Jack Carsky - Head, Global IR Joe Saunders - Chairman & CEO Byron Pollitt - CFO

Adam Frisch - Morgan Stanley Jason Kupferberg - UBS Julio Quinteros - Goldman Sachs Craig Maurer - CLSA Sanjay Sakhrani - KBW Rod Bourgeois - Sanford Bernstein Bruce Harting - Barclays Capital Tien-Tsin Huang - JPMorgan Dan Perlin - RBC Capital Jim Kissane - Banc of America Tom McCrohan - Janney David Parker - Lazard Tim Willi - Wells Fargo Roger Smith - Macquarie Robert Dodd - Morgan Keegan Bob Napoli - Piper Jaffray

Thank you very much. Good afternoon and welcome to Visa Inc.’

s fiscal first quarter 2010 earnings conference call. And again our sincerest apologies for what was pretty large technical difficulty.

Today with us are Joe Saunders, Visa’s Chairman and Chief Executive Officer and Byron Pollitt, Visa’s Chief Financial Officer. This call is currently being webcast over the Internet.

It can be accessed on the Investor Relations section of our website at investor.visa.com. A replay of the webcast will also be archived on our site for 30 days.

A PowerPoint deck containing highlights of today’s commentary was posted to our website prior to this call. Let me also remind you that this presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

By their nature forward-looking statements are not guarantees of future performance, and as a result of a variety of factors, actual results could differ materially from such statements. Additional information concerning those factors is available in the company’s filings with the SEC which can be accessed through the SEC's website and the Investor Relations section of the Visa website.

For historical non-GAAP or pro forma related financial information disclosed in this call, the related GAAP measures and other information required by Regulation G of the SEC are available on the financial and statistical summary accompanying our fiscal first quarter earnings press release. This release can also be accessed through the Investor Relations section of our website.

With that, I will turn the call over to Joe.

Thank you, Jack. As we begin our new fiscal year, I am pleased to report that our first quarter results were indicative of both the continuing secular shift to electronic payments, especially debit as well as some encouraging signs in spending domestically and internationally.

With that being said, and consistent with our guidance expectations, it remains difficult to foresee how global economies will perform in the coming year, so we maintain cautious optimism about Visa’s results over the balance of 2010. Earnings for our first fiscal quarter on a GAAP basis were $1.02 per diluted share, a $0.28 or 38% increase over the first quarter of 2009.

Net income on a GAAP basis was $763 million, a 33% increase over the year-ago period. Recall that we will no longer be providing an adjusted basis for these metrics, but will adhere to the GAAP reported numbers going forward.

Net operating revenues in the quarter were just under $2 billion, a 13% increase over the year-ago period and in line with our guidance as a result of solid payment volume and cross border volume growth as well as strong process transaction growth. For the first time in our quarterly reporting, we are providing global payment volume growth in our operational performance data pack for the quarter just ended.

These results which will still be recognized on a lag basis and reflected in fiscal second quarter service revenue show encouraging improvement over the fiscal first quarter. Process transactions continue to grow from the mid to high single digit levels we saw over the course of fiscal 2009, ending the first quarter at 10.9 billion transactions, a 12% growth rate over the prior year period and up 9% from the growth reported for the fiscal fourth quarter.

I am pleased that we are executing well against our business plan. As we expand our payments network, growing issuers and acceptance locations, expanding our processing capabilities and driving transactions with effective marketing programs, we are able to take full advantage of the secular trend to digital currency and grow our business.

As a result even in this difficult economic environment, we are generating solid earnings and returning excess cash flow to our shareholders. During the first quarter, we repurchased $432 million of our class A shares under our previously announced $1 billion buyback plan at an average price of just under $79 a share.

We will continue to execute on this buyback as conditions warrant. We also recently announced the unlocking of an additional 56 million shares of our class C stock which will allow class C shareholders, primarily our international financial institution owners the ability to further monetize their Visa investment ahead of the scheduled March 2011 unlock.

