new integrated campaign that communicates our vision and how our brand is positioned for the future.

Those of you who have been covering us for a while may remember we once used the tagline Visa, it’s Everywhere You Want to Be, to reflect the growing presence of Visa in merchant locations across the United States. Today, the new global campaign allows us to expand what “everywhere” means and build upon the historical equities of the brand.

We’re bringing this new Visa brand and our mark to light gradually, starting with Olympic-themed advertising in the U.S. and a rollout to more markets and audiences around the world, starting in March. So I’m going to conclude just by reaffirming our view here of how excited we are about the future and the opportunity.

We’ve talked about the secular opportunity to penetrate cash and check and how healthy that opportunity is across the entire globe. We continue to work on innovation, being flexible and adaptive in the world we live in, both for our existing customers and continuing to open up the network on the edges to embrace the change that’s going on around us.

And with that, I’m going to open up the floor for questions to Byron and myself. .

[Operator instructions.] Our first question comes from Tim Willi from Wells Fargo. .

Wanted to get your thoughts, if you could, around Bitcoin. Obviously, that’s sort of the new rage. We get a lot of questions from investors. I’m sure you do as well.

But can you just talk about how you think about it, whether it is something that potentially could be a broad consumer application, or if it’s more of a niche around cross-border business? Or just how how you might think about that, and how Visa might interact or support that, or not at all..

I guess I would start with, it’s early days in terms of what Bitcoin is, and what it will be. We’re certainly paying attention to it. It’s very early to understand exactly what all of the implications are for it.

We will say, when we look at our network and the people that we compete with in terms of what people think of as a traditional network, the established network rules we have, the understanding of how things operate, understanding who the participants are, the fact that business that we do has financial institutions on either side of the transaction, you know, the success of our payment system and our primary competitors is that for a reason.

And there’s certainly some interesting things about Bitcoin and other things like it, but there’s also a great deal of complexity. People talk about things like frictionless and things like that, and when you actually dig through it, it’s really not the case. It’s far more complex than that.

And we feel very comfortable with the business that we have here. .

Our next question comes from Bob Napoli of William Blair. .

Question on security. And I’m sure you don’t have all the answers on this, but if EMV had been in place, would it have prevented some of the recent breaches? And just in line with the trend in security, it seems like there are these dates out there that tend to get pushed back.

Do you think that the breach at Target and others, do you sense it’s going to drive the adoption of EMV and other security faster than it otherwise would have? Are you seeing action taking place that wasn’t happening 30 days ago?.

Well, the second part of your question, I think the answer is yes. You know, people don’t live in a vacuum, and when you see the kinds of breaches that have occurred recently, it gets everyone focused on making sure that we’re doing all that we can to minimize any potential fraud in the future.

So the dates that we had set out are the dates that we are going to stick with. Again, it requires people do a lot of work, which we understand, but we think it’s good for the payment system, for the ultimate end user, which means it will ultimately be good for all of us, in the process.

On your first piece, remember, first of all, in terms of what actually has happened with the breaches that we’ve read about, not all the facts are out yet. So it’s a little premature for all of us to talk about what would have solved it.

I think it’s fair to say that as best we can tell, some of the breaches that you’ve read about don’t relate to the payment systems at all. They relate to breaches within companies’ server environments, or some personal information, so EMV would obviously have nothing to do with that.

To the extent that there were breaches occurring on the point of sale device, it’s probable that the account number possibly would have been able to be compromised, but the ability to reuse that account number to create a new card, to use that card at a physical point of sale on a fraudulent basis, would not be possible.

It would still be possible to use that account number potentially at card not present, which is why it’s important that the industry also continue to push forward with tokenization..

Tom McCrohan from Janney Capital Markets, you may ask your question..

Is V.me being positioned as a mobile wallet long term? Or is it more kind of a tender type for ecommerce transactions, something more like a Paypal?.

I think of V.me very simply as a way for our customers to have an easy way to make payments online with their general purpose credit card, through user name and password. So people like to ask is it a wallet? Is it this? Is it that? It’s really not that complicated.

It’s when you are buying on your computer, your tablet, or on your mobile device, right now it’s not easy to get from the beginning of the checkout process to the end of the checkout process using our products. .

:.

