FinanceLooker

Excrept from filing document 2024-09-30

The aggregate market value of the registrant s class A common stock held by non affiliates using the New York Stock Exchange closing price as of March 28 2024 the last business day of the registrant s most recently completed second fiscal quarter was approximately 439 3 billion There is currently no established public trading market for the registrant s class B 1 B 2 or class C common stock
Portions of the Registrant s Proxy Statement for the 2025 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10 K to the extent stated herein Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the Registrant s fiscal year ended September 30 2024
Visa and our other trademarks referenced in this report are Visa s property This report may contain additional trade names and trademarks of other companies The use or display of other companies trade names or trademarks does not imply our endorsement or sponsorship of or a relationship with these companies
This Annual Report on Form 10 K contains forward looking statements within the meaning of the U S Private Securities Litigation Reform Act of 1995 that relate to among other things the impact on our future financial position results of operations and cash flows prospects developments strategies and growth of our business anticipated expansion of our products in certain countries size and growth of the total addressable opportunities in consumer payments and new flows and our ability to capture such opportunities industry developments anticipated timing and benefits of our acquisitions expectations regarding litigation matters investigations and proceedings timing and amount of stock repurchases sufficiency of sources of liquidity and funding effectiveness of our risk management programs and expectations regarding the impact of recent accounting pronouncements on our consolidated financial statements Forward looking statements generally are identified by words such as anticipates believes estimates expects intends may projects could should will continue and other similar expressions All statements other than statements of historical fact could be forward looking statements which speak only as of the date they are made are not guarantees of future performance and are subject to certain risks uncertainties and other factors many of which are beyond our control and are difficult to predict We describe risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by any of these forward looking statements in
Visa is one of the world s leaders in digital payments Our purpose is to uplift everyone everywhere by being the best way to pay and be paid We facilitate global commerce and money movement across more than 200 countries and territories among a global set of consumers merchants financial institutions and government entities through innovative technologies
Since Visa s early days in 1958 we have been in the business of facilitating payments between consumers and businesses We are focused on extending enhancing and investing in our proprietary advanced transaction processing network VisaNet to offer a single connection point for facilitating payment transactions to multiple endpoints through various form factors As a network of networks enabling global movement of money through all available networks we are working to provide payment solutions and services for everyone everywhere
discussion below As the payments ecosystem continues to evolve we have broadened this model to include digital banks digital wallets and a range of financial technology companies fintechs governments and non governmental organizations NGOs We provide transaction processing services primarily authorization clearing and settlement to our financial institution and merchant clients through VisaNet During fiscal 2024 303 billion payments and cash transactions with Visa s brand were processed by Visa or other networks equating to an average of 829 million transactions per day Of the 303 billion total transactions 234 billion were processed by Visa
that our clients including nearly 14 500 financial institutions use to develop and offer payment solutions or services including credit debit prepaid and cash access programs for individual business and government account holders During fiscal 2024 Visa s total payments and cash volume were
and seek to provide value by enabling access to our global network including offering our technology capabilities through application programming interfaces APIs We partner with both traditional and emerging players to innovate and expand the payments ecosystem allowing them to use the resources of our platform to scale and grow their businesses more quickly and effectively
through our network of networks strategy We aim to provide a single connection point so that Visa clients can enable money movement for businesses governments and consumers regardless of which network is used to start or complete the transaction This model ultimately helps to unify a complex payments ecosystem
Visa s network of networks approach creates opportunities by facilitating person to person P2P business to consumer B2C business to business B2B and government to consumer G2C payments in addition to consumer to business C2B payments
to the benefit of our clients and partners through advertising promotional and sponsorship initiatives with the International Olympic Committee the International Paralympic Committee the National Football League and the Red Bull Formula One Teams
In a typical Visa C2B payment transaction the consumer purchases goods or services from a merchant using a Visa card or payment product The merchant presents the transaction data to an acquirer usually a bank or third party processing firm that supports acceptance of Visa cards or payment products for verification and processing Through VisaNet the acquirer presents the transaction data to Visa which in turn sends the transaction data to the issuer to check the account holder s account balance or credit line for authorization After the transaction is authorized the issuer posts the transaction to the consumer s account and effectively pays the acquirer an amount equal to the value of the transaction minus the interchange reimbursement fee
Visa earns revenue by facilitating money movement across more than 200 countries and territories among a global set of consumers merchants financial institutions and government entities through innovative technologies
Consist mainly of value added services related to advisory marketing and certain card benefits license fees for use of the Visa brand or technology and fees for account holder services certification and licensing
Earned for authorization clearing and settlement value added services related to issuing acceptance and risk and identity solutions network access and other maintenance and support services that facilitate transaction and information processing among our clients globally
Paid to financial institution clients merchants and other business partners to grow payments volume increase Visa product acceptance encourage merchant acceptance and use of Visa payment services and drive innovation
Visa provides payment processing for both non Visa branded and Visa branded card transactions In the context of non Visa branded card transactions we facilitate payment processing by providing gateway routing services to other payment networks At the client s request we may provide authorization clearing or settlement services on our network before or after we route the transaction to the other payments network In those instances Visa may earn data processing revenue for the specific services provided In the context of Visa branded card transactions on our network we provide authorization clearing and settlement services and may earn service data processing international transaction or other revenue Depending on applicable regulations some payment processors may or may not use our network to process Visa branded card transactions If they use our network we may earn service revenue and data processing revenue If they do not use our network we earn only service revenue
Visa is not a financial institution We do not issue cards extend credit or set rates and fees for account holders of Visa products nor do we earn revenue from or bear credit risk with respect to any of these activities
Interchange reimbursement fees reflect the value merchants receive from accepting our products and play a key role in balancing the costs and benefits that account holders and merchants derive from participating in our payments network Generally interchange reimbursement fees are paid by acquirers to issuers We establish default interchange reimbursement fees that apply absent other established settlement terms These default interchange reimbursement fees are set independently from the revenue we receive from issuers and acquirers Our acquiring clients are responsible for setting the fees they charge to merchants for the MDR and for soliciting merchants Visa sets fees to acquirers independently from any fees that acquirers may charge merchants Therefore the fees we receive from issuers and acquirers are not derived from interchange reimbursement fees or MDRs
of opportunity globally excluding Russia and China to convert cash check Automated Clearing House ACH domestic schemes and other forms of electronic payment into cards and digital accounts on Visa s network We aim to grow consumer payments through expansion of credentials and acceptance points and deepening engagement with consumers through key enablers We are focused on developing innovative digital solutions and products across face to face and ecommerce payments providing consumers and merchants around the world the best ways to pay and be paid
Credit cards and digital credentials allow consumers and businesses to access credit to pay for goods and services Credit cards are affiliated with programs operated by financial institution clients co brand partners fintechs and affinity partners
Debit cards and digital credentials allow consumers and small businesses to purchase goods and services using funds held in their deposit accounts Debit cards enable account holders to transact in person online or via mobile without needing cash or checks and without accessing a line of credit The Visa PLUS Global ATM network also provides debit credit and prepaid account holders with cash access and other
banking capabilities in more than 200 countries and territories worldwide through issuing and acquiring partnerships with both financial institutions and independent automated teller machine ATM operators
Prepaid cards and digital credentials draw from a designated balance funded by individuals businesses or governments Prepaid cards address many use cases and needs including general purpose reloadable payroll government and corporate disbursements healthcare gift and travel Visa branded prepaid cards also play an important part in financial inclusion bringing payment solutions to those with limited or no access to traditional banking products
Since we introduced Tap to Pay technology over ten years ago it has emerged as a preferred way to pay in the face to face environment among consumers in many countries around the world Tap to Pay adoption is growing and many consumers have come to expect this seamless payment experience
Tap to Pay has become the default way Visa cardholders pay in nearly 60 countries and territories with more than 90 percent penetration of Visa face to face transactions and in over 125 countries and territories Tap to Pay comprises more than 50 percent of our face to face transactions Excluding the U S over 80 percent of face to face Visa transactions globally were contactless in fiscal 2024 In the U S Visa has surpassed 50 percent contactless penetration and more than 535 million Tap to Pay enabled Visa cards have been issued In addition we have activated more than 870 contactless public transport projects worldwide We processed more than 2 0 billion contactless transactions on global transit systems in fiscal 2024 surpassing the number of transactions in 2023
Visa Token Service VTS brings trust to digital commerce innovation As consumers increasingly rely on digital transactions VTS is designed to enhance the digital ecosystem through improved authorization reduced fraud and improved consumer experience VTS helps protect digital transactions by replacing 16 digit Visa account numbers with a token that includes a surrogate account number cryptographic information and other data to protect the underlying account information This security technology can work for a variety of in person or online payment transactions As of September 30 2024 Visa has provisioned 11 5 billion network tokens
Click to Pay provides a simplified and more consistent cardholder checkout experience online by removing time consuming key entry of personal information and enabling consumer and transaction data to be passed securely between payments network participants Based on the EMV
Secure Remote Commerce industry standard Click to Pay brings a standardized and streamlined approach to online checkout and meets the needs of consumers shopping across a growing number of connected devices The goal of Click to Pay is to make online payments as secure reliable and interoperable as the in person checkout experience
Our new flows business is focused on driving digitization and improving the payments and money movement experience across all payment flows beyond C2B through our network of networks These include P2P B2C B2B and G2C payments which provide some of the largest payment opportunities in the world Representing a total addressable opportunity of approximately 200 trillion
of payment flows annually excluding Russia and China this pillar of our business aims to make payments and money movement easier for businesses consumers and governments using both Visa s global network and connectivity to other networks around the world
The first objective is to grow B2B payments volume through our Visa Commercial Solutions This part of the business focuses on addressing the 145 trillion of opportunity in B2B payment flows around the world annually excluding Russia and China We believe around 15 of the annual opportunity or 20 trillion could be addressed
by our card and virtual products which we are continuously evolving for more use cases Another 105 trillion of the annual opportunity is in the accounts payable and accounts receivable space that largely relies on check ACH and wires Lastly cross border volumes which are addressable by our Visa Commercial Solutions and Visa Direct Platform represent 20 trillion of opportunity on an annual basis
The second objective is to put the power of money movement in our clients hands enabling them to move money around the world This part of the business focuses on addressing 20 trillion in B2C 20 trillion in P2P and 15 trillion in G2C opportunities annually excluding Russia and China as well as the cross border B2B opportunity These flows are largely addressed through our Visa Direct Platform encompassing a broad network of eligible cards bank accounts and digital wallets as well as our Visa B2B Connect network
As a long time participant in the B2B ecosystem we have been supporting small businesses large and middle market companies and governments with their payments needs We continue to see opportunity for growth as businesses seek simple digital experiences similar to those available to consumers Visa offers a holistic suite of tailored solutions for businesses providing payment reconciliation and data to help manage working capital and drive efficiency set spend controls manage expenses and automate payment processes
Our portfolio of commercial payments solutions includes small business cards corporate travel cards purchasing cards virtual cards and digital credentials Businesses look to optimize processes and effectively manage working capital by utilizing our commercial payments solutions To support small businesses we expanded the small business supplier matching webtool so that it is directly accessible to small and medium size businesses enhancing their ability to use their cards for business payments For large business spend we have been expanding our presence in specific commercial spend verticals such as fleet and fuel travel and agriculture We have also extended our products and capabilities specifically for accounts receivable and accounts payable spend through either embedded finance capabilities or new solutions like our Accounts Receivable Manager virtual card automation solution in the U S
We facilitate domestic and cross border money movement enabling clients to collect convert hold and send funds across our network which has the potential to reach more than 11 billion cards bank accounts and digital wallets Visa Direct enables P2P payments and account to account A2A transfers business and government payouts to individuals or small businesses merchant settlements and refunds among other use cases across more than 195 countries and territories
Visa Direct utilizes more than 75 domestic payment schemes more than 15 real time payments schemes more than 15 card based networks and more than five payment gateways with the potential to reach more than 11 0 billion endpoints through 4 0 billion cards 3 5 billion bank accounts and 3 5 billion digital wallets In fiscal 2024 Visa Direct processed nearly 10 billion transactions for more than 550 partners
Visa B2B Connect is a key part of our value proposition and considered part of the Visa Direct platform It is a multilateral B2B cross border payments network designed to facilitate reliable secure and cost effective transactions from the bank of origin directly to the beneficiary bank helping streamline settlement and optimize payments for financial institutions corporate clients Visa B2B Connect continues to scale and is available in more than 100 countries and territories
The Visa Direct platform now also includes Visa Cross Border Solutions and our digitally native Currencycloud capabilities that service new flows and our established cross border consumer payments businesses with capabilities such as providing real time foreign exchange rates virtual accounts and enhanced liquidity and settlement
In addition our Visa solution provides interoperability for our clients In fiscal 2023 we announced the launch of Visa which enables transfers between participating P2P apps Visa is now fully live for eligible users of PayPal and Venmo in the U S In addition to bringing reach flexibility and convenience to P2P payment experiences Visa
Value added services represent an opportunity for us to diversify our revenue with products and solutions that help our clients and partners optimize their performance differentiate their offerings and create better experiences for their customers Our comprehensive suite of value added services spans five categories Issuing Solutions Acceptance Solutions Risk and Identity Solutions Open Banking Solutions and Advisory Services
Our value added services strategy has three areas of focus 1 provide services for Visa transactions 2 deliver network agnostic services for non Visa transactions and 3 provide services that go beyond payments We have made significant progress across each of these areas and offer more than 200 products and services as of September 30 2024 many of which are designed to work together to deliver high impact business outcomes
Visa DPS is a large issuer processor of Visa debit transactions In addition to multi network transaction processing Visa DPS also provides a wide range of value added services including fraud mitigation dispute management data analytics campaign management a suite of digital solutions and contact center services Our capabilities in API based issuer processing solutions like DPS Forward allow our clients to create new payments use cases and provide them with modular capabilities for digital payments
In early 2024 Visa completed its acquisition of Pismo a global cloud native issuer processing and core banking platform with operations in Latin America Asia Pacific and Europe Pismo s technology platform expands Visa s offerings to include core banking and card issuer processing capabilities across credit debit and prepaid cards via cloud native APIs and also helps enable Visa to provide support and connectivity for emerging payment frameworks and real time payments RTP networks for financial institution clients
We provide a range of other services and digital solutions to issuers such as account controls digital issuance and branded consumer experiences In addition Visa offers loyalty and benefits solutions to issuers aimed at creating compelling and differentiated cardholder experiences as well as Buy Now Pay Later BNPL capabilities which allow shoppers the flexibility to pay for a purchase in equal payments over a defined period of time Visa is investing in installments as a payments strategy by offering Visa credentials and BNPL solutions to issuers and fintechs
Visa Acceptance Solutions provide modular value added services in addition to the traditional gateway function of connecting merchants to payment processing Using the Visa Acceptance Platform acquirers payment service providers independent software vendors and merchants can improve the way their consumers engage and transact help to mitigate fraud and lower operational costs and adapt to changing business requirements They can also connect with other fintechs through a global payment management platform to use their services Using an omnichannel solution with a cloud based architecture Visa Acceptance Solutions capabilities which includes Cybersource and Authorize net provide new and enhanced payment integrations with ecommerce platforms enabling sellers and acquirers to provide tailored commerce experiences with payments seamlessly embedded
In addition Visa Acceptance Solutions provide secure reliable services for merchants and acquirers that reduce friction and drive acceptance Examples include Token Management Service which helps simplify network token adoption access and management for merchant and acquiring clients provides a single integration point into major card networks and is used standalone or easily integrated into other payment solutions please see the
discussion above Global Urban Mobility which supports transit operators to accept Visa contactless payments in addition to closed loop payment solutions and Account Updater which provides updated account information for merchants to help strengthen customer relationships and retention Visa also offers Dispute
Visa s Risk and Identity Solutions transform data into insights for near real time decisions and facilitate account holder authentication to help financial institution and merchant clients prevent fraud and protect account holder data With the increasing popularity of omnichannel commerce and digital payments among consumers fraud prevention helps increase trust in digital payments The Visa Protect suite of solutions include a range of products that empower financial institutions and merchants with tools that facilitate automation simplify fraud prevention and enhance payment security such as Visa Consumer Authentication Service Visa Protect Authentication Intelligence and Visa Provisioning Intelligence These offerings highlight our artificial intelligence AI and machine learning capabilities for example Visa Protect Authentication Intelligence uses machine learning algorithms to identify fraud for Visa Secure authentication requests and Visa Provisioning Intelligence is an AI based product designed to prevent tokens from being fraudulently provisioned
In March 2024 Visa announced three new products as part of the end to end Visa Protect suite that are designed to reduce fraud across immediate A2A and card not present CNP payments as well as transactions both on and off Visa s network Visa Deep Authorization is an AI powered transaction risk scoring solution tailored to better manage CNP payments which strengthens the protection of Visa s transactions through transaction risk scoring Visa Protect for A2A Payments is our first fraud prevention solution built specifically for real time non card payments Finally Visa Risk Manager with scheme agnostic Visa Advanced Authorization is a comprehensive AI powered fraud risk management solution Visa s value added fraud prevention tools layer on top of a suite of our network programs that protect the safety and integrity of the payment ecosystem help to prevent detect and mitigate threats
Since our acquisition of Tink AB an open banking platform we continue to accelerate the development and adoption of open banking securely and at scale Visa s open banking capabilities range from data access use cases such as account verification balance check and personal finance management to payment initiation capabilities such as A2A transactions and merchant payments These capabilities can help our partner businesses deliver valuable services to their customers
In fiscal 2024 we expanded our presence in Europe and began expanding into the U S with a suite of product offerings that enable users to connect accounts and provide trusted parties with access to their financial data including digitizing and streamlining the A2A payments experience In fiscal 2025 we plan to launch Visa A2A in the UK an open system bringing standards rules and a dispute management service to eligible banks and businesses enabling them to provide consumers with a more streamlined bill payment experience Key features will include increased protection more optionality by allowing consumers to pay directly from their bank accounts and enhanced controls over payment permissions
Visa Advisory Services offers deep payments expertise through a global consulting practice proprietary analytics models data scientists and economists marketing services and managed services to deliver insights for issuers acquirers merchants fintechs and other partners that help them make better business decisions and scale their operations
Operating as the payments consulting arm of Visa Visa Consulting and Analytics VCA utilizes our payments expertise and economic intelligence to identify actionable insights make recommendations and help implement solutions VCA is comprised of specialized advisory practices such as strategy and commercial money movement portfolio optimization digital AI risk and implementation support which drive measurable outcomes for our clients VCA Managed Services embeds teams within client organizations to help execute key initiatives
Visa Marketing Services provides clients with unique activation opportunities with Visa s sponsorships and utilizes our data analytics and understanding of customers transactional behavior to provide marketing solutions designed to deliver effective results drive brand preference and influence consumer behavior
Our network of networks strategy means moving money to all endpoints and to all form factors using all available networks and being a single connection point for our partners and providing our value added services on all transactions no matter the network The key component of our network of networks strategy is interoperability We are opening up our network and increasingly using other networks to reach accounts we could not otherwise reach and enabling new types of money movement Visa B2B Connect Visa Direct and Visa are examples of our strategy Visa has invested more than 3 billion in AI and data infrastructure over the last 10 years
Visa s leading technology platforms comprise software hardware data centers and a large telecommunications infrastructure Visa s four data centers are a critical part of our global processing environment and have a high redundancy of network connectivity power and cooling designed to provide continuous availability of systems Together these systems deliver the secure convenient and reliable service that our clients and consumers expect from the Visa brand
Our in depth multi layer security approach includes a formal program to devalue sensitive and or personal data through various cryptographic means embedded security in the software development lifecycle identity and access management controls to protect against unauthorized access and advanced cyber detection and response capabilities We use information security tools that help keep our clients and consumers safe and invest significantly in our comprehensive approach to cybersecurity We deploy information security technologies to protect data confidentiality the integrity of our network and service availability and to strengthen our core cybersecurity capabilities to minimize risk Our payments ecosystem risk and control team continually monitors threats to the payments ecosystem to help ensure attacks are detected and prevented efficiently and effectively through pairing our AI capabilities with our security experts
Visa s strong brand helps deliver added value to our clients and their customers financial institutions merchants and partners through compelling brand expressions a wide range of products and services as well as innovative brand and marketing efforts In line with our commitment to an expansive and diverse range of partnerships for the benefit of our stakeholders Visa is a sponsor of top entertainment and sports properties including the FIFA World Cup 2026
Attracting developing and advancing the best talent globally is critical to our continued success This year we grew our total workforce from approximately 28 800 in fiscal 2023 to approximately 31 600 employees in fiscal 2024 an increase of 10 percent year over year Voluntary workforce turnover rolling 12 month attrition was 5 percent as of September 30 2024 Visa employees are located in more than 80 countries and territories with 57 percent located outside the U S At the end of fiscal 2024 Visa s global workforce was 58 percent men and 42 percent women and women represented 38 percent of Visa s leadership defined as vice president level and above In the U S ethnicity of our workforce was 42 percent Asian 8 percent Black 13 percent Hispanic 3
As Visa strives to achieve our purpose and our growth objectives we have focused on enhancing our employees expertise across our business We offer unique career pathways for employees and provide them with tools and support to build on their leadership impact and develop their careers Along with learning support from Visa University and our educational assistance program employees are encouraged to broaden their knowledge and develop new skills through alternative career pathways and talent development programs including our global technology apprenticeship military talent and mentorship programs Visa s commitment to fostering a culture of innovation and collaboration also is demonstrated through our employees adoption of generative AI tools for content generation productivity and business automation including an internal secure version of ChatGPT and our Ask People Team Portal
We are committed to providing benefits that support our employees As part of our inclusive whole person approach to benefits Visa offers a robust package of curated tools resources and benefits for our employees While some programs may vary by location some of our financial benefits include our 401 k match employee stock purchase plan and financial wellbeing sessions and resources In addition to our enhanced mental well being benefits we began offering mental health first aid training for employees and are piloting a peer to peer ambassador network to create an employee support system
Based on our latest employee engagement survey 91 of employees would recommend Visa as a great place to work We strive to put our people first and this is exemplified by prioritizing investments to create spaces that encourage collaboration inspire creativity and reflect our brand in our office locations and data centers worldwide In 2024 Visa opened the Mission Rock market support center in San Francisco forming a unified complementary campus with our Foster City location
This year we also recommitted to ensuring that employees feel closely connected to one another and to our business at large To support this effort Visa activated Viva Engage our new internal social network as a place for all employees to collaborate share information and connect with company leadership in real time every day Since our launch of Viva Engage 97 of employees had visited the platform at least once with 82 accessing the platform at least twice a week on average