This program has no dilutive effect on our earnings per share and is similar to the prior program we executed in July of last year. With that, let me turn the call over to Byron who will take you through the details of our financial results and then I will be back to share our views on the economic environment and our upcoming March Investor Day.

Thank you, Joe. As is customary, let me began with the financial highlights for our first fiscal quarter and then comment on the global payment volume trends for the current quarter followed by transaction results for January.

As Joe already mentioned, it was a solid quarter with slightly higher than anticipated revenue growth and earnings growth in line with our guidance. As noted earlier, we began providing realtime payment volume statistics this quarter.

However, it is important to keep in mind that for the time being, we will continue to recognize current quarter service revenues on prior quarter payment volume. While it is our ultimate intent to recognize the associated revenue on a current basis as well, that's still in the future.

Global payment volume growth for the September quarter in constant dollars rose from a positive 2% in the June quarter to 3%. In the US payment volume growth was a negative 1% in the September quarter, up from a negative 3% in the June quarter.

Debit again proved both its resiliency as a product, and its secular appeal by delivering a positive 7% growth compared to 5% growth in the June quarter. Credit, while still challenged, improved to a negative 9% in the September period from a negative 10% in the June period.

On a constant dollar basis, rest of the world payment volume grew at 8% in the September quarter holding steady with the 8% rate delivered in the June quarter. These results reflect continued secular growth and a strong and healthy diversified country base outside the US.

Global crossborder volume growth improved in the September quarter, posting a negative 5% growth rate on a constant dollar basis from the negative 8% rate in the June period. Transactions processed over Visa's network totaled $10.9 billion in the fiscal first quarter, an increase of 12% over the similar period a year ago and up from 9% we saw in the September quarter.

Turning to the income statement. In our first fiscal quarter, gross revenues of $2.3 billion were up 16% from the similar period in 2009.

Volume and support incentive as a percentage of gross revenues came in at 16%, up from the prior year’s depressed level of 13% and more indicative of what we can expect over the course of fiscal 2010 as payment volume growth improved versus the prior year. Net operating revenues in the quarter were almost $2 billion, a 13% increase over the operating revenues reported for the first fiscal quarter of 2009.

This was in line with our revenue guidance, though slightly ahead of the low end of an 11% to 15% range provided to you last quarter. The drivers were better than anticipated process transaction growth and crossborder volume as well as the continuing effect of previously disclosed pricing actions.

Moving to the individual revenue line items for the quarter service revenue was $827 million, up 4% over the prior-year period and reflective of still relatively anemic payment volume growth in the quarter ending September. Data processing revenue was $765 million, up 38% over the prior year based on strong processed transaction growth of 12% and the continuing effect of previously enacted pricing actions.

International transaction revenues were up a solid 9% to $552 million primarily due to an improvement in crossborder volumes during the period. The foreign exchange impact on revenue in the fiscal first quarter was neutral due to the impact of our hedging activity.

At this point in the fiscal calendar, the balance of year revenue forecast is substantially hedged. Our operating margin was 62%, but benefited from a one-time reversal of $41 million in litigation reserves and from favorable timing in marketing spend.

The $41 million contra-expense in the quarter is related to the previously announced pre-payment of the retailer's litigation settlement which by itself represents two full percentage points of margin and contributed a non-recurring $0.03 to the quarter's earnings per share. Total operating expenses for the first quarter was $743 million, a decline of $30 million or 4% year-over-year.

These results benefited from the gain related to the retailer's litigation settlement mentioned earlier and $28 million in restructuring costs incurred in the prior year. Our expectation continues to be that expenses on a full year basis will be relatively flat to the 2009 level on a GAAP basis.

On a sequential quarter basis, we saw lower expenses in several line items including personnel, marketing and professional fees. The lower personnel spend was primarily due to lower restructuring expenses and incentive accruals in the current quarter.

This quarter, we also reclassified certain contractor expenses to the personnel line that heretofore were characterized under professional and consulting fees. This reclassification was applied to each of the four quarters of fiscal 2009 and the full year 2008.

