In reflecting on our year, while we got off to a strong start in October 2019, our business was immediately impacted in mid-March as COVID-19 spread from Asia to Europe and then around the globe, forcing countries to lock down. People stopped traveling, and shopping was focused principally on acquiring household essentials. The corresponding reduction in purchase volume significantly influenced our financial results in the second half of the year. In response, we were thoughtful and adjusted our expenses accordingly. At the same time, we stayed focused on our long-term goals and continued to invest in key initiatives to support sustained growth.

As I write this letter to you in November, the virus is still with us. In fact, travel is still very restricted. Many are working from home, and the pandemic is resurging in parts of the world. We expect our fiscal year 2021 to be difficult, particularly in the first two quarters, as we will be comparing ourselves to pre-COVID-19 quarters last year. We, like many, are hopeful the therapeutics will improve, but the timetable for a safe and effective vaccine and a return to pre-COVID-19 levels of business and normal daily life remain uncertain.

Even with all we have faced, I remain bullish on the growth opportunities ahead. The effects of COVID-19 have not changed our strategy. In fact, stay-at-home restrictions, social distancing and other safety guidelines have led to new purchasing habits that validate Visa’s strategic focus driven by an ever-growing digital world. We are committed to working with our clients and partners to continue to transform the movement of money by concentrating on three strategic priorities:

• Consumer payments
• New flows
• Value added services

Underpinning our growth strategy is a deep and long-standing commitment to deliver measurable and sustained social impact. We know from our conversations with clients, governments and non-governmental organizations (NGOs) that access to secure and reliable financial tools can uplift individuals, businesses and economies. Later in this letter, I will discuss how we are applying our resources, expertise and charitable contributions to drive positive change.

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.

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.

For a number of years, we have been working to identify, prioritize and enable new and improved money flows beyond C2B transactions.

These new flows account for $185 trillion in annual global value exchange — from person-to-person transactions (P2P), business-to-consumer transactions (B2C), business-to-business transactions for both large and small businesses (B2B and B2b) and government-to-consumer payments (G2C). The combination of our network, partnerships and trusted brand ideally positions Visa to capture significant volumes in all of these opportunities.

In many ways, COVID-19 accelerated the urgency for secure, fast and seamless money movement. For example, Visa Direct, our capability for pushing funds directly to a card or bank account, grew to 3.5 billion transactions globally in fiscal year 2020, capturing a larger share of a segment with $65 trillion in untapped annual potential. Visa Direct’s momentum was driven by growth in use cases, such as enabling gig economy workers to be paid quickly and securely and for family members to transfer funds to each other in times of need. The latter use case, which we refer to as P2P transactions, saw an 80 percent increase in the U.S. as more people exchanged funds virtually.

Gig economy workers, such as this food delivery person, can be paid quickly and securely using Visa Direct

In fiscal year 2020, we continued to capitalize on the more than $120 trillion B2B opportunity driven by global businesses seeking more efficient ways to make cross- border payments and conduct transactions. An example is Visa B2B Connect, a new network Visa is building that reduces processing time for cross-border corporate transactions by enabling them to flow directly from the bank of origin to the beneficiary bank. Visa B2B Connect currently includes 80 markets, and we expect that we will expand to 30 new markets over the next 18-24 months, aiming to reach scale by 2022.

On the G2C side, we collaborated with our financial institution clients to support the U.S. government’s delivery of 4 million prepaid Visa cards as part of the COVID-19 stimulus in May, and facilitated pandemic relief payments in other countries, including France, Spain, Italy, Guatemala and the Dominican Republic. This is in addition to the more than two dozen state government programs, where unemployment insurance benefits are distributed through Visa prepaid debit cards. We are encouraged by the number of governments seeking digital payment options for their constituents, and expect this trend to continue.

If there is one lesson the past year has taught us, it is the importance of being able to act quickly to meet the changing demands of customers. There are few organizations with the data and digital commerce expertise of Visa. Through our value added services (VAS), we provide cutting-edge products, capabilities, solutions and insights to help our clients see around corners and offer differentiated services to their customers. These include seller solutions to help reduce friction at the point of sale and to build acceptance, consulting services and data products to provide accurate, timely and actionable information, and tools to help manage risk and fraud. In fiscal year 2020, VAS revenue grew 18 percent, showcasing the client demand for these services.

As one example, both merchants and acquirers actively sought Cybersource’s offerings as they looked for ways to evolve their business models and meet shifting customer behaviors accelerated by COVID-19. Cybersource enables sellers to offer omnichannel digital commerce experiences, such as buy online/pick-up in store and curbside pick-up, to their customers. For example, Barclaycard, one of the largest acquirers in Europe, is working with Cybersource to support its merchants’ digital payment journeys, ecommerce and omnichannel requirements.

