MEMO FROM THE FUTURE: VISA

CEO Edition

BOARD STRATEGY MEMO June 2030

TO: Visa Board of Directors, Executive Committee

FROM: Ryan McInerney, Chief Executive Officer

DATE: June 2030

SUBJECT: Navigating the AI and Stablecoin Disruption

THE MOMENT

Visa's fundamental model—take 2-3% of every transaction processed globally—is under attack from an opponent we can't defeat through traditional competition: artificial intelligence optimizing for cost.

This is not competitive displacement (another payment processor offering better service). This is structural displacement (AI agents directing commerce to the cheapest settlement rails regardless of brand or ubiquity).

Our response strategy will determine whether Visa emerges stronger or becomes a legacy player serving declining transaction volumes.

THE THREAT

AI agents are optimizing commerce transactions for total cost, including payment processing fees.

When a consumer asks an AI agent "book me a flight," the agent doesn't care about brand loyalty or credit card rewards. It cares about total cost: flight price + payment processing fee.

If Visa charges 2.3%, and stablecoin settlement costs $0.50 (0.02%), AI agents will choose stablecoin.

This is not a price war we can win by cutting fees. If we cut fees to 0.5%, stablecoins would cut to 0.2%. We'd be racing to zero margins.

The only winning strategy is to become the payment processor that AI agents prefer, regardless of cost.

THE STRATEGY

Visa has three options:

Option 1: Defend Market Share at Lower Margins

Cut fees from 2.3% to 1.5%, remaining price-competitive with stablecoin rails, and try to hold 70% market share.

Implication: Operating margin falls from 62% to 40-45%, despite operating leverage. Valuation drops 40-50%.

This is a defensive play. It maintains Visa's relevance but sacrifices profitability.

Option 2: Become a Stablecoin/Web3 Player

Build Visa's own stablecoin and settlement rails. Migrate Visa infrastructure to blockchain. Compete directly with Solana, Ethereum, and other L2s.

Implication: Billions in R&D investment, 5-10 year transition, existential bet.

Risk: Visa's strength is not blockchain technology or community governance. We could spend billions and still lose to native web3 competitors.

Option 3: Become the Infrastructure Layer for AI-Mediated Commerce

Instead of being the payment processor, become the payment processor for AI agents, regardless of settlement rail.

Visa's value shifts from "taking a cut of transactions" to "providing infrastructure that AI trusts."

How: - Build APIs that let AI agents query Visa for real-time pricing and merchant availability - Provide settlement in any currency (stablecoin, fiat, other) - Charge for infrastructure/APIs rather than percentage of transaction - Maintain the brand and ubiquity, lose the percentage model

Implication: Revenue model changes fundamentally. Margins decline in long term. But Visa remains essential infrastructure.

MY RECOMMENDATION

I'm recommending Option 3: Become infrastructure for AI-mediated commerce.

Here's why:

First: We can't win a price war against stablecoins. Our margin advantage is in oligopolistic pricing, not cost structure.

Second: We shouldn't try to become a web3 native player. That's not where our strength lies.

Third: What we can do is remain essential infrastructure that AI agents trust and use.

The future of commerce looks like this: - Consumers interact with AI agents - AI agents query multiple payment rails (Visa, stablecoin, bank transfer) for pricing and availability - AI agents choose based on optimization (cost, speed, merchant preference) - Visa remains relevant if it's one of the options AI agents query and use

THE EXECUTION PLAN

Phase 1 (2030-2031): Build AI-Friendly APIs

• Create APIs that AI agents can query for real-time pricing, merchant acceptance, settlement options
• Make it trivial for merchants to accept Visa + stablecoin + bank transfer in parallel
• Begin shifting from percentage-based fees to infrastructure-based fees

Phase 2 (2032-2033): Launch Multi-Currency Settlement

• Visa settles in multiple currencies: USD, EUR, stablecoins (USDC, USDT), CBDCs
• Merchants choose settlement currency; Visa handles cross-currency conversion
• This makes Visa the "universal payment processor" rather than a card network

Phase 3 (2034-2035): Reposition as Payments Infrastructure

• By 2035, Visa is known as "infrastructure that AI trusts for commerce"
• Revenue model is 30-40% transaction-based fees + 60-70% infrastructure/API fees
• Margins are lower but more resilient

FINANCIAL IMPLICATIONS

2030 (today): $38.7B revenue, 62% operating margin 2035 (projected): $50-55B revenue, 45-50% operating margin

This implies total operating income of $22-27B in 2035 (vs. $24B in 2030).

The growth is modest, but profitability is maintained. More importantly, Visa remains essential infrastructure rather than becoming a legacy payment processor.

THE DIFFICULT TRUTH

We need to acknowledge that the 2-3% interchange fee era is ending.

For 60 years, Visa could sustainably take 2-3% of every transaction because: 1. We were the only global payment network 2. Consumers had no alternative 3. Merchants had no alternative 4. Regulators accepted our pricing

AI changes all three of those dynamics: 1. Multiple payment networks exist (stablecoins, bank transfers, others) 2. AI agents will always choose the cheapest option 3. Merchants will demand lowest-cost settlement 4. Regulators may pressure us on pricing

Our strategy acknowledges this reality rather than fighting it.

CLOSING THOUGHT

Visa's strength has always been its role as "the infrastructure layer of global commerce."

For 60 years, that meant being the card network. Going forward, it means being the infrastructure layer that powers all payment options.

This is a smaller business than what we've been, but it's a more defensible one.

Let's execute on this vision.

Ryan

Confidential — Board and Executive Committee Only