We have included a pro forma reconciliation of this with our press release financials to assist you in your modeling efforts. Marketing costs were sequentially lower.

For context, we intentionally curtailed some media spend in the first quarter while absorbing Winter Olympics reduction expenses in 2009 fiscal fourth quarter. Media spend will increase in the second and third quarters around the Olympics and the FIFA World Cup event, both of which are major Visa sponsorships.

Even with these investments aimed at activating our global sponsorships, we continue to see full year marketing expense below $1 billion. Professional and consulting fees declined sequentially as a result of higher spending in the prior quarter, as we brought our new East Coast Data Center fully online.

Capital expenditures were $37 million in the quarter representing ongoing investment in technology and our newer initiatives. For fiscal 2010, we now expect capital expenditures to be around $200 million.

Moving on to the balance sheet, we ended the first quarter in strong shape with negligible debt, and cash, cash equivalents, restricted cash, and available for sale investments of $6 billion. Of this total, $1.6 billion is restricted cash, which represents amount sufficient to fully payout the American Express settlement with $1 billion that is currently uncommitted.

As we previously announced in a press release two weeks ago and as Joe mentioned earlier, we will be unlocking 50% of the remaining outstanding Class C shareholders representing 56 million shares which will further alleviate the Class C overhang as we approach the ultimate unlock date of March 25, 2011. Now let me comment on December’s payment volume data and our early read on January.

Then I'll cover our updated financial expectations for the balance of the year. Global payment volume growth for the December quarter in constant dollars rose from a positive 3% in September to 8%.

We experienced meaningful growth in all of our global regions. In the US, payment volume growth was a positive 7% in the December quarter, up from a negative 1% in the September quarter.

Debit continued to prove its resiliency as a product and its secular appeal by delivering a positive 15% growth compared to 7% growth in the September quarter. Debit currently accounts for 54% of total US payment volumes.

Credit, while still challenged, rebounded to a negative 1% in the December period from a negative 9% rate in the September period. Looking to January, through the 28th of the month, US payment volume growth up 10% is above the fiscal fourth quarter rate of 7% and on par with December’s month end 10% growth.

On a constant dollar basis, rest of world payment volume grew at 10% in the December quarter, up from an 8% rate in the September quarter. These results recognize continued secular growth and a strong and healthy diversified country base outside the US.

Global cross border volume growth rebounded considerably in the December quarter posting a 2% growth rate on a constant dollar basis from the negative 5% rate in the September period. Growth in the month of December was an unexpectedly strong 4%.

Whether it is representative of a broader cyclical trend or just pent-up demand remains to be determined. Having said that, January crossborder volume growth on a constant basis showed further resiliency posting a 9% rate of growth through the 28th of the month, up from the 4% rate for the month of December.

Process transactions through the 28th of January grew 13% over the prior-year period, up slightly from the 12% growth posted for the fiscal first quarter. Now let me comment on our expectations over the coming fiscal year for operating performance and the resulting impacts on our full year guidance.

Based on an encouraging first quarter, we are recasting our net revenue growth target for the year to be in the range of 11% to 15% rather than at the low end of that range. Holding to our target range recognizes that our fiscal year is just underway and global economic performance is still difficult to foresee.

We continue to target better than 20% earnings per share growth in 2010 on a GAAP basis excluding the VisaNet Brazil gain and a 2011 earnings per share growth goal, better than 20%. We are raising our expectation for our full year 2010 operating margin to the mid to high 50s, up slightly from the mid 50s, we initially targeted for this year.

As mentioned earlier, increased marketing and advertising expenses in the next two quarters, as well as further investments in our newer initiatives will exert a downward bias on our margin for the balance of the year. Based on a better understanding of our tax outlook, we now expect our full year 2010 tax rate to be in a range of 36.5% to 38.5% rather than the 38% to 39% range with which we began the year.

Capital expenditures are now expected to be around $200 million at the low end of our initial range of $200 million to $250 million. And our projection for free cash flow for the year remains north of $2 billion, which is net of the $682 million pre-payment we made in the quarter on the previously settled retailer's litigation.