We also are dedicated to ensuring that employees feel valued in their day to day work In recent years Visa has prioritized and invested in employee recognition which in turn drives engagement and innovation Our UPLIFT program is designed to drive engagement and innovation by enabling employees to recognize appreciate and celebrate each other no matter their role or level The UPLIFT program also drives Visa s culture by grounding the recognition categories in Visa s Leadership Principles further reinforcing that at Visa it is not only about
you do it For fiscal 2024 active UPLIFT platform users as a percentage of all users was 78 while the number of recognitions sent nearly doubled from approximately 130 000 to nearly 248 000 since the prior year
to uplift everyone everywhere by being the best way to pay and be paid Fintechs are key enablers of new payment experiences and new flows Our work with fintechs is one of our greatest opportunities and has opened new points of acceptance extended credit at the point of sale made cross border money flows more efficient moved B2B payments volume onto Visa s network expedited payroll and provided digital wallet customers access to our services Our portfolio of fintech partners is diverse and continues to grow and scale In fiscal 2024 we signed over 650 commercial partnerships with fintechs globally from early stage companies to growing and mature players an increase of 30 percent year over year
To better serve fintechs Visa has a suite of streamlined commercial programs and digital onboarding tools Fintech Fast Track our flagship program for fintechs is designed to help launch new financial features quickly such as launching a new card program or enabling the movement of money with Visa Direct We provide streamlined
Visa Ready our certification program helps technology companies build and launch payment solutions that meet Visa s global standards around security and functionality With our startup engagement programs like the Visa Everywhere Initiative early stage companies can build payment solutions based on our capabilities Visa also manages programs including She s Next Empowered by Visa a global women s entrepreneurship initiative and the Africa Fintech Accelerator Program to uplift underrepresented communities
Visa continually explores opportunities to augment our capabilities and provide meaningful value to our clients Mergers and acquisitions joint ventures and strategic investments complement our internal development and enhance our partnerships to align with Visa s priorities Visa applies a rigorous business analysis to our acquisitions joint ventures and investments to ensure they will differentiate our network provide value added services and accelerate growth
In fiscal 2024 we completed our acquisition of Pismo and entered into definitive agreements to acquire a majority interest in Prosa a leading payments processor in Mexico and to acquire Featurespace a developer of real time AI payments protection technology that prevents and mitigates payments fraud and financial crime risks After closing Prosa will continue to operate as an independent company The Prosa and Featurespace acquisitions are both subject to customary closing conditions including applicable regulatory approvals
Visa is committed to operating as a responsible ethical inclusive and sustainable company As one of the global leaders in digital payments Visa strives to join with clients partners and other stakeholders to empower people businesses and communities to thrive to be an industry leader in addressing the CRS topics most significant to our role as a payments technology company and to meet and exceed our expectations for performance and transparency Visa s purpose is to uplift everyone everywhere by being the best way to pay and be paid We believe deeply in our purpose and we are focused on empowering people and economies securing commerce and protecting customers investing in our workforce protecting the planet and operating responsibly Our 2023 CRS Report as well as other CRS related resources are available on our website at
We own and manage the Visa brand which stands for acceptance security convenience speed and reliability Our portfolio of Visa owned trademarks is important to our business Generally trademark registrations are valid indefinitely as long as they are in use and or maintained We give our clients access to these assets through agreements with our issuers and acquirers which authorize the use of our trademarks in connection with their participation in our payments network Additionally we own a number of patents and patent applications related to our business and continue to pursue patents in emerging technologies that may have applications in our business We rely on a combination of patent trademark copyright and trade secret laws in the U S and other jurisdictions as well as confidentiality procedures and contractual provisions to protect our proprietary technology
The global payments industry continues to undergo dynamic and rapid change Existing and emerging competitors compete with Visa s network and payment solutions for consumers and for participation by financial institutions and merchants Technology and innovation are shifting consumer habits and driving growth opportunities in ecommerce mobile payments blockchain technology and digital currencies These advances are enabling new entrants many of which depart from traditional network payment models In certain countries the evolving regulatory landscape is creating local networks or enabling additional processing competition
These networks typically offer a range of branded general purpose card payment products that consumers can use at millions of merchant locations around the world Examples include American Express Diners Club Discover JCB Mastercard and UnionPay These competitors may be more concentrated in specific geographic regions such as Discover in the U S and JCB in Japan or have a leading
Item 1A Regulatory Risks Government imposed obligations and or restrictions on international payments systems may prevent us from competing against providers in certain countries including significant markets such as China and India
American Express Diners Club Discover JCB and Mastercard data sourced from The Nilson Report issue 1264 May 2024 Includes all consumer small business and commercial credit debit and prepaid cards American Express Diners Club Discover and JCB include business from third party issuers JCB figures include other payment related products and some figures are estimates Mastercard excludes Maestro and Cirrus figures
Operated in many countries these networks often have the support of government influence or mandate In some cases they are owned by financial institutions or payment processors These networks typically focus on debit payment products and may have strong local acceptance and recognizable brands Examples include NYCE Pulse and STAR in the U S Interac in Canada and eftpos in Australia
These providers such as closed commerce ecosystems BNPL solutions and cryptocurrency platforms often have a primary focus of enabling payments through ecommerce and mobile channels however they are expanding or may expand their offerings to the physical point of sale These companies may process payments using in house account transfers between parties electronic funds transfer networks like the ACH global or local networks like Visa or some combination of the foregoing In some cases these entities can be both a partner and a competitor to Visa
RTP networks have launched in at least 80 countries and continue to be driven by strong government sponsorship and regulatory initiatives to enable and drive adoption e g FedNow in the U S PIX in Brazil and United Payments Interface UPI in India increasing their position as an alternative to payment card schemes These networks primarily focus on domestic transactions with adoption varying by use cases and geographies However with linkages such as PayNow in Singapore and UPI in India cross border RTP networks are advancing and will compete with our cross border business RTP networks can compete with Visa on consumer payments and other payment flows e g B2B and P2P but can also be customers for value added services such as risk management
They continue to expand payment capabilities in person and online for consumers and merchants and provide consumers with additional ways to pay While digital wallets can help drive Visa volumes they can also be funded by non card payment options Digital wallet providers who utilize RTP networks provide additional competition
We compete with payment processors for the processing of Visa transactions These processors may benefit from mandates requiring them to handle processing under local regulation For example as a result of regulation in Europe under the Interchange Fee Regulation IFR we may face competition from other networks processors and other third parties who could process Visa transactions directly with issuers and acquirers
We compete with alternative solutions to our new flows e g Visa Direct and Visa B2B Connect such as ACH RTP and wires We compete with other global and local card networks for commercial card portfolios Additionally we may face competition from financial institution clients who are experimenting with B2B blockchain payments
We face competition from companies that provide alternatives to our value added services These include a wide range of players such as technology companies information services and consulting firms governments and merchant services companies The integration of technology like generative AI can create new and better offerings that compete with our value added services such as strengthened risk monitorization and managing digital identification Regulatory initiatives could also lead to increased competition in these areas
We believe our fundamental value proposition of security convenience speed and reliability as well as the number of credentials and our acceptance footprint help us to succeed In addition we understand the needs of the individual markets in which we operate and partner with local financial institutions merchants fintechs governments NGOs and business organizations to provide tailored and innovative solutions We will continue to utilize our network of networks strategy to facilitate the movement of money We believe Visa is well positioned competitively due to our global brand our broad set of payment products new flows offerings and value added services and our proven track record of processing payment transactions securely and reliably
As a global payments technology company we are subject to complex and evolving global regulations in the various jurisdictions in which our products and services are used The most significant government regulations that impact our business are discussed below For further discussion of how global regulations may impact our business see
We are subject to anti corruption laws and regulations including the U S Foreign Corrupt Practices Act FCPA the UK Bribery Act and other laws that generally prohibit the making or offering of improper payments to foreign government officials and political figures for the purpose of obtaining or retaining business or to gain an unfair business advantage We are also subject to anti money laundering and anti terrorist financing laws and regulations including the U S Bank Secrecy Act In addition we are subject to economic and trade sanctions programs administered by the Office of Foreign Assets Control OFAC in the U S Therefore we do not permit financial institutions or other entities that are domiciled in countries or territories subject to comprehensive OFAC trade sanctions currently Cuba Iran North Korea Syria Crimea and the Donetsk People s Republic and Luhansk People s Republic regions of Ukraine or that are included on OFAC s list of Specially Designated Nationals and Blocked Persons to issue or acquire Visa cards or engage in transactions using our products and services
Certain governments including China India Indonesia Thailand and Vietnam have taken actions to promote domestic payments systems and or certain issuers payments networks or processors by imposing regulations that favor domestic providers impose local ownership requirements on processors require data localization or mandate that domestic processing be done in that country
An increasing number of jurisdictions around the world regulate or influence debit and credit interchange reimbursement rates in their regions For example the U S Dodd Frank Wall Street Reform and Consumer Act Dodd Frank Act limits interchange reimbursement rates for certain debit card transactions in the U S the European Union EU IFR limits interchange rates in the European Economic Area EEA as discussed below and the Reserve Bank of Australia RBA regulates average permissible levels of interchange
Many jurisdictions have adopted regulations that require payments system participants to monitor identify filter restrict or take other actions with regard to certain types of payment transactions on the Internet such as gambling digital currencies the purchase of cigarettes or alcohol and other controversial transaction types
In the U S the Dodd Frank Act limits network exclusivity and restrictions on merchant routing choice for the debit and prepaid market segments Other jurisdictions impose similar limitations such as the IFR s prohibition in Europe on restrictions that prevent multiple payment brands or functionality on the same card
We have historically enforced rules that prohibit merchants from charging higher prices to consumers who pay using Visa products instead of other means However merchants ability to surcharge varies by geographic market as well as Visa product type and continues to be impacted by litigation regulation and legislation
Aspects of our operations or business are subject to increasingly complex and fragmented data related regulations including with respect to privacy data use AI and cybersecurity which impact the way we collect use and handle data operate our products and services and even impact our ability to offer a product or service In addition legislatures and regulators globally are proposing new laws or regulations on these topics that could require Visa to adopt more restrictive data collection and processing practices expand cybersecurity requirements limit cross border data flows impact the adoption of advanced AI systems and impose increased obligations on companies handling personal data
Visa is subject to financial sector oversight and regulation in substantially all of the jurisdictions in which we operate In the U S for example the Federal Banking Agencies FBA formerly known as the Federal Financial Institutions Examination Council has supervisory oversight over Visa under applicable federal banking laws and policies as a technology service provider to U S financial institutions The federal banking agencies comprising the FBA are the Federal Reserve Board the Comptroller of the Currency the Federal Deposit Insurance Corporation and the National Credit Union Administration Visa may also be separately examined by the Consumer Financial Protection Bureau CFPB as a service provider to the banks that issue Visa branded consumer credit and debit card products Central banks in other countries regions including Canada Europe India Ukraine and the UK as discussed below have recognized or designated Visa as a retail payment system under various types of financial stability regulations Visa is also subject to oversight by banking and financial sector authorities in other jurisdictions such as Brazil and Hong Kong
There are a number of EU regulations that impact our business As discussed above the IFR regulates interchange rates within the EEA requires Visa Europe to separate its payment card scheme activities from processing activities for accounting organization and decision making purposes within the EEA and imposes limitations on network exclusivity and routing National competent authorities in the EEA are responsible for monitoring and enforcing the IFR in their markets We are also subject to regulations governing areas such as privacy and data protection anti bribery anti money laundering anti terrorism and sanctions Other regulations in Europe such as the second Payment Services Directive PSD2 require among other things that our financial institution clients provide certain customer account access rights to emerging non financial institution players PSD2 also includes strong customer authentication requirements for certain transactions that could impose both operational complexity on Visa and impact consumer payment experiences Visa Europe is also subject to supervisory oversight by the European Central Bank and certain competent authorities in Europe
In the UK Visa Europe is designated as a Recognized Payment System bringing it within the scope of the Bank of England s supervisory powers and subjecting it to various requirements including on issues such as governance and risk management designed to maintain the stability of the UK s financial system Visa Europe is also regulated by the UK s Payment Systems Regulator PSR which has wide ranging powers and authority to review our business practices systems rules and fees with respect to promoting competition and innovation in the UK and ensuring payment systems take care of and promote the interests of service users The PSR recently established a supervisory team to specifically oversee payment system operators like Visa in the aforementioned areas Post Brexit the UK has adopted various European regulations including regulations that impact the payments ecosystem such as the IFR and PSD2 The PSR is responsible for monitoring Visa Europe s compliance with the IFR as adopted in the UK
Certain governments around the world are adopting laws and regulations pertaining to corporate responsibility and sustainability performance transparency and reporting Regulations may include mandated corporate reporting e g Corporate Sustainability Reporting Directive or in individual areas such as mandated reporting on climate related financial disclosures
Various regulatory agencies across the world also continue to examine a wide variety of other issues including mobile payment transactions tokenization access rights for non financial institutions money transfer services identity theft account management guidelines disclosure rules security and marketing that could affect our financial institution clients and our business Furthermore following the passage of PSD2 in Europe several countries including Australia Brazil Canada Hong Kong and Mexico are contemplating granting or have already granted various types of access rights to third party processors including access to consumer account data maintained by our financial institution clients In October 2024 the CFPB in the United States issued a final rule on personal financial data rights that would provide consumers and third parties
Our annual reports on Form 10 K our quarterly reports on Form 10 Q our current reports on Form 8 K proxy statements and any amendments to those reports filed or furnished pursuant to the U S Securities Exchange Act of 1934 can be viewed at
as soon as reasonably practicable after these materials are electronically filed with or furnished to the U S Securities and Exchange Commission SEC In addition we routinely post financial and other information which could be deemed to be material to investors on our investor relations website Information regarding our corporate responsibility and sustainability initiatives is also available on our website at
for more information on the most significant areas of regulation that affect our business The impact of these regulations on us our clients and other third parties could limit our ability to enforce our payments system rules require us to adopt new rules or change existing rules affect our existing contractual arrangements increase our compliance costs and require us to make our technology or intellectual property available to third parties including competitors in an undesirable manner As discussed in more detail below we may face differing rules and regulations in matters like interchange reimbursement rates preferred routing domestic processing and localization requirements currency conversion point of sale transaction rules and practices privacy data use and protection licensing requirements and associated product technology As a result the Visa operating rules and our other contractual commitments may differ from country to country state to state or by products Complying with these and other regulations increases our costs and operational complexity and reduces our revenue opportunities
If widely varying regulations come into existence worldwide we may have difficulty rapidly adjusting our products services fees and other important aspects of our business to comply with the regulations Our compliance programs and policies are designed to support our compliance with a wide array of regulations and laws such as regulations regarding anti money laundering anti corruption competition money transfer services privacy and sanctions and we continually adjust our compliance programs as regulations evolve However we cannot guarantee that our practices will be deemed compliant by all applicable regulatory authorities In the event our controls should fail or we are found to be out of compliance for other reasons we could be subject to monetary damages civil and criminal penalties litigation investigations and proceedings and damage to our global brands and reputation Furthermore the evolving and increased regulatory focus on the payments industry could negatively impact or reduce the number of Visa products our clients issue the volume of payments we process our net revenue our brands our competitive positioning our ability to use our intellectual property to differentiate our products and services the quality and types of products and services we offer the countries in which our products are used and the types of consumers and merchants who can obtain or accept our products all of which could harm our business and financial results
Increased scrutiny and regulation of the global payments industry including with respect to interchange reimbursement fees merchant discount rates operating rules risk management protocols and other related practices could harm our business
In the U S and many other jurisdictions we have historically set default interchange reimbursement fees Even though we generally do not receive any revenue related to interchange reimbursement fees in a payment transaction in the context of credit and debit transactions those fees are paid by the acquirers to the issuers the reverse is true for certain transactions like ATM interchange reimbursement fees are a factor on which we compete with other payments providers and are therefore an important determinant of the volume of transactions we process Consequently changes to these fees whether voluntarily or by mandate can substantially affect our overall payments volumes and net revenue
Interchange reimbursement fees certain operating rules and related practices continue to be subject to increased government regulation globally and regulatory authorities and central banks in a number of jurisdictions have reviewed or are reviewing these fees rules and practices For example
Regulations adopted by the U S Federal Reserve cap the maximum U S debit interchange reimbursement rate received by large financial institutions at 21 cents plus 5 basis points per transaction plus a possible fraud adjustment of 1 cent Additionally the Dodd Frank Act limits issuers and payment networks ability to adopt network exclusivity and preferred routing in the debit and prepaid area which also impacts our business In response to merchant requests the Federal Reserve has recently taken actions to revisit its regulations that implement these aspects of the Dodd Frank Act For example in October 2022 the Federal Reserve published a final rule effectively requiring issuers to ensure that at least two unaffiliated networks
are available for routing CNP debit transactions by July 1 2023 In October 2023 the Federal Reserve issued a proposal for comment which would further lower debit interchange rates with a mechanism for automatic adjustment every two years Separately there continues to be interest in regulation of credit interchange fees and routing practices by members of Congress and state legislators in the U S In June 2023 legislation was reintroduced in the U S House of Representatives and Senate which among other things would require large issuing banks to offer a choice of at least two unaffiliated networks over which electronic credit transactions may be processed Similar legislation was introduced in the previous Congress in 2022 but failed to advance
The current legislation has additional bipartisan support and while the ultimate outcome of the legislation remains unclear its sponsors continue to strongly advocate for its passage Finally some states in the U S have passed or are considering passing laws that regulate how interchange can be assessed For example in May 2024 Illinois passed a law that restricts the assessment of interchange on the state tax and gratuity portions of a transaction and restricts financial institutions and payment networks among others from using payment transaction data for any purpose other than facilitating or processing a transaction Such laws may also impose significant technical and compliance burdens on our business In Europe the EU s IFR places an effective cap on consumer credit and consumer debit interchange fees for both domestic and cross border transactions within the EEA 30 basis points and 20 basis points respectively EU member states have the ability to further reduce these interchange levels within their territories The European Commission has announced its intention to conduct another impact assessment of the IFR which could result in even lower caps on interchange rates and the expansion of regulation to other types of products services and fees
Several countries in Latin America continue to explore regulatory measures against payments networks and have either adopted or are exploring interchange caps including Argentina Brazil Chile and Costa Rica In Asia Pacific the Reserve Bank of Australia RBA which already regulates interchange continues to monitor issues related to the cost of acceptance the potential merits of mandating merchant choice routing on dual network debit cards and competition in digital wallet payments In 2022 the New Zealand Parliament passed legislation capping domestic interchange rates for debit and credit products and the government remains focused on lowering costs of digital payments to businesses and consumers Interchange is also regulated in certain countries in the Central and Eastern Europe Middle East and Africa region including the United Arab Emirates Finally many governments including but not limited to governments in India Costa Rica and Turkey are using regulation to further drive down MDR which could negatively affect the economics of our transactions
While the focus of interchange and MDR regulation has primarily been on domestic rates historically there are several examples of increasing focus on cross border rates in recent years For example in 2019 we agreed to limit certain cross border interchange rates in a settlement with the European Commission That agreement has been extended through 2029 In 2020
Costa Rica became the first country to formally regulate cross border interchange rates by regulation Cross border MDR is also regulated in Costa Rica and Turkey In June 2022 the UK s PSR initiated a market review
As referenced above with increased lobbying by merchants and other industry participants we are also beginning to see regulatory interest in network fees For example the UK s PSR is conducting a market review into scheme and processing fees In its interim report the PSR indicated that it is reviewing possible remedies any of which if adopted could impose additional complexity and burdens on our business in the UK Other regulators for example in Australia the EU and Chile have expressed an interest in network fees including issues related to transparency Finally in 2024 the Greek Parliament limited acquirer fees for certain small ticket transactions in some merchant categories for a period of three years
In addition industry participants in some countries including Argentina Colombia the Dominican Republic Paraguay Peru and South Africa have sought intervention from competition regulators or filed claims relating to certain network rules including Visa s restrictions on cross border acquiring The Central Bank of Chile recently enacted regulation that will permit cross border acquiring for CNP transactions under certain conditions Other countries like Brazil have adopted regulations that require us to seek government pre approval for certain of our network rules which could also impact the way we operate in certain markets
Government regulations or pressure may also impact our rules and practices and require us to allow other payments networks to support Visa products or services to have the other networks functionality or brand marks on our products or to share our intellectual property with other networks In addition the EU s
We are also subject to central bank oversight in a growing number of countries including Brazil India the UK and within the EU In several jurisdictions we have been designated as a systemically important payment system Some countries with existing oversight frameworks are looking to further enhance their regulatory powers while regulators in other jurisdictions are considering or adopting approaches based on these regulatory principles For example in October 2023 VisaNet was designated as a prominent payment system in Canada These types of designations generally result in oversight of authorization clearing and settlement activities including policies procedures and requirements related to governance reporting cybersecurity processing infrastructure capital and or credit risk management We could also be required to adopt policies and practices designed to mitigate settlement and liquidity risks including increased requirements to maintain sufficient levels of capital and financial resources locally as well as localized risk management or governance Increased oversight could also include new criteria for member participation and merchant access to our payment systems Furthermore as governments increase their focus on cybersecurity parts of our business have become considered significant or critical infrastructure by certain central banks
As innovations in payment technology have enabled us to expand into new products and services they have also expanded the potential scope of regulatory influence For instance new products and capabilities including tokenization push payments and new flows e g Visa B2B Connect could bring increased licensing or authorization requirements in the countries where the product or capability is offered Furthermore certain portions of our business are regulated as payment institutions or as money transmitters subjecting us to various licensing supervisory and other requirements As we continue to expand our capabilities and offerings in furtherance of our network of networks strategy we will need to obtain new types of licenses These licenses could result in increased supervisory and compliance obligations that are distinct from the obligations we are subject to in our capacity as a payment card network
Regulators around the world increasingly take note of each other s approaches to regulating the payments industry Consequently a development in one jurisdiction may influence regulatory approaches in another The risks created by a new law regulation or regulatory outcome in one jurisdiction have the potential to be replicated and to negatively affect our business in another jurisdiction or in other product offerings For example our settlement with the European Commission on cross border interchange rates has drawn preliminary attention from some regulators in other parts of the world Similarly new regulations involving one product offering may prompt regulators to extend the regulations to other product offerings For example credit payments could become subject to similar regulation as debit payments or vice versa The RBA initially capped credit interchange but subsequently capped debit interchange as well
