Welcome to Visa's Fiscal Third Quarter 2021 Earnings Conference Call. All participants are in a listen only mode until the question and answer 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 session. Over to your host from Investor Relations, Ms.
Jennifer Comeaux and Mr. Mike Milotec. Ms. Comeaux, you may now begin. Thanks, Michelle.
Fiscal Q3 2021 earnings call. Before we begin, we want to acknowledge the filing was a little later than usual due to an issue, but hopefully you've had an opportunity to review prior to the call. Session. Joining us today are Al Kelly, Visa's Chairman and Chief Executive Officer and Visat Prabhu, session. Visa's Vice Chairman and Chief Financial Officer.
This call is being webcast on the Investor Relations section of our website at www.investor.visa.com. Session. A slide deck containing financial and statistical highlights session has been posted on our IR website. Let me also remind you that this presentation includes forward looking statements. Session.
These statements are not guarantees of future performance and our actual results could differ materially as a result of many centers. Additional information concerning those factors is available in our most recent reports on Forms 10 ks and 10 Q, session, which you can find on the SEC's website and the Investor Relations section of our website. For non GAAP financial information disclosed in this call, session. The related GAAP measures and reconciliation are available in today's earnings release. And with that, let me turn the call over to Al.
Thanks, Jennifer. Good afternoon. Thank you for joining us. We had a really strong fiscal third quarter as payments volume, transactions across border volume all improved globally. In our time today, I will first cover our results and then discuss our performance to date across our 3 growth levers, Consumer payments, new flows and value added services.
So first, Q3 results. Net revenue rose 27% or 39% if service revenues were recognized on the current quarter's payment volume. This growth far exceeded our expectations due to the strength in the U. S, improving cross border volumes and lower than expected client incentives largely due to deal timing. Non GAAP EPS was $1.49 up 41 session.
As we look at volumes and transactions, keep in mind that year over year growth rates are less indicative of performance and the business trajectory due to the COVID-nineteen impact. So once again, we provide metrics compared to 2019 on session. Payments volume was 121% of 2019, which is up 5 points session. Of 2019, 7 points better than the Q2 and up 53% year over year. Session.
Process transactions were 120 percent of 2019, up 4 points from Q2 and up 39% year over year. Vasant will provide more color on our results. So now let me transition to progress relative to our business strategy. Efforts across our 3 growth levers help to fuel strong results while positioning us to capture future opportunities. In consumer payments this quarter, we saw favorable secular trends and had a number of wins with large issuers, co brands and fintechs.
Cash displacement trends continued this quarter. Globally, cash volume on Visa debit credentials, session. The dollar amount of cash taken out of ATMs was 98% of 2019 levels, flat on Visa debit credentials was 140% of 2019 levels, up 5 points from Q2. While debit remains strong and has accelerated since Q2, credit spending is now also improving. Global credit payments volume was 104% session of 2019, up 4 points from the Q2.
At the same time, face to face payments session. The volume trends are stable to improving while e commerce or card not present remains elevated. When we average across our Proved one point in Q3 over Q2. Travel is starting to recover both domestically and in cross border, session. Again, averaging across our top markets where we process versus 2019, domestic travel spending improved more than 20 points in Q3 over Q2.
Globally, cross border travel, excluding inter Europe versus 2019 improved 6 points in Q3 over Q2 and exited the quarter with June at 50% session of 2019. Simply looking at the absolute levels, it was a record quarter for Visa with $2,700,000,000,000 in payments volume session. Payment transactions per day globally, which is up $60,000,000 per day from the last quarter session and nearly 160,000,000 transactions per day from a year ago. And we expect much more recovery to come, especially in the areas of credit countries increasing tap to pay limits. For example, in Brazil, the limit was doubled 5 months ago, and the face to face tap to pay penetration has already more than doubled from 6% to 14% in that short period.
In the United States this quarter, we surpassed 370,000,000 session. New York, San Francisco and San Jose. Merchant progress continued as well. Target has doubled its tap to pay penetration in the last year to 2 out of every 5 face to face transactions, and Costco's U. S.
Gas stations have reached 40% penetration Continue to win with large issuers globally. Let me share a few examples from the quarter. In the United States, we're pleased to have renewed our long standing partnership with Navy Federal Credit Union, The largest U. S. Credit union with over 10,500,000 members for a multiyear credit, debit and processing agreement.
Also in the U. S, Google Pay introduced a Visa virtual card that links to U. S. Android users' Google Pay balances, enabling these users to spend their balances at stores. In Italy, we extended our agreement with Bancassalla, part of the Cello Group, the largest private and independent banking group in Italy for the consumer credit and commercial portfolios with plans to launch session.
In Singapore, we're expanding our strong partnership with DBS, the largest bank in session. In our CEMEA region, we won the consumer credit portfolio of Qatar National Bank, the largest financial institution in the Middle East and Africa, and we renewed the credit portfolio of Saudi British Bank, 1 of the largest Saudi banks. Session. We're also building momentum as a global leader in co brands. In the U.
