Welcome to Visa's fiscal third quarter 2016 earnings conference call. All participants are in a listen-only mode until the question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host, Mr. Jack Carsky, Head of Global Investor Relations. Mr. Carsky, you may begin.

Thanks, Kerri. Good afternoon, everyone, and welcome to Visa Inc.'s fiscal third quarter earnings conference call. With us today are Charlie Scharf, Visa's Chief Executive Officer, and Vasant Prabhu, Visa's CFO. This call is currently being webcast over the Internet and is accessible on the Investor Relations section of our website at www.investor.Visa.com. A replay of the webcast will be archived on our site for 90 days. A PowerPoint deck containing the financial and statistical highlights of today's call have been posted to our IR website. Let me also remind you that this presentation may include forward-looking statements. These statements aren't guarantees of future performance, and our actual results could materially differ as a result of a variety of factors. Additional information concerning those factors is available in our most recent reports on Forms 10-K and 10-Q, which you can find on the SEC's website and the Investor Relations section of our website. And finally, for historical non-GAAP or pro forma related financial information disclosed in this call, the related GAAP measures and any other information required by Regulation G of the SEC are available in the financial and statistical summary accompanying today's press release. And with that, I'll turn the call over to Charlie. Charles W. Scharf - Chief Executive Officer & Director: Thank you very much, Jack, and good afternoon, everyone. Thanks for taking the time. There are a series of topics that I'm going to discuss today. I'll talk a little bit about third quarter results, a few comments about our European acquisition, and talk about litigation. I'm going to make some comments about the agreement we signed with PayPal today. I have a series of business updates that I'm going to walk through and then just a few sentences on the future before I turn it…

Thank you, Vasant. Operator, at this time we are ready to take questions.

Thank you. Our first question is from Mr. Tom McCrohan of CLSA. Your line is now open.

Hi. Thank you. A question on the PayPal agreements. One of the aspects of the agreement seems to be focused on having Visa being more of the default payment option, funding option on the PayPal account. So today what is Visa's share as the default funding option for PayPal accounts? Where do you believe this agreement is going to move that share? And what happens at the end of the 12-month period, exclusivity period, if Visa doesn't get the share that you expect it to get as a result of your negotiations? Thanks. Charles W. Scharf - Chief Executive Officer & Director: Let me do a couple things, and Jack can chime in here too. Relative to what we make up of a PayPal wallet, you really have to ask PayPal that question because we know what we know and we have some general thoughts, but they really can be the ones and should be the ones. Generally, what we've always thought is that roughly half the transactions that run through PayPal run through a network, and we're roughly half or so of that, split between credit and debit, but I would call those gross approximations and directional, and you really need to talk to them. Relative to what happens in terms of the flows, again, if you go through what I said, what we really are interested in doing is to ensure that Visa cards are on a level playing field. And if they're on a level playing field, we feel great about our ability to increase the amount of volume that run over Visa cards and ultimately benefit our clients. And so what the agreement does is it enables that to occur, and there's a period of time where we will work actively together and exclusively to move…

Thanks, Tom. Operator, next question?

Our next question is from David Togut of Evercore ISI. Your line is now open.

Thanks and congratulations on completing the Visa Europe acquisition. Now that you own Visa Europe, can you update us on your thoughts with respect to the pricing opportunity there to move Visa Europe's prices over time closer to MasterCard's, which are currently at a significant premium? Charles W. Scharf - Chief Executive Officer & Director: I don't think there's much that we're going to add that we haven't said before on that. In the process of moving to a commercial enterprise, we obviously know what the market is. But we're also keenly aware that pricing should be reflective of the value that's added. And so I think that's a conversation that we'll have directly with our clients. And when it's appropriate, we'll talk more broadly about it.

Next question, please?

Thank you. Our next question is from Jason Kupferberg of Jefferies. Your line is now open.

Great. Thanks, guys, maybe just a quick clarification and then a question. Are you still expecting high single-digit EPS accretion from Visa Europe in fiscal 2020? And then my question just on the PayPal agreement, it looks like it's U.S.-only. Is there still something potentially in the works for non-U.S. as well? Charles W. Scharf - Chief Executive Officer & Director: So on PayPal, it is U.S.-only. And I think we're each in the position where we'd like to turn our attention outside the U.S., but we wanted to get the U.S. done first. Vasant M. Prabhu - Chief Financial Officer & Executive Vice President: And on the Visa Europe accretion, no, there's no change in our expectations for the long-term.