When we cannot set default interchange reimbursement rates at optimal levels issuers and acquirers may find our payments system less attractive This may increase the attractiveness of other payments systems such as our competitors closed loop payments systems with direct connections to both merchants and consumers We believe some issuers may react to such regulations by charging new or higher fees or reducing certain benefits to consumers which make our products less appealing to consumers Some acquirers may elect to charge higher MDR regardless of the Visa interchange reimbursement rate causing merchants not to accept our products or to steer customers to alternative payments systems or forms of payment In addition in an effort to reduce the expense of their payment programs some issuers and acquirers have obtained and may continue to obtain incentives from us including reductions in the fees that we charge which directly impacts our net revenue
Finally policymakers and regulatory bodies in the U S Europe and other parts of the world are exploring ways to reform existing competition laws to meet the needs of the digital economy including restricting large technology companies from engaging in mergers and acquisitions requiring them to interoperate with potential competitors and prohibiting certain kinds of self preferencing behaviors While the focus of these efforts remains primarily on increasing regulation of large technology ecommerce and social media companies they could also have implications for other types of companies including payments networks which could constrain our ability to effectively manage our business or potentially limit how we make our products and services available
Government imposed obligations and or restrictions on international payments systems may prevent us from competing against providers in certain countries including significant markets such as China and India
Governments in a number of jurisdictions shield domestic payments providers including card networks brands and processors from international competition by imposing market access barriers and preferential domestic regulations To varying degrees these policies and regulations affect the terms of competition in the marketplace and impair the ability of international payments networks to compete Public authorities may also impose regulatory requirements that favor domestic providers or mandate that domestic payments or data processing be performed entirely within that country which could prevent us from managing the end to end processing of certain transactions
In China UnionPay remains the predominant processor of domestic payment card transactions and operates the predominant domestic acceptance mark Although we filed an application with the People s Bank of China PBOC in May 2020 to operate a Bank Card Clearing Institution BCCI in China the timing and the procedural steps for approval remain uncertain There is no guarantee that the license to operate a BCCI will be approved or if we obtain such license that we will be able to successfully compete with domestic payments networks Co badging and co residency regulations also pose additional challenges in markets where Visa competes with national networks for issuance and routing Certain banks have issued dual branded cards for which domestic transactions in China are processed by UnionPay and transactions outside of China are processed by Visa or other international payments networks The PBOC is contemplating that dual branded cards be phased out over time as new licenses are issued to international companies to participate in China s domestic payments market Accordingly we have been working with Chinese issuers to issue Visa only branded cards for international travel and later for domestic transactions should we obtain a BCCI license However notwithstanding such efforts the phase out of dual branded cards has decreased our payment volumes and impacted the net revenue we generate in China
UnionPay has grown rapidly in China and is actively pursuing international expansion plans which could potentially lead to regulatory pressures on our international routing rule which requires that international transactions on Visa cards be routed over VisaNet Furthermore although regulatory barriers shield UnionPay from competition in China alternative payments providers such as Alipay and WeChat Pay have rapidly expanded into ecommerce offline and cross border payments which could make it difficult for us to compete even if our license is approved in China NetsUnion Clearing Corp a Chinese digital transaction routing system and other such systems could have a competitive advantage in comparison with international payments networks
Regulatory initiatives in India including a data localization mandate implemented by the government have cost implications for us and could affect our ability to effectively compete with domestic payments providers Furthermore any inability to meet the requirements of the data localization mandate could impact our ability to do business in India In Europe with the support of the European Central Bank a group of European banks announced their intent to launch a pan European payment system the European Payments Initiative EPI While EPI subsequently announced a focus on account to account instant payments across a range of use cases the purported motivation behind EPI is to reduce the risks of disintermediation of European providers by international technology companies and continued reliance on international payments networks for intra Europe card transactions Furthermore regional groups of countries such as the Gulf Cooperation Council GCC and a number of countries in Southeast Asia e g Malaysia have adopted or may consider efforts to restrict our participation in the processing of regional transactions The African Development Bank has also indicated an interest in supporting national payment systems in its efforts to expand financial inclusion and strengthen regional financial stability Finally some countries such as Nigeria and South Africa are mandating on shore processing of domestic transactions Geopolitical events including sanctions trade tensions or other types of activities have intensified these activities which could adversely affect our business For example in the aftermath of U S and European sanctions against Russia and the decision by U S payments networks including Visa to suspend operations in the country some countries have expressed concerns about their reliance on U S financial services companies including payments networks and have taken steps to bolster the development of domestic solutions Separately Russia has called for the BRICS countries a five country bloc made up of Brazil Russia India China and South Africa and which has recently expanded to include countries such as Egypt Ethiopia Iran Saudi Arabia and the United Arab Emirates to lessen dependence on Western payments systems by among other things integrating payments systems and cards across member countries
Central banks in a number of countries including those in Argentina Australia Brazil Canada Europe India and Mexico are in the process of developing or expanding national RTP networks and instant payment solutions with the goal of driving a greater number of domestic transactions onto these systems
Federal Reserve launched its FedNow Service with core clearing and settlement functionality and expects to add more features and enhancements over time Some countries are also exploring cross border connectivity of their respective RTP systems Finally an increasing number of jurisdictions are exploring the concept of building central bank digital currencies for retail payments such as the European Central Bank s Digital Euro initiative
Due to our inability to manage the end to end processing of transactions for cards in certain countries e g Thailand we depend on our close working relationships with our clients or third party service providers to ensure transactions involving our products are processed effectively Our ability to do so may be adversely affected by regulatory requirements and policies pertaining to transaction routing or on shore processing In general national laws that protect or otherwise support domestic providers or processing may increase our costs decrease our payments volumes and impact the net revenue we generate in those countries decrease the number of Visa products issued or processed impede us from utilizing our global processing capabilities and controlling the quality of the services supporting our brands restrict our activities limit our growth and the ability to introduce new products services and innovations force us to leave countries or prevent us from entering new markets and create new competitors all of which could harm our business
Laws and regulations regarding the handling of personal data including laws and regulations related to privacy cybersecurity and AI may impede our services or result in increased costs legal claims or fines against us
Our business relies on the processing of data across national borders Legal requirements relating to the collection storage handling use disclosure transfer disposal and security of personal data continue to evolve and we are subject to an increasing number of privacy data protection cybersecurity and AI requirements around the world For example our ongoing efforts to comply with complex U S state privacy and data protection regulations and emerging international privacy and data protection laws may increase the complexity of our compliance operations entail substantial expenses divert resources from other initiatives and projects and limit the services we are able to offer Additionally privacy laws in other regions such as China s Personal Information Protection Law and India s Personal Data Protection Act may have extraterritorial application and include restrictions on cross border data transfers extensive notification and localization requirements and substantial compliance and audit obligations The global proliferation of new privacy and data protection laws may lead to inconsistent and conflicting requirements which create an uncertain regulatory environment Noncompliance could also result in regulatory penalties and significant legal liability Enforcement actions and investigations by regulatory authorities into companies related to data security incidents and privacy violations are generally increasing In Europe data protection authorities continue to apply and enforce the General Data Protection Regulation GDPR imposing record setting fines
We are also subject to a variety of laws and regulations governing the development use and deployment of AI technologies These laws and regulations are still evolving and there is no single global regulatory framework for AI The market is still assessing how regulators may apply existing consumer protection and other laws in the context of AI There is thus uncertainty on what new laws will look like and how existing laws will apply to our development use and deployment of AI In the midst of this uncertainty we may face challenges due to the complexity and rapidly changing nature of AI technology and applicable laws Our use of AI and machine learning is subject to various risks at each stage of use In the context of AI development risks include those related to intellectual property considerations the collection and use of personal information third party risks technical limitations of algorithms and the accuracy of training data and compliance with emerging AI legal standards In the context of use and deployment risks include ethical and compliance considerations and our ability to monitor and safely deploy AI systems throughout the organization with appropriate safeguards The EU has adopted a comprehensive AI Act that applies harmonized rules across Europe with the aim of fostering innovation and respecting fundamental rights The EU AI Act comes into force in stages with the key provisions related to high risk AI coming into force in August 2026 There is still limited guidance on the EU AI Act but it could depending on how provisions are interpreted and enforced limit the ability to create and deploy AI systems for uses deemed high risk in the EU or add increased compliance costs associated with these systems Our development and implementation of governance frameworks for our AI and machine learning systems may not be successful in mitigating all of these emerging risks
Further as we develop integrated and personalized products and services and acquire new companies to meet the needs of a changing marketplace we may expand our data profile through additional data types and sources across multiple channels and involving new partners This potential expansion could amplify the impact of these various laws and regulations on our business As a result we are required to constantly monitor our privacy
data and cybersecurity practices and potentially change them when necessary or appropriate We also may need to provide increased care in our data management governance and quality practices particularly as it relates to the use of data in products leveraging AI
The application of tax laws requires significant judgment and can be subject to uncertainty and differing interpretations We are currently under examination by or in disputes with the U S Internal Revenue Service as well as tax authorities in other jurisdictions and we may be subject to additional examinations or disputes in the future We exercise significant judgment and make estimates that we believe to be reasonable in calculating our worldwide provision for income taxes and other tax liabilities However relevant tax authorities may disagree with our estimates interpretations or tax treatment of certain material items Failure to sustain our position in these matters could adversely affect our cash flows and financial position
In addition changes in existing laws in the U S or foreign jurisdictions including unilateral actions of foreign jurisdictions to introduce digital services taxes or changes resulting from the Organization for Economic Cooperation and Development s proposals for modernizing the international tax system including the introduction of a global minimum tax with widespread implementation by member countries expected by 2025 may also materially affect our effective tax rate and could increase our tax payments Please see
We are involved in numerous litigation matters investigations and proceedings asserted by civil litigants governments and enforcement bodies investigating or alleging among other things violations of competition and antitrust law consumer protection law privacy law and intellectual property law these are referred to as actions in this section Details of the most significant actions we face are described more fully in
of this report These actions are inherently uncertain expensive and disruptive to our operations In the event we are found liable or reach a settlement in any action particularly in a large class action lawsuit such as one involving an antitrust claim entitling the plaintiff to treble damages in the U S or we incur liability arising from a government investigation we may be required to pay significant awards or judgments settlements costs or fines In addition settlement terms judgments orders pressures or events in or resulting from actions have impacted and may continue to impact our business by creating uncertainty for our business or by influencing or requiring us to modify among other things the default interchange reimbursement rates we set the Visa operating rules or the way in which we enforce those rules our fees or pricing or the way we do business These actions or their outcomes may also influence regulators investigators governments or civil litigants in the same or other jurisdictions which may lead to additional actions against Visa Finally we are required by some of our commercial agreements to indemnify other entities for litigation brought against them even if Visa is not a defendant
of this report we have certain financial protections pursuant to the respective retrospective responsibility plans The two retrospective responsibility plans are different in the protections they provide and the mechanisms by which we are protected The failure of one or both of the retrospective responsibility plans to adequately insulate us from the impact of such settlements judgments losses or liabilities could materially harm our financial condition or cash flows or even cause us to become insolvent
The global payments space is intensely competitive As technology evolves and consumer expectations change new competitors or methods of payment emerge and existing clients and competitors assume different roles Our products compete with cash checks electronic payments virtual currency payments global or multi regional networks other domestic and closed loop payments systems digital wallets and alternative payments providers primarily focused on enabling payments through ecommerce and mobile channels As the global payments space becomes more complex we face increasing competition from our clients other emerging payment providers such as fintechs other digital payments technology companies that have developed payments systems
enabled through online activity in ecommerce social media and mobile channels other providers of new flows and value added service offerings as well as governments in a number of jurisdictions e g Brazil and India as discussed above that are developing supporting and or operating national schemes RTP networks and other payment platforms For more information please see
Our competitors may acquire develop or make better use of substantially better technology have more widely adopted delivery channels or have greater financial resources They may offer more effective innovative or a wider range of programs products and services They may use more effective advertising and marketing strategies that result in broader brand recognition and greater use including with respect to issuance and merchant acceptance They may also develop better security solutions or more favorable pricing arrangements Moreover even if we successfully adapt to technological change and the proliferation of alternative types of payment services by developing and offering our own services in these areas such services may provide less favorable financial terms for us than we currently receive from VisaNet transactions which could hurt our financial results and prospects
Certain of our competitors operate with different business models have different cost structures or participate in different market segments Many of these competitors are also able to use existing payment networks without being subject to many of the associated costs Moreover these competitors also occupy various roles in the payments ecosystem that enable them to influence payment choice of other participants Those business models may ultimately prove more successful or more adaptable to regulatory technological and other developments In some cases these competitors have the support of government mandates that prohibit limit or otherwise hinder our ability to compete for transactions within certain countries and regions Some of our competitors including American Express Discover private label card networks virtual currency providers technology companies that enable the exchange of digital assets and certain alternative payments systems like Alipay and WeChat Pay operate closed loop payments systems with direct connections to both merchants and consumers Government actions or initiatives such as the Dodd Frank Act the IFR in Europe or RTP initiatives by governments such as the U S Federal Reserve s FedNow or the Central Bank of Brazil s Pix system may provide competitors with increased opportunities to derive competitive advantages from these business models and may create new competitors including in some cases the government itself Similarly regulation in Europe under PSD2 and the IFR may require us to open up access to and allow participation in our network to additional participants and reduce the infrastructure investment and regulatory burden on competitors In addition to the open banking provisions under PSD2 efforts to implement or facilitate open banking and open finance requirements are underway across a number of countries including Australia Brazil Canada and the U S which could impose additional requirements on financial institutions or others regarding access to and use of financial data We also run the risk of disintermediation due to factors such as emerging technologies and platforms including mobile payments alternative payment credentials other ledger technologies or payment forms and by virtue of increasing bilateral agreements between entities that prefer not to use our payments network for processing transactions For example merchants could process transactions directly with issuers or processors could process transactions directly with issuers and acquirers
We along with our competitors clients network participants and others are developing or participating in alternative payments systems or products such as mobile payment services ecommerce payment services P2P payment services real time and faster payment initiatives and payment services that permit ACH or direct debits from or to consumer checking accounts that could either reduce our role or otherwise disintermediate us from the transaction processing or the value added services we provide to support such processing Examples include initiatives from The Clearing House an association consisting of large financial institutions that has developed its own faster payments system Early Warning Services which operates Zelle a bank offered alternative network that provides another platform for faster funds or real time payments across a variety of payment types including P2P corporate and government disbursement bill pay and deposit check transactions and cryptocurrency or stablecoin based payments initiatives
Many countries or regions are developing or promoting domestic networks switches and RTP systems e g U S Brazil India and Europe and in some countries the government itself owns and operates these RTP systems e g Brazil To the extent these governments mandate local banks and merchants to use and accept these systems for domestic or other transactions prohibit international payments networks like Visa from participating on those systems and or impose restrictions or prohibitions on international payments networks from offering payment services on such transactions we could face the risk of our business being disintermediated in those countries For example in some regions Latin America Southeast Asia and the Middle East including through intergovernmental organizations such as the
Association of Southeast Asian Nations and the GCC some countries are at varying stages of exploring or operationalizing the cross border connectivity of such domestic systems Similarly India has expressed interest in expanding its digital public infrastructure which includes its RTP system Unified Payments Interface UPI outside the country and for cross border payments
Parties that access our payment credentials tokens and technologies including clients technology solution providers or others might be able to migrate or steer account holders and other clients to alternative payment methods or use our payment credentials tokens and technologies to establish or help bolster alternate payment methods and platforms
Participants in the payments industry may merge form joint ventures or enable or enter into other business combinations that strengthen their existing business propositions or create new competing payment services
New or revised industry standards related to online checkout and web payments cloud based payments tokenization or other payments related technologies set by individual countries regions or organizations such as the International Organization for Standardization American National Standards Institute World Wide Web Consortium European Card Standards Group PCI Co Nexo and EMVCo may result in additional costs and expenses for Visa and its clients or otherwise negatively impact the functionality and competitiveness of our products and services
As the competitive landscape is quickly evolving we may not be able to foresee or respond sufficiently to emerging risks associated with new businesses products services and practices We may be asked to adjust our local rules and practices develop or customize certain aspects of our payment services or agree to business arrangements that may be less protective of Visa s proprietary technology and interests in order to compete and we may face increasing operational costs and risk of litigation concerning intellectual property Our failure to compete effectively in light of any such developments could harm our business and prospects for future growth
Our financial institution clients and merchants can reassess their commitments to us at any time or develop their own competitive services While we have certain contractual protections our clients including some of our largest clients generally have flexibility to issue non Visa products Further in certain circumstances our financial institution clients may decide to terminate our contractual relationship on relatively short notice without paying significant early termination fees Because a significant portion of our net revenue is concentrated among our largest clients the loss of business from any one of these larger clients could harm our business results of operations and financial condition For more information please see
In addition we face intense competitive pressure on the prices we charge our financial institution clients In certain regions we are increasingly facing competition from RTP networks other payment facilitators offering lower pricing and government involvement in domestic and cross border payments In order to stay competitive we may need to adjust our pricing or offer incentives to our clients to grow payments volume enter new market segments adapt to regulatory changes and expand their use and acceptance of Visa products and services These include up front cash payments fee discounts rebates credits performance based incentives marketing and other support payments that impact our net revenue and profitability In addition we offer incentives to certain merchants and acquirers to encourage them to route transactions to Visa Pressures on pricing incentives fee discounts and rebates could moderate our growth If we are not able to implement cost containment and productivity initiatives in other areas of our business or grow our volumes in other ways to offset or absorb the financial impact of these incentives fee discounts and rebates it may harm our net revenue and profits
In addition it may be difficult or costly for us to acquire or conduct business with financial institutions or merchants that have longstanding exclusive or nearly exclusive relationships with our competitors These financial institutions or merchants may be more successful and may grow more quickly than our existing clients or merchants In addition if there is a consolidation or acquisition of one or more of our largest clients or co brand partners by a financial institution client or merchant with a strong relationship with one of our competitors it could
to maintain and expand the use and acceptance of Visa products Certain merchants and merchant affiliated groups have been exerting their influence in the global payments system in certain jurisdictions such as the U S Australia Canada and Europe to attempt to lower acceptance costs paid by merchants to acquirers or their agents to accept payment products or services by lobbying for new legislation seeking regulatory intervention filing lawsuits and in some cases surcharging or refusing to accept Visa products If they are successful in their efforts we may face increased compliance and litigation expenses issuers may decrease their issuance of our products and consumer usage of our products could be adversely impacted For example in the U S certain stakeholders have raised concerns regarding how payment security standards and rules may impact debit routing choice and the cost of payment card acceptance In addition to ongoing litigation related to the U S migration to EMV capable cards and point of sale terminals U S merchant affiliated groups and processors have expressed concerns regarding the EMV certification process and some policymakers have expressed concerns about the roles of industry bodies such as EMVCo and the Payment Card Industry Security Standards Council in the development of payment card standards Additionally many merchants have advocated for lower acceptance costs in the form of reduced interchange rates which could result in some issuers eliminating or reducing their promotion or use of Visa s products and services eliminating or reducing cardholder benefits such as rewards programs or charging account holders increased or new fees for using Visa branded products all of which could negatively impact Visa s transaction volumes and related revenue Finally some merchants and processors have advocated for changes to industry practices and Visa acceptance requirements at the point of sale including the ability for merchants to accept only certain types of Visa products to mandate only PIN authenticated transactions to differentiate or steer among Visa product types issued by different financial institutions and to impose surcharges on customers presenting Visa products as their form of payment If successful these efforts could adversely impact consumers usage of our products and decrease our overall transaction volumes and net revenue lead to regulatory enforcement and or litigation that increases our compliance and litigation expenses and ultimately harm our business
As noted above our relationships with industry participants are complex and require us to balance the interests of multiple third parties For instance we depend significantly on relationships with our financial institution clients and on their relationships with account holders and merchants to provide our products and services and thereby compete effectively in the marketplace We offer incentives to merchants acquirers ecommerce platforms and processors to encourage routing preference and acceptance growth We also engage in many payment card co branding efforts with merchants who receive incentives from us As emerging participants such as fintechs enter the payments industry we engage in discussions to address the role they may play in the ecosystem whether as for example an issuer merchant ecommerce platform or digital wallet provider As these and other relationships become more prevalent and take on a greater importance to our business our success will increasingly depend on our ability to sustain and grow these relationships In addition we depend on our clients and third parties including network partners vendors and suppliers to submit facilitate and process transactions properly provide various services associated with our payments network on our behalf and otherwise adhere to our operating rules and applicable laws As our clients expand their global footprint their legal and regulatory obligations can become even more complex From time to time our relationships may be affected by actions of our clients and industry participants that may materially and adversely impact our business products or services and to the extent we or such parties fail to perform or deliver adequate services or comply with regulatory obligations it may result in negative experiences for account holders or others when using their Visa branded payment products which could harm our business and reputation
Our brand is globally recognized and is a key asset of our business We believe that our clients and their account holders associate our brand with acceptance security convenience speed and reliability Our success depends in large part on our ability to maintain the value of our brand and reputation of our products and services in the payments ecosystem elevate the brand through new and existing products services and partnerships and
