Will Visa report cross-border volume growth below 10% YoY in either Q2 or Q3 FY2026?

Cross-border volume decelerated 500bps from +16% to +11% over one year, now sitting just 1pp above the 10% threshold. Post-COVID travel normalization is a real secular headwind, and management acknowledged lower-than-expected FX volatility extending for the rest of the year, which compresses currency conversion fees. With two quarters to trigger, even modest continuation of the deceleration trend (~250bps/quarter) would produce a sub-10% print by Q2. Stablecoin settlement ARR growth ($2.5B to $4.6B) may partially offset in total revenue but likely does not count toward the reported cross-border volume metric.

Q1 FY2026 (Oct-Dec) includes holiday travel season — a typically strong period for cross-border volume. If +11% was the result during a seasonally strong quarter, Q2 (Jan-Mar) could be weaker due to winter travel seasonality, increasing the probability of a sub-10% print. The 'either Q2 OR Q3' framing provides two independent chances. If each quarter has roughly a 35-40% independent probability of dipping below 10%, the combined probability of at least one breach is ~55-64%. The comparison base also matters — if FY2025 Q2/Q3 had strong cross-border growth, the YoY comps become harder.

Contrarian considerations temper the bearish case. Visa management may be deliberately guiding conservative on FX to set up beats — a common pattern at mega-cap companies. Global travel continues to expand per IATA trends, and the 11% level may represent a new equilibrium rather than a continuing decline. However, at +11%, normal quarterly volatility (estimated 2-3pp standard deviation) alone creates meaningful probability of a sub-10% quarter even without further structural deceleration. The stablecoin settlement growth could represent genuine new cross-border flows being captured by Visa, potentially stabilizing the metric.

The deceleration trend is unambiguous: +16% to +11% in one year, a 500bps decline. The question only requires dropping 1pp further below 10% in one of two quarters. Post-COVID normalization is real, FX headwinds are acknowledged by management, and alternative payment rails (PIX, UPI, stablecoins) are growing rapidly in key emerging markets. The Gravy Gauge's 60% probability assessment for continued deceleration aligns with this estimate. With two quarters providing two chances, the math strongly favors YES.

The deceleration is real but may be flattening as the post-COVID normalization base effect washes out. Growth could stabilize at 10-12% as a new normal for mature cross-border payments. However, specific headwinds push toward further deceleration: lower FX volatility compresses currency conversion fees, alternative rails gain share in Brazil (PIX) and India (UPI), and potential macro weakness could dampen travel. The two-quarter window is generous — even if the base case is 10-11% growth, the probability of at least one quarterly print below 10% from normal volatility is substantial.

Mechanically: Q2 FY2026 (Jan-Mar) is likely more vulnerable than Q3 (Apr-Jun) due to winter travel seasonality — international travel peaks in summer months which coincides with Q3. I estimate ~45% probability Q2 drops below 10% and ~35% for Q3, yielding approximately 59% probability at least one quarter breaches the threshold. Management's acknowledgment of continued FX drag and the committee's unresolved debate about whether deceleration is cyclical vs. structural both support above-50% probability. The stablecoin substitution question adds uncertainty — if stablecoin settlement is substitutive rather than additive, reported cross-border volume would underperform.

Clear deceleration pattern: +16% to +11% over one year. Only 1pp above the 10% threshold. Two quarters to trigger. FX headwinds acknowledged. Alternative rails growing. The Gravy Gauge's 60% deceleration probability plus the two-quarter window makes a sub-10% print likely.

Cross-border at +11%, threshold at 10%, two chances. FX headwinds and post-COVID normalization support further deceleration. But 10% may represent a natural growth floor for Visa's cross-border segment given global travel expansion. Summer travel in Q3 provides a potential buffer. Q2 is the higher-risk quarter for a sub-10% print.

The 500bps annual deceleration combined with acknowledged FX drag and alternative rails growth makes a sub-10% quarter more likely than not. Summer travel in Q3 may provide a buffer, but Q2 winter seasonality creates a likely breach point. The committee identified this as a HIGH priority escalation trigger, and the data supports near-term resolution.