Perfect, thank you.

Thanks, Jason. Next question please, operator?

Our next question is from Darrin Peller of Barclays. Your line is now open.

Thanks, guys. Thanks for the update. I just want to go back to the timing you mentioned before around tailwinds. You mentioned a number of renewals also around large clients in your remarks. Incentives and rebates broadly were thought to be timed for the Costco and USAA deals I think early, followed by then revenue coming on in the next couple of quarters. So can you just provide us an update with the timing on those as the incentives are now flowing through, and should we get the revenue off that in the next few quarters? And then also, other types of incentives coming with those renewals, is there going to be any type of spike on that going forward? Thanks, guys. Vasant M. Prabhu - Chief Financial Officer & Executive Vice President: I guess you were referring to the headwinds and tailwinds comments I had made. There was nothing there about renewals as it relates to next year. There is the normal course of renewals that we would do in the course of a year. In terms of incentives kicking in, as I mentioned, Costco incentives will definitely kick in meaningfully in the fourth quarter with a quarter lag. As you know, service revenues kick in a quarter later. You will see in our gross revenue an uptick in the rate of growth both from USAA and Costco, and of course there will be an uptick also on the incentive line. And the net of all that, we'll talk about all that as we talk more comprehensively about 2017. Other than that, I don't think there was anything else I said that you were talking about. That pretty much explains the comments on 2017.

Next question, please?

Thank you. Our next question is from Dan Perlin of RBC Capital Markets. Your line is now open.

Thanks. I just had a question on the PayPal-Visa agreement. The participation now in VDEP, I just want to be clear. That does now qualify them for a different interchange tier, which would be lower. And then the incentive fee that you're talking about, just so I'm clear, that's coming out of your – that would come out of your contra-revenue. And do we need to be contemplating that more significantly in 2017? Charles W. Scharf - Chief Executive Officer & Director: So I just want to be – so VDEP, so just a couple things on VDEP. So what we've done is we have agreed with PayPal that they will have the ability to access Visa tokens. But in order to do that, they have to work with the financial institutions and they have to agree to provide those tokens. So what we've done is – think of it like we've enabled PayPal to have those discussions directly with the issuers, and that's up to the issuers to determine whether or not they would like to do that.

Next question, please?

Thank you. Our next question is from Moshe Katri of – let me check, of (43:40) Trading. Your line is now open.

Hey, thanks. Just going back to Visa Europe, your large competitor is talking about opportunities for them to gain some share in Europe. Maybe you can give us some color on any sort of potential churn that you're seeing in that business, and what are we doing to protect that down the road? Thanks. Charles W. Scharf - Chief Executive Officer & Director: Listen, there are a lot of people that do a lot of talking out there, and that's fine. We spend a lot of time talking to our clients and working actively with them on delivering value day in and day out and letting the results speak for themselves. I would say that from the moment that we've announced the transaction, I think we're extremely, extremely comfortable with the renewal activity that's taken place in Europe. The team in Europe I would tell you has – our team in Europe has delivered everything that they've said they would deliver to us, and that has continued in the period after the close. Our conversations with clients I feel are exactly what we want them to be, which is they are very excited about having the opportunity to get access to the capabilities that the global Visa can bring, which Visa Europe was not able to bring. And so there are a lot of things that they liked about Visa Europe that encouraged them to do business with Visa Europe over a long period of time with those relationships, and we bring additional capabilities. And so I look at the environment and say listen, everywhere we compete across the world, you have to show up with better products day in and day out, and that's what we're able to do in Europe. And until I see anything different than what we've seen, I'm going to continue to feel great about where we are.

That's helpful, thanks.

Thanks, Moshe. Next question, please, operator.