uphold our corporate reputation The popularity of products that we have developed in partnership with technology companies and financial institutions as well as government actions that mandate other networks to process Visa branded card transactions may have the potential to cause brand disintermediation at the point of sale in ecommerce and mobile channels and decrease the presence of our brand Our brand reputation may also be negatively impacted by a number of factors including authorization clearing and settlement service disruptions data security breaches compliance failures by Visa including by our employees agents clients partners or suppliers failure to meet expectations of our clients consumers or other stakeholders negative perception of our industry the industries of our clients Visa accepting merchants or our clients customers and agents including third party payments providers ill perceived actions or affiliations by clients partners or other third parties such as sponsorship or co brand partners and fraudulent or illegal activities using our payment products or services and which we may not always be in a position to detect and or prevent from occurring over our network Our brand could also be negatively impacted when our products are used to facilitate payment for legal but controversial products and services including adult content cryptocurrencies firearms and gambling activities Additionally these risks could be exacerbated if our financial institution partners and or merchants fail to maintain necessary controls to ensure the legality of these transactions if any legal liability associated with such goods or services is extended to ancillary participants in the value chain like payments networks or if our network and industry become entangled in political or social debates concerning such legal but controversial commerce If we are unable to maintain our reputation the value of our brand may be impaired which could harm our relationships with clients account holders employees prospective employees governments and the public as well as impact our business
More than half of our net revenue is earned outside the U S In addition international cross border transaction revenue represents a significant part of our net revenue and is an important part of our growth strategy Our net revenue is dependent on the volume and number of payment transactions made by consumers governments and businesses whose spending patterns may be affected by economic political market health and social events or conditions Adverse macroeconomic conditions within the U S or internationally including but not limited to recessions inflation rising interest rates high unemployment currency fluctuations actual or anticipated large scale defaults or failures rising energy prices or a slowdown of global trade and reduced consumer small business government and corporate spending have a direct impact on our volumes transactions and net revenue Furthermore in efforts to deal with adverse macroeconomic conditions governments may introduce new or additional initiatives or requests to reduce or eliminate payment fees or other costs In an overall soft global economy such pricing measures could result in additional financial pressures on our business
In addition outbreaks of illnesses pandemics like COVID 19 or other local or global health issues political uncertainties international hostilities armed conflicts wars civil unrest climate related events including the increasing frequency of extreme weather events impacts to the power grid and natural disasters have to varying degrees negatively impacted our operations clients third party suppliers activities and cross border travel and spend
Geopolitical trends towards nationalism protectionism and restrictive visa requirements as well as continued activity and uncertainty around economic sanctions tariffs or trade restrictions including restrictions on the cross border flow of data also limit the expansion of our business in certain regions and have resulted in us suspending our operations in other regions During fiscal 2022 economic sanctions were imposed on Russia by the U S the EU United Kingdom and other jurisdictions and authorities impacting Visa and its clients In March 2022 we suspended our operations in Russia and as a result are no longer generating revenue from domestic and cross border activities related to Russia The war in Ukraine and any further actions by or in response to such actions by Russia or its allies could have lasting impacts on Ukraine as well as other regional and global economies any or all of which could adversely affect our business The ongoing military conflict in the Middle East and any resulting conflicts in the region could potentially have similar negative impacts
A decline in economic political market health and social conditions could impact our clients as well and their decisions could reduce the number of cards accounts and credit lines of their account holders and impact overall consumption by consumers and businesses which would ultimately impact our net revenue Our clients may implement cost reduction initiatives that reduce or eliminate marketing budgets and decrease spending on optional or enhanced value added services from us Any events or conditions that impair the functioning of the financial markets tighten the credit market or lead to a downgrade of our current credit rating could increase our future borrowing costs and impair our ability to access the capital and credit markets on favorable terms which could affect our liquidity and capital resources or significantly increase our cost of capital
Finally as governments investors and other stakeholders face additional pressures to accelerate actions to address climate change and other environmental governance and social topics governments are implementing regulations and investors and other stakeholders are imposing new expectations or focusing investments in ways that may cause significant shifts in disclosure commerce and consumption behaviors that may have negative impacts on our business As a result of any of these factors any decline in cross border travel and spend would impact our cross border volumes the number of cross border transactions we process and our currency exchange activities which in turn would reduce our international transaction revenue
We are subject to laws regulations and other measures that govern a wide range of topics including those that are related to matters beyond our core products and services such as matters that touch upon sustainability climate change human capital inclusion and diversity and human rights A wide range of stakeholders including governments customers employees and investors are increasingly focused on and are developing expectations regarding these corporate responsibility matters We have established CRS related initiatives adopted reporting frameworks and announced several related goals These goals may change from time to time implementation of these goals may require considerable investments and ultimately we cannot guarantee that we will achieve them
Our ability to achieve any CRS objectives is subject to numerous risks many of which are outside of our control including the evolving legal environment and regulatory requirements for the tracking and reporting of CRS standards or disclosures and the actions of suppliers partners and other third parties Certain of our regulators have proposed or adopted or may propose or adopt rules or standards related to these matters that would apply to our business New regulations have been enacted and or are expected in several jurisdictions including the EU s Corporate Sustainability Reporting Directive the SEC climate related disclosures that could require disclosure of climate related information and the State of California s legislation requiring broad disclosure of greenhouse gas emissions and other climate related information Prevailing CRS standards and expectations may also reflect conflicting values or objectives which can result in our practices being judged by standards that are continually evolving and are not always clear From time to time the methodologies for reporting our CRS data may be updated and previously reported data may be adjusted to reflect an improvement in the availability and quality of data changing assumptions changes in the nature and scope of our operations and other changes in circumstances This may result in a lack of consistent or meaningful comparative data from period to period or between us and other companies in the same industry Further where new laws or regulations are more stringent than current legal or regulatory requirements we may experience increased compliance burdens and costs to meet such obligations
Our stakeholders often hold differing views on our CRS related goals and initiatives which may result in negative attention in traditional and social media or a negative perception of our response to concerns regarding these matters In addition we also face potentially conflicting supervisory directives as certain U S regulatory and non U S authorities have prioritized CRS related issues while Congress and certain U S state governments have signaled pursuing potentially conflicting priorities These circumstances among others may result in pressure from investors unfavorable reputational impacts including inaccurate perceptions or a misrepresentation of our actual CRS practices diversion of management s attention and resources and proxy fights among other material adverse impacts on our business Any failure or perceived failure by us to adhere to our public statements comply fully with developing interpretations of CRS laws and regulations or meet evolving and varied stakeholder expectations and standards could negatively impact our business reputation financial condition and operating results
We indemnify issuers and acquirers for settlement losses they may suffer due to the failure of another issuer or acquirer to honor its settlement obligations in accordance with the Visa operating rules In certain instances we may indemnify issuers or acquirers in situations in which a transaction is not processed by our system This indemnification creates settlement risk for us due to the timing difference between the date of a payment transaction and the date of subsequent settlement Our indemnification exposure is generally limited to the amount of unsettled Visa card payment transactions at any point in time and any subsequent amounts that may fall due relating to adjustments for previously processed transactions Changes in the credit standing of our clients or concurrent settlement failures or insolvencies involving more than one of our largest clients several of our smaller clients significant sponsor banks through which non financial institutions participate in the Visa network or systemic operational failures could expose us to liquidity risk and negatively impact our financial position Even if we have sufficient liquidity to cover a settlement failure or insolvency we may be unable to recover the amount of such
The global payments industry is undergoing significant and rapid technological change including increased proliferation of mobile and other proximity and in app payment technologies ecommerce tokenization cryptocurrencies distributed ledger and blockchain technologies cloud based encryption and authorization and new authentication technologies such as biometrics FIDO 2 0 3D Secure 2 0 and dynamic cardholder verification values or dCVV2 As a result we expect new services and technologies to continue to emerge and evolve including those developed by Visa such as our new flows offerings For example generative AI solutions have emerged as an opportunity for Visa its clients suppliers merchants and partners to innovate more quickly and better serve consumers Rapid adoption and novel uses of generative AI across the marketplace may also introduce unique and unpredictable security risks to our systems information and the payments ecosystem In addition to our own initiatives and innovations we work closely with third parties including potential competitors for the development of and access to new technologies It is difficult however to predict which technological developments or innovations will become widely adopted and how those technologies may be regulated Moreover some of the new technologies could be subject to intellectual property related lawsuits or claims potentially impacting our development efforts and or requiring us to obtain licenses implement design changes or discontinue our use If we or our partners fail to adapt and keep pace with new technologies in the payments space in a timely manner it could harm our ability to compete decrease the value of our products and services to our clients impact our intellectual property or licensing rights harm our business and impact our future growth
Our cybersecurity and processing systems as well as those of financial institutions merchants and third party service providers have experienced and may continue to experience errors interruptions delays or damage from a number of causes including power outages hardware software and network failures computer viruses ransomware malware or other destructive software AI technologies by bad actors internal design manual or user errors cyber attacks terrorism political tensions war or other military conflicts or civil unrest security breaches of our physical premises workplace violence or wrongdoing catastrophic events natural disasters severe weather conditions and other effects from climate change In addition there is risk that third party suppliers of hardware and infrastructure required to operate our data centers and support employee productivity could be impacted by supply chain disruptions such as manufacturing shipping delays and service disruption due to cyber attacks An extended supply chain or service disruption could also impact processing or delivery of technology services
Furthermore our visibility and role in the global payments industry also puts our company at a greater risk of being targeted by hackers In the normal course of our business we have been the target of malicious cyber activity We have been and may continue to be impacted by attacks and data security breaches of financial institutions merchants and third party service providers We are also aware of instances where governments have directed or sponsored attacks against some of our financial institution clients and other instances where merchants and issuers have encountered substantial data security breaches affecting their customers some of whom were Visa account holders Given the increase in online banking ecommerce and other online activity we continue to see increased cyber and payment fraud activity as cybercriminals attempt phishing and social engineering scams distributed denial of service attacks and other disruptive actions Overall such attacks and breaches have resulted and may continue to result in fraudulent activity and ultimately financial losses to Visa s financial institution clients merchants or third party service providers
Numerous and evolving cybersecurity threats including advanced and persistent cyber attacks targeted attacks against our employees and trusted partners insider threats social engineering threats such as phishing or deepfake schemes including those using synthetic media could compromise the confidentiality availability and integrity of data in our systems particularly on our internet facing applications or the systems of our third party service providers Because the tactics techniques and procedures used to obtain unauthorized access or to disable or degrade systems change frequently have become increasingly more complex and sophisticated and may be difficult to detect for periods of time we may not anticipate these acts or respond adequately or timely For example cybercriminals have increasingly demonstrated advanced capabilities such as use of zero day
vulnerabilities and rapid integration of new technology such as generative AI are being used by threat actors to create sophisticated attacks that are increasingly automated targeted and more difficult to defend against The security measures and procedures we our financial institution and merchant clients other merchants and third party service providers in the payments ecosystem have in place to protect sensitive consumer data and other information may not be implemented effectively may differ in scope and complexity across different ecosystem participants or may not be successful or sufficient to counter all data security breaches cyber incidents and attacks or system failures In some cases the mitigation efforts may be dependent on third parties who may not follow the required contractual standards who may not be able to timely patch vulnerabilities or fix security defects or whose hardware software or network services may be subject to error defect delay outage or lack appropriate malware prevention to prevent breaches or data exfiltration incidents Cyber incidents and attacks can have cascading impacts that unfold with increasing speed across our internal networks and systems and those of our partners and clients Despite our security measures and programs to protect our systems and data and prevent detect and respond to data security incidents there can be no assurance that our efforts will prevent all such threats
In addition as a global financial services company Visa is increasingly subject to complex and varied cybersecurity regulations and cyber incident reporting requirements across numerous jurisdictions With the often short timeframes required for cyber incident reporting there is a risk that Visa or its third party service providers will fail to meet the reporting deadlines for any given incident It may take considerable time for us to investigate and evaluate the full impact of cyber incidents particularly for sophisticated attacks These factors may inhibit our ability to provide prompt full and reliable information about the cyber incident to our clients partners and regulators as well as to the public In the event we are found to be out of compliance we could be subject to monetary damages civil and criminal penalties litigation investigations and proceedings and damage to our reputation and brand
Any of these events individually or in the aggregate could significantly disrupt our operations result in the unauthorized disclosure release gathering monitoring misuse loss or destruction of confidential proprietary sensitive and personal information including account data information or data security compromises impact our clients and consumers damage our reputation and brand result in litigation or claims violations of applicable privacy and other laws and increased regulatory review or scrutiny investigations actions fines or penalties result in damages or changes to our business practices decrease the overall use and acceptance of our products decrease our volume net revenue and future growth prospects and be costly time consuming and difficult to remedy In the event of damage or disruption to our business due to these occurrences we may not be able to successfully and quickly recover all of our critical business functions assets and data through our business continuity program Furthermore while we maintain insurance our coverage may not sufficiently cover all types of losses or claims that may arise
As part of our overall business strategy we make acquisitions and strategic investments and enter into joint ventures We may not achieve the anticipated benefits of our current and future acquisitions joint ventures or strategic investments and they may involve significant risks and uncertainties including
the data security cybersecurity and operational resilience posture of our acquired entities joint ventures or companies we invest in or partner with may not be adequate and may be more susceptible to a system failure service disruption or cyber incident or attack
disruptions costs liabilities judgments settlements or business pressures resulting from litigation matters investigations or legal proceedings involving our acquisitions joint ventures or strategic investments
the economic political regulatory and compliance risks associated with our acquisitions joint ventures or strategic investments including when entering into a new business or operating in new regions or countries For more information on regulatory risks please see
In addition we may pursue additional strategic objectives such as additional exchange offers which can divert resources and management s attention from our existing business and if unsuccessful may harm our business and reputation
The talents and efforts of our employees particularly our key management are vital to our success The market for highly skilled workers and leaders in our industry especially in fintech technology cybersecurity and other specialized areas is extremely competitive Our management team has significant industry experience and would be difficult to replace We may be unable to retain them or to attract hire or retain other highly qualified employees particularly if we do not offer employment terms that are competitive with the rest of the labor market Ongoing changes in laws and policies regarding immigration travel and work authorizations have made it more difficult for employees to work in or transfer among jurisdictions in which we have operations and could continue to impair our ability to attract hire and retain qualified employees Failure to attract hire develop motivate and retain highly qualified and diverse employee talent especially in light of changing worker expectations and talent marketplace variability regarding flexible work models to meet our goals related to fostering an inclusive and diverse culture or to adequately address potential increased scrutiny of our inclusion and diversity related programs and initiatives to develop and implement an adequate succession plan for the management team to maintain our strong corporate culture of fostering innovation collaboration and inclusion in our current hybrid model or to design and successfully implement flexible work models that meet the expectations of employees and prospective employees could impact our workforce development goals impact our ability to achieve our business objectives and adversely affect our business and our future success
The conversions of our class B and class C common stock or series A B and C preferred stock into shares of class A common stock would result in voting dilution to and could adversely impact the market price of our existing class A common stock
The market price of our class A common stock could fall as a result of many factors The value of our class B 1 B 2 and C common stock and series A B and C preferred stock is tied to the value of the class A common stock Under our U S retrospective responsibility plan upon final resolution of our U S covered litigation all class
B 1 and B 2 common stock will become convertible into class A common stock Under our Europe retrospective responsibility plan Visa will continue to release value from the series B and series C preferred stock in stages based on developments in current and potential litigation The series B and series C preferred stock will become fully convertible to series A preferred stock or class A common stock no later than 2028 subject to a holdback to cover any pending claims Conversion of our class B 1 B 2 and C common stock into class A common stock or our series A B and C preferred stock into class A common stock would increase the amount of class A common stock outstanding which would dilute the voting power of existing class A common stockholders In addition the sale of significant portions of converted class A common stock could adversely impact the market price of our existing class A common stock
Although their voting rights are limited holders of our class B 1 B 2 and C common stock and in certain specified circumstances holders of our series A B and C preferred stock can vote on certain significant transactions With respect to our class B 1 B 2 and C common stock these transactions include a proposed consolidation or merger a decision to exit our core payments business and any other vote required under Delaware law With respect to our series A B and C preferred stock voting rights are limited to proposed consolidations or mergers in which holders of the series A B and C preferred stock would receive shares of stock or other equity securities with preferences rights and privileges that are not substantially identical to the preferences rights and privileges of the applicable series of preferred stock or in the case of series B and C preferred stock holders would receive securities cash or other property that is different from what our class A common stockholders would receive Because the holders of classes of capital stock other than class A common stock are our current and former financial institution clients they may have interests that diverge from our class A common stockholders As a result the holders of these classes of capital stock may not have the same incentive to approve a corporate action that may be favorable to the holders of class A common stock and their interests may otherwise conflict with interests of our class A common stockholders
Provisions contained in our certificate of incorporation and bylaws and our capital structure could delay or prevent a merger takeover attempt or change in control that our stockholders may consider favorable For example except for limited exceptions
no person may beneficially own more than 15 percent of our class A common stock or 15 percent of our total outstanding common stock on an as converted basis unless our board of directors approves the acquisition of such shares in advance
only our board of directors Chair or CEO or any stockholders who have owned continuously for at least one year not less than 15 percent of the voting power of all shares of class A common stock outstanding may call a special meeting of stockholders
As a global company providing payment services to consumers and companies around the world trust is an indispensable asset A strong cybersecurity program is a key element to maintaining this trust As a result we consider cybersecurity risk one of our key enterprise risks and we assess identify and manage such risk as part of our overall enterprise risk management framework See
Visa s cybersecurity program has been established to identify analyze mitigate monitor and govern cybersecurity risk and was designed around widely accepted international standards such as ISO 27002 and the Payment Card Industry Data Security Standards as well as applicable legal and regulatory requirements We implement our cybersecurity program primarily through our Key Controls which define the requirements for the protection of Visa information and technology assets All employees must complete annual training on our Key Controls and are required to comply with the requirements Exceptions to the Key Controls must be approved by an established senior management working group which is overseen by our Corporate Risk Committee CRC the management committee responsible for overseeing Visa s cybersecurity program and other operational risks
The Key Controls are updated and reviewed annually by our Cybersecurity Governance Risk and Compliance team and approved by management committees to ensure they continue to address evolving cybersecurity threats and associated legal and regulatory obligations
As part of our overall business strategy we have acquired a number of companies for which our full cybersecurity standards may not be appropriate These designated entities may deliver products and services using systems which are not fully integrated with our standard technology platforms or hosted in our data centers We have established a separate set of Key Controls for designated entities appropriate to their size and operations that are designed around the same widely accepted international standards noted above but tailored to the operational reality and business needs of these entities Regular reporting of our acquired entities cybersecurity program is provided to our Chief Information Security Officer CISO President of Technology management committees and the board of directors For additional information about our structural and organizational risks see
Visa s global cyber security incident response team provides monitoring of Visa networks and digital assets across three cyber fusion centers in the U S United Kingdom and Singapore In addition Visa s threat intelligence and research teams monitor commercial and government intelligence sources for new and emerging threats Our cybersecurity awareness team regularly publishes and shares information with Visa employees on emerging threats such as deepfake and generative AI powered social engineering schemes
To address significant cybersecurity incidents and other crisis events we maintain a business incident response plan which identifies key stakeholders defines escalation processes and sets the thresholds above which our cybersecurity legal and crisis management teams will inform management s Executive and Disclosure Committees as well as when the CEO and his designee will inform the board of directors of an incident For cybersecurity incidents below these crisis thresholds we maintain subordinate incident response plans and standard operating procedures used by our security incident response team Like many companies we and some third parties on which we rely periodically experience cybersecurity incidents However as of September 30 2024 we were not aware of any direct or third party cybersecurity incidents in the past three fiscal years that have materially affected our business strategy results of operations or financial condition
We proactively manage our cybersecurity risk by continually seeking to identify and mitigate potential cybersecurity threats to and vulnerabilities in our information and technology assets with both internal and external assessments as appropriate For example public facing technology assets are subject to both internal security
assessments and external security researcher testing under our vulnerability disclosure and bug bounty programs Identified threats and vulnerabilities are required to be remediated within stringent timelines for which compliance and exceptions are tracked in reporting to management and the board of directors
of this report our cybersecurity policies and controls may not be implemented or followed appropriately to mitigate all of our risks We employ three lines of defense designed to address this risk The first line of defense consists of the technology teams who develop build and deploy our products and services These teams are trained on and accountable for following our Key Controls The second line of defense includes separate internal security and risk teams that conduct security assessments of our networks and products overseeing the remediation of any findings Finally our independent internal audit function operates as the third line of defense assessing the effectiveness of our policies and controls and implementation thereof We are also subject to regular detailed examinations by financial regulators and external auditors which often contain a significant cybersecurity component
We also apply this same overall framework to our oversight and management of cybersecurity risk from service providers vendors suppliers and other third parties Our policies require due diligence on our service providers vendors and suppliers prior to engagement and impose audit rights in our contracts in order to identify cybersecurity risks associated with third party relationships proportionate to the inherent risk associated with the products and services provided and the criticality and sensitivity of our information and technology assets to which the third party may have access As noted in our risk factors in
of this report our third party risk management framework may not be implemented effectively or may not be successful or sufficient to mitigate all of our risks When we become aware that a service provider vendor supplier or other third party has experienced any compromise or failure in the cybersecurity infrastructure owned or controlled by such third party we may attempt to mitigate our risk including by terminating such third party s connection to our information and technology assets where appropriate
Our CISO is responsible for day to day management and oversight of our information security program and leads our cybersecurity organization which comprises approximately 1 000 professionals globally as of September 30 2024 Our CISO and President of Technology receive regular reports from our cybersecurity personnel in connection with monitoring the prevention detection mitigation and remediation of cybersecurity incidents Our CISO reports directly to our President of Technology and provides quarterly reports on our cybersecurity performance to the CRC
Our current CISO has over 30 years of industry experience leading enterprise cybersecurity teams and enabling secure and scalable ecommerce and payment platforms at multiple Fortune 500 companies Since joining Visa in November 2015 he has been a core part of building Visa s Zero Trust Architecture and advancing VisaNet s cybersecurity defense capabilities Our current President of Technology joined Visa in November 2013 and has over 30 years of experience in leading the development and deployment of commerce and transaction technologies which includes overseeing cybersecurity risk and transformational technology initiatives At Visa our President of Technology is responsible for the Company s technology innovation and investment strategy product engineering cybersecurity global IT and operations infrastructure and for accelerating the integration of engineering and product teams
