On Thursday, March 31st Andrew Westergren, CFO of Visa North America, joined the CFO Forum Atlanta. Andrew is a seasoned strategy and corporate development leader with the results-orientation of a proven operating executive.

VISA’S ATLANTA EXPANSION
Visa has 125 people in Atlanta with plans of expanding to 1,000 local employees. They plan to invest $30M in their new location while sourcing diverse, local suppliers to help with the build. The Atlanta office will be Visa’s most state-of-the-art office to date and is scheduled to open by the end of 2022. The Atlanta location will represent a wide range of teams, with a concentration in technology, client services, and a finance function as well.
Visa’s move to Atlanta well help drive their diversity and inclusion goals. There is a very diverse pool in Atlanta that many companies want to tap into. As we know, some of the nation’s top institutions of higher learning are in the Atlanta-metro area. Visa has signed a deal with the Georgia Fintech Academy to support recruiting from the Georgia university system. Atlanta is a lower cost talent pool relative to their locations in San Francisco and New York.
Visa’s local teams are exploring a variety of philanthropic endeavors and have set aside funds to be involved and engaged in the community. Lastly, they have also signed on with the ATDC (Advanced Technology Development Center) as a corporate contributor to their mission of supporting the local start-up and FinTech community of companies.
CONSUMER SPEND BEHAVIOR
There was a dramatic dip in March to May of 2020, followed by steady recovery. Spending behavior declined by 30%, a massive drop, which made a dramatic impact on the economy overall. What is surprising from Andrew’s vantage point, is the strength of the recovery. We have seen 5 years’ worth of change going online to e-commerce spend, and less people are using cash. “Tap to pay” transactions also increased, as well as consumers shopping online for products and groceries for the first time. The biggest underlying change was that users are using cards versus cash.
Debit dramatically outperformed credit through the pandemic. Consumer spend shifted to debit, and credit was slower to recover. Whether than shift to credit, consumers shifted to debit in times of uncertainty. Debit was much less of a dip, and sustained much more growth. Community banks with debit portfolios had better performance than the larger banks with credit portfolios.
Cross-Border Travel is recovering. There is clearly a pent up
urge to travel due to the dramatic halt of cross-border travel during the pandemic. For example, Mexico is close to 200% index from where it was as Americans are traveling to Mexico due to very few Covid restrictions. Peru & Chile also had large index spikes due to “Covid Tourism”, cross-border transactions driven by people traveling to the states to get vaccinated. Corporate travel is lagging consumer travel significantly.
The spending momentum index, month over month consumer spend, is similar across regions. The pattern is similar, dip during pandemic, different depths of dip depending on regions, with slightly different recovery increases likely linked to restrictions.
As for economic growth, a few negatives include increased fuel prices and shortages, which leads to inflation. For example, Ukraine and Russia are large wheat and fertilizer producers. This will have a direct impact on developing nations and supply chains. 1M to 2M people die of starvation every year and this could increase to 15M -100M with a humanitarian and food crisis coming our way.  Other concerns include inflation, global equity market volatility, and cyber-attacks.
On a positive note, domestic oil production increases may lead to greater business investment, U.S. farm incomes may benefit from higher grain prices. Also, lower long-term interest rates may support greater borrowing, and greater defense spending could lift federal investment within GDP.
What should we focus on in the months ahead? Inflation, tight labor markets (demand and older population, productivity growth (increases by going remote and decreasing commutes), and rising interest rates.
TOP OF MIND ISSUES FOR VISA
  • Pulling out of Russia – March 5th announcement, cut off all transactions to and out of Russia. This was a departure from the neutral position Visa maintains. This equates to 4% ($1B) of lost revenue. Visa safely evacuated Russian and Ukrainian employees and their families.
  • Growth of New Flows and Value-Added Services Businesses – Card business typically grows 8-10%, $0.43 for every 100 dollars of spend. New flows include push to (debit) card solution which opens a new set of transactions.  Head of new flows in Dubai, Singapore, Europe.
  • Crypto – Is this going to disrupt us? Long-term wait and see how blockchain evolves. It’s certainly efficient and low cost, but more difficult with high volume consumer transactions. Visa has $6B cards in circulation and 40M merchant locations.  Crypto currency has been good for Visa because people have a front-end debit card linked to crypto assets consumers link to debit. Crypto is treated just like any other currency with an exchange rate. Visa views crypto as asset right now, not sure of long-term impact.
  • FinTech’s – Visa has a very bank friendly culture. Originally FinTech’s were viewed as disruptors 10-15 years ago; however, Visa advocates for FinTech companies disrupting banks. FinTech’s increase transactions so Visa partnes with them to bring them onto new networks.
  • Return to Office – Visa is headed back into the office. The driver being collaboration, community, and connection. They have had pushback from the younger population, but Visa decided they want people to collaborate in the office. Stronger business by having employees come in 2.5 days/week.
  • Talent – No magic solutions. Currently fighting economics of more expensive talent. Focused efforts on providing more robust set of tools to manage the process. Hired head of talent acquisition. Putting into place a dashboard to help with pipeline and hiring process. Goal is a robust tracking tool to shorten interview cycle – return is extremely high.
QUESTION & ANSWERS:
On spending Trends – Typically, we rely on credit to manage cash flow shortages during periods of stress. However, during the pandemic, people shifted towards debit during uncertainty. There are credit spikes when people have confidence and know their future income. Savings rates increased. Interestingly, write offs for card companies were low – stimulus packages helped.
On other Trends – Tap to Pay changed during the pandemic. US is furthest behind with this technology. There are point of sale system costs, it’s hard for Visa to mandate tap to pay. However, there are benefits to both parties.
On buy now, pay later – Visa works with merchants and issuers at point of sale. The banks know they can define what interest rates will be depending on risk level. Banks develop incentive dollars for buy now, pay later. There is a developed Solution to get traction, but this is a small portion of overall spending 1-2%. A trend with dramatic growth. Many of the large banks want their own solution.
On real time payments – Big threat from Visa’s perspective but mainly domestic right now. Visa’s global network is a major advantage. Real time payments are moving slowly but gaining traction. Bank-led solutions like Zelle are also gaining traction.
ABOUT THE SPEAKER:
Andrew Westergren is Visa’s CFO for North America, and he recently added the New Payment Flows business to his scope of responsibility, which includes Visa Business Solutions, Visa Direct, B2B Connect and Visa Government Solutions.  He became the North America CFO after leading Visa’s Strategy and Corporate Development team for three years.  He joined the company in November 2016, based in San Francisco.
Prior to joining Visa, Andrew worked at Intuit as Senior Vice President and Chief Corporate Strategy and Development officer. During his tenure at Intuit, he led over 30 acquisitions and divestitures totaling over $2.6B in value, helping Intuit become one of the top 10 Tech acquirers in 2014 and 2015.
Previously he was Managing Director at Argus Information and Advisory Services. Prior to Argus, he was a Partner and Managing Director with The Boston Consulting Group, His career has focused on helping financial services and software companies define innovative strategies, lead transformations, accelerate growth and improve performance.
Andrew earned a Bachelor of Arts degree in philosophy from Stanford University and a juris doctor degree from Harvard Law School.

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