Our next question is from Tien-tsin Huang with JP Morgan..

I had a quick follow up on the breach, then I had a cross-border question. Just on the breach, any risk of indirect impact from consumer [confidence] changing maybe in terms of usage of card, maybe mix shift to credit, or just reissuance risk in general.

And then on cross-border, I know there’s a lot of discussion in the market around emerging markets, FX volatility.

Can that have any impact on cross-border activity or profitability? What should we be considering there? And then lastly, cross border, on the World Cup front and with the Olympics, is that enough to show up in cross-border volumes?.

Why don’t I start with the first? Consumer confidence and using the cards, which we pay very close attention to, continues to still look very, very good. We’ve actually done our own surveys, starting at the time of the breach.

One of the reasons why we ran the advertising that we ran to make sure that consumers understand that, while it’s unpleasant and not something that we want them to go through, they’re actually protected. And in terms of what we’ve seen in our actual payment results and these surveys, things continue to look pretty good for us..

On the cross-border front, logic would say that depending on how currencies move, it should have an impact on cross-border. The way it tends to materialize, and the way we typically think about it, is by corridor. And yet what we saw this past quarter, despite a broad strengthening of the U.S.

dollar, there was actually strong traffic to the United States and strong cross-border spend from countries where the currencies were somewhat weaker relative to the U.S. dollar. And that’s counterintuitive to what you would normally think.

As a result, our view more broadly on cross-border is that it’s economically driven, and that how economic growth globally behaves is more likely to have an impact on our overall cross-border volumes. So if I were to single out an area, emerging markets, there’s been a lot of focus on declining values and growth rates in emerging markets.

Those areas still have been vibrant sources of growth for us, but we have a close watch on that in the year to come. With regard to World Cup, Brazil has been one of those countries where the currency has weakened, which bodes well for incoming traffic to the World Cup this summer in Brazil.

The outbound spend from Brazil is one that will be under pressure, for two reasons. One, the weakness of the currency. That’s often overpowered by an unflagging desire for Brazilians to travel.

The government’s making it more difficult, however, by putting on some pretty serious taxes, both on the use of credit and debit cards when they’re used in cross-border transactions.

So I’d say from a World Cup standpoint, hopefully I would expect most of the Brazilians to stay home for the festivities and that outbound travel is probably never much in the cards.

Inbound travel, if anything, should be aided by the weakness in the currency in Brazil and possibly Argentina will benefit as well, as their currency has taken a nosedive of late. .

Hard to believe we’ll see anything Sochi..

Yes..

The next question will be from Bryan Keane, Deutsche Bank. .

Just two quick questions. One, I guess, just what’s behind the slowdown in U.S.

debit volumes, and any difference between PIN and signature? And secondly, I noticed you guys hide EMV chip, just your latest thoughts on the EMV chip versus the EMV chip and PIN, and will you promote one versus the other?.

On the debit side, I’d say hard to read that. There is pretty tepid growth in personal disposable income, which is the primary indicator we look at, now that we’ve pretty much lapped the more immediate Durbin effects. Remember, debit is disproportionately nondiscretionary.

So one of the important drivers of debit spend is the growth in jobs, which adds to the overall growth in nondiscretionary and debit spend. And we’re just not seeing much in the way of growth rates there. What we’re seeing is declining growth rates there for the U.S. in that regard.

If we were to take a look at Visa signature versus Interlink, I would say the growth rates on the PIN side have been running higher than on the signature side.

And as you noticed, we downshifted a bit from where we were in the prior quarter as we began to move further away from the immediate effects of Durbin and begin to hit a more normalized pattern..

Charlie Scharf :.

. :.

The next question comes from Darrin Peller of Barclays..

We noticed that the service fees were up sequentially.

Did anything in pricing or perhaps some lag effects from the [unintelligible] drive that? And then is there anything unsustainable around the amount you’re now generating in service fees per dollar of payment volume? And then just quickly, on the topic of pricing, we clearly saw a pretty significant cross-border price change at Mastercard over the last couple of quarters.

While I know you guys want to be careful and surgical on pricing changes, especially [unintelligible], might there be some similar opportunities soon from Visa?.