Visa s board of directors exercises oversight and control of Visa s overall enterprise risk management framework and delegates oversight and control of Visa s cybersecurity program to our audit and risk committee ARC which is responsible for ensuring that management has risk based processes in place designed to assess identify and manage cybersecurity risks to which Visa is exposed As noted in
however these processes may not be sufficient to mitigate all cybersecurity risks Our CISO provides an update on our cybersecurity program to the ARC twice per year and to the full board of directors annually The updates to the ARC and the full board of directors provide an overview of our cybersecurity performance progress against goals cybersecurity threat landscape and other relevant developments
As of September 30 2024 we owned or leased 135 office locations in 83 countries around the world including four data centers located in the U S the United Kingdom and Singapore Our corporate headquarters are located in owned and leased premises in the San Francisco Bay Area
Our class A common stock has been listed on the New York Stock Exchange under the symbol V As of November 6 2024 we had 319 stockholders of record of our class A common stock The number of beneficial owners is substantially greater than the number of record holders because a large portion of our class A common stock is held in street name by brokers and other financial institutions on behalf of our stockholders There is currently no established public trading market for our class B 1 B 2 or C common stock As of November 6 2024 there were 657 215 and 353 holders of record of our class B 1 B 2 and C common stock respectively
On October 29 2024 our board of directors declared a quarterly cash dividend of 0 59 per share of class A common stock determined in the case of all other outstanding common and preferred stock on an as converted basis payable on December 2 2024 to holders of record as of November 12 2024
Subject to legally available funds we expect to continue paying quarterly cash dividends on our outstanding common and preferred stock in the future However the declaration and payment of future dividends is at the sole discretion of our board of directors after taking into account various factors including our financial condition settlement indemnifications operating results available cash and current and anticipated cash needs
This management s discussion and analysis provides a review of the results of operations financial condition and liquidity and capital resources of Visa Inc and its subsidiaries Visa we us our or the Company on a historical basis and outlines the factors that have affected recent earnings as well as those factors that may affect future earnings The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included in
This section of the report generally discusses fiscal 2024 compared to fiscal 2023 Discussions of fiscal 2023 compared to fiscal 2022 that are not included in this report can be found in Management s Discussion and Analysis of Financial Condition and Results of Operations in Part II Item 7 in our Annual Report on Form 10 K for the year ended September 30 2023 filed with the U S Securities and Exchange Commission
Visa is a global payments technology company that facilitates global commerce and money movement across more than 200 countries and territories among a global set of consumers merchants financial institutions and government entities through innovative technologies We provide transaction processing services primarily authorization clearing and settlement to our financial institution and merchant clients through VisaNet our proprietary advanced transaction processing network We offer products solutions and services that facilitate secure reliable and efficient money movement for all participants in the ecosystem
Net revenue increased 10 over the prior year primarily due to the growth in nominal cross border volume processed transactions and nominal payments volume partially offset by higher client incentives Exchange rate movements did not have a material impact on net revenue growth
GAAP operating expenses increased 6 over the prior year primarily driven by higher expenses related to personnel general and administrative and marketing expenses partially offset by lower litigation provision See
During fiscal 2024 we recorded additional accruals of 140 million to address claims associated with the interchange multidistrict litigation We also made deposits of 1 5 billion into the U S litigation escrow account The additional accruals related to the interchange multidistrict litigation could be higher or lower than deposits made into the U S litigation escrow account See
In September 2024 we entered into a definitive agreement to acquire Featurespace Limited Featurespace a developer of real time artificial intelligence payments protection technology that prevents and mitigates payments fraud and financial crime risks This acquisition is subject to customary closing conditions including applicable regulatory approvals In January 2024 we acquired Pismo Holdings a global cloud native issuer processing and core banking platform for a purchase consideration of 929 million See
In July 2024 we released 2 7 billion of the as converted value from our series B and C preferred stock and issued 99 264 shares of series A preferred stock in connection with the eighth anniversary of the Visa Europe acquisition See
In May 2024 we accepted 241 million shares of class B 1 common stock tendered in the exchange offer In exchange we issued approximately 120 million shares of class B 2 common stock and 48 million shares of class C common stock See
Visa may but is under no obligation to conduct a successive exchange offer if i one year has passed since the initial exchange offer for the next preceding class of class B common stock and ii if the estimated interchange reimbursement fees at issue in unresolved claims for damages in the U S covered litigation have been reduced by 50 or more since the consummation of the prior exchange offer or in the case of the first successive exchange offer since October 1 2023 as determined by Visa The estimated interchange reimbursement fees at issue in unresolved claims for damages in the U S covered litigation were 49 6 billion as of October 1 2023 and as of October 1 2024 were approximately 48 4 billion
During fiscal 2024 we repurchased 64 million shares of our class A common stock in the open market for 17 0 billion As of September 30 2024 our share repurchase program had remaining authorized funds of 13 1 billion See
We use non GAAP financial measures of our performance which exclude certain items which we believe are not representative of our continuing operations as they may be non recurring or have no cash impact and may distort our longer term operating trends We consider non GAAP measures useful to investors because they provide greater transparency into management s view and assessment of our ongoing operating performance
These long term investments are strategic in nature and are primarily private company investments Gains and losses associated with these investments are tied to the performance of the companies that we invest in and therefore do not correlate to the underlying performance of our business
Amortization of acquired intangible assets consists of amortization of intangible assets such as technology customer relationships and trade names acquired in connection with business combinations executed beginning in fiscal 2019 Amortization charges for our acquired intangible assets are non cash and are significantly affected by the timing frequency and size of our acquisitions rather than our core operations As such we have excluded this amount to facilitate an evaluation of our current operating performance and comparison to our past operating performance
Acquisition related costs consist primarily of one time transaction and integration costs associated with our business combinations These costs include professional fees technology integration fees restructuring activities and other direct costs related to the purchase and integration of acquired entities These costs also include retention equity and deferred compensation when they are agreed upon as part of the purchase price of the transaction but are required to be recognized as expense
These figures are estimated and approximated These estimates do not include claims in certain purported indirect purchaser class actions or any claims of merchants serviced by opt outs that are payment processors and facilitators The interchange at issue for unresolved claims will continue to increase See U S Covered Litigation in
Litigation provision includes significant accruals related to certain legal matters that are not covered by the U S retrospective responsibility plan or the Europe retrospective responsibility plan uncovered legal matters and additional accruals associated with the interchange multidistrict litigation which are covered by the U S retrospective responsibility plan U S covered litigation Litigation provision associated with these matters can vary significantly based on the facts and circumstances related to each matter and do not correlate to the underlying performance of our business During fiscal 2024 2023 and 2022 we have excluded these amounts to facilitate a comparison to our past operating performance
Under the U S retrospective responsibility plan we recover the monetary liabilities related to the U S covered litigation through a downward adjustment to the rate at which shares of our class B 1 and class B 2 common stock ultimately convert into shares of class A common stock During fiscal 2024 basic and diluted earnings per class A common stock was unchanged as a result of the downward adjustments of the class B 1 and B 2 common stock conversion rates during the period During fiscal 2023 and fiscal 2022 basic earnings per class A common stock was unchanged and increased 0 01 respectively and diluted earnings per class A common stock was unchanged in both fiscal years as a result of the downward adjustments of the class B 1 common stock conversion rate during the periods See
During fiscal 2024 we recorded a charge within general and administrative expense associated with the consolidation of certain leased office spaces We have excluded these amounts as they do not reflect the underlying performance of our business
During fiscal 2024 as a result of the resolution of an audit we recognized a benefit within general and administrative expense related to the release of the reserve previously recognized in fiscal 2021 This one time benefit is not representative of our ongoing operations
During fiscal 2024 we donated investment securities to the Visa Foundation and recognized a non cash general and administrative expense We have excluded this amount as it does not reflect the underlying performance of our business
During fiscal 2022 we recorded a loss within general and administrative expense from the deconsolidation of our Russian subsidiary and also incurred charges in personnel expense as a result of steps taken to support our employees in Russia and Ukraine We have excluded these amounts as they are one time charges and do not reflect the underlying performance of our business
Non GAAP operating expenses non operating income expense income tax provision effective income tax rate net income and diluted earnings per share should not be relied upon as substitutes for or considered in isolation from measures calculated in accordance with U S GAAP The following tables reconcile our as reported financial measures calculated in accordance with U S GAAP to our respective non GAAP financial measures
volume represents the aggregate dollar amount of purchases made with cards and other form factors carrying the Visa Visa Electron V PAY and Interlink brands and excludes Europe co badged volume Nominal payments volume is denominated in U S dollars and is calculated each quarter by applying an established U S dollar foreign currency exchange rate for each local currency in which our volumes are reported
Processed transactions include payments and cash transactions and represent transactions using cards and other form factors carrying the Visa Visa Electron V PAY Interlink and PLUS brands processed on Visa s networks
Service revenue in a given quarter is primarily assessed based on nominal payments volume in the prior quarter Therefore service revenue reported for the twelve months ended September 30 2024 2023 and 2022 was based on nominal payments volume reported by our financial institution clients for the twelve months ended June 30 2024 2023 and 2022 respectively On occasion previously presented volume information may be updated Prior period updates are not material
Figures in the table may not recalculate exactly due to rounding Percentage changes are calculated based on unrounded numbers On occasion previously presented information may be updated Prior period updates are not material
Net revenue increased in fiscal 2024 over the prior year primarily due to the growth in nominal cross border volume processed transactions and nominal payments volume partially offset by higher client incentives
Our net revenue is impacted by the overall strengthening or weakening of the U S dollar as payments volume and related revenue denominated in local currencies are converted to U S dollars In fiscal 2024 exchange rate movements did not have a material impact on net revenue growth
increased in fiscal 2024 over the prior year primarily due to growth in nominal cross border volume of 14 excluding transactions within Europe partially offset by lower volatility of a broad range of currencies
include amortization of internally developed and purchased software depreciation expense for property and equipment and amortization of finite lived intangible assets primarily obtained through acquisitions
consist mainly of card benefits such as costs associated with airport lounge access extended cardholder protection and concierge services facilities costs travel and meeting costs indirect taxes foreign exchange gains and losses and other corporate expenses incurred in support of our business
represents litigation expenses and is an estimate based on management s understanding of our litigation profile the specifics of each case advice of counsel to the extent appropriate and management s best estimate of incurred loss
increased in fiscal 2024 over the prior year due to higher usage of travel related card benefits a charitable contribution to the Visa Foundation and lease consolidation costs in the current year higher indirect taxes and higher unfavorable foreign currency fluctuations partially offset by the release of the reserve on indirect taxes previously recognized in fiscal 2021
was approximately flat in fiscal 2024 over the prior year primarily due to higher interest benefit related to taxes and lower interest expense related to lower outstanding debt offset by higher losses from derivative instruments See
During fiscal 2024 the Organization for Economic Cooperation and Development OECD published administrative guidance around the implementation of a 15 global minimum tax Pillar Two Various OECD member countries have either enacted or are in the process of enacting Pillar Two legislation which will apply to Visa beginning in fiscal 2025 While we do not expect a material tax impact in fiscal 2025 we are monitoring developments and evaluating the potential impact of Pillar Two on future years
Based on our current cash flow budgets and forecasts of our short term and long term liquidity needs we believe that our current and projected sources of liquidity will be sufficient to meet our projected liquidity needs for more than the next 12 months We will continue to assess our liquidity position and potential sources of supplemental liquidity in view of our operating performance current economic and capital market conditions and other relevant circumstances
es Cash provided by operating activities in fiscal 2024 was lower than the prior fiscal year primarily due to higher incentive payments and higher cash paid for taxes due to the timing of payments partially offset by continued growth in our underlying business
Cash used in investing activities in fiscal 2024 was lower than the prior fiscal year primarily due to higher proceeds from maturities and sales net of purchases of investment securities partially offset by cash paid for acquisitions and the absence of cash received from the settlement of net investment hedge derivative instruments
Cash used in financing activities in fiscal 2024 was higher than the prior fiscal year primarily due to higher share repurchases and higher dividends paid partially offset by the absence of the principal debt payment upon maturity of our December 2022 senior notes
Our investment portfolio is designed to invest cash in securities which enables us to meet our working capital and liquidity needs Our investment portfolio consists of debt securities issued by the U S Treasury and U S government sponsored agencies 3 0 billion of the investments are classified as current and are available to meet short term liquidity needs The remaining non current investments have stated maturities of more than one year from the balance sheet date however they are also generally available to meet short term liquidity needs
Factors that may impact the liquidity of our investment portfolio include but are not limited to changes to credit ratings of the securities uncertainty related to regulatory developments actions by central banks and other monetary authorities and the ongoing strength and quality of credit markets We will continue to review our portfolio in light of evolving market and economic conditions However if current market conditions deteriorate the liquidity of our investment portfolio may be impacted and we could determine that some of our investments are impaired which could adversely impact our financial results We have policies that limit the amount of credit exposure to any one financial institution or type of investment
We maintain a commercial paper program to support our working capital requirements and for other general corporate purposes As of September 30 2024 we had no outstanding obligations under the program See
We have an unsecured revolving credit facility which is maintained to ensure the integrity of the payment card settlement process and for general corporate purposes As of September 30 2024 there were no
Pursuant to the terms of the U S retrospective responsibility plan which was created to insulate Visa and our class A common stockholders from financial liability for certain litigation cases we maintain a U S litigation escrow account from which monetary liabilities from settlements of or judgments in the U S covered litigation will be payable As these funds are restricted for the sole purpose of making payments related to the U S covered litigation matters we do not rely on them for other operational needs See
Payments settlement due to and from our financial institution clients can represent a substantial daily liquidity requirement Most U S dollar settlements are settled within the same day and do not result in a receivable or payable balance while settlements in currencies other than the U S dollar generally remain outstanding for one to two business days which is consistent with industry practice for such transactions In general during fiscal 2024 we were not required to fund settlement related working capital As of September 30 2024 we held 11 2 billion of our total available liquidity to fund daily settlement in the event one or more of our financial institution clients are unable to settle with the remaining liquidity available to support our working capital and other liquidity needs See
Judgments in and settlements of litigation or other fines imposed in investigations and proceedings could give rise to future liquidity needs During fiscal 2024 we deposited 1 5 billion into the U S litigation escrow account to address claims associated with the interchange multidistrict litigation The balance of this account as of September 30 2024 was 3 1 billion and is reflected as restricted cash in our consolidated balance sheets See
During fiscal 2024 we repurchased shares of our class A common stock in the open market for 17 0 billion As of September 30 2024 our share repurchase program had remaining authorized funds of 13 1 billion Share repurchases will be executed at prices we deem appropriate subject to various factors including market conditions and our financial performance and may be effected through accelerated share repurchase programs open market purchases or privately negotiated transactions including through Rule 10b5 1 plans
During fiscal 2024 we declared and paid 4 2 billion in dividends to holders of our common and preferred stock On October 29 2024 our board of directors declared a quarterly cash dividend of 0 59 per share of class A common stock determined in the case of all other outstanding common and preferred stock on an as converted basis We expect to continue paying quarterly dividends in cash subject to approval by the board of directors See
As of September 30 2024 we had an outstanding aggregate principal amount relating to our senior notes of 21 1 billion Since the issuance of the 500 million green bond as part of our commitment to environmental sustainability and a sustainable payments ecosystem we have allocated all proceeds to eligible green projects See
As of September 30 2024 we had short term and long term obligations of 2 0 billion and 0 9 billion respectively related to agreements to purchase goods and services that specify significant terms including fixed or minimum quantities to be purchased minimum or variable price provisions and the approximate timing of the transaction For obligations where the individual years of spend are not specified in the contract we have estimated the timing of when these amounts will be spent For future obligations related to software licenses see
As of September 30 2024 we had short term and long term obligations of 217 million and 209 million respectively related to the estimated transition tax net of foreign tax credit carryovers on certain foreign earnings of non U S subsidiaries recognized during fiscal 2018
We indemnify our financial institution clients for settlement losses suffered due to the failure of any other client to fund its settlement obligations in accordance with our operating rules The amount of the indemnification is limited to the amount of unsettled Visa payment transactions at any point in time We maintain and regularly review global settlement risk policies and procedures to manage settlement risk which may require clients to post collateral if certain credit standards are not met See
In November 2023 the Financial Accounting Standards Board FASB issued Accounting Standards Update ASU 2023 07 which is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses This standard also enhances interim disclosure requirements and provides new segment disclosure requirements for entities with a single reportable segment This ASU is effective for our annual periods beginning October 1 2024 and interim periods beginning October 1 2025 and requires retrospective application to all prior periods presented We are currently evaluating the impact of the ASU on our disclosures
In December 2023 the FASB issued ASU 2023 09 which provides improvements to income tax disclosures This standard requires disaggregated information related to the effective tax rate reconciliation as well as information on income taxes paid This ASU is effective for our annual periods beginning October 1 2025 and requires prospective application with the option to apply the standard retrospectively We are currently evaluating the impact of the ASU on our disclosures
In November 2024 the FASB issued ASU 2024 03 which requires disclosure of additional information about specific expense categories underlying certain income statement expense line items This ASU is effective for our annual periods beginning October 1 2027 and requires either prospective or retrospective application We are currently evaluating the impact of the ASU on our disclosures
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require us to make judgments assumptions and estimates that affect the amounts reported See
of this report We have established policies and control procedures which seek to ensure that estimates and assumptions are appropriately governed and applied consistently from period to period However actual results could differ from our assumptions and estimates and such differences could be material
We believe that the following accounting estimates are the most critical to fully understand and evaluate our reported financial results as they require our most subjective or complex management judgments resulting from the need to make estimates about the effect of matters that are inherently uncertain and unpredictable
We enter into long term incentive agreements with financial institution clients merchants and other business partners for various programs that provide cash and other incentives designed to increase revenue by growing payments volume increasing Visa product acceptance encouraging merchant acceptance and use of Visa payment services and driving innovation These incentives are primarily accounted for as reductions to net revenue however if a separate identifiable benefit at fair value can be established they are accounted for as operating expenses Incentives are recognized systematically and rationally based on management s estimate of each client s performance These estimates are regularly reviewed and adjusted as appropriate based on changes in performance expectations actual client performance amendments to existing contracts or the execution of new contracts
Estimation of client incentives relies on forecasts of payments and transaction volume card issuance and card conversion Performance is estimated using client reported information transactional information accumulated from our systems historical information market and economic conditions and discussions with our clients merchants and business partners
If actual performance is not consistent with our estimates client incentives may be materially different than initially recorded Increases in incentive payments are generally driven by increased payments and transaction volume which drive our net revenue As a result in the event incentive payments exceed estimates such payments are not expected to have a material effect on our financial condition results of operations or cash flows The cumulative impact of a revision in estimates is recorded in the period such revisions become probable and estimable
We are currently involved in various legal proceedings the outcomes of which are not within our complete control and may not be known for prolonged periods of time Management is required to assess the probability of loss and estimate the amount of such loss if any in preparing our consolidated financial statements
We evaluate the likelihood of a potential loss from legal or regulatory proceedings to which we are a party We record a liability for such claims when a loss is deemed probable and the amount can be reasonably estimated Significant judgment may be required in the determination of both probability and whether a loss is reasonably estimable Our judgments are inherently subjective and based on a number of factors including management s understanding of the legal or regulatory profile and the specifics of each proceeding our history with similar matters advice of internal and external legal counsel and management s best estimate of incurred loss As additional information becomes available we reassess the potential loss related to pending claims and may revise our estimates
We have entered into loss sharing agreements that reduce our potential liability under certain litigation However our U S retrospective responsibility plan only addresses monetary liabilities from settlements of or final judgments in the U S covered litigation The plan s mechanisms include the use of the U S litigation escrow account The accrual related to the U S covered litigation could be either higher or lower than the U S litigation escrow account balance Our Europe retrospective responsibility plan only covers Visa Europe territory covered litigation and resultant liabilities and losses relating to the covered period subject to certain limitations and does not cover any fines or penalties incurred in the European Commission proceedings or any other matter See
Due to the inherent uncertainties of the legal and regulatory processes in the multiple jurisdictions in which we operate our judgments may be materially different than the actual outcomes which could have material adverse effects on our business financial conditions and results of operations in the period in which the effect becomes probable and reasonably estimable See
The determination of our provision for income taxes and income tax assets and liabilities requires significant judgment the use of estimates and the interpretation and application of accounting principles and tax laws
We have various tax filing positions with regard to the timing and amount of income including the allocation of income among various tax jurisdictions deductions and credits based on our interpretation of tax laws We record a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized We also inventory evaluate and measure all uncertain tax positions taken or expected to be taken on tax returns and record liabilities for the amount of such positions that in our judgement may not be sustained or may only be partially sustained upon examination by the relevant taxing authorities Our assessment may change based on various factors including changes in facts or circumstances changes in tax law and audit activity
Although we believe that our estimates and judgments are reasonable actual results may differ from these estimates Some or all of these judgments are subject to review by the taxing authorities If one or more of the taxing authorities were to successfully challenge our right to realize some or all of the tax benefit we have recorded and we were unable to realize this benefit it could have a material adverse effect on our financial condition results of operations or cash flows
Market risk is the potential economic loss arising from adverse changes in market factors Our exposure to financial market risks results primarily from fluctuations in foreign currency exchange rates interest rates and equity prices Aggregate risk exposures are monitored on an ongoing basis
We are exposed to risks from foreign currency exchange rate fluctuations that are primarily related to changes in the functional currency value of receipts and payments related to foreign currency denominated transactions We manage these risks by entering into foreign currency forward contracts that hedge exposures of the variability in the functional currency equivalent of anticipated non functional currency denominated cash flows Our foreign currency exchange rate risk management program reduces but does not entirely eliminate the impact of foreign currency exchange rate movements
As of September 30 2024 and 2023 the effect of a hypothetical 10 weakening in the value of the functional currencies is estimated to create an additional fair value loss of approximately 329 million and 236 million respectively on our outstanding foreign currency forward contracts The loss from this hypothetical weakening would be largely offset by a corresponding gain on our cash flows from foreign currency denominated revenue and payments See
We are further exposed to foreign currency exchange rate risk related to translation as the functional currency of Visa Europe is the Euro Translation from the Euro to the U S dollar is performed for balance sheet accounts using exchange rates in effect at the balance sheet dates and for revenue and expense accounts using an average exchange rate for the period Resulting translation adjustments are reported as a component of accumulated other comprehensive income loss on the consolidated balance sheets A hypothetical 10 change in the Euro against the U S dollar compared to the exchange rate as of September 30 2024 and 2023 would result in a foreign currency translation adjustment of 2 1 billion and 1 9 billion respectively