S. Alone, we have 7 of the top 10 co brands. Session. And this quarter, we're pleased to renew Hyatt in the U. S.
And renew and grow the Williams Sonoma co brand, which will be relaunched with an expanded scope Australia and Marcanalibra, the largest e commerce retailer in Latin America. In partnership with Banco Itau, We also won the co brand business of Magaloo, a major retailer with one of the largest co brand portfolios in Brazil. Finally, into the Asia Pacific region, we have secured a significant part of LINE Pay's business with the partnership renewal in Taiwan, session. FinTechs are also core to our consumer payments growth. Session.
And this quarter, we forged new partnerships and deepened relationships with long time clients. I just mentioned LINE Pay in Taiwan, and we also continue to see strong momentum in our with LINE Pay in Japan and with LINE BK in Thailand. Over the last year, they have added more than 2,000,000 visa credentials across those markets. Likewise, in India, longtime partner Paytm has issued 6,000,000 virtual Visa debit cards. In addition, they've recently started to issue physical Visa debit cards, which they expect to ramp up over the coming months.
Kakawa Pay, one of the top 3 mobile wallet providers in Korea with more than 30,000,000 users, recently signed on to issue Visa credit cards. In the Middle East, we're partnering with STC Pay, the fintech subsidiary of Saudi Arabia's largest telecom operator to embed session. More than a 1000000 Visa credentials have been issued since September of 'twenty. Rappi, Latin America's super app with over 70,000,000 users has now started issuing Visa credit cards in Brazil, Mexico, Colombia, and Peru session with plans to expand to additional countries in coming months. And in the crypto space, we recently signed 3 partnerships, 1 with Tala to partner on cryptocurrency solutions for the global unbanked and 2 with crypto exchanges FTX and CoinZoom to begin offering Visa cards.
We now have more than 50 crypto wallet and platforms, up from 35 in Q1 and more than the next leading network. Session. And collectively, they drove over $1,000,000,000 in payments volume and just represents a significant engine of growth. Started B2B that have been gaining traction. Our Freedom solution enables corporates to control and monitor corporate card And in the United States, Wells Fargo will deliver these capabilities to their corporate clients as part of our partnership we announced earlier this year.
Visa's commercial pay, which offers a mobile app enabling virtual card issuance and management of business incidentals session with enhanced data will be part of OCBC Bank's virtual purchasing card offering in Singapore. Visa Direct transaction growth remains robust with nearly a half a 1000000000 more transactions this quarter than in the Q3 of last year. ADP, a leading global technology company providing human capital management solutions recently integrated its wisely offering with Visa Direct to provide ADP clients with a digitally enabled, convenient, and cost effective solution for employee off cycle payments. Session. In the P2P space, the WhatsApp payment feature powered by Visa Direct and Visa Cloud Token Framework session.
Launched in Brazil in May and we're seeing early success with a significant number of Visa credentials enrolled and sizable growth in P2P money transfers. PayPal announced instant transfers for merchant settlement at p2p via Visa Direct in Australia. We also developed new use cases this quarter session. 1st, GoFundMe is integrating Visa Direct to soon launch funds disbursement to individuals and organizations. 2nd, Questrade, the Canadian brokerage platform, announced the launch of instant deposit, allowing investors to fund their trade installment providers globally.
We've also developed developed our own solution, which had some notable progress in the quarter. In Canada, Scotiabank is extending their Post purchase installments offering to they're offering to eligible Visa retail credit clients. CIBC is launching installments during purchase And Desjardins, North America's largest financial cooperative, will be offering during purchase installments for their eligible Visa customers. Session. In addition, Global Payments is enabling our installment solution for their merchant customers.
2nd, CyberSource, session. Our omni channel gateway platform has grown as a result of 3 drivers. 1, increased e commerce and omni channel volumes 2, more business creating online and omni channel presences while leveraging our risk pools and 3 more acquirers white labeling the solution. This past quarter, top 20 U. S.
Session. The acquire payer and Qatar National Bank both signed on to utilize Cybersource's capabilities. 3rd, DPS. Session. I mentioned the processing agreement earlier with Navy Federal.
They intend to utilize DPS. In addition, Current, session. 1 of the fastest growing U. S. FinTechs with nearly 3,000,000 members has selected Visa DPS as its partner.
Current will integrate with DPS's newest All digital processing solution called DPS Forward, which combines issuer processing capabilities with a new suite of APIs that integrate session. Finally, Visa Consulting and Analytics. Our advisory teams have delivered nearly 1,000 projects year to date in 88 countries to help our clients be more successful. Let me just share a couple of examples. In Latin America, we developed a digital acquisition platform that helped one of the top issuers in the region improve credit Approval turnaround times from days to minutes will also better qualifying leads to reach a 4 times improvement in approval rate compared to their prior solution.
Session. Globally, we have launched a new program called Visa Portfolio Health Check, where we review clients' portfolios tracking 30 plus key performance indicators. Year to date, we have held health checks across 55 countries, identifying nearly 300 specific opportunities work nearly $50,000,000,000 in incremental payment volume. Before I close, let me touch briefly on the 2 recently announced acquisitions. Session.