On the service fee side, I would say there’s no real callout. Remember, a lot of our service fee is subject to FX impacts. So if we look at the constant dollar growth in service fees, we’re at 13, the FX impact bringing that down to about 10 nominally. And service fee growth was around 9. So I’d say that’s pretty close.

So I’d say there’s no real callout on the yields. It’s well within a zipcode of what we have done within the past three or four quarters. So no callouts. .

And on the pricing question, I answer it very consistently with what we’ve been saying. We are not opposed to increase in price, we’re not opposed to decrease in price, we’re not opposed to keeping price the same, as long as there’s a reason for all of those things.

So I think we have been disciplined, we’ve been thoughtful, and that’s what we’ll continue to do. And I guess the last thing I would say is we are more than willing to sacrifice our short term performance versus other people if it’s the right long term thing to do for our company and for our industry.

And so we’re very comfortable with what we’ve done and what we haven’t done in pricing..

Jason Kupferberg of Jefferies, your line is open..

If I heard correctly, I think processed transaction growth slowed a little bit in the first three weeks of January, 11% versus the 13% last quarter. So wanted to get a little bit more color there in terms of kind of U.S. versus international trends.

And then just quickly switching gears, any thoughts in terms of the implications of the data breaches on MCX’s potential strategy? I know you guys get a lot of questions around that, but to the extent they were looking at private label or decoupled debit product as a primary funding source in their wallet now, with the potential for consumers to be more wary about giving their bank account data to a retailer.

Would just appreciate any thoughts you have around that..

Let me start with the transaction growth. And let me break it down U.S. versus international, give it to you for the first quarter, and then for January, so that you have the detail. So as I said on the call, processed transaction growth for the first quarter was 13%, U.S. was 9%, and international was 26%.

January, 21 days, processed transaction growth was 11. 7 for the U.S., 24 for international. So a downtick in both. .

And I guess just to add a touch of color on that, because we obviously look at these numbers daily, weekly. We look at all the trends. And the one thing that we talk about over the past several months, and it really goes back to the beginning of last quarter, is there’s a lot of volatility embedded in the numbers.

Week in, week out, it’s very hard to pick up trends. And so whether they’re positive or negative over a several week period of time, we’ve been unable to discern anything more meaningful than this continued tepid recovery that Byron described. And then on the second question, I guess I would say what we continue to say.

And I’ve talked about this fairly consistently. As we think about our competitive position, understanding that we’re continuing to evolve and change and make sure that we open our network up to those who can direct transactions to us and continue to build value on our network.

Having said all that, safety, security, and soundness is the price of entry in payments. There’s no question about that. And people can build whatever they want, and the moment that consumers start to get nervous about using their own personal information or payment credentials is the moment that people will start to see the effect of that.

And so what we and our primary competitors have are these established payment networks, known rules, people understand how they’re protected, which is why we think EMV is important, because it takes mag stripe to a new standard, and we’re pushing beyond EMV towards the next thing.

And so to the extent that other payment methods are not as secure, that is a competitive disadvantage. And that’s how we think about it. .

Sanjay Sakhrani from KBW, please ask your question..

Just had a question on the FX hedging practices going forward. How should we think about the relevance of them as currencies move going forward, especially if the U.S.

dollar were to strengthen more?.

According to the [forwards], the U.S. dollar is strengthening more against the currencies that are most relevant in our portfolio. So the forwards aren’t as steep as what we were looking at a year ago, but nonetheless, to the extent there has been a headwind, I would say looking forward, the headwind continues.

It’s just not as steep as it was when we looked out six, nine months ago. We begin hedging a year ahead of time. So we hedge 12 months out. We do rolling hedges. So we begin 12 months out, and then our hedges are largely in place, I would say, five or six months before the period we actually report. We do economic hedges, so we don’t hedge everything.

For a particular currency, we take revenue, subtract the natural hedge of the expenses we incur in that currency, and then we hedge not 100%, but a meaningful portion of the remainder, and we do that for about 15 currencies. The intent is not to speculate, but to simply dampen the impact of currencies.

And the way we approach it, it’s not possible to put complete hedges in place. The intent is to put enough in to dampen it within certain predetermined exposures that we calculate. It’s a pretty straightforward value at risk analysis. So when there are large sustained movements, those are going to be reflected in our numbers.