The next question is from Chris Brendler of Stifel. Your line is now open. Christopher Brendler - Stifel, Nicolaus & Co., Inc.: Hi, thanks. Good afternoon. I wanted to ask a question on your comments around Interlink and dynamic routing. Can you just refresh our memory what to the extent the landscape has changed recently and what's causing the increased dynamic routing? My sense is there are some merchants who are using chip cards to take advantage of not just routing on PIN, but also routing on signature. And I wanted to see if you could potentially also discuss any legal aspects of the Kroger lawsuit as it relates to forcing consumers to choose PIN. Thank you. Charles W. Scharf - Chief Executive Officer & Director: I'm not going to talk about anything regarding any ongoing litigation that we have, which I think is what you'd expect. But I'd say the following things. I think as we go through the conversion to EMV, there are a lot of moving pieces, especially in the debit world. With terminals having to be reprogrammed, new terminals out there, multiple applications embedded on chips and things like that, and merchants turning on PIN pads at different times from times when they've actually turned on the EMV reader. And so there's a lot of movement between signature and PIN, which is somewhat different than we would have seen in a steady-state environment, and that will play itself out. And that's not a plus or minus; there's just movement there. And that's just the reality of what happens during a conversion like this. What we see is ultimately we just want our consumers to have the ability to use the cards. Merchants have whatever abilities that Durbin has given them, and they've had those capabilities ever since Durbin was passed. And a big part of that is they have the ability to choose the routing preference. And so as we've seen since Durbin came into place, quarter by quarter there's just a whole series of things that impact where a merchant wants to route to. People give them incentives. Whose incentives they think they're going to hit or not hit help them decide where they want to route to and route away from. And so the Interlink volumes that we see, and we look at it regularly, are very volatile. And so just keep in mind that the numbers that I talked about which have that decrease, they're two weeks. And so someone can make a change in a routing table, we can see a very big impact. That can also change two or three weeks from now based upon what we do relative to incentives and things like that. And that is the way the business works, and I think that's the way the Durbin Amendment intended it to work.

Next question, operator?

Thank you. Our next question is from Bill Carcache of Nomura. Your line is now open.

Thank you. Charlie, I wanted to follow up on your comment about Visa issuers having I believe you said 12 months of exclusivity to promote their brands on PayPal. Do you have a sense for what would lead issuers to want to take advantage of that period of exclusivity? And do you expect – you touched on this earlier. But maybe a different way of asking the question is do you expect that the partnership agreement is going to drive a little bit more of a shift in the mix of PayPal volumes funded by Visa products? Charles W. Scharf - Chief Executive Officer & Director: Listen, I guess the way I'd put it is I think – so first of all, it's completely up to the issuers on whether or not they want to proactively work with ourselves and/or PayPal. Again, we're not telling any issuer they have to do anything. But what we've heard consistently from issuers, and I certainly experienced it when I was at one, is that ACH is a really bad thing. You're disintermediated. It's a bad customer experience. They don't understand the process to dispute things. Call centers don't understand information and things like that. And so given a choice, you'd rather have a transaction run over a Visa debit or credit product rather than ACH. So I would assume that most issuers would choose to want to actively engage to try and move those transactions onto cards which, quite frankly, consumers know, love, understand and are very comfortable with how those products work. And so during this period of time, PayPal wants to work actively with us because to the extent that consumers want to do this – again, I can't speak for them, but consumer choice was an important part of the discussion in the press release, and that's what this actually provides. So again, the way we look at, just as the network – but the way we look at what we've done in this agreement is we've taken – we've tried to work with PayPal in partnership to take away the things that discourage people from working together and take away the things that create bad customer experiences. And just when do you that in anything, hopefully you wind up with a position where people actually work together. And if you don't even just get back to – it should produce a higher level of growth coming from someplace else. And whether that comes from other networks, cash, check, any alternatives out there, we don't know. But that's what this agreement is. It's about taking those bad things out, providing a better consumer experience, and then the consumers will ultimately choose what they want to use. And again, as I said, we feel very comfortable that we'll do quite well in an environment like that, as our clients will.

Thanks, Bill. Operator, next question?

The next question is from Don Fandetti of Citigroup. Your line is now open.

