Visa was founded on a simple but transformative idea — to make payments between consumers and businesses (C2B) simple, reliable and secure. That idea has been at the heart of Visa’s success and our values for more than 60 years.
While many merchant segments, including travel, entertainment and hospitality, slowed or stopped completely because of COVID-19, commercial activity continued and, in some areas, accelerated. Prescriptions needed to be filled, groceries had to be purchased and school supplies bought. This led to an acceleration of ecommerce and an increased adoption of tap to pay, where customers simply tap their card or mobile device at a terminal to safely, securely and quickly make a payment, for face-to-face purchases. I am proud of the role Visa’s network, products and services are playing in ensuring these vital avenues of commerce remain open even during a global pandemic.
Not surprisingly, consumers quickly migrated online in the weeks following the March lockdowns, including many who had never shopped from their phone or computer before. Globally, the number of active credentials in ecommerce, excluding travel, rose 14 percent from January to September. And, as consumers embraced online shopping, the need to secure those transactions was more critical than ever. In fiscal year 2020, we expanded tokenization, a technology that replaces a consumer’s card-related sensitive information, such as a personal account number that you see on a Visa card, with a unique identifier (a token) that protects transactions when used for in-store mobile payments or online shopping. Globally, Visa crossed the 1.4 billion tokens milestone this year.
Of course, many businesses need to maintain a physical presence. As such, the investments we made in deploying tap to pay is playing an important role in enhancing social distancing.
Tap to pay penetration in fiscal year 2020 grew to 43 percent of all face-to-face Visa transactions globally (65 percent excluding the U.S.). The U.S. was a late adopter of the technology, but we are making good progress, with the number of Visa-branded tap to pay cards reaching 255 million in September.
We also expanded how and where Visa payments are accepted. The number of merchant locations where Visa is welcomed grew 16 percent to nearly 70 million in fiscal year 2020. We believe the actual number of Visa locations is millions higher, because partners like PayPal, Square and Stripe enable Visa acceptance for millions of additional sellers. As part of our acceptance expansion strategy, we rolled out our Tap to Phone technology, which transforms a mobile device into a Visa acceptance terminal for tap to pay transactions in 15 countries.
A shopkeeper accepts a payment using Tap to Phone, a technology that transforms a mobile device into a Visa acceptance terminal
Critical to growing acceptance and credentials globally is expanding our relationships with digital wallets and fintechs. Previously, we saw the rise of entirely new digital commerce ecosystems for buying and selling that were closed to Visa. Recently, however, there has been a fundamental shift as digital wallets and fintechs open their ecosystems and partner with Visa. They are becoming issuers of Visa credentials and enablers of Visa acceptance. And the opportunity for Visa and our partners is enormous. The combination of our existing wallet relationships with players such as Rappi in Latin America, Line Pay in Japan and PayTM in India, and new relationships with providers, including Toss in South Korea and Safaricom in Kenya, is an opportunity to expand by more than 2 billion potential credentials and nearly 70 million additional acceptance locations.
Visa is accepted at nearly 70M merchant locations around the world
Complementing our growth with fintechs are our ongoing strong relationships with our more than 15,400 financial institution clients. Globally, we renewed about 25 percent of our payments volume with key clients in fiscal year 2020 and secured several new wins. This is a testament to the value we bring.
Whatever the macro-economic conditions, there remains $18 trillion in consumer spending on cash and checks globally. Our focus is on accelerating the migration from inefficient paper-based payments to digital solutions, ensuring the payment experience is safer, more seamless and reliable — no matter how consumers want to pay or how merchants want to be paid.