They just won’t have the amplitude that you would have if we didn’t hedge. We have pretty good visibility to this, which is why we can give you a three to four quarter look ahead, which is our practice from a guidance standpoint..

Craig Maurer with CLSA, your line is open. .

First is for Byron. If you could discuss the cadence in marketing spend. Will the ramp look similar to what we saw during the last Olympic Games? Though I do know you have two events coming up.

And secondly, does [host card] emulation present a good tool for your tokenization project in the card not present world? And would you move quickly toward certification there?.

Let me just do number two first, because the answer is yes..

And on the second one, I don’t have a comparison, but you should expect a significant increase in marketing spend in Q2 and Q3, and then a meaningful downshift in Q4.

We’ve had this combination before, and even though the finals of the World Cup are typically in July, which is Q4, there is a substantial amount of marketing that occurs prior to the finals in that April, May, June timeframe.

So that quarter has a substantial component of the World Cup, and this quarter is the one that has virtually all of the Winter Olympics spend. One other callout, the spend for Winter Olympics is significant in terms of the quarterly cadence, but it is not at the level of spend that you would see for a Summer Olympics. .

Let me just reiterate what Byron said in his opening remarks, just to make sure that we were as clear as we can be. As we look to our fiscal second and third quarters, in the second and third quarters, because of what Byron referred to, our revenue growth numbers will not be as robust as we’ve seen this quarter and in the fourth quarter.

We said that we expect the expense growth to be higher in the second and third quarters because of the marketing numbers that Byron talked about. And that obviously then flows through to weaker margins in the second and third quarters, recovering in the fourth quarter for things that we know are coming, which is why we reaffirmed full year guidance.

But there will be these variable and lumpy trends as we see the year play itself out. .

Ken Bruce, Bank of America Merrill Lynch, you may ask your question. .

My question is relatively simple. It may not be quite as simple of an answer, but I’m hoping to get a little bit of perspective around the processed transactions.

Just in terms of the percentage that has basically been migrating slowly higher, I was hoping you might be able to dimensionalize what is driving that share increase in terms of processed transactions, what are the contributors to that, and maybe what you think is a reasonable high end for processed transactions.

And then separately, if you would provide any color around the merchant relationships that you mentioned in your opening remarks, in terms of improving those relationships and what that might entail..

in the United States, we process nearly 100% of our transactions. Outside of the United States, we can process anywhere from 90% to 0%. And so the opportunity for us to Visa process transactions is still a wide open field. And that, by the way, is particularly true in debit.

So you will hear us talk a lot more about that in the quarters to come, because it’s linked so directly to our growth opportunity..

And on the merchant question, we don’t have anything that we want to talk publicly about now with any individual merchant, but as I said in the opening remarks, our goal is to provide the kinds of value-added services for merchants that we have done such a good job of providing to the issuing community for a long period of time.

And we’re in the process of having discussions, and when we have specifics to talk about, we’ll talk about them..

[Operator instructions.] And the next one will come from Smitti Srethapramote, Morgan Stanley. .

Can you please give us an update on your government relations efforts in emerging markets to increase the electronification of payments?.

First of all, government relations for us, especially when you get outside of the developed world, is not a traditional government relations function. It’s not a staff function that sits to the side and just goes around and has lobbying types of conversations.

In the emerging markets, government relations is a business for us, because the government is our partner in helping electronify the payment systems in these particular markets. Very often, when the government leads with trying to move their transactions to the electronic payment systems, that then can help drive the market.

That’s what we see in places like Rwanda and other places, which are really emerging. And so when you look across the world, we think of the government as a client and a partner to helping build a business which is good for them.

And the reason why it’s good for them is it’s ultimately good for all of their participants, whether it’s the merchants or the individuals, and obviously we and our competitors will benefit from that, as cash exits society..

If I were to reflect back to when we went public in 2008, and if you were to have asked that question, I don’t think anyone would have thought to ask that question. But today, governments of emerging markets have gotten a lot more interested and pay a lot more attention to electronic forms of payment.

They’re interested in it from a very self-serving standpoint in that you can’t tax what you can’t see, but they’re also very focused on this is a way of providing, in Charlie’s words, a safer, more secure and sound financial system for their citizens.

And so there’s a natural tendency to want to regulate, and our involvement now is very, very early contact with a broad range of emerging market governments, because they can be very well intentioned but also unenlightened in regard to how to think about regulation, and what the impacts are.