First, that of the open banking platform, Pink. Visa's proven infrastructure and sustained investment in resilient cybersecurity and fraud prevention, session. Combined with Pink's APIs, their technology and customer relationships is expected to help accelerate the adoption of Open Banking in Europe session by ensuring a secure, reliable platform for innovation, which will help consumers and businesses. 2nd is the acquisition of CurrencyCloud, Cloud's capabilities on the front end of the transaction through their APIs and our settlement capabilities across VisaNet and other Visa networks session such as Plus, Earpork and Visa B2B Connect will be very compelling value propositions for our partners. Session.
In closing, as we look to finish our fiscal year, I'm very encouraged by the recovery trajectory across the board and pleased with the momentum in many of our key growth areas. Our recently session. Launched new brand campaign describes Visa as a network working for everyone, and we are increasingly sitting at the center of enabling money movement. I'm confident session. Our network to network strategy combined with our 3 growth levers of consumer payments, new flows and value added services remains more relevant than ever session positions us well as we look forward to a robust recovery.
With that, let me turn it over to Vasant. Vasant?
Thank you, Al. Good afternoon, everyone. Fiscal 3rd quarter results exceeded our expectations with net revenues up session. 27%, driven by robust growth in both credit and debit in the U. S, higher cross border volumes from a faster than anticipated recovery in travel, session as well as a spike in cryptocurrency purchases and low client incentives largely due to deal timing.
Session. Had we recognized service revenues on current quarter payments volume, net revenue growth would have been 39%. Session. The reason for this large difference in growth is a result of the significant quarter over quarter change in growth rates of payments volumes both last year and this year. Session.
The Q3 last year experienced the steepest drop in payments volume and Q3 this year has been our strongest growth quarter since the pandemic started. Session. When adjusted for the service fee recognition lag, net revenues for Q3 FY20 are lower session. And net revenues for Q3 this year are higher. GAAP EPS grew 10%, primarily due to a non recurring non cash session.
Non GAAP EPS rose 41%, helped by lower than expected expense growth and a lower tax rate. Exchange rate shift lifted net revenue growth by 1 point and EPS growth by 2 points. As we did last quarter to help you better assess Both the magnitude and the trajectory of the recovery, we have also provided key performance metrics relative to fiscal year 'nineteen. Session. In constant dollars, global payments volume was up 34%, led by continued strength in debit as well as improved credit spending.
Session. Compared to the Q3 of 2019, global payments volume was 21% higher, a 5 point acceleration from the 2nd quarter, session. With debit and credit improving by 5 points and 4 points respectively. Excluding China, total payments volume growth was 38% or 25% higher than 2019 and a 5 point acceleration from the 2nd quarter. Chinese domestic volumes session continue to be impacted by dual branded card conversions, which have minimal revenue impact.
U. S. Payment volume growth was 40% and up 30% over 2019, benefiting from economic impact payments in the first half of the quarter session. And then from the lifting of COVID related restrictions across the country. Debit growth accelerated 4 points, session.
Digitization and e commerce was sustained even as the economy reopened. Credit growth improved 8 points, session. Up 14 points from 2019. The credit improvement was fueled by 2 interrelated factors, a significant acceleration in travel, session. Entertainment and restaurant spending, as well as the resurgence of affluent cardholder spending.
Card presence spend accelerated by 9 points to 12% above 2019, even as Card Not Present volume excluding travel improved 4 points to 59% over 'nineteen. Session. As the U. S. Reopened, session.
Travel and entertainment spending improved steadily through the quarter, both up about 25 points from the 2nd quarter. Travel is approaching 2019 levels in July, while entertainment surpassed 2019 levels in May. Session. Restaurant spending in the quarter was over 20% above 2019 levels. Growth across all other spent categories remain session.
International constant dollar payments volume growth improved 4 points from the 2nd quarter, up 13% over 2019 levels. A few regional highlights. Growth in our CEMEA region remains strong, up 48% from 2019 levels consistent with Q2 fueled by cash digitization and client wins. Session. Latin America was also up 48% from 2019, accelerating 8 points from the 2nd quarter with robust performance across the region fueled by market share gains.
Brazil volumes are seemingly unaffected by the high level of COVID cases due to significant cash digitization and large increases in e commerce adoption. We're also benefiting from our digital partnerships session and client wins in Brazil. Europe was up 17% from 2019, improving 9 points from the 2nd quarter, session. The largest sequential acceleration among our regions. Across Europe, restrictions were relaxed and in store spending recovered, session, while e commerce spend remains strong.
Asia Pacific remains our weakest region, up 5% from 2019 session and down 3 points from the Q2 excluding China. Performance across the region varied based on the level of infections and COVID related restrictions. Session. There were intermittent restrictions during the quarter in Australia, Japan and Singapore. Much of Southeast Asia was significantly impacted session by rising COVID infections and resultant lockdowns.