That concludes my comments, so I'll turn the call back over to Joe.

Thanks Bryon. At this point, I'm sure you're sensing an underlying theme of appropriate cautiousness in our comment, and you should.

While there is no question that we feel positive about Visa's position in light of what is still a challenging economic picture, it's difficult to predict when a sustained recovery will be underway. As the ongoing secular shift to electronic payments continues, a significant portion of our marketing and advertising activities are squarely aimed at positively influencing that shift to Visa products.

We saw a strong growth in debit with positive comparables in certain categories of spend like fuel and recurring bill pay adding to that growth. We saw a better than anticipated international and crossborder volumes, but we're not clear if those are improving volumes representing a rebound or simply pent-up demand as Byron mentioned.

We believe that any recovery will take time and will likely have a few bumps along the way. A complete turnaround in the US will arguably take even longer.

Things like continuing high unemployment and underemployment, high levels of consumer debt and restrained consumer confidence will keep a lid on overall spending and payments growth especially credit for the foreseeable future. So, at this point in time we are continuing to focus on the initiatives that allowed us to get through this recession up to now in good shape.

Focusing on cost efficiencies and making the right investments for the future will allow us to fully take advantage of our business models as economies around the world gain ground. More importantly, it will set the stage for success over the longer term, as the payments industry continues to evolve globally.

At our upcoming Investor Day in March we will be providing you with greater insights into our long-term growth strategy. Specifically we'll explore the six key elements to this strategy including our local market focus, products and services, processing, brand, clients and acceptance.

And we’ll discuss how the investment decisions we are making today will help us achieve our longer-term growth objectives. As part of Investor Day, various members of our management team will present on their respective areas of expertise to illustrate how the elements of our strategy tie together.

We're looking forward to engaging in this strategic discussion with you, and of course we welcome your input on the agenda for the Investor Day and encourage you to reach out to our Investor Relations team on any specific areas of interest or concern you’d like to see covered. With that, we're ready to take questions.

Operator?

Professional and consulting expense, Byron, you explained why it was a little bit lower year-over-year, but it’s actually the one line item we'd like to see increased a lot, given that’s where the bulk of the product and R&D spend is. So, what is the trend there in terms of the investment in product and R&D and would you consider breaking out those investments in a separate line item going forward, so investors can get a better feel for resource allocation?

Once we normalize out the professional consulting expense associated with getting the new data center open which is now fully operational and live, we should be managing that up as we continue to invest in expanding our infrastructure and capabilities as well as new product investments. With regard to breaking that out to give more visibility to the type of expense that’s going against future growth, great question, we have that under consideration and we'll seriously consider that perhaps later in the year.

You should remember that that line item includes all of our legal expenses for litigation and we had a lot of that last year.

A quick question and a clarification if I could. My question is just to what extent are you seeing issuers reengage and start promoting credit products more actively at all and how much of that activity might be directed towards the affluent end of the market.

We're also hearing more about increased mailings occurring over the last two months of '09 and then my clarification is can you give a split on your US payment volumes for January between credit and debit within that plus 10%?

I think that there is considerable interest in the higher end of the retail market. I don’t think there is any question about that, and there is some evidence that there is a little bit more activity on the solicitation front, but I would say it's a way too early to say things have turned around and we're back to something that's close to what we were maybe a year and a half or two years ago.

Let me give you a little color on US debit and credit, and give you a little bit of historical trending by month and then into January, so you can see the progress. If we were to go back to October, credit grew in the US at minus four, November minus two, and then December actually turned positive two, January month to date through the 28th positive one.

If we were to do the same chronology for debit, October debit payment volume growth for the US was positive 12, moved to positive 15 in November, positive 19 in December and it's holding it positive 19 January month to date.

Can you just characterize a little bit on what you're seeing in terms of the impact of the CARD Act, and what that might be doing relative to your pricing strategies or anything that you guys might be feeling as a result of the legislation at this point?

I think as we’ve said before, the CARD Act has an indirect effect on us, but not a direct effect. You are asking a question that is difficult for me to answer.