And so we have got government relations people stationed all over the world, particularly in emerging markets, and their role is largely educational, so that governments that have a legitimate interest in regulating this part of their monetary system can do so understanding how best to provide safety, security, and soundness and to allow the market to operate so that they get the kind of penetration of electronic payments, which will grow and be healthy.

And we’ve been exceptionally pleased with the reception of most governments to talking with us and partnering with us to develop their electronic payment systems in a way that’s healthy and I think will provide a good foundation for growth to come. .

Glenn Greene of Oppenheimer, you may ask your question..

As you renewed your Chase deal, I think the implication, or you suggested that you’d pick up some incremental volume.

I was curious if you’ve started to see that, and should we be thinking about that as sort of being reflected in the run rate or something that we could expect going forward throughout calendar ’14 as sort of incremental volume? And then just a quick number question, in terms of where are you in terms of V.me merchants signed..

On Chase, we do expect to see incremental volume during the course of the year. We expect some to begin this quarter, not material, and we expect it to build through the course of fiscal year ’14. In our guidance, that incremental is contemplated, but it will be more second half weighted, clearly, than first half..

And on V.me merchants, I don’t have the updated number here, to be honest with you. .

Do we sort of get a step function increase at some point during this year, or is it sort of gradual, test mode, kind of figuring it out?.

We’ll be in a position to answer that question in another month or two, because we’ve just rolled out the new platform that I described. And we’ll start to see the effect of it, and have a better understanding of what it means for the ramp up..

Next we have Chris Brendler of Stifel..

I have two questions that I probably won’t get a lot of detail on, so hopefully it won’t take too long.

One is Visa Europe, anything you can say additionally about Visa Europe and what potentially that would look like if it could come back to you? Any progress there? Any updates? And then similarly, on the Judge Leon case and the appeal, obviously you can’t give us too much there, but I was wondering if there was any way you could, on a timeline, it sounded like from that hearing that the timeline could be shorter than I think the original estimates that were somewhere around a year.

Is it possible we could hear something from the three judge appeal panel in the next couple of months?.

Nothing different to talk about on Visa Europe. Otherwise, I would have mentioned it in my opening remarks. And on timing, we don’t know, on the appeal..

And in terms of the last question, we’ve got the numbers. We have over 300 signed, and 80 are currently live, on the V.me..

Next we have a question from Glenn Fodor of Autonomous..

Byron, just wanted to peel back your comments on emerging markets a little bit more.

Can you give us a rough sense of what percent of your volumes come from emerging markets? And then within that volume category, can you give us a range of what type of multiple to your overall volume growth that this is growing? Is it three times as fast, or four times?.

I don’t actually have those statistics at my command. The emerging markets, these growth rates are midteens and better. .

And depending on the market, it could be substantially better than that..

Yes, and could be substantially better. And these growth rates, we have a portfolio. So even though some of these have had currency issues in terms of weakening currencies, these growth rates have held pretty well even where there has been weaker currencies. Government intervention, where they’re trying to limit the outbound, can have an effect.

You’re seeing that in Brazil today. Likely to see it in Argentina, Venezuela, countries where there have been more severe locations. But the durability of the growing cross-border in emerging markets has been quite resilient..

Your last question will come from Andrew Jeffrey of SunTrust..

Quick question on the cybersource transaction growth, which decelerated in the first fiscal quarter.

Any commentary just broadly around that, and implications or read throughs to overall ecommerce volume?.

Let me separate the two. On ecommerce volume, this was a fantastic holiday spend season for ecommerce. And the trend in growth and ecom is very, very healthy. And so the downshift a bit in the growth in cybersource has nothing to do with the underlying growth in ecommerce.

What I would say the cybersource established an early significant position as a gateway in what has become a much more competitive space.

And I think what we’re going to find in the next few quarters is that we’re going to need to up our game and that this space is just going to be more competitively intense than it has been in the past couple of years.

And that is a direct testament to how attractive the growth prospects are for ecom, which is the one channel that is particularly suited for electronic payments..

And with that, we want to thank everybody for joining us this morning. And as always, if you have any follow up questions, please feel free to give either Victoria or myself a call. Thanks..