We designated our Euro denominated senior notes as a net investment hedge against a portion of the foreign exchange rate exposure from our net investment in Visa Europe Foreign currency translation adjustments resulting from the Euro denominated senior notes partially offset the foreign currency translation adjustments resulting from our net investment in Visa Europe See
We are also subject to foreign currency exchange risk in daily settlement activities This risk arises from the timing of rate setting for settlement with clients relative to the timing of market trades for balancing currency positions Risk in settlement activities is limited through daily operating procedures including the utilization of Visa settlement systems and our interaction with foreign exchange trading counterparties
Our investment portfolio assets are held in both fixed rate and adjustable rate securities Investments in fixed rate instruments carry a degree of interest rate risk The fair value of fixed rate securities may be adversely impacted due to a rise in interest rates Additionally a falling rate environment creates reinvestment risk because as
securities mature the proceeds are reinvested at a lower rate generating less interest income As of September 30 2024 and 2023 a hypothetical 100 basis point increase in interest rates did not have a material impact on the fair value of our investment securities Any realized losses resulting from such interest rate changes would only occur if we sold the investments prior to maturity Historically we have been able to hold investments until maturity
We have interest rate and cross currency swap agreements on a portion of our outstanding senior notes that allow us to manage our interest rate exposure through a combination of fixed and floating rates and reduce our overall cost of borrowing Together these swap agreements effectively convert a portion of our U S dollar denominated fixed rate payments into U S dollar and Euro denominated floating rate payments By entering into interest rate swaps we have assumed risks associated with market interest rate fluctuations As of September 30 2024 and 2023 a hypothetical 100 basis point increase in interest rates did not have a material impact on the interest expense for each fiscal year See
Our equity investments are held in both marketable and non marketable equity securities The marketable equity securities are investments in publicly traded companies and the non marketable equity securities include investments in privately held companies As of September 30 2024 and 2023 the carrying value of our marketable equity securities was 63 million and 163 million respectively and the carrying value of our non marketable equity securities was 1 4 billion for each fiscal year These securities are subject to a wide variety of market related risks that could substantially reduce or increase the fair value of our holdings A decline in financial condition or operating results of these investments could result in a loss of all or a substantial part of our carrying value in these companies We regularly review our non marketable equity securities for possible impairment which generally involves an analysis of the facts and changes in circumstances influencing the investment expectations of the entity s cash flows and capital needs and the viability of its business model
We have audited the accompanying consolidated balance sheets of Visa Inc and subsidiaries the Company as of September 30 2024 and 2023 the related consolidated statements of operations comprehensive income changes in equity and cash flows for each of the years in the three year period ended September 30 2024 and the related notes collectively the consolidated financial statements We also have audited the Company s internal control over financial reporting as of September 30 2024 based on criteria established in
In our opinion the consolidated financial statements referred to above present fairly in all material respects the financial position of the Company as of September 30 2024 and 2023 and the results of its operations and its cash flows for each of the years in the three year period ended September 30 2024 in conformity with U S generally accepted accounting principles Also in our opinion the Company maintained in all material respects effective internal control over financial reporting as of September 30 2024 based on criteria established in
The Company s management is responsible for these consolidated financial statements for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management s Report on Internal Control over Financial Reporting Our responsibility is to express an opinion on the Company s consolidated financial statements and an opinion on the Company s internal control over financial reporting based on our audits We are a public accounting firm registered with the Public Company Accounting Oversight Board United States PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audits in accordance with the standards of the PCAOB Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement whether due to error or fraud and whether effective internal control over financial reporting was maintained in all material respects
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements whether due to error or fraud and performing procedures that respond to those risks Such procedures included examining on a test basis evidence regarding the amounts and disclosures in the consolidated financial statements Our audits also included evaluating the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the consolidated financial statements Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk Our audits also included performing such other procedures as we considered necessary in the circumstances We believe that our audits provide a reasonable basis for our opinions
A company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles A company s internal control over financial reporting includes those policies and procedures that 1 pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company 2 provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and 3 provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company s assets that could have a material effect on the financial statements
Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that 1 relates to accounts or disclosures that are material to the consolidated financial statements and 2 involved our especially challenging subjective or complex judgments The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements taken as a whole and we are not by communicating the critical audit matter below providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates
and has recorded a litigation accrual of 1 537 million as of September 30 2024 of which the substantial majority of that accrual relates to Individual Merchant Actions In preparing its consolidated financial statements the Company is required to assess the probability of loss associated with each legal proceeding and estimate the amount of such loss if any The outcome of legal proceedings to which the Company is a party is not within the complete control of the Company and may not be known for prolonged periods of time
required especially challenging auditor judgment due to the assumptions and estimation associated with the consideration and evaluation of possible outcomes The Company could incur judgments enter into settlements or revise its expectations regarding the outcome of merchants claims which could have a material effect on the estimated amount of the liability in the period in which the effect becomes probable and reasonably estimable
The following are the primary procedures we performed to address this critical audit matter We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company s litigation accrual process for the
We evaluated the Company s ability to estimate its monetary exposure by comparing historically recorded liabilities to actual monetary amounts incurred upon resolution of legal matters for merchants that opted out of the previous MDL class settlement To assess the estimated monetary exposure in the Company s analysis we compared such amounts to the complete population of amounts attributable to the remaining opt out merchants We performed a sensitivity analysis over the Company s monetary exposure calculations and we recalculated the amount of the ending litigation accrual We read letters received directly from the Company s external legal counsel and internal legal counsel that discussed the Company s legal matters including the
Visa Inc Visa or the Company is a global payments technology company that facilitates global commerce and money movement across more than 200 countries and territories Visa operates one of the world s largest electronic payments networks VisaNet which provides transaction processing services primarily authorization clearing and settlement The Company offers products solutions and services that facilitate secure reliable and efficient money movement for participants in the ecosystem Visa is not a financial institution and does not issue cards extend credit or set rates and fees for account holders of Visa products In most cases account holder and merchant relationships belong to and are managed by Visa s financial institution clients
The consolidated financial statements include the accounts of Visa and its consolidated entities and are presented in accordance with accounting principles generally accepted in the United States of America U S GAAP The Company consolidates entities for which it has a controlling financial interest including variable interest entities VIEs for which the Company is the primary beneficiary The Company s investments in VIEs have not been material to its consolidated financial statements as of and for the periods presented Intercompany balances and transactions have been eliminated in consolidation
The Company s activities are interrelated and each activity is dependent upon and supportive of the other All significant operating decisions are based on analysis of Visa as a single global business The Company has one reportable segment Payment Services
The preparation of consolidated financial statements in conformity with U S GAAP requires management to make estimates and assumptions about future events These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period These estimates may change as new events occur and additional information is obtained and will be recognized in the period in which such changes occur Future actual results could differ materially from these estimates The use of estimates in specific accounting policies is described further below as appropriate
Cash and cash equivalents include cash and certain highly liquid investments with original maturities of 90 days or less from the date of purchase Cash equivalents are primarily recorded at cost which approximates fair value due to their generally short maturities The Company defines restricted cash and restricted cash equivalents as cash and cash equivalents that cannot be withdrawn or used for general operating activities See
for a discussion of the U S covered litigation The escrow funds are held in money market investments and classified as restricted cash equivalents on the consolidated balance sheets Interest earned on escrow funds is recognized in investment income expense and other on the consolidated statements of operations
The Company measures certain financial assets and liabilities at fair value on a recurring basis Certain non financial assets such as goodwill intangible assets and property equipment and technology are subject to nonrecurring fair value measurements if they are deemed to be impaired Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date Fair value measurements are reported under a three level valuation hierarchy See
Marketable equity securities which are reported in investment securities on the consolidated balance sheets include investments in publicly traded companies as well as mutual fund investments related to various employee compensation and benefit plans Dividend income as well as gains and losses from changes in fair value are recognized in investment income expense and other on the consolidated statements of operations
Trading activity in the mutual fund investments is at the direction of the Company s employees These investments are held in a trust and are not considered by the Company to be available for its operational or liquidity
needs The corresponding liability is reported in accrued liabilities on the consolidated balance sheets with changes in the liability recognized in personnel expense on the consolidated statements of operations
The Company s investments in debt securities which are classified as available for sale and reported in investment securities or cash and cash equivalents on the consolidated balance sheets include U S government sponsored debt securities and U S Treasury securities These securities are recorded at cost at the time of purchase and are carried at fair value The Company considers these securities to be available for sale to meet working capital and liquidity needs Investments with stated maturities of less than one year from the balance sheet date or investments that the Company intends to sell within one year are classified as current assets while all other securities are classified as non current assets Unrealized gains and losses are reported in other comprehensive income loss The specific identification method is used to calculate realized gain or loss on the sale of securities which is recorded in investment income expense and other on the consolidated statements of operations Interest income is recognized when earned and included in investment income expense and other on
The Company evaluates its debt securities for impairment on an ongoing basis When there has been a decline in fair value of a debt security below the amortized cost basis the Company recognizes an impairment in investment income expense and other on the consolidated statements of operations if it has the intent to sell the security or it is more likely than not that the Company will be required to sell the security before recovery of the amortized cost basis In addition if the Company identifies that the decline in fair value has resulted from credit losses the credit loss component is recognized as an allowance on the consolidated balance sheets and
The Company s non marketable equity securities which are reported in other assets on the consolidated balance sheets include investments in privately held entities without readily determinable fair values All gains and losses on non marketable equity securities are recognized in inv
The Company applies the equity method of accounting when it does not have control but has the ability to exercise significant influence over the entity Under the equity method the Company s share of each entity s profit or loss is recognized
The Company applies the fair value measurement alternative for equity securities in certain other entities when it does not have the ability to exercise significant influence over the entity The Company adjusts the carrying value of these equity securities to fair value when orderly transactions for identical or similar investments of the same issuer are observable
The Company regularly reviews investments accounted for under the equity method and the fair value measurement alternative for possible impairment which generally involves an analysis of the facts and changes in circumstances influencing the investment expectations of the entity s cash flows and capital needs and the viability of its business model
The Company considers the following to be financial instruments cash cash equivalents restricted cash restricted cash equivalents investment securities settlement receivable and payable accounts receivable customer collateral non marketable equity securities and derivative instruments See
The Company operates systems for authorizing clearing and settling payment transactions worldwide Most U S dollar settlements with the Company s financial institution clients are settled within the same day and do not result in a receivable or payable balance Settlements in currencies other than the U S dollar generally remain outstanding for one to two business days resulting in amounts due from and to clients These amounts are presented as settlement receivable and settlement payable on the consolidated balance sheets
The Company has cash deposits and other non cash assets from certain clients in order to ensure that their performance of settlement obligations arising from Visa payment services are processed in accordance with the Company s operating rules The cash collateral assets held by the Company are restricted and
The Company recognizes an obligation at inception for guarantees and indemnifications that qualify for recognition regardless of the probability of occurrence The Company indemnifies its financial institution clients for settlement losses suffered due to the failure of any other client to fund its settlement obligations in accordance with the Visa operating rules The Company estimates expected credit losses and recognizes an allowance for those credit losses related to its settlement indemnification obligations The estimated fair value of the liability for settlement indemnification is included in accrued liabilities on the consolidated balance sheets
Property equipment and technology are recorded at historical cost less accumulated depreciation and amortization which are computed on a straight line basis over the asset s estimated useful life Depreciation and amortization of technology furniture fixtures and equipment are computed over estimated useful lives ranging from 2 to 10 years Leasehold improvements are amortized over the shorter of the useful life of the asset or lease term Building improvements are depreciated between 3 and 40 years and buildings are depreciated over 40 years Improvements that increase functionality of the asset are capitalized and depreciated over the asset s remaining useful life Land and construction in progress are not depreciated
Technology includes purchased and internally developed software including technology assets obtained through acquisitions Internally developed software represents software primarily used by the VisaNet electronic payments network Internal and external costs incurred during the preliminary project stage are expensed as incurred Qualifying costs incurred during the application development stage are capitalized Once the project is substantially complete and ready for its intended use these costs are amortized on a straight line basis over the technology s estimated useful life Acquired technology assets are initially recorded at fair value and amortized on a straight line basis over the estimated useful life
The Company evaluates the recoverability of long lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable If the sum of expected undiscounted net future cash flows is less than the carrying amount of an asset or asset group an impairment loss is recognized to the extent that the carrying amount of the asset or asset group exceeds its fair value See
The Company determines if an arrangement is a lease at its inception Right of use ROU assets and corresponding lease liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term For this purpose the Company considers only payments that are fixed and determinable at the time of commencement As a majority of the Company s leases do not provide an implicit rate the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options The Company does not record a ROU asset and corresponding liability for leases with terms of 12 months or less
Lease agreements generally contain lease and non lease components Non lease components primarily include payments for maintenance and utilities The Company does not combine lease payments with non lease components for any of its leases Operating leases are recorded as ROU assets which are included in other assets on the consolidated balance sheets The current portion of lease liabilities is included in accrued liabilities and the long term portion is included in other liabilities on the consolidated balance sheets The Company s lease cost is included in general and administrative expense on the consolidated statements of operations and consists of amounts recognized under lease agreements adjusted for impairment and sublease income
The Company accounts for business combinations using the acquisition method and accordingly the identifiable assets acquired the liabilities assumed and any noncontrolling interest in the acquiree are generally recorded at their acquisition date fair values The excess of the purchase price over the fair value of net assets acquired including identifiable intangible assets is recorded as goodwill Acquisition related costs are expensed in the periods in which the costs are incurred
Finite lived intangible assets primarily consist of customer relationships and trade names obtained through acquisitions Finite lived intangible assets are amortized on a straight line basis and are tested for recoverability if events or changes in circumstances indicate that their carrying amounts may not be recoverable These intangible assets have useful lives ranging from 3 to 15 years
Indefinite lived intangible assets consist of trade name customer relationships and reacquired rights Intangible assets with indefinite useful lives are not amortized but are evaluated for impairment annually or more frequently if events or changes in circumstances indicate that impairment may exist The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative impairment test for indefinite lived intangible assets The Company assesses each category of indefinite lived intangible assets for impairment on an aggregate basis Impairment exists if the fair value of the indefinite lived intangible asset is less than the carrying value
Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination Goodwill is not amortized but is evaluated for impairment at the reporting unit level annually or more frequently if events or changes in circumstances indicate that impairment may exist
The Company performed its annual impairment review of indefinite lived intangible assets and goodwill as of February 1 2024 and concluded there was no impairment as of that date No recent events or changes in circumstances indicate that impairment existed as of September 30 2024 See
The Company evaluates the likelihood of an unfavorable outcome in legal or regulatory proceedings to which it is a party and records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated These judgments are inherently subjective and based on a number of factors including the specifics of such legal or regulatory proceedings the merits of the Company s defenses and consultation with internal and external legal counsel Actual outcomes of these legal and regulatory proceedings may differ materially from the Company s estimates The Company expenses legal costs as incurred in professional fees on the consolidated statements of operations See
The Company s net revenue is comprised principally of the following categories service revenue data processing revenue international transaction revenue and other revenue reduced by client incentives As a payments network service provider the Company s obligation to the customer is to stand ready to provide continuous access to Visa s payments network over the contractual term facilitate the processing of payment transactions including authorization clearing and settlement and deliver related products and services The Company delivers its payments network services directly to issuers and acquirers who provide those services to others within the payments network the merchants and consumers The Company considers all parties in Visa s payments network as customers The Company earns net revenue primarily from issuers and acquirers Consideration is variable based primarily upon the amount and type of transactions and payments volume on Visa s products The transaction price for each specific service is reported net of discounts attributable to individual services or fees The Company recognizes revenue net of sales and other similar taxes as the payments network services are performed in an amount that reflects the consideration the Company expects to receive in exchange for those services The Company has elected the optional exemption to not disclose the remaining performance obligations related to payments network services and other performance obligations which are constrained by and dependent upon the future performance of its clients which are variable in nature The Company also recognizes revenue net of sales and other similar taxes from other value added services including issuing solutions acceptance solutions risk and identity solutions open banking solutions and advisory services as these value added services are performed
For revenue generated from arrangements that involve third parties the Company evaluates whether it is the principal and recognizes revenue on a gross basis or the agent and recognizes revenue on a net basis In this assessment the Company considers if it obtains the control of the specified services before they are transferred to the customer or if the Company is arranging for the services to be provided
Service revenue consists mainly of revenue earned for services provided in support of client usage of Visa payment services This revenue includes fees related to payments volumes Visa s obligation is to stand ready to
provide continuous access to Visa s payments network and related services with respect to Visa branded payments programs Current quarter service revenue is primarily assessed using a calculation of current quarter s pricing applied to the prior quarter s payments volume
Data processing revenue consists of revenue earned for authorization clearing and settlement value added services related to issuing acceptance and risk and identity solutions network access and other maintenance and support services that facilitate transaction and information processing among the Company s clients globally Data processing revenue is recognized in the same period the related transactions occur or services are performed
International transaction revenue is earned for cross border transaction processing and currency conversion activities Cross border transactions arise when the country of origin of the issuer or financial institution originating the transaction is different from that of the beneficiary International transaction revenue is recognized in the same period the cross border transactions occur or services are performed
Other revenue consists mainly of value added services related to advisory marketing and certain card benefits license fees for use of the Visa brand or technology and fees for account holder services certification and licensing Other revenue is recognized in the same period the related transactions occur or services are performed
The Company enters into long term contracts with financial institution clients merchants and other business partners for various programs that provide cash and other incentives designed to increase revenue by growing payments volume increasing Visa product acceptance encouraging merchant acceptance and use of Visa payment services and driving innovation Incentives are classified as reductions to net revenue within client incentives unless the incentive is a cash payment made in exchange for a distinct good or service provided by the customer in which case the payment is classified as operating expenses The Company generally capitalizes upfront and fixed incentive payments as client incentives assets under these agreements when paid and amortizes the amounts as reductions to net revenue ratably over the contractual term Incentives that are earned by the customer based on performance targets are recorded as reductions to net revenue when earned based on management s estimate of each client s future performance and the unpaid portion is recognized as client incentives liabilities These accruals are regularly reviewed and estimates of performance are adjusted as appropriate based on changes in performance expectations actual client performance amendments to existing contracts or the execution of new contracts Client incentives assets and liabilities are classified on the consolidated balance sheets as current or long term based on a 12 month operating cycle
The Company expenses costs for the production of advertising as incurred The cost of media advertising is expensed when the advertising takes place Sponsorship costs are recognized over the period in which the Company benefits from the sponsorship rights Promotional costs are expensed as incurred when the related services are received or when the related event occurs
The Company accounts for income taxes using the asset and liability method Deferred tax assets and liabilities are recognized to reflect the future tax consequences attributable to temporary differences between the financial statement carrying amounts and the respective tax basis of existing assets and liabilities and operating loss and credit carryforwards Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled In assessing whether deferred tax assets are realizable management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized A valuation allowance is recorded for the portions that are not expected to be realized based on the level of historical taxable income projections of future taxable income over the periods in which the temporary differences are deductible and qualifying tax planning strategies
Where interpretation of the tax law may be uncertain the Company recognizes measures and discloses income tax uncertainties The Company accounts for interest expenses and penalties if any related to uncertain tax positions in interest expense and investment income expense and other respectively on the consolidated statements of operations See
The Company s functional currency is the U S dollar for the majority of its foreign operations except for Visa Europe Limited Visa Europe whose functional currency is the Euro Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date At period end monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet dates Nonmonetary
assets and liabilities are remeasured at historical exchange rates Resulting foreign currency transaction gains and losses related to conversion and remeasurement are recorded in general and administrative expense on the consolidated statements of operations and were not material for fiscal 2024 2023 and 2022
Where a non U S currency is the functional currency translation from that functional currency to the U S dollar is performed for balance sheet accounts using exchange rates in effect at the balance sheet dates and for revenue and expense accounts using an average exchange rate for the period Resulting translation adjustments are reported as a component of accumulated other comprehensive income loss on the consolidated balance sheets
Derivatives are carried at fair value on a gross basis on the consolidated balance sheets The Company utilizes foreign exchange forward contracts to hedge against foreign currency exchange rate fluctuations related to certain monetary assets and liabilities denominated in foreign currencies Gains and losses resulting from changes in the fair value of these derivative instruments not designated for hedge accounting are recorded in general and administrative expense on the consolidated statements of operations
The Company also uses foreign exchange forward contracts which are designated as cash flow hedges to reduce its exposure to foreign currency rate changes on forecasted non functional currency denominated operational cash flows The terms of these derivative instruments are generally no more than 12 months The Company uses regression analysis to assess hedge effectiveness prospectively and retrospectively The effectiveness tests are performed on foreign exchange forward contracts based on changes in the spot rate of the derivative instrument compared to changes in the spot rate of the forecasted hedged transaction Forward points are excluded from effectiveness testing purposes and are reported in earnings Gains and losses resulting from changes in the fair value of derivative instruments designated as cash flow hedges are recorded in other comprehensive income loss When the forecasted transaction occurs and is recognized in earnings the amount in accumulated other comprehensive income loss related to that hedge is reclassified to the consolidated statements of operations in the corresponding account where revenue or expense is recorded Derivative instruments designated as cash flow hedges are subject to master netting agreements which provide the Company with a legal right to net settle multiple payable and receivable positions with the same counterparty in a single currency through a single payment However the Company presents fair values on a gross basis on the consolidated balance sheets