In India, a sharp slowdown in spending starting in mid April through May was followed by a quick rebound with July trending well above 2019 levels. Global process transaction growth was 20% over 2019, improving 4 points from the Q2 as transactions increased with volume across session in the mid-50s. The cross border volume recovery continued as more countries open their borders. Constant dollar cross border volume excluding transactions within Europe was at 82% of 2019 volume, a 7 point improvement from Q2, led by session. Cross border card not present volume excluding travel continued to be very strong, up 56% from 2019, Improving 12 points from the Q2 with cryptocurrency purchases representing most of that acceleration.
We have seen more active cards session and more spend per card in cryptocurrency purchases. We saw the normal seasonal uptick in cross travel spending during March April. However, cross border travel in May June was stronger than the typical seasonal session. As many borders reopened or eased requirements. Cross border travel related spend excluding intra Europe was at 45% of 2019 levels, expanding 6 points from the 2nd quarter, rising from 40% of 2019 April to 50% in June.
Session. The state of the cross border travel recovery varies significantly across regions depending on border openings, quarantine and other requirements, session as well as infection levels. Outbound travel from the U. S. And Latin America was back to around 60% of 2019 levels session in the Q3, whereas Europe and CEMEA were about halfway back.
Inbound travel has recovered the most into Latin America and CEMEA Latin America above 2019 levels due to Mexico, whereas the U. S. And Europe are only about a third of 2019 levels. Session. Asia Pacific cross border travel, both in and out, has recovered the least, still at around a quarter of 2019 levels.
Session. We've seen immediate impacts on popular travel destinations open their borders. Greece opened borders in April session. And inbound card present spend rose nearly 30 points by the end of June relative to 2019 levels. France opened on June 9 and inbound card present volume rose nearly 20 points by the end of June relative to 2019.
Session. Travel to Mexico has been strong for several quarters, while the Q3 accelerated further helped by travel from the U. S. Amid vaccination progress. Session.
Since April, card present cross border spend in Mexico from the U. S. Rose nearly 50 points session to over 170 percent of 2019 levels. Moving now to a quick review of 3rd quarter financial results. Service revenues grew 17%, led by 11% growth in the 2nd quarter constant dollar payments volume, helped further by favorable session.
Exchange rates and mix as well as small pricing modifications. Data processing grew 32% due to very strong Domestic process transaction growth, particularly outside the U. S. The 7 percentage point difference between revenue session. And process transaction growth reflected the mix shift away from higher yielding cross border transactions.
In addition, session. While value added services recorded in data processing revenues had strong and accelerating growth, this was slower than overall process transaction growth, session, which benefited from lapping effects. International transaction revenues were up 54%, 8 points lower than nominal cross border volumes, excluding intra Europe due to lapping high currency volatility last year session and a less favorable regional mix. Other revenues grew 31%, led by consulting and data services session and helped by lapping COVID impacts last year. In total, value added services revenue grew 28%, session.
Of the 14 point acceleration from the 2nd quarter, about 2 thirds was due to COVID related lapping effects. Client incentives were 25.8 percent of gross revenues, consistent with the 2nd quarter, but lower than our expectations session due to both numerator and denominator effects. A lower than expected numerator as some deals were delayed and are now expected for the Q4, session. Also higher incentives from U. S.
Outperformance were largely offset by lower incentives from underperformance in Asia Pacific. A higher than expected denominator as we had stronger cross border volume and value added services revenue, session mostly due to timing of some initiatives being pushed into Q4, particularly marketing spend and professional fees. Marketing expenses did grow over 50% in the quarter as we lap reductions in spending at the outset of COVID last year. G and A expenses decreased year over year due to favorable foreign currency fluctuations and lower indirect session. You recorded gains from our equity investments of $439,000,000 Visa has minority investments in over session.
When there is a new financing round or an IPO, per the accounting rules, we mark our investments to market, session, which can result in gains or losses. Our investment portfolio has been performing very well. There were gains across several of our investments. Session. The gain recorded this quarter was largely driven by 1 partner's financing round and another partner's IPO.
Session. Excluding investment gains, non GAAP non operating expense was $114,000,000 in the fiscal third quarter. Our GAAP tax rate was 41.3 percent due to a $1,000,000,000 non recurring, non cash tax charge pertaining to the remeasurement of deferred tax liabilities and the taxes related to investment gains. The non GAAP tax rate was lower than expected at 17.9 percent due to the recognition of a tax benefit. GAAP EPS was $1.18 session.
Non GAAP EPS was $1.49 up 41% over last year. We bought 9,500,000 shares of Class A common stock at an average price of $227.83 for $2,200,000,000 this quarter. Including our quarterly dividend of $0.32 per share, session. We returned approximately $2,900,000,000 of capital to shareholders in the quarter. Moving on to our outlook for the Q4.
I'll start with business trends through July 21. Session and credit up 17% versus 2019. As we've said before, weekly numbers can have noise in them. For example, session. In the 3rd week of July 2019, a major online retailer had their annual sales event, which impacted performance 2019 are modestly above the Q3, but in line with June.
