Christopher Suh
Chief Financial Officer at Visa
Thanks, Ryan. Good afternoon, everyone. We closed the year with another strong quarter. In Q4, we saw relatively stable growth across payments volume, cross-border volume, and processed transactions when compared to Q3. In constant dollars, global payments volume was up 8% year-over-year and cross-border volume, excluding intra-Europe, was up 13% year-over-year. Processed transactions grew 10% year-over-year.
Fiscal fourth quarter net revenue was up 12%, above our expectations, primarily due to lower-than-expected incentives, stronger-than-expected other revenue and FX being less of a drag than expected. Net revenue was also up 12% in constant dollars. EPS was up 16% year-over-year and 17% in constant dollars, higher than expected from the strong net revenue performance and a lower-than-expected tax rate.
Let's go into the details. In the US, total payments volume grew 5% year-over-year, in line with Q3. Credit and debit also each grew 5%. Card-present volume grew 2% and card-not-present volume grew 6%. Consumer spend across all segments from low to high spend has remained relatively stable to Q3. Our data does not indicate any meaningful behavior change across consumer segments from last quarter.
Moving to international markets. Total payments volume was up 10% in constant dollars, stable to Q3. In most major regions, payments volume year-over-year growth rates in constant dollars were strong for the quarter, with Latin America up 24%,up 24%, CEMEA up 19%, and Europe up 12%. Asia Pacific payments volume saw a marginal improvement from Q3 in constant dollars for the quarter but was still less than 1% year-over-year growth, primarily due to the macroeconomic environment, most notably in Mainland China. Asia Pacific payments volume growth, excluding Mainland China, was relatively consistent to Q3.
Now to cross-border volume, which I will speak to today in constant dollars and excluding intra-Europe transactions. Total cross-border volume was up 13% in Q4, below Q3, in line with our expectations. Q4 cross-border e-commerce measured as card-not-present volume, excluding travel and crypto purchases, grew 15%, which was faster than cross-border travel volume growth at 12%, in line with our expectations. Indexed to 2019, cross-border travel was relatively consistent with Q3.
As we look at the travel corridors, the primary driver of the lower year-over-year cross-border travel volume growth was Asia Pacific inbound and outbound, which continued to be impacted by the same primary factors we've been mentioning all year: macroeconomic conditions, currency weakness, and flight bookings being below pre-COVID levels. We also saw a step-down in CEMEA outbound travel volume growth compared to Q3 due to Ramadan timing. Normalized for this, the CEMEA growth was stable.
Now let's review our fourth quarter financial results. I'll start with the revenue components. Service revenue grew 8% year-over-year versus the 7% growth in Q3 constant dollar payments volume due to mix and improving utilization of card benefits. Data processing revenue grew 8% versus 10% processed transaction growth primarily due to fees and penalties being lower than the prior year. International transaction revenue was up 9% versus the 13% increase in constant dollar cross-border volume, excluding intra-Europe, impacted by lapping higher currency volatility from last year, even with the average quarterly volatility being slightly higher in Q4 versus Q3.
Other revenue grew 30%, primarily driven by strong marketing services revenue growth related to the Olympics, consulting and, to a lesser extent, pricing. Client incentives grew 6%. As expected, Q4 was the annual low point for year-over-year growth due to lapping significant renewals from the prior year. In addition, it was further lowered from some onetime adjustments due to client performance. While Ryan mentioned a significant amount of renewal activity in his remarks, the majority of of that impact will begin in Q1 2025.
Now on to our three growth engines. Consumer payments revenue growth was driven by relatively stable payments volume, cross-border volume, and processed transaction growth. New flows revenue grew 22% year-over-year in constant dollars, helped by a onetime rebate adjustment due to deal timing. Visa Direct transactions grew 38% year-over-year helped by growth in Latin America for interoperability among P2P apps. Commercial volume rose 5% year-over-year in constant dollars, below Q3, primarily due to days mix.
Value-Added Services revenue grew 22% in constant dollars to $2.4 billion, led by strong growth in marketing services and consulting and issuing solutions. Operating expenses grew 11%, led by increases in marketing and personnel expenses. FX was a minimal drag instead of the 0.5 point benefit we had expected. Our acquisition of Pismo represented an approximately 0.5 point drag as well. Non-operating income was $69 million. Our tax rate was 16.5% due to an update in our tax position across jurisdictions.
EPS was $2.71, up 16% over last year, with an approximately one point drag from exchange rates and an approximately 0.5 point drag from Pismo. In Q4, we bought back approximately $5.8 billion in stock and distributed over $1 billion in dividends to our stockholders. We also funded the litigation escrow account by $1.5 billion, which has the same effect as a stock buyback. At the end of September, we had $13.1 billion remaining in our buyback authorization.
As we closed out fiscal 2024 and readied for fiscal 2025, I reflected on our full year performance relative to what we had expected at the start of year. With the strong Q4, full year net revenue grew 10%, in line with our expectations, and EPS grew 15%, above our expectations, a testament to Visa's diversified business model. Volatility started strong in Q1 but then declined and remained at lower-than-expected levels throughout most of the year. For incentives, we anticipated year-over-year growth will be lower than fiscal 2023 due primarily to smaller impacts from renewals in fiscal 2024. The growth rate ended up being even lower than we expected due to client performance adjustments and deal timing.
