Harshita Rawat: Good afternoon. So, Ryan, I want to follow up on value-added services, such an important part of your growth story. I know you’ve talked about the five types of services you offer and how your top 250 clients use almost 2x the number of services versus the rest of your client base. Can you give us some sense on how these penetration numbers have evolved over time? And finally as you kind of think about pricing for these services, to what extent it’s a bundle pricing along with core versus kind of a separately priced service? Thank you.
Ryan McInerney: Okay. You have a great memory. As we’ve said, our top 265 clients or so use on average about 22 of our value-added services. We don’t talk about like how that’s moved quarter-to-quarter, but the opportunity is enormous just when you think about the number of clients we have around the planet. And so as I was mentioning earlier kind of what we’ve done is we’ve armed our frontline teams with kind of client-by-client, what are they using, what are they not using, what are the opportunities to create value for the client by putting value-added services A, B, C or D to work for them and we’re having great success and you see that in the numbers. In terms of the pricing, it’s — it’s different pricing models for different products and different suites of solutions in different places around the world.
We’re always trying to come up with the right product pricing mix that’s going to work best for our products in the market. And we have a portfolio of value-added services that span from issuing to acceptance to risk and identity to advisory into open banking and the competitive sets are deep and different in all of those markets. So we’re bringing different pricing approaches to each and every market around the world to help meet the best that we can for our clients.
Jennifer Como: Next question, please.
Operator: Our next caller is Ramsey El-Assal with Barclays. You may go ahead.
Ramsey El-Assal: Hi. Thanks for taking my question. I wanted to ask about one of the consumer payment opportunities that Ryan called out, namely taking share from domestic card networks. How do you drive that? Is it just a question of getting banks to issue more of your cards or is it more on the acceptance or consumer side? What are the levers that you have to basically speed that up?
Chris Suh: Yeah. Thanks for the question. On the — it’s really the first of the things that you mentioned. Now, of course, we need to have great acceptance. We need to have great capabilities and all those types of things, which we do in every market we operate around the planet. So then it becomes sitting down with clients, helping them understand the value of, for example, a Visa debit card versus a card that runs primarily on domestic schemes. And then you get into e-commerce capabilities that Visa Debit is able to provide their clients that maybe they don’t get the same type of capabilities from the domestic scheme. You get to cross-border travel opportunities that their customers would have if they were using a Visa card versus one of those domestic schemes that I mentioned.
You also get into the risk and fraud prevention capabilities that I mentioned earlier and the ability to have more transactions approved and lower fraud rates, tokenization, I mean, all these kind of benefits, you’ve heard us talk about over and over again, those are what our teams can sit down with the clients and explain to them. Often the clients will do some pilots and some tests, they’ll see the results, they’ll see higher spend, they’ll see higher client satisfaction. And then ultimately the decision to issue Visa cards to their clients becomes a very clear decision for them.
Jennifer Como: Next question, please.
Operator: Our next caller is Jamie Friedman with Susquehanna. You may go ahead.
James Friedman: Hi. I was wondering if you could share some color on how Prosa is doing so far and how you view the opportunity in Mexico as you start to press and productize into the Mexican market. Thank you.
Ryan McInerney: Yeah. Thanks, Jamie. We view the Mexican opportunity as a very significant one. And coincidentally, I was just down there a couple of weeks ago meeting with clients and meeting with the Prosa team as well. So as I think I explained on one of these calls, today, because we don’t process transactions domestically in Mexico, we’re not able to deliver a lot of the value-added services that I’ve mentioned over the course of this call to our clients. And so first and foremost, our clients are very excited about us having the opportunity to have a majority ownership stake in Prosa and then bring these world class capabilities that we’ve built to the Mexican market, the things I mentioned earlier, tokenization or the risk scoring algorithms that I mentioned or the e-commerce capabilities that I mentioned those types of things.
Now Prosa itself is a great asset. It’s been operating for 50 years in Mexico has deep processing experience, it has scale. They do more than 10 billion transactions annually. They have a great base of clients. So it’s really the combination of both Prosa’s experience and deep footprint in the Mexican market combined with our experience, our technology, our track record in bringing a lot of these services to market, the combination of those two things gives us a lot of confidence and our clients a lot of confidence that we can digitize the significant amount of cash and check and electronic payments that exist today in Mexico.
Jennifer Como: Next question, please.
Operator: Our next question is from Andrew Schmidt with Citi. You may go ahead.
Andrew Schmidt: Hey, Ryan. Hey, Chris. Thanks for having me on the call here. I wanted to go back to cross-border for a second. Obviously, a part of the back-half growth is the narrowing of the spread between cross-border revs and volumes. Maybe if you could talk a little about how, whether those assumptions have changed at all with FX volumes coming down or if there’s other puts and takes we should consider there? Thanks a lot.