The Company designated its Euro notes a non derivative financial instrument as net investment hedges against a portion of the Company s Euro denominated net investment in Visa Europe The Company also holds interest rate and cross currency swap agreements on a portion of the outstanding senior notes that allows the Company to manage its interest rate exposure through a combination of fixed and floating rates and reduce the overall cost of borrowing The Company designated the interest rate swaps as fair value hedges and the cross currency swaps as net investment hedges Gains and losses related to hedging instruments for fair value hedges are recognized in interest expense along with a corresponding loss or gain related to the change in the fair value of the underlying hedged item in the same line item on the consolidated statements of operations Gains and losses related to derivative and non derivative hedging instruments for net investment hedges are recorded in other comprehensive income loss
Cash flows associated with derivatives designated as a cash flow hedge are classified as an operating activity on the consolidated statements of cash flows Cash flows associated with derivatives designated as a fair value hedge or a net investment hedge are classified as an investing activity Cash flows associated with derivatives not designated as a hedging instrument are classified as an operating activity See
The Company measures share based compensation cost at the grant date net of estimated forfeitures based on the estimated fair value of the award The Company recognizes compensation cost for awards with only service conditions on a straight line basis over the requisite service period which is generally the vesting period Compensation cost for performance based awards is recognized on a graded vesting basis The amount is initially estimated based on target performance and is adjusted as appropriate based on management s best estimate throughout the performance period See
Basic earnings per share is computed by dividing net income available to each class of shares by the weighted average number of shares of common stock and participating securities outstanding during the period Participating securities include the Company s series A B and C preferred stock and restricted stock units RSUs that contain non forfeitable rights to dividends or dividend equivalents Net income is allocated to each class of common stock and participating securities based on its proportional ownership on an as converted basis The weighted average number of shares outstanding of each class of common stock reflects changes in ownership over the periods presented See
Diluted earnings per share is computed by dividing net income available to each class of shares by the weighted average number of shares of common stock outstanding participating securities outstanding and if dilutive potential class A common stock equivalent shares outstanding during the period Dilutive class A common stock equivalents may consist of 1 shares of class A common stock issuable upon the conversion of series A B and C preferred stock and class B 1 B 2 and C common stock based on the conversion rates in effect through the period and 2 incremental shares of class A common stock calculated by applying the treasury stock method to the assumed exercise of employee stock options the assumed purchase of stock under the Company s Employee Stock Purchase Plan and the assumed vesting of unearned performance shares See
In September 2024 Visa entered into a definitive agreement to acquire Featurespace Limited a developer of real time artificial intelligence payments protection technology that prevents and mitigates payments fraud and financial crime risks This acquisition is subject to customary closing conditions including applicable regulatory approvals
In January 2024 Visa acquired Pismo Holdings a global cloud native issuer processing and core banking platform for a purchase consideration of 929 million The Company allocated 139 million of the purchase consideration to technology customer relationships other net assets acquired and deferred tax liabilities and the remaining 790 million to goodwill
The nature amount timing and uncertainty of the Company s revenue and cash flows and how they are affected by economic factors are most appropriately depicted through the Company s revenue categories and geographical markets The following tables disaggregate the Company s net revenue by revenue category and by geography
Remaining performance obligations are comprised of deferred revenue and contract revenue that will be invoiced and recognized as revenue in future periods primarily related to value added services As of September 30 2024 the remaining performance obligations were 4 1 billion The Company expects approximately half to be recognized as revenue in the next two years and the remaining thereafter However the amount and timing of revenue recognition is affected by several factors including contract modifications and terminations which could impact the estimate of amounts allocated to remaining performance obligations and when such revenue could be recognized
The Company reconciles cash cash equivalents restricted cash and restricted cash equivalents reported on the consolidated balance sheets that aggregate to the beginning and ending balances shown in the consolidated statements of cash flows as follows
Prepaid expenses and other current assets include restricted cash and restricted cash equivalents related to funds held by the Company on behalf of clients in segregated bank accounts that generally cannot be withdrawn or used for general operating activities These amounts are offset by corresponding liabilities recorded in accrued liabilities on the Company s consolidated balance sheets
The Company has established several related mechanisms designed to address potential liability under certain litigation U S covered litigation These mechanisms are included in and referred to as the U S retrospective responsibility plan and consist of a U S litigation escrow agreement the conversion feature of the Company s shares of class B common stock the makewhole agreements relating to the class B 1 common stock exchange offer the indemnification obligations of the Visa U S A Inc Visa U S A members an interchange judgment sharing agreement a loss sharing agreement and an omnibus agreement as amended
In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation 1 05 md 01720 JG JO E D N Y or MDL 1720 including all cases currently included in MDL 1720 any other case that includes claims for damages relating to the period prior to the Company s initial public offering IPO that has been or is transferred for coordinated or consolidated pre trial proceedings at any time to MDL 1720 by the Judicial Panel on Multidistrict Litigation or otherwise included at any time in MDL 1720 by order of any court of competent jurisdiction
any claim that challenges the reorganization or the consummation thereof provided that such claim is transferred for coordinated or consolidated pre trial proceedings at any time to MDL 1720 by the Judicial Panel on Multidistrict Litigation or otherwise included at any time in MDL 1720 by order of any court of competent jurisdiction and
any case brought after October 22 2015 by a merchant that opted out of the Rule 23 b 3 settlement class in MDL 1720 that arises out of facts or circumstances substantially similar to those alleged in MDL 1720 and that is not transferred to or otherwise included in MDL 1720 See
In accordance with the U S litigation escrow agreement the Company maintains an escrow account from which settlements of or judgments in the U S covered litigation are paid The decision to add funds to the escrow account is made by the board of directors upon request by the Company s litigation committee all members of which are affiliated with or act for certain Visa U S A members The accrual related to the U S covered litigation could be either higher or lower than the U S litigation escrow account balance See
Under the terms of the plan when the Company funds the U S litigation escrow account the value of the Company s class B 1 and B 2 common stock is subject to dilution through a downward adjustment to the rate at which shares of class B 1 and B 2 common stock ultimately convert into shares of class A common stock This has the same economic effect on earnings per share as repurchasing the Company s class A common stock because it reduces the class B conversion rate and consequently the as converted class A common stock share count with each deposit amount See
As a condition to participating in the class B 1 common stock exchange offer each participating stockholder together with its respective parent guarantors as applicable entered into a separate makewhole agreement with Visa pursuant to which the holder agreed to reimburse Visa in cash for the portion of certain future deposits into the U S litigation escrow account that but for the holder s participation in the exchange offer would have been absorbed by such holder through a reduction in the class B 1 conversion rate in respect of the class B 1 common stock it tendered in the exchange offer Payments under the makewhole agreements arise when as a result of a deposit into the U S litigation escrow account the as converted value of the class B 2 common stock a holder received in the exchange offer becomes or is already less than zero but the class B 1 conversion rate remains greater than or equal to zero No additional payment obligations will arise under the makewhole agreements after the class B 1 conversion rate reaches zero See
To the extent that amounts available under the U S litigation escrow arrangement and other agreements in the plan are insufficient to fully resolve the U S covered litigation the Company will use commercially reasonable efforts to enforce the indemnification obligations of Visa U S A s members for such excess amounts including but not limited to enforcing indemnification obligations pursuant to Visa U S A s certificate of incorporation and bylaws and in accordance with their membership agreements
Visa U S A and Visa International Service Association Visa International have entered into an interchange judgment sharing agreement with certain Visa U S A members that have been named as defendants in the interchange multidistrict litigation which is described in
Visa has entered into a loss sharing agreement with Visa U S A Visa International and certain Visa U S A members The loss sharing agreement provides for the indemnification of Visa U S A Visa International and in certain circumstances Visa with respect to i the amount of a final judgment paid by Visa U S A or Visa International in the U S covered litigation after the operation of the U S litigation escrow arrangement conversion feature of the Company s class B common stock and interchange judgment sharing agreement plus any amounts reimbursable to the interchange judgment sharing agreement signatories or ii the damages portion of a settlement of a U S covered litigation that is approved as required under Visa U S A s certificate of incorporation by the vote of Visa U S A s specified voting members The several obligation of each bank that is a party to the loss sharing agreement will equal the amount of any final judgment enforceable against Visa U S A Visa International or any other signatory to the interchange judgment sharing agreement or the amount of any approved settlement of a U S covered litigation multiplied by such bank s then current membership proportion as calculated in accordance with Visa U S A s certificate of incorporation
On October 22 2015 Visa entered into an amendment to the loss sharing agreement The amendment includes within the scope of U S covered litigation any action brought after the amendment by an opt out from the Rule 23 b 3 Settlement Class in MDL 1720 that arises out of facts or circumstances substantially similar to those alleged in MDL 1720 and that is not transferred to or otherwise included in MDL 1720 On the same date Visa entered into amendments to the interchange judgment sharing agreement and omnibus agreement that include any such action within the scope of those agreements as well
Visa entered into an omnibus agreement with Mastercard and certain Visa U S A members that confirmed and memorialized the signatories intentions with respect to the loss sharing agreement the interchange judgment sharing agreement and other agreements relating to the interchange multidistrict litigation see
Under the omnibus agreement the monetary portion of any settlement of the interchange multidistrict litigation covered by the omnibus agreement would be divided into a Mastercard portion at 33 3333 and a Visa portion at 66 6667 In addition the monetary portion of any judgment assigned to Visa related claims in accordance with the omnibus agreement would be treated as a Visa portion Visa would have no liability for the monetary portion of any judgment assigned to Mastercard related claims in accordance with the omnibus agreement and if a judgment is not assigned to Visa related claims or Mastercard related claims in accordance with the omnibus agreement then any monetary liability would be divided into a Mastercard portion at 33 3333 and a Visa portion at 66 6667 The Visa portion of a settlement or judgment covered by the omnibus agreement would be allocated in accordance with specified provisions of the Company s U S retrospective responsibility plan The litigation provision on the consolidated statements of operations was not impacted by the execution of the omnibus agreement
On August 26 2014 Visa entered into an amendment to the omnibus agreement The omnibus amendment makes applicable to certain settlements in opt out cases in the interchange multidistrict litigation the settlement sharing provisions of the omnibus agreement pursuant to which the monetary portion of any settlement of the interchange multidistrict litigation covered by the omnibus agreement would be divided into a Mastercard portion at 33 3333 and a Visa portion at 66 6667 The omnibus amendment also provides that in the event of termination of the class settlement agreement Visa and Mastercard would make mutually acceptable arrangements so that Visa shall have received two thirds and Mastercard shall have received one third of the total of i the sums paid to defendants as a result of the termination of the settlement agreement and ii the takedown payments previously made to defendants
The Company has entered into a loss sharing agreement with Visa Europe and certain of Visa Europe s member financial institutions located in the United Kingdom UK LSA members Each of the UK LSA members has agreed on a several and not joint basis to compensate the Company for certain losses which may be incurred by the Company Visa Europe or their affiliates as a result of certain existing and potential litigation relating to the setting and implementation of domestic multilateral interchange fee rates in the United Kingdom prior to the closing of the Visa Europe acquisition Closing subject to the terms and conditions set forth therein and with respect to each UK LSA member up to a maximum amount of the up front cash consideration received by such UK LSA member The UK LSA members obligations under the UK loss sharing agreement are conditional upon among other things either a losses valued in excess of the sterling equivalent on June 21 2016 of 1 0 billion having arisen in UK covered claims and such losses having reduced the conversion rate of the series B preferred stock accordingly or b the conversion rate of the series B preferred stock having been reduced to
The Company has entered into a litigation management deed with Visa Europe which sets forth the agreed upon procedures for the management of the VE territory covered litigation the allocation of losses resulting from this litigation VE territory covered losses between the series B and C preferred stock and any accelerated conversion or reduction in the conversion rate of the shares of series B and C preferred stock The litigation management deed applies only to VE territory covered litigation and resultant losses and liabilities The litigation management deed provides that the Company will generally control the conduct of the VE territory covered litigation subject to certain obligations to report and consult with the litigation management committee for VE territory covered litigation VE Territory Litigation Management Committee The VE Territory Litigation Management Committee which is composed of representatives of certain Visa Europe members has also been granted consent rights to approve certain material decisions in relation to the VE territory covered litigation
The Company obtained certain protections for VE territory covered losses through the series B and C preferred stock the UK loss sharing agreement and the litigation management deed collectively Europe retrospective responsibility plan The plan covers VE territory covered litigation and resultant liabilities and losses relating to the covered period which generally refers to the period before the Closing Visa s protection from the plan is further limited to 70 of any liabilities where the claim relates to inter regional multilateral interchange fee rates where the issuer is located outside the Visa Europe territory and the merchant is located within the Visa Europe territory The plan does not protect the Company in Europe against all types of litigation or remedies or fines imposed in competition law enforcement proceedings only the interchange litigation specifically covered by the plan s terms
Unlike the U S retrospective responsibility plan the Europe retrospective responsibility plan does not have an escrow account that is used to fund settlements or judgments The Company is entitled to recover VE territory covered losses through periodic adjustments to the class A common stock conversion rates applicable to the series B and C preferred stock The total amount of protection available through the preferred stock component of the Europe retrospective responsibility plan is equivalent to the as converted value of the preferred stock which can be calculated at any point in time as the product of a the outstanding number of shares of preferred stock b the current conversion rate applicable to each series of preferred stock and c Visa s class A common stock price This amount differs from the value of the preferred stock recorded within stockholders equity on the Company s consolidated balance sheets The book value of the preferred stock reflects its historical value recorded at the Closing less VE territory covered losses recovered through a reduction of the applicable conversion rate The book value does not reflect changes in the underlying class A common stock price subsequent to the Closing
Visa Inc net income is not impacted by VE territory covered losses as long as the as converted value of the preferred stock is greater than the covered loss VE territory covered losses are recorded when the loss is deemed to be probable and reasonably estimable or in the case of attorney s fees when incurred Concurrently the Company records a reduction to stockholders equity in the contra equity account right to recover for covered losses which represents the Company s right to recover such losses through adjustments to the conversion rate applicable to the preferred stock
VE territory covered losses may be recorded before the corresponding adjustment to the applicable conversion rate is effected Adjustments to the conversion rate may be executed once in any six month period unless a single individual loss greater than 20 million is incurred in which case the six month limitation does not apply When the adjustment to the conversion rate is made the amount previously recorded in right to recover for covered losses is then recorded against the book value of the preferred stock within stockholders equity
As required by the litigation management deed on June 21 2024 the eighth anniversary of the Visa Europe acquisition Visa in consultation with the VE Territory Litigation Management Committee carried out a release assessment After the completion of this assessment the Company released 2 7 billion of the as converted value from its series B and C preferred stock and issued 99 264 shares of series A preferred stock in July 2024 Eighth Anniversary Release Each holder of a share of series B and C preferred stock received a number of series A preferred stock equal to the applicable conversion adjustment divided by 100 The Company paid 5 million in cash in lieu of issuing fractional shares of series A preferred stock Each share of series A preferred stock will be automatically converted into 100 shares of class A common stock in connection with a sale to a person eligible to hold class A common stock in accordance with Visa s certificate of incorporation
Adjustment to right to recover for covered losses for the conversion rate adjustment differs from the actual recovered amount due to differences in foreign exchange rates between the time the losses were incurred and the subsequent recovery through the conversion rate adjustment
The following table presents the as converted value of the preferred stock available to recover VE territory covered losses compared to the book value of preferred stock recorded within the Company s consolidated balance sheets
As of September 30 2024 the as converted value of preferred stock is calculated as the product of a 2 million and 3 million shares of the series B and C preferred stock outstanding respectively b 1 0030 and 1 7860 the class A common stock conversion rate applicable to the series B and C preferred stock outstanding respectively and c 274 95 Visa s class A common stock closing stock price
As of September 30 2023 the as converted value of preferred stock is calculated as the product of a 2 million and 3 million shares of the series B and C preferred stock outstanding respectively b 2 9370
Money market funds U S Treasury securities and marketable equity securities are classified as Level 1 within the fair value hierarchy as fair value is based on unadjusted quoted prices in active markets for identical assets The Company s deferred compensation liability is measured at fair value based on marketable equity securities held under the deferred compensation plan
The fair value of U S government sponsored debt securities as provided by third party pricing vendors is based on quoted prices in active markets for similar not identical assets Derivative instruments are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data
For fiscal 2024 2023 and 2022 the Company recognized net unrealized gains of 12 million and net unrealized losses of 102 million and 393 million respectively on marketable and non marketable equity securities held as of period end
The Company s investments in privately held companies do not have readily determinable fair values These investments are measured at fair value on a non recurring basis and are classified as Level 3 due to the absence of quoted market prices the inherent lack of liquidity and the fact that significant inputs used to measure fair value are unobservable and require management s judgment
Debt instruments are measured at amortized cost on the Company s consolidated balance sheets The fair value of the debt instruments as provided by third party pricing vendors is based on quoted prices in active markets for similar not identical assets If measured at fair value in the financial statements these instruments would be classified as Level 2 in the fair value hierarchy As of September 30 2024 the carrying value and estimated fair value of debt was 20 8 billion and 19 2 billion respectively As of September 30 2023 the carrying value and estimated fair value of debt was 20 5 billion and 17 7 billion respectively
the carrying values of settlement receivable and payable and customer collateral are an approximate fair value due to their generally short maturities If measured at fair value in the financial statements these financial instruments would be classified as Level 2 in the fair value hierarchy
The Company entered into various operating lease agreements primarily for real estate The Company s leases have original lease periods expiring between fiscal 2025 and 2038 For certain leases the Company has options to extend the lease term for up to 10 years Payments under the Company s lease arrangements are generally fixed
As of September 30 2024 and 2023 ROU assets included in other assets on the consolidated balance sheets was 873 million and 488 million respectively As of September 30 2024 and 2023 the current portion of lease liabilities included in accrued liabilities on the consolidated balance sheets was 150 million and 106 million respectively and the long term portion included in other liabilities was 685 million and 412 million respectively
During fiscal 2024 2023 and 2022 total operating lease cost was 179 million 129 million and 117 million respectively As of September 30 2024 and 2023 the weighted average remaining lease term for operating leases was approximately eight years and the weighted average discount rate for operating leases was 3 51 and 2 43 respectively
The Company s outstanding senior notes are senior unsecured obligations of the Company ranking equally and ratably among themselves and with the Company s existing and future unsecured and unsubordinated debt The senior notes are not secured by any assets of the Company and are not guaranteed by any of the Company s subsidiaries As of September 30 2024 the Company was in compliance with all related covenants Each series of senior notes may be redeemed as a whole or in part at the Company s option at any time at specified redemption prices In addition each series of the Euro notes may be redeemed as a whole at specified redemption prices upon the occurrence of certain U S tax events
Visa maintains a commercial paper program to support its working capital requirements and for other general corporate purposes Under the program the Company is authorized to issue up to 3 0 billion in outstanding notes with maturities up to 397 days from the date of issuance As of September 30 2024 and 2023 the Company had no outstanding obligations under the program
In May 2023 the Company entered into an amended and restated credit agreement for a five year unsecured 7 0 billion revolving credit facility which will expire in May 2028 This credit facility is maintained to ensure the integrity of the payment card settlement process and for general corporate purposes Interest on borrowings will be charged at the applicable reference rate or an alternative base rate as defined in the credit agreement based on the currency and type of the borrowing plus an applicable margin based on the applicable credit rating of the Company s senior unsecured long term debt The Company has agreed to pay a commitment fee which will fluctuate based on such applicable rating of the Company As of September 30 2024 the Company was in compliance with all related covenants As of September 30 2024 and 2023 the Company had no amounts outstanding under the credit facility
The Company sponsors qualified and non qualified defined benefit pension and other postretirement benefit plans that provide for retirement and medical benefits for eligible employees residing in the U S The Company also sponsors other pension benefit plans that provide benefits for eligible internationally based employees at certain non U S locations The Company s defined benefit pension and other postretirement benefit plans are actuarially evaluated incorporating various assumptions such as the discount rate and the expected rate of return on plan assets Disclosures below include the U S pension plans and certain non U S pension plans The Company uses a September 30 measurement date for its pension and other postretirement benefit plans
The U S pension plans are closed to new entrants and frozen However existing plan participants continue to earn interest credits on existing balances at the time of the freeze Additionally the Visa Europe plans are closed to new entrants However future benefits continue to accrue for active participants
The funded status of the Company s defined benefit pension plans is substantially recorded in other assets on the consolidated balance sheets and is measured as the difference between the fair value of plan assets and the accumulated benefit obligation As of September 30 2024 and 2023 for the U S pension plans the fair value of plan assets was 1 2 billion and 1 0 billion respectively accumulated benefit obligation was 670 million and 640 million respectively and the funded status was 531 million and 374 million respectively As of September 30 2024 and 2023 for non U S pension plans the fair value of plan assets was 370 million and 317 million respectively accumulated benefit obligation was 302 million and 287 million respectively and the funded status was 68 million and 30 million respectively
As of September 30 2024 and 2023 the amount recognized in accumulated other comprehensive income loss before tax for the U S pension plans was 56 million and 82 million respectively As of September 30 2024 and 2023 the amount recognized in accumulated other comprehensive income loss before tax for non U S pension plans was 48 million and 87 million respectively
The Company sponsors a defined contribution plan or 401 k plan that covers its employees residing in the U S In fiscal 2024 2023 and 2022 personnel expenses included 212 million 192 million and 161 million respectively attributable to the Company s employees under the 401 k plan The Company s contributions to this 401 k plan are funded on a current basis and the related expenses are recognized in the period that the payroll expenses are incurred
The Company indemnifies its clients for settlement losses suffered due to failure of any other client to fund its settlement obligations in accordance with the Visa operating rules This indemnification creates settlement risk for the Company due to the difference in timing between the date of a payment transaction and the date of subsequent settlement The Company maintains and regularly reviews global settlement risk policies and procedures to manage settlement risk which may require clients to post collateral if certain credit standards are not met Historically the Company has experienced minimal losses as a result of its settlement risk guarantee However the Company s future obligations which could be material under its guarantees are not determinable as they are dependent upon future events
The Company s settlement exposure is limited to the amount of unsettled Visa payment transactions at any point in time which vary significantly day to day For fiscal 2024 the Company s maximum daily settlement exposure was 137 4 billion and the average daily settlement exposure was 84 3 billion To mitigate the risk of settlement exposure the Company has various forms of collateral including restricted cash letters of credit guarantees beneficial rights to trust assets and pledged securities As of September 30 2024 and 2023 the Company had total collateral of 7 7 billion and 6 2 billion respectively
September 30 2024 and 2023 the aggregate notional amount of the Company s derivative instruments designated as hedging instruments was 11 7 billion and 11 0 billion respectively As of September 30 2024 and 2023 the aggregate notional amount of the derivative instruments not designated as hedging instruments was 1 9 billion and 0 8 billion respectively
These interest rate swaps were designated as fair value hedges on a portion of the outstanding senior notes As of September 30 2024 and 2023 the carrying value of the hedged senior notes was 3 9 billion and 3 7 billion respectively
For fiscal 2024 2023 and 2022 the Company recognized a net increase decrease in earnings related to excluded forward points from forward contracts designated as net investment hedges and interest differentials from swap agreements of 94 million 25 million and 151 million respectively