On the business driver front, processed transactions grew 10% as expected. Payments volume grew 8% in constant dollars, below expectations due to a combination of weakness in Asia Pacific, as we have discussed, and in the US from ticket size not improving as expected and, to a lesser extent, from the Reg II impact. Total cross-border volume growth, excluding intra-Europe, was 15% in constant dollars, generally in line with our original expectations, though the growth in cross-border travel volume was lower, primarily due to Asia Pacific travel and card not present, excluding travel, volume growth, performed better than we expected.
As we've seen this year, volumes and transactions can swing quarter-to-quarter. As these drivers fluctuate, we work carefully to manage our business to deliver on our expectations. So as we thought about our budget and guidance philosophy going into fiscal 2025, it's largely the same approach and represents our best view based on today.
So let's get into the guidance details and a quick note. When I reference 2024 and 2025, I'm referring to our fiscal years.
As we regularly say, we are not economic forecasters so we're assuming the macroeconomic environment stays generally where it is today. As such, we expect payments volume and processed transaction growth to remain strong and generally in line with full year 2024 levels. For cross-border volumes, we expect the Q4 2024 trend to generally continue with card not present excluding travel volume growing slightly more than travel volume.
Now let's cover our underlying assumptions for net revenue growth. First, volatility. We're expecting that the full year currency volatility levels are roughly in line with the Q4 2024 average, which implies that volatility will no longer be a drag starting with Q2 2025. Next, pricing. We will continue to price to value in 2025 with the pricing impact being generally the same as 2024. However, the cadence is expected to be different as we expect the vast majority of the incremental pricing impact will take effect in April versus being more balanced between October and April as it was in 2024.
On incentives, first, there were a significant amount of renewals in Ryan's remarks that will be impacting Q1 2025 incentives. In total, we expect more than 20% of our payments volume to be impacted by renewals in 2025 compared to less than 15% that was impacted in 2024. Second, remember that in the first and second quarters of 2024, we called out client performance and deal timing as helping incentives. And in Q4, we had additional onetime performance adjustments. Adding this up, 2025 year-over-year incentives growth is expected to be significantly higher than 2024.
We expect to close on Prosa and Featurespace in 2025, and when we do, we will update our estimates for the acquisition impacts. We pulled these assumptions together on an adjusted basis, defined as non-GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentations for more detail. In 2025, we expect full year adjusted net revenue growth to be in the high single to low double digits, with incentives being the key driver of the difference between 2024 and 2025.
As always, revenue performance is sensitive to several factors so to the extent that there are deal delays or significant deal performance adjustments and/or macro volatility and driver performance that is better than expected, adjusted net revenue growth would be on the higher end of the range. In terms of quarterly variability, we expect the second half revenue performance to be better than the first due to some of the dynamics I have spoken about, volatility, pricing and, to a lesser extent, incentives.
Now moving to expenses. We currently expect to grow adjusted operating expense in the high single digit to low double digits as we continue to fund new flows and Value-Added Services projects, our sales efforts and growth initiatives in specific countries. Non-operating income is expected to be between $150 million and $200 million as a result of lower interest rates. Our tax rate is expected to be between 18% and 18.5%.
On capital return, the Board has declared an increase to our quarterly dividend by 13%, and we intend to return excess free cash flow to shareholders through buybacks. All this results in adjusted EPS growth to be in the high end of low double digits.
Now moving to Q1. For the first three weeks of October through the 21st, with volume growth in constant dollars, US payments volume was up 6%, with debit up 7% and credit up 6% year-over-year. Cross-border volume, excluding intra-Europe, grew 13% year-over-year. Processed transactions grew 11% year-over-year.
Now to financial expectations. We expect Q1 adjusted net revenue growth in the high single digits. Three things to note when we look at the step-down in adjusted net revenue growth from the fourth quarter in 2024 to the first quarter in 2025. First, incentives. There are a number of factors impacting incentives, especially in Q1 and H1 so let me go through each part. As I mentioned earlier, Q4 incentives growth was even lower than expected, with the combined impact of the lapping of significant renewals in 2023 and the onetime adjustments due to client performance.
As I also mentioned, in 2025, we expect a significantly higher amount of our payments volume to be impacted by renewals, approximately 20% compared to under 15% in 2024. This is a combination of the large amount of renewals in Q4 2024 that will go into effect plus the amount of renewals we expect in 2025. In addition, the timing of the deal terms in 2025 is such that we expect about 60% of the 2025 renewal volume to go into effect in Q1. Putting those all together, we expect a significant step-up in the dollar amount of incentives from Q4 of 2024 to Q1 of 2025.
Second, the timing of pricing actions. As I mentioned, whereas in 2024, the pricing impact was similar quarter-to-quarter, this year, we expect less pricing impact in the first half than the back half with Q1 having the smallest impact. Third, other revenue. As we do not have a major event in Q1 like the Olympics or FIFA, we anticipate lower growth in consulting and marketing services-related revenue compared to Q4.
We expect adjusted operating expense growth to be in the high single digit to low double digits. On a year-over-year basis, remember that the first quarter of 2024 had a lower operating expense growth rate, both from lapping FIFA-related expenses in 2023 and from the allocation of Olympic-related marketing spend to other quarters.
Non-operating income is expected to be between $35 million and $45 million, and our tax rate is expected to be around 18.5%. This puts our first quarter adjusted EPS growth in the low double digits. As always, if the environment changes and there are events that impact our business, we will remain flexible and thoughtful on balancing short- and long-term considerations.
As we are several weeks into fiscal 2025, Visa's underlying business continues to be healthy and the growth opportunities are significant. We look forward to discussing this and our long-term growth algorithm at the upcoming Investor Day.
And now, Jennifer, I'll hand it back to you.