Yes. Charlie, MasterCard is buying VocaLink. And I was curious if that has any incremental impact to you. Obviously, you dominate debit in the UK. I wanted to get your thoughts there. And also related to that, any early views on PSD2 and what that might mean to your debit volumes? Charles W. Scharf - Chief Executive Officer & Director: Listen, obviously they just announced it this morning, so it's very early. So I would say – and I honestly haven't had a chance to read what they've actually written, but I guess I'd just say a couple of things. And I think the same goes true for PSD2, which is – we as a network are successful not because we offer extremely low-priced commodity services with very little value-add. It's the exact opposite of that. And the ability for us to have grown the business that we've grown around the world is all about delivering value-added services, whether it's fraud protection, risk scoring, work on marketing, all those things. That's ultimately why people choose networks. And as I said, that's something that we need to deliver both not just to issuers, but ultimately to merchants, either directly or through the acquiring community. And so to the extent that we do that, whoever we compete with, because remember, we've competed, as we've – we've competed with PayPal, which has had another way of doing business here. And in the physical world, we've done quite well and felt very comfortable with our ability to compete in the online world as we've developed these solutions. So for us, it's about creating that value, delivering on innovation. And I wouldn't underestimate the work that we have done at Visa on fast funds, push payments, and things that we're doing both in developed parts of the world and emerging parts of the world. And so regardless of who buys what out there, those are activities that we had underway because there's tremendous opportunity. And I think those are the things that will allow us to compete, not just with an acquisition out there, but the types of people that will be able to insert themselves into the payment flow because of PSD2.

Thanks, Don. Operator, next question.

The next question is from Lisa Ellis of Bernstein. Your line is now open. Lisa D. Ellis - Sanford C. Bernstein & Co. LLC: Hi. Good afternoon, guys. It looks like Visa Europe's volume growth decelerated again this quarter on top of I think a deceleration last quarter. Can you just talk about now that you've seen under the hood a bit, what's been driving the deceleration in their volume growth and how you expect that to look going forward, both now that you own the asset as well as in the wake of the regulatory changes in Europe? Thanks. Vasant M. Prabhu - Chief Financial Officer & Executive Vice President: Lisa, Visa Europe's growth has generally tracked well with what we had anticipated. The business is performing pretty much exactly as we expected, if not a little better. And we've seen some – it's very early to assess the impact of Brexit. We haven't seen much change. We've seen other than the exchange rate impacts, which I talked to you about earlier, we've seen some modest impacts on the cross-border business, as you would expect. Inbound commerce into Europe and the UK in particular is picking up as a result of the exchange rate moves most likely, especially from Asia. Outbound from the UK is relatively stable in transaction terms. But as you would expect, when the currency moves, there is an impact on the ticket itself. But other than that, the business is performing almost exactly in line with expectations.

Operator, next question, please.

The next question is from Sanjay Sakhrani of KBW. Your line is now open. Sanjay Sakhrani - Keefe, Bruyette & Woods, Inc.: Thank you. Good evening. A quick question on PayPal again. Is it safe to assume that you guys had conversations with the banks and that they were involved in the framework of a potential deal with them? And then just maybe my follow-up related is, if the issuer tokens aren't used by the banks or applied by the banks, does that change the economic incentives part of the agreement? Thanks. Charles W. Scharf - Chief Executive Officer & Director: On the second question, no. And on the first question, listen, like any business, we have clients and we talk to them. And our clients have been very, very vocal – not in private to us – but publicly about what they've liked and what they haven't liked about the interactions historically with PayPal, as I've been. And so when asked, I've been very, very clear about what it is we don't like about PayPal. And I've also been very clear that we think that they've developed some great capabilities, have enormous respect for what they've created. And if we could fix the bad things, we'd be very excited about working together. And so the things that we went about from our standpoint wanting to change are exactly those things. And so I don't think anyone should be – I'd be surprised if anyone here is surprised about what those things are. And there were some things that were important to PayPal. But as I said, ultimately this is about taking the roadblocks out and creating the opportunity for people to work together. But again, we're not putting anyone in a position where they have to.

Thanks, Sanjay. Next question, operator?

The next question is from Bryan Keane of Deutsche Bank. Your line is now open.

