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Visa increases 401(k) match, ups dividend from tax reform benefits

Many companies are touting employee benefits and long-term changes as a result of tax reform benefits, and Visa Inc. is no exception.

On a call to discuss fiscal first-quarter earnings, CEO Alfred Kelly Jr. said the company is prioritizing long-term sustainable investments rather than issuing one-time actions from tax reform benefits.

The payments giant has increased its company contribution to the U.S. 401(k) program, although executives did not say by how much.

Also in light of the recently enacted Tax Cuts and Jobs Act, Visa's board increased its quarterly cash dividend to 21 cents per share. However, Kelly noted that using tax benefits to grow the business organically is Visa's top objective for capital allocation.

In response to a question about whether tax benefits increase the company's likelihood of M&A, CFO Vasant Prabhu said Visa's plans have not changed.

"We were not cash-constrained before, so we're not going to change our posture other than the fact that lower taxes make investments more attractive," he said.

Visa executives also highlighted opportunities in Europe. Kelly cited the fact that Germany's economy remains enormously cash-driven, adding that the country has a fragmented banking environment and infrastructure. He said e-commerce can be "a stimulant" to train consumers in areas such as Germany, teaching them that using their credit or debit card is a safe way to transact.

As far as finding synergies with the Visa Europe integration, Kelly said the company is more than 90% through any general expense rationalization. The next big step in integration is technology migration, which Kelly said is set to begin in the first quarter.