I think it would more appropriately answered by our financial institution customers. Having said that, Byron just went over the gross statistics on the credit card business compared to the debit card business and I think it’s clear that it’s not growing at anything close to the rates that it historically has and obviously a lot of that has to do with the economy and a lot of that has to do with the rules and regulations that they operate in.

You had mentioned the growth in recurring bill pay, I was wondering if you’ve had any progress in terms of getting utilities to sign on for that product?

I think we’ve had a pretty consistent growth in that category over the last several years, I can’t tell you exactly what percent of that category it is, it’s something that you might want to follow up with Jack.

Byron, I was wondering if you could just quantify kind of the seasonality of the marketing spend this year in terms of magnitude and just the tax rate, should we assume that we build off of that in terms of migrating lower in 2011?

On the marketing side, the way we try to be helpful here is that the first quarter is low spending for the year. We will increase marketing spend in the second fiscal quarter, think of that as Winter Olympics driven.

Then third quarter, we will be increasing marketing spend relative to the first quarter, think of that as FIFA World Cup. So the marketing spend which is under $1 billion, with the guidance for the year is much more oriented to the middle two fiscal quarters, with the first quarter probably being the lightest.

If you switch to the tax rate, so we have re-guided the tax rate into a range of 36.5 to 38.5. That follows the trajectory that we outlined during our IPO presentation of ultimately aiming to be in the 35% to 36% range, so we consider that a journey.

We have yet to process what the administration’s recent tax proposals are and of course that guidance was not enlightened by those tax proposals. So I would say stay tuned on what 2011, 2012 and beyond will ultimately yield, but we remain on this trajectory of getting into that 35% to 36% range that we talked about from inception.

You just posted 13% revenue growth, a very strong volume growth and also improving revenue yield and we are at the beginning of what seems to be an upturn in the economy and so your current revenue growth run rate is at the midpoint of your new revenue growth guidance. I was wondering if you could just handicap or sort of talk to us about what would have to happen for your revenue growth to come in at the low end of your revenue range?

Then what would have to happen to be at the high-end or even at above the upper end of your range because it seems if the cyclical trends continue just to run on their current page, you might actually be able to exceed your latest revenue guidance range or maybe I'm looking at that the wrong way, so I wonder if you could handicap that for us?

I think that we said on a number of occasions that we're comfortable with our guidance, and we are maintaining cautious optimism. We think that we did better in the first quarter than we thought we were going to do.

We don't know whether that level of activity is sustainable and I'm a little bit conservative in that. I'm not ready to predict where the economy is going and so it's hard for me to answer that question.

What I can answer is given the environment that we're operating in today, we're comfortable with the guidance that we've given.

Can you just compare and contrast the credit trends in US versus rest of the world in terms of the growth rates you're seeing and then to the degree that you can give any kind of outlook to next 2011 on the expense line? Ordinarily companies with the kind of growth you're having are matching that up with some kind of expense growth, but you're able to hold the line on expense in marketing this year and still as the last question alluded to give the appearance at least through the first quarter that you're well ahead of your targets, so if you could just comment on those?

Let me start with the credit trends. So using rest of world as the proxy, for what you are asking about, the rest of world, considered on a constant dollar basis, the growth trends in credit, credit alone, so this would exclude debit, credit alone never turned negative.

It did drop from a high double-digits growth into mid single-digit growth, that’s what we are looking at for the quarter just ended in December and on a slight upward trend for rest of world. We are still in that mid to upper single-digit credit growth.

If you look at all products, credit plus debit, then you are right around 10% growth for the quarter just ended, and that would be the quarter just ended in December.

I wanted to ask about debit which accelerated more than we expected both in the US and overseas. A couple of questions there, was there anything unusual to consider like new wins cycling through, just trying to get a better sense of same-store growth?

And secondly I was curious if you’re seeing any signs of debit cannibalizing credit?