Notable exceptions include improvements in India, Canada and Brazil session with modest slowdowns in Australia and Japan. Process transaction growth continued to improve, up 23% versus 2019. Session. Cross border volume excluding transactions within Europe on a constant dollar basis were 81% of 2019, session, which is one point below the Q3 in June. Travel related spending versus 2019 improved 3 points compared to June, offset by lower e commerce growth, mostly due to cryptocurrency purchases falling back to pre April levels.
The recent announcements by the UK and Canada regarding border openings in August should be helpful in the Q4, While Asia Pacific remains largely close to Travelers. Assuming July trends continue, 4th quarter net revenue growth is expected to be in line with the 3rd quarter. We expect the benefit from the service fee recognition lag And the cross border travel recovery to be partially offset by cryptocurrency purchases falling back to pre April levels, session, as well as smaller year over year lapping benefits in transactions processing and value added services revenues. The Q3 was the Q1 of growth relative to fiscal year 2019 we have had since the pandemic started. Based on current trends, we expect 4th quarter net revenue growth relative to fiscal year 2019 to be in the same range as the 3rd quarter.
Session. Q4 operating expenses are expected to grow in the mid teens, inclusive of some expenses planned for the Q3, which were pushed into Q4. Non operating expense is expected to be around $125,000,000 Our tax rate expectations are in the 19% to 19.5% range. In summary, we had a stronger than expected Q3 as economies and borders reopened. Session.
Even as card present spend recovered, e commerce spend stayed strong. Debt spending sustained high growth rates as cash digitization remains robust. Session. The cross border travel recovery is gaining momentum. Our new flows and value added services businesses continue to grow at high rates session as they have all through the pandemic.
We are stepping up investment in key growth initiatives as we look ahead to several quarters of recovery session and prepare to capture the exciting opportunities available to us in the post COVID era. With that, I'll hand it over to Mike for questions and answers.
Session. We're now ready to take questions, Michelle.
Thank Our first question comes from Tien tsin Huang from JPMorgan. You may go ahead, sir.
Session. Hey, thank you
so much. Great results here. A lot I could ask, but let me ask on debit versus credit dynamics. Session. I'm really focused on the U.
S. Here. I'm just curious, Alex, I
have your views on relative growth between debit
and credit session. Changed based on what you've observed so far and the recovery and with all these FinTech names investing in card growth and card engagement, I think you mentioned current session. So just curious what you're thinking is there. I'm not
sure I'll go up between the 2. So I think what we're seeing now is, as you've seen in the numbers, debit has had session. It's indexing close to 150 pre COVID levels. That reflects Really a huge step up in the digitization of cash. It's evident all over the world.
You see that in CIMLIA numbers, you see it in Latin America numbers. So debit is the engine of cash digitization. So structurally, debit is benefiting from cash digitization picking up, as well as the move to e commerce. What you are seeing though is that credit is accelerating quite fast. And if you look at the numbers, the biggest quarter over quarter Recovery, it's been quite significant in credit.
Structurally, I think what we're seeing is the affluent Customers come back to spending because economies have reopened and the plastic sectors that would benefit from reopening like restaurants, travel and entertainment are also picking up. There's so many things going on here that are, let's call it, recovery related or fundamental changes like Cash digitization and e commerce that it's too early to tell whether there is a significant structural change between the use of debit and credit. I think credit has got quite a few quarters to go of recovery, and the trend remains quite robust even as we look at July. Session. Thank you.
The only
thing I would add, Tien Tsin, is that we saw a major separation session through the pandemic, the heart of the pandemic between credit and debit growth. And this quarter, session. The separation between them in the business was more like 6 points where we've seen quarters
session. Makes sense. Thank you both.
Thank you. Our next question comes
session. Alison, can you talk about Open Banking and what it means for Visa in light of the accelerated activity there and also your recent acquisition of Think? Session. In what ways Visa can participate in this global move towards Open Banking? And also, can you talk about the potential to take
Well, I'll start and Vasant can jump in. The epicenter of Open Banking is Europe, which is what attracted us to Taint. It is an open banking platform that has a footprint in 18 markets that allows through single API customers, which are primarily developers to access financial data And take us connectivity to about 3,400 banks and FIs and about 10,000 developers in Europe. And it's one of 400 Players, I mean, versus other markets. There's an awful lot of players in the open banking space in Europe because of the fact that it is session is ground 0.
And we do think that the combination of our Various capabilities and relationships combined with Tink's technology and relationships is going to ideally accelerate The adoption of Open Banking in Europe. It's early days, but there is going to be an increased Adoption of Open Banking and we see making progress in Europe first session. Even beyond the 18 markets that Tink is in, and there's no reason why we can't take the business to other parts of the session. World, particularly in Asia and CEMEA.
Thank you, Brian. Next question.
Thank you. Ramsey El Assal from Barclays. You may go ahead.
Hi. Thanks for taking my question this afternoon. Session. Could you update us on B2B Connect and talk a little bit how your go to market strategy there is evolving? How is it ramping?
Session. And just give us a general update on what's happening with B2B Connect.
