In the management discussion section of the Visa’s fiscal third quarter 2020 earnings conference call, Romania was mentioned as an „example of dramatic changes” in e-commerce adoption.
The intervention of Alfred F. Kelly Chairman & Chief Executive Officer, Visa, Inc.
„So to start our third quarter results, net revenues in the fiscal third quarter were $4.8 billion, a decrease of 17% or 16% in constant dollars.
All of the business drivers were significantly impacted by the pandemic. Payments volume this quarter declined 10% globally or 9% excluding China. Cross-border volume excluding intra-Europe, which drives our international transaction revenues, declined 47% on a constant-dollar basis, driven primarily by the lack of travels. Including intra-Europe, volume was down 37%.
We processed 30.7 billion transactions or over 337 million per day through the quarter on our network, a 13% decrease over the prior year. However, in each case, the business drivers improved each month throughout the quarter, meaningfully for payments volume and processed transactions, and only marginally for cross-border volume.
In consumer payments, even with all the success Visa has had electronifying payments, there is still $18 billion transacted in cash and checks globally.
In today’s environment, people are sensitive to touching surfaces, including cash and check, and we are seeing this manifesting interest and usage in tap-to-pay, which we know helps digitize cash at the low ticket level and has historically increased transactions by an average of 20% over time in mature markets globally.
From second quarter to third quarter, we had nearly 50 countries improve tap-to-pay penetration by more than 5 percentage points, and over 10 countries increased by 10 percentage points or more. We have helped more than 55 countries to increase their tap-to-pay limits, reducing the share of transactions that require consumer contact by more than 40% in several of those countries.
Another positive trend has been the shift to e-commerce. This works in our favor because Visa’s share of digital commerce, where cash is not an option, is approximately three times greater than the physical point of sale.
In the United States, Visa credentials active in e-commerce excluding travel were over 12% higher in June than in January. In addition, the total spend per active credential also increased during that time by over 6%, which is notable considering new adopters typically spend less than those used to shopping online. In fact, when you isolate the active credentials, who tend to be more significantly engaged in e-commerce, the spend per active credential increased by over 25%.
And these trends are not unique to the United States. During this period in the UK, active e-commerce credentials increased 16%, while spend per active credential increased 3%. In Brazil, active e-commerce credentials increased 11%, while spend per active credential increased 12%. In markets where e-commerce is not as developed, there are examples of dramatic changes in adoption. Argentina experienced active e-commerce card growth of over 100% and Romania 70%.
Vasant M. Prabhu Vice Chairman & Chief Financial Officer, Visa, Inc:
„The COVID crisis has also significantly accelerated the secular shift to ecommerce. Card-not-present spend excluding travel has grown over 25% every week since mid-April, which is 2x the pre-COVID growth rate. Card-present spending improved steadily through the quarter as reopenings went into effect, from declining almost 50% in early April to declining in the high single digits by late June, but there has been little improvement since. It is too early to tell what all the underlying causes of this recent stabilization are. Recovery trajectories for card-present volumes are relatively similar across states.”
For more details: Visa Inc. – Earnings Call – Transcript of discussions
„Tendinţele pe care le-am remarcat înainte de începerea pandemiei s-au accelerat pe perioada stării de urgenţă. Am văzut acest lucru ca o oportunitate, un tipping point pentru bancă. Post-pandemie nu avem cum sa ne întoarcem la comportamentul financiar pe care îl aveam până în februarie a.c. Relaţia românilor cu online-ul s-a schimbat. In plus, cardul fizic se va dematerializa. Vom asista la o scădere a cererii pentru cardurile fizice, respectiv la o creştere a preferinţei pentru componenta digitală a acestora.”