Chris Suh: Yeah, sure. Yeah, I spoke at length about volatility. So we had — in Q2 we saw volatility — currency volatility at multiyear lows. This one is hard to predict. In Q3, our assumption, what’s embedded in the guidance for Q3 is that the currency volatility levels remain at this low level. We do have, again, embedded in our forecast. We do anticipate that Q4 improves slightly. That’s generally in line with market expectations. But, yeah, that is our view of currency volatility. That said, the underlying health of our business as we enter the second half of the year, we feel really good about across consumer payments, across new flows, across value-added services. And so volatility is sort of the variable and we’ll have to see how it comes in.
Jennifer Como: Next question, please.
Operator: Our next question comes from Jason Kupferberg with Bank of America. You may go ahead.
Jason Kupferberg: Thank you, guys. Can you talk about your second half expectations for new flows and VAS revenue growth as well as cross-border travel volume growth? Thanks.
Chris Suh: Sure. Let me unpack that a little bit. From a — as you heard us, we reaffirmed our prior year guide for the full year, adjusted net revenue growth, OpEx, EPS. And within that, I spoke about the fact that volatility is going to cause our currency volatility — treasury revenues in international to be lower than we anticipated in Q3. But again full year unchanged within that. Our expectations for new flows in that are consistent with the ones that we shared at the beginning of the year, which we anticipated. For the full year, new flows will grow faster than consumer payments with weighted toward faster growth in the second half of the year. We’re seeing that with the 14% growth in Q2. We anticipate continuing to see a good growth in the second half of the year.
Value-added services has grown over 20% in each of the first two quarters. The momentum there is pretty evident. The second part of your question was, I think, around cross-border travel of volumes in total. So we did make a little bit of adjustment. You heard me talk about based on half-one trends. And so again, this is one with a couple of parts, so let’s just go through it in detail. First of all, we feel really good, feel great about our first-half total cross-border performance, 16% growth in Q2, in line with our expectations, and within that, travel was 17% and e-commerce growth mid-teens better than expected. And so that unpacking travel a bit, we’ve seen most of our travel volume expectations play out actually as we planned at the beginning of the year, which continues to be strong and healthy in most regions LAC, Europe, CEMEA and all the ones that I talked about on the call, with Asia being the exception to that, which again continues to improve with the pace of recovery being slower than expected, offset again by strength in the e-commerce cross-border business, which is performing better than we expected.So we expect these trends to continue into the second half and thus, we’ve moderated our outlook for travel due to AP and upped our expectations on e-commerce.
So putting that all together, overall, our view is that total cross-border volumes remain strong, growing in the mid-teens in the second half, which is frankly the better measure in relation to our financial performance given the strong yields across both travel and e-commerce.
Jennifer Como: Next question, please.
Operator: And our last question comes from Ken Suchoski with Autonomous Research. You may go ahead.
Kenneth Suchoski: Hey, good afternoon. Thanks for taking the question. A lot of my questions have been asked. I just want to ask about the service yields, though, because they came in a little bit lighter than we were expecting. So can you just talk about what drove that? It looks like the service yield declined year-over-year, but maybe there’s some offset with client incentives also coming a little bit lower in the quarter. So any detail there would be helpful. Any thoughts on how to think about the year-over-year change in that yield going forward? Thanks.
Chris Suh: As we talked about both service revenue and data processing revenue grew generally in line with the underlying drivers, service revenue at 7% versus the 8% in constant dollar PV, Q1 constant dollar PV that’s impacted by a number of smaller things, none of which I would call out as a single thing. Data processing revenue grew a little bit above processed transactions, 1.12 versus 11 and that was helped aided a little bit by pricing. From a yield perspective, I think the thing that’s important is that our second quarter yields remained consistent with Q1 and consistent with the average over the last several quarters. And so we’re seeing very stable yields across the business and we’re pleased to see that. And even more broadly, our net revenue yield across the whole company remained quite stable.
Jennifer Como: Great. And last question please, Holly.
Operator: And our last question comes from Paul Golding with Macquarie Capital. You may go ahead.
Paul Golding: Thanks so much. Ryan, you were talking about the addressable opportunity of $20 trillion of which cash and check was half. I was wondering if you can give any thought to quantifying the ACH versus the domestic network conversion and where you think you are in that opportunity capture for each of those. Thanks.
Ryan McInerney: Yeah, thanks. We’re having great success in all three. I gave you examples. Some of our teams are ahead of others in different parts of the world and domestic schemes are more prevalent in some parts of the world than others like I mentioned Europe as an example. But the opportunity is enormous in all three of these areas and we’ve been having really good success in all three of the areas.
Jennifer Como: And with that, we’d like to thank you for joining us today. If you have additional questions, please feel free to call or email our Investor Relations team. Thanks again and have a great day.
Operator: And this concludes today’s conference. Thank you for participating. You may disconnect at this time and have a great rest of your day.