Well, I think as we've talked in session. The most important thing with B2B Connect is to continue to grow out the infrastructure, And that requires both signing key partners, and we had announced last quarter, I guess, the signing of Goldman Sachs transaction banking as a user of B2B Connect. And we're using bank integrators like ACI and session. At this point, that's our emphasis. Our emphasis is building out this the robustness of this network, so it has more endpoints and more clients.
Again, we see this as a $10,000,000,000 opportunity and we think that B2B Connect is a Has the capability to be a much better than swift kind of alternative for driving Payments without having to build cross border payments without having to build out a corresponding banking network. Session. So we've continued to sign players and they've continued to do their infrastructure connections to us and we've started to drive transactions. But at this point, session. When I have an update on B2B Connect, I'm much more interested in how we're doing in driving the robustness of the network versus We're counting progress on the number of transactions that we're actually seeing slow over the network.
Session. Yes. One other thing I might add to that is you may have seen the announcement of Visa Payout Service. Session. Essentially, we're integrating both Visa Direct and B2B Connect to offer a single point for our customers to come to us for all kinds of Cross border payments, either business customers, B2B customers, whether they are low ticket, high volume, Which we can handle through the Visa Direct capability and Earthport, all of their high value, Low volume transactions, which we can handle through B2B Connect.
So essentially from a client standpoint, they don't they just session interface with us. And whatever the needs are, we can meet in any form, whether it's through account, to card, or to any part of session. So it's important to note that it also sort of integrates well with our other capabilities to provide a single point of contact. Session.
That's terrific. Thank you.
Thank you. Our next question comes from Lisa Ellis with MoffettNathanson. You may go ahead.
Session. Hi, good afternoon. Thanks for taking my question. Wanted to dig in a little on value added services and new flows, given call out that value added services grew 28%, I think you said in the quarter, was peaking back at Investor Day February 2020, which is of course session. A lifetime ago now, but at the time you would kind of put this framework out that new flows in value added services were around 23% of revenues growing in the high session.
And that was sort of the momentum expected going forward. Can you just kind of broadly talk about now 18 months later through the pandemic, how session. Your outlook for new flows in value added services has evolved. Do you now expect it to be faster and bigger given both the secular shifts during the pandemic as well as some of the acquisitions you've made. Maybe what's just changed in that outlook?
Thank you.
Well, Lisa, we remain extremely robust and excited about the opportunities in value added services Obviously, in some of our value added services, we actually saw declines during the pandemic. Certainly, people were buying less travel benefits from us. There were less transactions in certain cases against which we could sell value added services. But as I said, we started to see transactions really roar back this quarter. For the first time ever, we averaged over 600,000,000 session.
Transactions a quarter in the quarter and for every day in the quarter, I should say. And that was up 160 from by More than 160,000,000 transactions a day a year ago during the pandemic. So I think that as we start to get into what I hope what I believe is going robust recovery and a continued growth in transactions, we're going to continue to see our platform type services, CyberSource, session. Our issuer processing, our risk and identity services, which represent about 2 thirds of our value added services, Grow very nicely. I think we've continued to start to see recoveries on the other side in things like session.
Our consulting and I think as travel comes back, our card benefits and travel related card benefits will trajectory of where we wanted to be in 5 years. I feel like we're going to get right back on that trajectory and maybe even do better than we might have thought We would do. In terms of new flows, I'd say a couple of things. One is, obviously, Visa Direct continues to do very well. I cited that it was almost a half a 1000000000 more transactions in the quarter than the prior year.
And I think in Vasant's remarks, you talked about mid-50s percent growth levels continuing, and we've seen this for numbers of quarters now. And in the B2B space, we're starting to see Some recovery, the B2B space looks like the consumer credit space. So It's the commercial volumes kind of echoing or following that, mirroring that, although small business is obviously recovering quicker than large market. But as I think as people start to come back to work, as business travel starts to return, I feel good that The commercial volume will continue to come back as well. So again, I would say that in the new flows area, while we again went off from what we would have said at Investor Day.
The reality is I think we'll get right back on now as we're seeing Really very good beginning to what I think will be a robust recovery.
Terrific. Thank you.
Thank you. Our next question comes from Sanjay Sakhrani from KBW. You may go ahead, sir.
Session. Thank you. I guess my question is if you parse through the granular spending trends, I'm curious how much of the spend outperformance you're session is related to pent up demand versus stimulus benefits. I'm just trying to think through how to run rate the outperformance. And then specific To the Q4 expectations, maybe you could just speak, Bhassan, to the your expectations relative to the Q3, particularly on cross border?
Thanks.
Sure. So as it relates to the second part of your question, if you look The trends in the 1st 3 weeks of July, and I want to emphasize, as we said before, that 3 weeks don't make a trend and you shouldn't read too much into I told you that the 3rd week of July in the U. S. Was impacted by what happened in the 3rd week of July in 2019, That's sort of a we often look at it as a clean year, but when you look at week by week numbers, there's always going to be unusual things about what happened session. In the same week in 2019 or what day of the week was when or what holidays impacts were and so on.
