Visa CEO says payments giant is moving into crypto in a 'very big way' during yesterday's earnings call. The plan was discussed at a high level and they are describing the firm as "extremely well-positioned" to take on the market. As we all know Visa is undertaking a multi-pronged strategy as it relates to its services related to crypto space. They are building a program around bitcoin, stablecoins and central bank digital currencies (CBDCs).
During the earnings call, Kelly again drew a distinction between the different elements of the broader plan, citing the spending and purchase of cryptocurrencies, crypto-related APIs for financial institutions, settlements via stablecoins and CBDCs.
"So our focus is on five different opportunities that we see in this space and I would say that this is space that we are leaning into in a very big way and I think are extremely well-positioned,". "We're talking to central banks about the criticality of public/private partnership and in particular the criticality of acceptance because for these central bank digital currencies to have value, they're going to have to both be secure in the minds of consumers, and that's something we have a long track record with and could help. And then secondly, obviously they have to have some form of utility,"
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I think beyond purchases of crypto and payment settling the most interesting points were on the topic of CBDCs. Visa said that the firm is in conversation with central banks about their development, suggesting that the payments firm could play a role in that process. I think the fact that they are advocating for public/private partnerships to support CBDCs suggest their analyst believe it's the model of the future that could be very lucrative for the private company supporting the system. It also shows that the CBDCs are not an academic concept, but they actually being considered. Visa has actually filed a patent application for technology that would support connections between financial institutions and central banks.
I think Visa will be a leader in the bridge between traditional financial markets and crypto markets. Unlike JPMorgan who's CEO has been a staunch opponent of crypto; Kelly and his team get it. Looking at Visas's financials supports the thesis of digitalization.
For the quarter ending March 31, Visa reported net income of $3 billion, or $1.38 per share, slightly down from $3.1 billion, or $1.39 per share, the same period in 2020. That's better than the Zacks Investment Research expectations of $1.26 per share. Revenue for the quarter was $5.73 billion, down from $5.85 billion in 2020. Analysts' projections were $5.56 billion.
Visa reported card-not-present volume excluding travel grew 20% in the first quarter, while growth in the U.S., Canada, Brazil, U.K., Italy and Singapore was 30% higher. Card-present spending, which is up 4%, did not slow growth in CNP payments, Visa said, suggesting the return of card-present payments as the economy recovers is not negatively impacting e-commerce growth.
Wha this is telling me is people are going to digital cards and the transition between a digital card and digital currency is seamless form a device perspective. If people can use the same form. fit and function as current option add digital currencies into daily transactions is easy.
I'm more bullish that ever after listening to the call and understanding Visa's position and how they are helping dirve adoption.