Well, I don’t how you define whether debit cannibalizes credit, obviously debit is growing quickly than credit, but I think that’s the nature of the economic environment that we are living in. I think that the question is to what extent will the credit volume accelerate as the economy improves and I think till that happens it’s going to hard to measure the balance between the two of them.

I mean we obviously remain very encouraged about our debit growth, but we are frankly also encouraged with what's going on with the credit product in the world outside of United States, particularly, but we are not particularly discouraged by what's going on in the US. Was there another part of the question, I think I am missing part of the question.

Did I answer your question? Okay.

I was wondering if you could just give us some sort of update as it pertains to kind of the enhanced check out services you guys have been talking about in the past and then the other EC initiatives, e-commerce initiatives that you have been spending a fair bit of money on? Thanks.

Well, I think the enhance checkout is something that we are pretty excited about and we intend to roll that out in a very big way in about six weeks. So, I think I'll leave that until our Investor Day presentation.

But I will tease you by telling you we are extremely excited about it, I think it'll be a big deal. And we continue to invest in that and other electronic payment improvements, whether they are in the Internet space or the mobile space or anyone of a number of other things.

Byron mentioned that probably beginning at our March Investor Day we will breakout what we are spending on what a little bit more clearly than we have up to now, but I will remind you that we have committed to spending a $150 million to $200 million on new product development this year and I think that we will get there.

Thanks. Joe, can you comment on the competitive environment, and your recent loss of a large debit portfolio?

Thanks. And maybe just to follow-up, an update on the conversion of the WaMu portfolio and the timing of the SunTrust roll off?

I think that we've said for a long time on a lot of these calls, that you should expect it sooner or later we are going to lose a customer and that's exactly what happened. We like to believe that we are disciplined as it relates to what we are willing to do, and how far we are willing to go, and I think that this is a case in point, so I'm unhappy that we lost a customer.

We don't lose very many, we've gained a lot more than we've lost. But that being said, it's a tough competitive environment and as I have also said on a number of occasions, MasterCard is a good company.

And they are just consistently getting beat [ph] on every deal that there is. As it relates to the WaMu portfolio, I think we are just beginning to see any -- we're only at the very early stages of beginning to see any volume.

The conversion is going on, I think it's pretty de minimis in the numbers that you are looking after this quarter, particularly since the service revenues are lagged. I would say as it relates to SunTrust that I don't know what their conversion schedule is, but I believe that will take a reasonable amount of time to fully divest themselves.

Joe, can you prioritize kind of your strategic initiatives beyond this year as far as how are you going to generate long term revenue growth outside of just the secular shift from cash and check to electronic payments, one of those initiatives obviously being trying to position Visa as best possible for growth outside the United States. I am just kind of wondering how you are thinking about that, because given it seems like everyone just keeps talking about the secular shift, secular shift, that’s going to slow at some point and it seems like there is a lot more powerful trends outside the US, just want to see how you are thinking about that?

Thanks.

But we can ride the secular shift I think for quite a while if we did it appropriately, but you are right. I mean there is a lot more to it than that, I don’t think that I could even begin to answer the question and do a justice in the amount of time that we have.

But once again I will encourage you and everybody else to attend our investor conference, because I do intend and we do intend to expand a great deal on the subject and it’s worth listening to and it'll take a little time, but I can assure you, if you come, the trip will be worthwhile.

I was just hoping you could update us on the Canadian market, and specifically the finance ministry up there has established some current voluntary code of contact that you and others have responded to, but is that any sense for the outcome of that and has that changed your strategy or your timing for entering that market more aggressively.

I think that we are in a period of reflection right now and I don’t think it will move quite as aggressively as we might have hoped. But having said that, these rules in general are quite acceptable to us, and I think that the one or two sticking points that will be resolved, and I think that we will proceed into the market, but I can't give you specifics or specific timing as it relates to that.

I guess, I'll just have to leave you with the thought that we're still sure that we will be in the debit market in Canada at sometime in the not terribly distant future.