Session. So setting that aside, what you saw in the 1st 3 weeks of July was quite a bit of stability on the cross border side. Session. And we think that's sort of the trend for the Q4. We see some of the cryptocurrency cross border purchases Have fallen back to pre April levels.
We had a spike in April May, as we mentioned. So that will has pulled back in July, as you can see, that was replaced by travel continuing to recover. And so that gave you a certain amount of stability. Session. The big question mark is what kind of a summer travel improvement will we get in cross border travel, given that While borders have opened and substantially more borders are open than they were before, it's still not normal in that all borders are not open and especially borders in Asia are not So I think our best sort of view of the Q4 as it relates to cross border travel and cross border in general is that cross border in general stays relatively stable with the Q3 with travel recovering session.
And cryptocurrency purchases falling back a bit and so on balance we're at neutral. In terms of the domestic businesses around the world, session. We provided you some color in the comments. Everything we're seeing so far, if you adjust for unique things that's happened in 2019, is a trend that's either stable or slightly better in the U. S.
And around the world, either stable or slightly better, with no evidence right now anywhere of delta impact in the spending and an important correlation there is mobility. Mobility is highly correlated with spending we find and mobility indexes in general are either stable or climbing still session. Even as infections are climbing in many parts of the world and even where infections have gone up a lot, mobility doesn't seem to be session impacted yet. No evidence of it, nor are we seeing any impact on spending.
Session. Sanjay, the only thing I would add is that, yes, where there's been stimulus, that has certainly impacted some spending, but it tends to Drive spending for a couple of weeks and then wane over the 3rd to 5th week. Session. I might use a different phrase than pent up demand. I think it's a little bit of a return to normal.
And I'd also bring back the We're starting gyms are open, people are going to sporting events. And then I'd come back to something Vasant I did in response to one of the earlier questions, which is the affluent customers jumped back into the marketplace. These are the people that drives up white tablecloths, restaurant spending. These are people who make discretionary purchases. These are the people who are heading to Mexico and other places as borders open up.
And so I think, again, I'd echo what Dusan said that if mobility can Continue to improve, I think we just get closer and closer to returning to a more normal and therefore feel like There's going to be a good run here of a good recovery for the business.
Thank you.
Session. Thank you. Our next question comes from Mr. Darrin Peller with Wolfe Research. You may go ahead, sir.
Session. Thanks, guys. When we look at cross border at 85% of 2019 travel, still 50% to 60% of 2019 levels. Clearly, there's considerable room to the upside when that travel resumes, especially looking at how e comms held up. Can we just revisit the incremental net revenue opportunity from that?
I know there's a lower correlation of rebates incentives from cross border and it's a higher margin business. So session. If you could just reconfirm that. And then would you let much of that pass through for shareholders, just given that we've missed out on 1.5 year of cross border to the same magnitude we should have had.
Well, if you do simple math and say that the cross border business would have 2% of 'nineteen. I mean, you can do the math yourself, right? We would have been indexing closer to 120 or 121, I suppose, if you assume 10%. And that delta between 82121 gives you a sense if you apply that to our international revenues line, it gives you a sense of it. Now we do have some additional cross border revenues in the data processing line because that is there's data processing revenue associated with cross border 2.
So if you do the math, I mean, you can see that it's a sizable amount of revenue. Yes, you're right. Incentives are not Generally tied to cross border. There are in some parts of the world, particularly Asia, where for travel related portfolios, we may have some incentives tied cross border in those portfolios. So a fair chunk of it would flow through to the net revenue line.
And that's one of the reasons in fact why our incentive The gross revenues have climbed. It's because of this mix shift. As far as how that how much of that flows through to the bottom line, session. Our approach has been we need to invest as much as we need to invest to grow the business. There are significant opportunities available.
Session. We've already told you that our expenses will grow in the mid teens in the Q4. If cross border recovers faster, that won't necessarily change our investment plans. And we've never managed for margins. Margins are an outcome.
Our goal is to drive as much volume and revenue growth as we can And to invest what we need to drive that growth.
Got it. Thanks guys.
Thank you. Our next question comes from Bob Napoli from William Blair. You may go ahead, sir.
Thank you and good afternoon. Session. Question just following up on the Currency Cloud acquisition and the growth of cross border, Visa's view on the growth of cross border maybe physical travel with all the different marketplaces out in the world, it seems like there's been an acceleration potentially. So any just any thoughts session. On the growth of cross border long term ex travel and the how Visa in particular is Looking to get more deeply, I guess, engaged.
Well, I'll start and Vasant can pick up. Look, the reality is the world is shrinking from the perspective of how easy it is for people to buy sellers in different countries and different regions around the world. And we've seen a Dramatic increase, millions and millions of people shopping online during the pandemic who never shopped online before. So Our expectation is that you're going to continue to see very, very good growth And in terms of cross border is something you're not going to be able to and nor want to Go back to the way it was before. I think that this is a fundamental change in how people shop and it's going to continue to drive the Cash digitization that we've been talking about.