We have also seen increased interest in our consulting and analytics services, where Visa professionals help clients solve challenges and seize opportunities. We delivered 50 percent more projects this year over last. This growth is a reflection of how clients are relying on us not just to process payments, but to provide trustworthy, data-driven advice to help them manage their business.

Today‘s great companies manage to deliver exceptional financial performance, while also improving societal health. It is our firm belief that economies that include everyone, everywhere uplift everyone, everywhere.

For example, by enabling governments to digitize the distribution of benefits to their citizens, we are driving measurable value in terms of access, efficiency and security. Similarly, by partnering with our clients and NGOs, we are working to bring more of the 1.7 billion under and unbanked adults across the world into the financial mainstream.

Beyond our efforts to make economies more inclusive, a cause that has galvanized and inspired our team, is the worldwide effort to advocate for racial and social justice. For Visa, inclusion and diversity is a business imperative with plans, commitments and specific goals that we are tracking rigorously.

We made an initial $10 million investment to create a Visa Black Scholars and Jobs Program, specifically for college-bound Black and African American students. We plan to start accepting applications for the 2021 – 2022 academic year this fall. Upon graduation, all recipients who have met their commitments will be guaranteed a full-time job with Visa. This is an important step that will help us drive lasting change within Visa and beyond. We also established a goal to increase the number of employees from underrepresented groups at the vice president level and above in the U.S. by 50 percent in three years and increase the number of employees from underrepresented groups in the U.S. by 50 percent in five years.

Visa employees at a leadership program designed to provide insights and strategies for career advancement to high potential Black and African American, and Latinx employees

To nurture our current and future Black and African American employees, we are establishing new mentorship and sponsorship programs to provide individual career coaching, assistance with development plans and career mapping guidance. And, we are providing everyone at Visa with resources to be stronger allies in the fight for equality and inclusivity by offering active allyship training and developing manager workshops. To foster continued dialogue, we launched a monthly “Race Talks” series where we welcome guests who study racial injustice and Black and African American history to share their knowledge with Visa employees.

Finally, we are using our purchasing power to increase the number of diverse suppliers within our network and holding our suppliers accountable for ensuring they have stepped up their internal diversity efforts.

As we work hard to make Visa a fair, equitable and empowering place for all of our colleagues, we are also taking strides to uplift businesses and communities around the world that have been affected by the pandemic. In addition to working with governments to facilitate the delivery of valuable financial assistance, we are focused on giving a boost to the small and micro businesses (SMBs) that represent 90 percent of the world’s businesses.

We pledged to help 50 million SMBs across the world affected by COVID-19 get back to business by the end of 2023, in part by equipping them to send and receive payments digitally.

Presenting a small business owner with a “back to business” kit as part of our commitment to help 50 million SMBs globally affected by COVID-19

The Visa Foundation bolstered these efforts by making a five-year, $200 million commitment to support SMBs, aligned with its long-term focus on women’s economic advancement and inclusive economic development. In the early stages of the pandemic, the Foundation also committed an additional $10 million for immediate emergency relief to support charitable organizations across the globe, providing frontline assistance in responding to the impact of COVID-19.

Beyond supporting SMBs, we believe it is just as important to be an environmentally sensitive company and to build a more sustainable world. In August, we appointed our first Chief Sustainability Officer to ensure we continue to take bold and industry leading actions on the environment.

As part of those actions, Visa issued an inaugural $500 million green bond offering this year. We believe it to be the first issued by a digital payments network. We plan to use the proceeds to advance the company’s commitment to environmental sustainability and a sustainable payments ecosystem. I am also proud to report that we met our goal to use 100 percent renewable electricity by 2020, and that we are getting closer every day to our goal of becoming completely carbon neutral.

We have also prioritized the use of more sustainable materials in payment cards for issuers, while continuing to develop and deploy cardless technology.

While the challenges and uncertainties of COVID-19 remain, I am confident Visa has the right strategy, people and partnerships to weather the storm.

Our core growth levers of consumer payments, new flows and value added services position us well for long-term sustainable growth and can be catalysts for supporting a broader economic recovery.

We are embracing a wider purpose relative to our planet, society, economies around the world, local communities, and of course, our shareholders and employees. By living our purpose, Visa can play an even greater role in transforming how the world moves money.

Thank you so much for your continued support. My colleagues and I work hard every day to execute our strategy and grow Visa’s business, while advancing our commitment of making the world a better place for everyone, everywhere.

Alfred F. Kelly, Jr.Chairman and Chief Executive Officer