Visa CIO: Michael Dreyer

Sumi Das: Mike thanks for joining us today.

Michael Dreyer: Thanks for having me.

Sumi Das: Visa operates one of the world's largest financial payment networks, with 1.6 billion cards being used in over 170 countries, how does Mike Dreyer help that all happen?

Michael Dreyer: Well, it's coordination between a lot of people out there. We have a tremendous amount of qualified subject matter experts with in our organization and a well-oiled machine. With that we work with a number of people out there. We have 16,000 financial institutions we connect to, 29 million merchants, we process authorized clearances, settle more than 81 billion transactions every year and 3.8 trillion dollars US we settled last year, so as you said it is a large complex organization and between that it takes a tremendous amount of collaboration and cooperation.

Sumi Das: And it takes IT, so what are your responsibilities as CIO?

Michael Dreyer: As CIO I have responsibilities for all application development globally within the organization. We work with the various stakeholders out there to make sure we have the appropriate products and services at the right time. The one thing we don't want to be, from an IT standpoint, is a gating criteria. I don't want some one to come to me from a business standpoint and say "we'd like to have this" and then us say "it is going to take us x amount of time and this amount of money to get you out in the market." We want to make sure that we are the right partner for our business rather than an impediment.

Sumi Das: Given the current economic climate, has your role as CIO been affected?

Michael Dreyer: I think we all have to acknowledge that it has been a very unique time in the credit markets. I think that from an IT standpoint, as we always have, is we work--as our bank clients look to consolidate, to acquire, to do what ever they need to do--to make sure that we stand ready. Whether it is helping them transition portfolios, whether they're looking at conversions--we'll continue to work with them on that. We also do two major business releases a year, one in April and one in October. And obviously we will coordinate with our banks and with merchants and with acquirers to make sure that we have the right infrastructure necessary to support what ever changes are coming down.

Sumi Das: How many transactions does Visa handle daily?

Michael Dreyer: Daily, it varies. We actually run anywhere from 300 million plus. It depends on what we call peak season. Peak season is traditionally the time right after Thanksgiving in the United States through after the New Year. That has actually been elongated now, given the advent of pre-paid gift cards. There is a new product that has actually taken what we traditionally had as a peak season and actually moved that into the January time frame as consumers go out and utilize the cards to procure goods and services.

Sumi Das: What are the IT challenges of handling that volume as well as during the peak periods?

Michael Dreyer: Well, it's a continuous process of improvement. We look at it from a year. As we go into the January time frame, we will actually do a decomposition of what happened during that peak season. We will look at how many transactions were handled around the world and what we did will actually have a stress test, if you will, in July, where we actually test our systems with the new configurations to see how many transactions we had and what we can handle up to. For example, last year we processed approximately 7400 transactions per second at peak. And what that is measured at is a sustained volume for over an hour. Usually it happens, the day before or two days before the United States Christmas time, usually is when we see the shopping happen at that point in time and we can actually configure our system for 10000, we have actually have done tests that run that up as high as 15000. We have a tremendous amount of head room to handle unique transactions, whether it is information or loyalty or so forth.

Sumi Das: In an interview in 2006 you said, that reliability comes first for Visa and then security, why?

Michael Dreyer: In today's environment I do not think you can take reliability and security as separate items. They're both at the same stature of importance to us. You want the network to be reliable. People trust Visa to be there at all times but at the same time, the consumer requires us to be the most safe and secure way to pay, so we approach security through a layered approach, if you will. Whether it is the network, the application, the actual data--we look at various ways to encrypt the information, to safe-guard the information, and at the same time making sure that we have the reliability that you have come to expect from a Visa standpoint.

Sumi Das: They go hand in hand.

Michael Dreyer: They go hand in hand.

Sumi Das: Tell us about innovations at Visa. Can you give us examples of innovations that have helped Visa get ahead but also continue to deliver on its brand promise?

Michael Dreyer: Innovation comes in any number of forms. We look at it, when you are a developing country or a developed country, really at the essence we are looking to take cash and check and moving them to electronic forms of payment. If you take a country like India, for example, you will see mobile technology come out quicker there than other places. That's an area where the communications infrastructure in a lot of places may not be as advanced as in others, so mobile is a perfect way for people to pay and be paid. We have to be at the forefront of that. Innovation also comes in the form of Visa PayWave in developed countries and you are looking at quick service restaurants, for example, where the big thing is to solve for people getting through the line quickly. A tap and go is about as convenient of a way as you can. So innovation depends upon the market, it depends upon what we are trying to accomplish in that market and we want to make sure that we have the appropriate form factor at the right time.

Sumi Das: This idea of using your mobile phone as a way to pay for things--is there a way to use IT to ensure that the mobile experience is as reliable and secure as using plastic, plopping down my credit card?

Michael Dreyer: I think that is one of the core tenets of our business. We definitely want to make sure that you as a consumer, and taking care of our corporate clients, make sure that whatever form factor they use--whether it is a contactless chip card, whether it is a contact chip card in other areas, or whether it is a mobile phone--that whatever form factor is the best way to pay for you, we want to make sure that you have the same experience on that transaction: whether it is a physical card, whether you are tapping and go on a Visa PayWave, or whether you are taking your mobile phone and procuring goods and services that way. It is one that we make sure we will cross form factors, so we want to keep that consumer trust and confidence in Visa payments

Sumi Das: Visa prides itself on being ‘everywhere you want to be', but MasterCard is keeping Visa on its toes overseas. How do you build IT systems on a global scale?

Michael Dreyer: I think Visa has been doing that for any number of years. We have been a global organization for a long time. We have competed effectively in this market place as have our other competitors. I think that we have a differential advantage with our four high-processing data centers around the globe. We run a single image of our authorization system around the world which allows us to take that transaction and view them all at a time, that's what makes advanced authorization so interesting is we are looking, not only at a transaction in location A, but looking at all transactions as the come into our system and building better models and a better approach. We are making sure that we have that, where ever Visa cards are used.

Sumi Das: You have four data processing centers on three continents. What are the core pieces of technology that you are using to operate those centers?

Michael Dreyer: You really need to segment into our core systems, what some people refer to as legacy systems and our open systems and draw a distinction between them. We have our authorization systems, that is when you authorize a transaction you actually utilize that system and we have clearing and settlement where you move the funds and clear the transaction and send the money to the appropriate parties at that point in time. We also have our open systems. We have Visa resolve online, which is our charge back dispute system, back office, if you will, so in the case you do have a transaction you are researching more, you have the ability to go back and look at that. We have our data warehouses as well to where we can take that transaction and do the research on it or do the modeling, whether it is to build on loyalty or whether it is to do other things and make sure we have that. It is utilizing the breadth of the Visa organization but also making sure that we have the appropriate economies of scale in a data warehouse where we don't need to replicate all this in all places

Sumi Das: Finally, looking forward, what are your biggest challenges?

Michael Dreyer: We look at protecting and growing our core business. Obviously credit, debit, commercial, small business, large and middle market--we want to make sure that we provide the right products and services for them at the right time so, protect and grow if you will. We also want to extend the value of the network and extend the reach. We want to make sure that the overriding thing we want to make sure of is that our technology strategy is inline with the corporate strategy. One of the things that I do not want to be, and I will say this again is the gating criteria on whether we go into a certain market. You don't want to be one that says I can't do that.

Sumi Das: Mike, thanks for speaking with us today.

Michael Dreyer: Thanks for having me.

Sumi Das: I have been speaking with Michael Dreyer, CIO of Visa. For CIO Sessions, I'm Sumi Das, thanks for watching.