CurrencyCloud, the acquisition we announced, I don't know, A week or 2 ago, I think builds on and extends our existing capabilities to provide better FX services and Easier connectivity to FinTechs, financial institutions and other partners. And they have a really cool set section via those APIs. And our settlement capabilities across VisaNet and our other networks, B2B Connect, Earthport Plus, etcetera is going to create a very powerful combination. So ultimately, our session is to provide global reach here with simplicity and flexibility at competitive pricing, and we want to leverage our settlement scale and make sure that session. We're also leveraging our sophistication in managing risk.
So we like the asset in session. Currency cloud, we like this to be a combination of Visa's capabilities and Currency cloud's capabilities. Session. And we like the fact that from a dynamics perspective, we see cross border travel continuing
Yes. And going back to your question about moving past sort of our traditional business of enabling payments to merchants cross border, session. You've heard us talk about the extraordinary progress we're making in remittances, for example. We signed up all the major remittance providers and we can provide a very flexible, very attractive proposition for their consumers at a very session. And it's not an area that we served before.
Beyond that, you heard earlier about Visa payment service, payout service, which is very valuable to pay gig economy players around the world, as well as it has a big role to play in marketplace and so on. The third one I would highlight is the partnerships we signed with a whole range of cryptocurrency wallets that enable the use of Visa credentials that they issue at 70,000,000 merchants around the world and a big chunk of that business is expected to be cross border too. So our business in cross border has gone well beyond the traditional, let's call it C2B space to B2B cross border, of course, and a significant chunk of B2C cross border. Session. Thank you.
Appreciate it.
Thank you. Our next question comes from Ashwin Shirvaikar from Citibank. Sync. You may go ahead, sir.
Thank you. Hi, Allison. I was hoping that you Might be able to answer a framework question as investors think primarily about fiscal 2022 rather than 4Q. Session. As you're going through your budget planning process, how are you thinking about pricing?
How are you thinking about session. Expenses, what would it take for you to say return to providing a
full year outlook, if you could
Kind of provide a framework of how you're thinking.
Yes, it's too early to give you a perspective on 2022, I think we'll save that for October. And whether we provide a full year outlook or do what we've done this quarter is to give you the we have of what we see around us right now and how it might play out for a quarter or 2 Whether we go further than that, I think we'll assess as we go along. As we've said, we've already given you some indications of Our posture as it relates to investment, we are preparing for multiple quarters of recovery. You heard earlier session. The conversation about the cross border recovery that still remains ahead of us.
So clearly, there's plenty of recovery still to session. And we are investing in preparation for a post COVID world where we see extraordinary opportunities in new flows and value added services. So we are stepping up investments and our expenses are growing in the mid teens and so on. Session. In terms of projecting where revenues are going to be or what the volume trends are going to be, we'll save a lot of Our discussion and pricing and our thoughts for that for October.
Got it. Thanks.
Our next question comes from David Togut with Evercore ISI. You may go ahead.
Session. Thank you. Good afternoon. Recently, your U. S.
Centric competitor sharply increased consumer rewards on one of its mass affluent credit cards and session.
Some of those reward increases were matched by Visa issuers. So I'm curious for your view on how this step up in the rewards
Well, I think what issuers are doing is getting ready for Our return to travel being an important spend category. As you well know, many of these reward propositions in North America, both in the U. S. And in Canada, are very tied to travel. All the big airlines, all the big hotels have co brand programs and even for other programs that are more Reward programs are more generic.
A lot of their bird options are tied to travel. So I think that travel has started to come back. It will continue to come back as mobility increases as restrictions get lifted, etcetera. And I think issuers are trying to make sure that as that happens and as The affluent consumer and middle market consumer starts to get in their car and get on airplanes more that
We have time for one more question, Michelle.
Thank you. Dan Delive from Mizuho. You may go ahead, sir.
Session. Hey guys, thanks for squeezing me in. So I was just surprised to see the impact of crypto in the future if we get into more sort of crypto volatility just to get some more color because I don't think this was a big factor
We've seen
a few months here and there of these kinds of spikes in purchases. So Essentially, most of the time cryptocurrency impacts our business is when purchases go up. A lot of the people who buy crypto are buying them from entities that are Non U. S. Based, often based in Europe.
So these end up being cross border transactions when they buy cryptocurrencies like Bitcoin. And so when there is a spike in buying activity, you will see that in some of our cross border e commerce numbers. Session. In terms of quantifying how much it is, if you look at the our cross border e commerce business, ex travel, has been quite stable Through several weeks months, you'll see a bump up in April and into May and you can attribute a fair amount of that Strictly the cryptocurrency purchases. We've had this before.
There was another spike when there was a big run up in crypto prices and then a collapse, I don't know, must have been a year ago. So it has happened before. It has now fallen back to pre April levels, although it's still running at a level that is session higher than it was 6 months ago. But you can quantify it if you look at the numbers.
Got it. Thank you so much.
And that's all the time we have. So thank
you for joining us today. If you have additional questions, you can always feel free to call or email Jennifer or myself. So thank