A question around debit, two parts, number one, were there any portfolio conversions in 1Q that helped to drive such strong growth and cards issued, it looks like it probably was? And second, just within the debit business and the strong growth in what appears to be accelerating growth, are there any strategic or product driven initiatives within Visa or the large issuers that you are aware of that could be setting the stage for more than just a cyclical rebound, but maybe a lot more life in debit market than maybe was previously thought.

Well, okay, to answer the first part of the question, we've looked at this quite carefully and there is no effect of adding other portfolios in our numbers in this quarter. The growth is real growth not growth because we added a customer.

To answer the second part of your question, it seems to me that when I look at retail services and financial institutions that there is a more holistic customer experience type of movement that’s going on. I think, it’s a share of wallet movement, I think it is an effort by financial institutions to embrace individual customers over a wide array of products and making sure that these things complement each other.

So, I think you'll see things begin to happen that are a little bit different and I believe that you'll see some focus on encouraging transactions and encouraging consolidation within a financial institution. But, I am not a financial institution and I cannot speak for them, and there is a lot going on in every major financial institution, every medium sized and small financial institution in this country as a result of economy that we find ourselves in, rules and regulations that they look like.

So, I would encourage you to continue to ask them the same questions and see what they say.

I just know that there is a number of licensing fees in the other line and I was just wondering is there something unique going on there in that quarter? And then the second part I guess is that, you did give us the trends in the US, but was there anything specific that happened in those businesses that did cause you to increase your guidance, I mean relative to what you guys had been expecting, what's changing?

I think that there is a little bit more pickup than we anticipated. There is clearly more pickup in the cross border volume than what we had anticipated.

So, we're pleasantly surprised in that regard as it relates to your first quarter.

Yes, you're referring to the other revenue. There are a couple of drivers there that are worth pointing out.

The first one is, we have a arrangement with many of our clients where we handle their rewards redemption and we refer to these as pass-through revenues or expenses and so, there has been a pickup in our redemptions over the past year, that was true for this quarter and that pickup is the single largest driver of the growth rate and other revenue and that comes with roughly an equal offset in expense. There is some new licensing revenue in this category and this comes from arrangements that we have entered into with the entity we referred to as VisaNet Brazil and up to the time they went public, they would pay us regular dividends.

And so the dividends stopped because our share ownership was sold, but instead, we are now receiving licensing fees, and those licensing fees appear in other revenue. The dividends that we used to receive were appearing in other income.

And those are the two principle drivers for that growth.

Just on the pricing that you referenced to, if I remember right, you took a price increase September quarter on data processing. So seeing that flow through, should we be expecting basically lapping of that in the fourth fiscal quarter this year, a slowdown in revenue, or do you have other material pricing initiatives underway to offset some of that lapping effect?

The one that you are talking about, we would lap in the fourth quarter. We have given guidance on what we expect pricing increases to generate this year in our current guidance.

I don’t think that that would cover the shortfall. We have always pointed that out.

As it relates to anything else, at the point in time that we make any decision as it relates to that pricing, and whether or not it will affect our guidance, we will disclose that immediately.

Operator, at this point we probably have time for one more question.

On debit, we look at some banks that put out their debit spending numbers, and your spending numbers are much higher than on debit or much higher than the banks. And I am wondering, are you seeing new customers and are community banks picking up market share?

Is prepaid having a significant effect on debit and also, your international debit, I mean have there been some breakthroughs in international?

That’s a difficult question for me to answer. We can't grow any faster than our customers.

I mean, whatever they grow, we grow. We don't have any volume outside that.

We have a prepaid business that's doing quite well, but there is nothing about it that would shock you in our numbers right now. I think that outside the United States, it’s the secular shift and our continued success in being able to make electronic payments in a number of geographies.

And Tim, other than that, I think it's the things that financial institutions are doing to encourage the usage of debit cards in the United States. And of course I shouldn't diminish our effect, the effect that we're having on moving things to electronic payments through our promotions, and our advertising in our market.

All right, that about wraps it up. Thank you all very much for joining us today and apologize again for the technical glitch.

If anybody has any follow-up questions, feel free to call Investor Relations. Thank you.