Hi, guys. Just two questions. I guess first on looking at one of the headwinds, it was market entry costs. So I guess I'm assuming that's China. And in June, China announced their rules for the networks to enter the market. So I guess I'm curious. Have you guys submitted your application yet and the next steps in China? And then just secondly, Vasant, what has Visa Europe been growing at constant currency? And then what is your expectation in the fourth quarter guidance for Visa Europe constant currency year-over-year growth in 4Q? Thanks. Charles W. Scharf - Chief Executive Officer & Director: So on China, I would say the clarity that we need to finalize all the information and submit all the pieces is still coming together. We have submitted pieces of what's required, but there are also some new things that have come forth that we're working through that relate to national security with reviews that are going to be necessary as well as encryption standards, which was something that was new that was added. So these are active conversations that we're having with the Chinese government. And we continue to do all of our planning so that when we do have clarity, we'll be able to submit everything that we need to. Vasant M. Prabhu - Chief Financial Officer & Executive Vice President: In terms of Visa Europe's growth, if you look, there's a schedule in our operational data package. I think it's on page six that gives you some historical data on Visa Europe's performance. So if you're talking about volume, payment volume, over the past – let's say the last quarter, constant dollar payment volume growth was 6.6%. And then over the last year, constant dollar payment volume growth was a little over 7%. So it has been fairly stable if you look at the numbers for the past several quarters. It swings up and down a bit along the way. We're not expecting anything different. We're clearly monitoring the impact of Brexit to see if there's any impact. It's really not evident at this point. It's minor. We'll have to keep watching it. But as far as it relates to the fourth quarter, we're not assuming any change in trend. And in terms of its specific impact on us, you see that in the guidance we provided, where we told you that the revenue impact of Visa Europe on the quarter if you go to the table we have was 13 to 14 points of additional dollar revenue growth that would be added to our reported numbers because of Visa Europe, three to four points of additional revenue growth on a full-year basis. And as far as the income impact, we had told you last quarter and we are reiterating that that Visa Europe's income will offset the debt interest we had. So essentially it will make up for the debt interest in the quarter. So that's pretty much it.

The next question is from Craig Maurer of Autonomous. Your line is now open.

Yes, hi, thanks and congratulations for closing Visa Europe. I did have a quick question on the PayPal release. Just I was hoping you could explain how the V debt portion works in tokenization and how that will enable brick-and-mortar point-of-sale should an issue erupt. Are you just basically saying that PayPal will have the opportunity to wrap a Visa token within the PayPal wallet and then pass it through to a merchant like an Apple Pay would for Visa card acceptance? Charles W. Scharf - Chief Executive Officer & Director: Yes.

Okay. So this in no way is enabling Visa to wrap any other type of funding mechanism in a larger Visa token for acceptance? Charles W. Scharf - Chief Executive Officer & Director: I'm not sure I understand what you're asking, but what you described is exactly what's contemplated. To the extent that PayPal chooses to create an experience at the physical point of sale, if they can get the issuer to agree, just as an Apple Pay or a Samsung Pay or Android Pay, there can be a token provisioned to a device. And it will be – the transaction will take place as these other wallet transactions that use tokens.

Right, and so this would need to be a bespoke agreement between PayPal and an issuer. Okay, I understand. Thank you.

Thanks, Craig. Operator, we have time for one more question.

Thank you. Our next question is from Tien-Tsin Huang of JPMorgan. Your line is now open.

Great, thanks. Thanks, Jack, kudos for getting this PayPal deal done. I was curious. Charlie, you said I think at our conference that PayPal can't be friend and foe, and so I was wondering. Does this deal mean PayPal is now 100% friend to Visa? Are there outs or end term dates in the agreement to call out? Also, does the deal change in any way your Visa Checkout strategy? Thanks. Charles W. Scharf - Chief Executive Officer & Director: So the answer is it's a long-term agreement. We feel like we've addressed everything that we wanted to address, and it was a great conversation. We were both trying to get – again, as I said earlier, what we both wanted to get to was a point that PayPal, ourselves, and the issuers would look at it and say it's something that makes sense for all of us to work together. And that's based upon the fact that we're providing a better experience and the opportunities are greater than ever for consumers and merchants. So having everyone align is what we were after, and that's what we think we've done here. And so we feel very good that we're in a position, as I said, where – this is a framework where we can work happily together hopefully for a very long period of time because it's going to drive more growth. That's what it's all about. It does not change our Visa Checkout strategy. Here too, I've been very consistent in saying that one of the things that we don't know is we don't know ultimately what experiences are going to win at the point of sale, either online or at the physical point of sale. And so given the fact that we are the global acceptance mark that's…

Thank you, Tien-Tsin, and thank you all for joining us today. If anybody has any follow-up questions, feel free to give Investor Relations a call. Charles W. Scharf - Chief Executive Officer & Director: Thanks, everyone.

Thank you, and that concludes today's conference. Thank you for participating. You may now disconnect.