The amount of pre tax net gains losses related to cash flow hedges recorded in accumulated other comprehensive income loss as of September 30 2024 that is expected to be reclassified into the consolidated statements of operations within the next 12 months is not material
For fiscal 2024 2023 and 2022 the Company recognized pre tax net gains losses in other comprehensive income loss related to net investment hedges of 321 million 445 million and 845 million respectively As of September 30 2024 and 2023 the amount in accumulated other comprehensive income loss was 182 million and 433 million respectively
The Company s derivative financial instruments are subject to both credit and market risk The Company monitors the credit worthiness of the financial institutions that are counterparties to its derivative financial instruments and does not consider the risks of counterparty nonperformance to be significant The Company mitigates this risk by entering into master netting agreements and such agreements require each party to post collateral against its net liability position with the respective counterparty As of September 30 2024 the Company received collateral of 62 million from counterparties which is included in accrued liabilities on the consolidated balance sheets and posted collateral of 48 million which is included in prepaid expenses and other current assets on the consolidated balance sheets Notwithstanding the Company s efforts to manage foreign exchange risk there can be no absolute assurance that its hedging activities will adequately protect against the risks associated with foreign currency fluctuations As of September 30 2024 credit and market risks related to derivative instruments were not considered significant
Net revenue by geographic market is primarily based on the location of the issuing or acquiring financial institution Net revenue earned in the U S was approximately 41 43 and 44 of total net revenue in fiscal 2024 2023 and 2022 respectively No individual country other than the U S generated 10 or more of total net revenue in these years
The class B 1 and class B 2 to class A common stock conversion calculations for dividend payments are based on a conversion rate rounded to the tenth decimal Conversion rates are presented on a rounded basis
Under the terms of the U S retrospective responsibility plan when the Company funds the U S litigation escrow account the value of the Company s class B 1 and B 2 common stock is subject to dilution through a downward adjustment to the rate at which shares of class B 1 and B 2 common stock ultimately convert into shares of class A common stock See
The following table presents the reduction in the number of as converted class B 1 and B 2 common stock after deposits into the U S litigation escrow account under the U S retrospective responsibility plan
Effective price per share for the period represents the weighted average price calculated using the effective prices per share of the respective adjustments made during the period Effective price per share for each adjustment is calculated using the volume weighted average price of the Company s class A common stock over a pricing period in accordance with the Company s current certificate of incorporation
Under the terms of the Europe retrospective responsibility plan the Company is entitled to recover VE territory covered losses through periodic adjustments to the class A common stock conversion rates applicable to the series B and C preferred stock and is required to undertake periodic release assessments following the anniversary of the Visa Europe acquisition to determine if value should be released from the series B and C preferred stock The
recovery and any releases of value have the same economic effect on earnings per share as repurchasing the Company s class A common stock because it reduces the series B and C preferred stock conversion rates and consequently reduces the as converted class A common stock share count See
The following table presents the reduction in the number of as converted series B and C preferred stock after the Company recovered VE territory covered losses through conversion rate adjustments and completed its Eighth Anniversary Release in fiscal 2024 and sixth anniversary release in fiscal 2022 collectively Anniversary Releases
Effective price per share for the period represents the weighted average price calculated using the effective price per share of the respective adjustments made during the period Effective price per share for each adjustment is calculated using the volume weighted average price of the Company s class A common stock over a pricing period in accordance with the Company s current certificates of designations for its series B and C preferred stock
Figures in the table may not recalculate exactly due to rounding Average repurchase cost per share and total cost are calculated based on unrounded numbers and include applicable taxes Shares repurchased in the open market include 90 million unsettled repurchases as of September 30 2024
In October 2023 and 2022 the Company s board of directors authorized share repurchase programs of 25 0 billion providing multi year flexibility and 12 0 billion respectively These authorizations have no expiration date As of September 30 2024 the Company s share repurchase program had remaining authorized funds of 13 1 billion All share repurchase programs authorized prior to October 2023 have been completed
In fiscal 2024 2023 and 2022 the Company declared and paid dividends of 4 2 billion 3 8 billion and 3 2 billion respectively On October 29 2024 the Company s board of directors declared a quarterly cash dividend of 0 59 per share of class A common stock determined in the case of all other outstanding common and preferred stock on an as converted basis payable on December 2 2024 to all holders of record as of November 12 2024
As of September 30 2024 and 2023 the Company was authorized to issue 25 million shares of preferred stock of which the following series have been created and authorized 4 million shares of series A preferred stock 2 million shares of series B preferred stock and 3 million shares of series C preferred stock As of September 30 2024 the Company was authorized to issue 2 0 trillion shares of class A common stock 499 million shares of class B 1 common stock 123 million shares of class B 2 common stock 61 million shares of class B 3 common stock 31 million shares of class B 4 common stock 15 million shares of class B 5 common stock and 1 1 billion shares of class C common stock As of September 30 2023 the Company was authorized to issue 2 0 trillion
On January 23 2024 Visa s common stockholders approved amendments to the Company s certificate of incorporation authorizing Visa to implement an exchange offer program that would have the effect of releasing transfer restrictions on portions of the Company s class B common stock by allowing holders to exchange a portion of their outstanding shares of class B common stock for shares of freely tradeable class C common stock The certificate of incorporation amendments automatically redenominated all shares of class B common stock outstanding at the amendment date as class B 1 common stock with no changes to the par value conversion features rights or privileges All references to class B common stock outstanding prior to January 23 2024 have been updated in this report to class B 1 common stock to reflect this redenomination The amendments also authorized new classes of class B common stock that will only be issuable in connection with an exchange offer where a preceding class of B common stock is tendered in exchange and retired
The class B common stock is not convertible or transferable until the date on which all of the U S covered litigation has been finally resolved This transfer restriction is subject to limited exceptions including transfers to other holders of class B common stock After termination of the restrictions the class B common stock will be convertible into class A common stock if transferred to a person that was not a Visa Member as defined in the certificate of incorporation or similar person or an affiliate of a Visa Member or similar person Upon such transfer each share of class B common stock will automatically convert into a number of shares of class A common stock based upon the applicable conversion rate in effect at the time of such transfer
Adjustment of the conversion rate occurs upon i the completion of any follow on offering of class A common stock completed to increase the size of the U S litigation escrow account or any cash deposit by the Company in lieu thereof resulting in a further corresponding decrease in the conversion rate or ii the final resolution of the U S covered litigation and the release of funds remaining on deposit in the U S litigation escrow account to the Company resulting in a corresponding increase in the conversion rate See
On May 6 2024 Visa accepted 241 million shares of class B 1 common stock tendered in the exchange offer In exchange on May 8 2024 Visa issued approximately 120 million shares of class B 2 common stock and 48 million shares of class C common stock The class B 1 common shares exchanged have been retired and constitute authorized but unissued shares The conversion rate adjustments for the class B 2 common stock will have double the impact compared to conversion rate adjustments for the class B 1 common stock
In connection with the Visa Europe acquisition three series of preferred stock of the Company were created Upon issuance all of the preferred stock participate on an as converted basis in regular quarterly cash dividends declared on the Company s class A common stock Preferred stock may be issued as redeemable or non redeemable and has preference over any class of common stock with respect to the payment of dividends and distribution of the Company s assets in the event of a liquidation or dissolution
The shares of series B and C preferred stock are subject to restrictions on transfer and may become convertible in stages based on developments in the VE territory covered litigation The shares of series B and C preferred stock will become fully convertible on the 12th anniversary of the closing of the Visa Europe acquisition subject only to a holdback to cover any then pending claims Upon any such conversion of the series B and C preferred stock whether by such 12th anniversary or thereafter with respect to claims pending on such anniversary the conversion rate would be adjusted downward and the holder would receive either class A common stock or series A preferred stock for those who are not eligible to hold class A common stock pursuant to the Company s certificate of incorporation The conversion rates may also be reduced from time to time to offset certain liabilities
The series A preferred stock generally designed to be economically equivalent to the Company s class A common stock is freely transferable and each share of series A preferred stock will automatically convert into 100 shares of class A common stock upon a transfer to any holder that is eligible to hold class A common stock under the charter See
The holders of the series B and C preferred stock have no right to vote on any matters except for certain defined matters including in specified circumstances any consolidation merger combination or similar transaction of the Company in which the preferred stockholders would either i receive shares of common stock or other equity securities of the Company with preferences rights and privileges that are not substantially identical to the preferences rights and privileges of the applicable series of preferred stock or ii receive securities cash or other property that is different from what the Company s class A common stockholders would receive With respect to these limited matters on which the holders of preferred stock may vote approval by the preferred stockholders requires the affirmative vote of the outstanding voting power of each such series of preferred stock each such series voting as a single class In either case the series B and C preferred stockholders are entitled to cast a number of votes equal to the number of shares held by each such holder Holders of the series A preferred stock upon issuance at conversion will have similar voting rights to the rights of the holders of the series B and C preferred stock
Class A common stockholders have the right to vote on all matters on which stockholders generally are entitled to vote Class B and C common stockholders have no right to vote on any matters except for certain defined matters including i any decision to exit the core payments business in which case the class B and C common stockholders will vote together with the class A common stockholders in a single class ii in specified circumstances any consolidation merger combination or similar transaction of the Company in which case the class B and C common stockholders will vote together as a single class and iii the approval of certain amendments to the Company s certificate of incorporation in which case class A B and C common stockholders will vote as a separate class including if such amendments affect the terms of class B or C common stock In these cases the class B and C common stockholders are entitled to cast a number of votes equal to the number of shares of class B or C common stock held multiplied by the applicable conversion rate in effect on the record date Holders of the Company s common stock have no right to vote on any amendment to the current certificate of incorporation that relates solely to any series of preferred stock
Diluted class A common stock earnings per share calculation includes the assumed conversion of class B 1 B 2 and C common stock and participating securities on an as converted basis as shown in the table below and the incremental common stock equivalents related to employee stock plans as calculated under the treasury stock method The common stock equivalents were not material for each of fiscal 2024 2023 and 2022
authorizes the compensation committee of the board of directors to grant various types of equity awards including non qualified stock options options RSUs and performance based shares to its employees and non employee directors for up to 198 million shares of class A common stock Shares available for grant may be either authorized and unissued or previously issued shares subsequently acquired by the Company Under the EIP shares withheld for taxes or shares used to pay the exercise or purchase price of an award shall not again be available for future grant The EIP will continue to be in effect until all of the common stock available under the EIP is delivered and all restrictions on those shares have lapsed unless the EIP is terminated earlier by the Company s board of directors
For fiscal 2024 2023 and 2022 the Company recorded share based compensation cost related to the EIP of 817 million 734 million and 571 million respectively in personnel expense on its consolidated statements of operations The related tax benefits for fiscal 2024 2023 and 2022 were 128 million 112 million and 82 million respectively
28 million and 11 million respectively As of September 30 2024 there was 27 million of total unrecognized compensation cost related to unvested options which is expected to be recognized over a weighted average period of approximately 0 42 year
The fair value and compensation cost before estimated forfeitures is calculated using the closing price of class A common stock on the date of grant During fiscal 2024 2023 and 2022 the weighted average grant date fair value of RSUs granted was 253 29 212 94 and 204 73 respectively During fiscal 2024 2023 and 2022 the total grant date fair value of RSUs vested was 616 million
As of September 30 2024 there was 796 million of total unrecognized compensation cost related to unvested RSUs which is expected to be recognized over a weighted average period of approximately 0 93 year
he performance condition is based on the Company s earnings per share target The market condition is based on the Company s total shareholder return ranked against that of other companies that are included in the Standard Poor s 500 Index
The fair value of each performance based shares incorporating the market condition was estimated on the date of grant using a Monte Carlo simulation model with the following weighted average assumptions
44 million and 49 million respectively Compensation cost for performance based shares is initially estimated based on target performance It is recorded net of estimated forfeitures and adjusted as appropriat
As of September 30 2024 there was 75 million of total unrecognized compensation cost related to unvested performance based shares which is expected to be recognized over a weighted average period of approximately 0 88 year
In fiscal 2024 and fiscal 2023 the effective income tax rates were 17 and 18 respectively The effective tax rate in fiscal 2024 differs from the effective tax rate in fiscal 2023 primarily due to a tax position taken across jurisdictions as well as the following
As of September 30 2024 and 2023 current income taxes receivable of 832 million and 206 million respectively were included in prepaid expenses and other current assets non current income taxes receivable of 442 million and 961 million respectively were included in other assets income taxes payable of 577 million and 1 5 billion respectively were included in accrued liabilities and accrued income taxes of 1 4 billion and 1 9 billion respectively were included in other liabilities on the consolidated balance sheets
Effective through September 30 2028 the Company s operating hub in the Asia Pacific region is subject to a tax incentive in Singapore which is conditional upon meeting certain requirements In fiscal 2024 2023 and 2022 the tax incentive decreased Singapore tax by 419 million
The Company is required to inventory evaluate and measure all uncertain tax positions taken or to be taken on tax returns and to record liabilities for the amount of such positions that may not be sustained or may only partially be sustained upon examination by the relevant taxing authorities
As of September 30 2024 2023 and 2022 the Company s total gross unrecognized tax benefits were 3 8 billion 3 5 billion and 2 7 billion respectively exclusive of interest and penalties described below Included in the 3 8 billion 3 5 billion and 2 7 billion were 1 4 billion 1 6 billion and 1 3 billion of unrecognized tax benefits respectively that if recognized would reduce the effective tax rate in a future period
The increases in unrecognized tax benefits include gross timing differences and various tax positions across several jurisdictions The decreases in unrecognized tax benefits primarily reflect changes as a result of the conclusion of audits
In fiscal 2024 2023 and 2022 the Company recognized 29 million 34 million and 15 million of net interest expense respectively related to uncertain tax positions In fiscal 2024 and 2023 the Company accrued no significant penalties and in fiscal 2022 the Company reversed accrued penalties of 31 million related to uncertain tax positions As of September 30 2024 and 2023 the Company had accrued interest of 300 million and 271 million respectively and no significant accrued penalties related to uncertain tax positions
The Company s U S federal income tax returns for fiscal 2016 through 2018 are currently under examination For fiscal 2008 through 2015 an unresolved issue related to certain income tax deductions remains During fiscal 2024 the Company filed a complaint with the U S Court of Federal Claims challenging the position of the Internal Revenue Service Except for the unresolved issue the federal statute of limitations has expired for fiscal years prior to 2016
In fiscal 2024 a resolution was reached regarding California refund claims for fiscal 2005 through 2011 The Company s California income tax returns for fiscal 2012 through 2015 are currently under examination The California statute of limitations has expired for fiscal years prior to 2012
In fiscal 2024 a resolution was reached regarding India tax assessments for taxable years falling within the period from fiscal 2010 to 2019 The Company will continue to appeal assessments received for subsequent periods
The Company is also subject to examinations by various state and foreign tax authorities All material federal state and foreign tax matters have been concluded for years through fiscal 2007 The timing and outcome of the final resolutions of the federal state and foreign tax examinations and refund claims are uncertain It is not reasonably possible to estimate the increase or decrease in unrecognized tax benefits within the next 12 months
The Company is a party to various legal and regulatory proceedings Some of these proceedings involve complex claims that are subject to substantial uncertainties and unascertainable damages For those proceedings where a loss is determined to be only reasonably possible or probable but not estimable the Company has disclosed the nature of the claim Additionally unless otherwise disclosed below with respect to these proceedings the Company cannot provide an estimate of the possible loss or range of loss Although the Company believes that it has strong defenses for the litigation and regulatory proceedings described below it could in the future incur judgments or fines or enter into settlements of claims that could have a material adverse effect on the Company s financial position results of operations or cash flows From time to time the Company may engage in settlement discussions or mediations with respect to one or more of its outstanding litigation matters either on its own behalf or collectively with other parties
The litigation accrual is an estimate and is based on management s understanding of its litigation profile the specifics of each case advice of counsel to the extent appropriate and management s best estimate of incurred loss as of the balance sheet date
Visa Inc Visa U S A and Visa International are parties to certain legal proceedings that are covered by the U S retrospective responsibility plan which the Company refers to as the U S covered litigation An accrual for the U S covered litigation and a charge to the litigation provision are recorded when a loss is deemed to be probable and reasonably estimable In making this determination the Company evaluates available information including but not limited to actions taken by the Company s litigation committee The total accrual related to the U S covered litigation could be either higher or lower than the escrow account balance See further discussion below under
During fiscal 2024 the Company recorded additional accruals to address claims associated with the interchange multidistrict litigation The accrual balance is consistent with the Company s best estimate of its share of a probable and reasonably estimable loss with respect to the U S covered litigation While this estimate is consistent with the Company s view of the current status of the litigation the probable and reasonably estimable loss or range of such loss could materially vary based on developments in the litigation The Company will continue to consider and reevaluate this estimate in light of the substantial uncertainties with respect to the litigation The Company is unable to estimate a potential loss or range of loss if any at trial if negotiated resolutions cannot be reached
Visa Inc Visa International and Visa Europe are parties to certain legal proceedings that are covered by the Europe retrospective responsibility plan Unlike the U S retrospective responsibility plan the Europe retrospective responsibility plan does not have an escrow account that is used to fund settlements or judgments The Company is entitled to recover VE territory covered losses through periodic adjustments to the class A common stock conversion rates applicable to the series B and C preferred stock An accrual for the VE territory covered losses and a reduction to stockholders equity will be recorded when the loss is deemed to be probable and reasonably estimable See further discussion below under
Beginning in May 2005 a series of complaints the majority of which were styled as class actions were filed in U S federal district courts by merchants against Visa U S A Visa International and or Mastercard and in some cases certain U S financial institutions The Judicial Panel on Multidistrict Litigation issued an order transferring the cases to the U S District Court for the Eastern District of New York for coordination of pre trial proceedings in MDL 1720 A group of purported class plaintiffs subsequently filed amended and supplemental class complaints The individual and class complaints generally challenged among other things Visa s and Mastercard s purported setting of interchange reimbursement fees their no surcharge and honor all cards rules alleged tying and bundling of transaction fees and Visa s reorganization and IPO under the federal antitrust laws and in some cases certain state unfair competition laws The complaints sought money damages declaratory and injunctive relief attorneys fees and in one instance an order that the IPO be unwound
Visa Inc Visa U S A Visa International Mastercard Incorporated Mastercard International Incorporated various U S financial institution defendants and the class plaintiffs signed a settlement agreement 2012 Settlement Agreement to resolve the class plaintiffs claims Pursuant to the 2012 Settlement Agreement the Company deposited approximately 4 0 billion from the U S litigation escrow account and approximately 500 million attributable to interchange reductions for an eight month period into court authorized settlement accounts Visa subsequently received from the district court and deposited into the Company s U S litigation escrow account takedown payments of approximately 1 1 billion
On June 30 2016 the U S Court of Appeals for the Second Circuit vacated the district court s certification of the merchant class reversed the approval of the settlement and remanded the case to the district court for further proceedings
On remand the district court entered an order appointing interim counsel for two putative classes of plaintiffs a Damages Class and an Injunctive Relief Class The plaintiffs purporting to act on behalf of the putative Damages Class subsequently filed a Third Consolidated Amended Class Action Complaint seeking money damages and attorneys fees among other relief A new group of purported class plaintiffs acting on behalf of the putative Injunctive Relief Class filed a class action complaint against Visa Mastercard and certain bank defendants seeking among other things an injunction against the setting of default interchange rates against certain Visa operating rules relating to merchants including the honor all cards rule and against various transaction fees including the fixed acquirer network fee as well as attorneys fees
On September 17 2018 Visa Mastercard and certain U S financial institutions reached an agreement with plaintiffs purporting to act on behalf of the putative Damages Class to resolve all Damages Class claims Amended Settlement Agreement The Amended Settlement Agreement supersedes the 2012 Settlement Agreement and includes among other terms a release from participating class members for liability arising out of conduct alleged by the Damages Class in the litigation including claims that accrue no later than five years after the Amended Settlement Agreement becomes final Participating class members will not release injunctive relief claims as a named representative or non representative class member in the putative Injunctive Relief Class The Amended Settlement Agreement also required an additional settlement payment from all defendants totaling 900 million with the Company s share of 600 million paid from the Company s litigation escrow account established pursuant to the Company s retrospective responsibility plan See
Certain merchants in the proposed settlement class objected to the settlement and or submitted requests to opt out of the settlement class On December 13 2019 the district court granted final approval of the Amended Settlement Agreement which was subsequently appealed Based on the percentage of class members by payment volume that opted out of the class 700 million was returned to defendants Visa s portion of the takedown payment approximately 467 million was deposited into the U S litigation escrow account On March 15 2023 the U S Court of Appeals for the Second Circuit affirmed the final approval of the Amended Settlement Agreement by the district court On August 3 2023 the district court entered an order appointing a special master to resolve matters arising out of or relating to the Amended Settlement Agreement s plan of administration
Three complaints have been filed against Visa and other defendants asserting violations of certain state antitrust laws and seeking recovery as indirect purchasers A complaint was filed by Old Jericho Enterprise Inc on May 29 2020 against Visa and Mastercard on behalf of a purported class of gasoline retailers operating in 24 states and the District of Columbia Two separate complaints were subsequently filed in 2021 against Visa and Mastercard on behalf of a purported class of merchants located in 25 states and the District of Columbia who have taken payment using the Square card acceptance service one by Hayley Lanning and others on April 28 and one by Camp Grounds Coffee and others on June 16 Plaintiffs in all three actions subsequently served motions for partial summary judgment Thereafter in May and September 2024 the district court denied motions for partial summary judgment filed by the Lanning and Camp Grounds plaintiffs and the Old Jericho plaintiffs which all three plaintiff groups have now appealed
Following remand from the U S Court of Appeals for the Second Circuit and the appointment of Injunctive Relief Class counsel on September 27 2021 the district court certified without opt out rights an Injunctive Relief Class consisting of all merchants that accept Visa or Mastercard credit or debit cards in the United States at any time between December 18 2020 and entry of final judgment
denied defendants motions for summary judgment based on the post IPO conspiracy claims and granted defendants motion for summary judgment on Injunctive Relief Class plaintiffs monopolization claims The district court denied the Injunctive Relief Class plaintiffs motion for partial summary judgment
On March 25 2024 Visa and Mastercard entered into an agreement to resolve the Injunctive Relief Class claims Injunctive Relief Settlement Agreement subject to court approval The Injunctive Relief Settlement Agreement included among other terms i a release from class members for claims for declaratory injunctive or equitable relief arising out of conduct alleged by the Injunctive Relief Class in the litigation that have accrued or may accrue in the future during the term of the Injunctive Relief Settlement Agreement ii provisions requiring reductions and caps on U S credit interchange rates and iii provisions requiring modifications to the Company s rules in the U S that among other things streamline requirements for merchants who wish to impose a surcharge on credit transactions On March 26 2024 the Injunctive Relief Class plaintiffs filed a motion for preliminary approval of the settlement which was denied on June 25 2024
Since May 2013 more than 50 cases have been filed in or removed to various federal district courts by hundreds of merchants generally pursuing damages claims on allegations similar to those raised in MDL 1720 The cases name as defendants Visa Inc Visa U S A Visa International Mastercard Incorporated and Mastercard International Incorporated although some also include certain U S financial institutions as defendants A number of the cases include allegations that Visa has monopolized attempted to monopolize and or conspired to monopolize debit card related market segments Some of the cases seek an injunction against the setting of default interchange rates certain Visa operating rules relating to merchants including the honor all cards rule and various transaction fees including the fixed acquirer network fee In addition some cases assert that Visa Mastercard and or their member banks conspired to prevent the adoption of chip and PIN authentication in the U S or otherwise circumvent competition in the debit market Certain individual merchants have filed amended complaints to among other things add claims for injunctive relief and update claims for damages
Visa has reached settlements with a number of merchants representing approximately 73 of the Visa branded payment card sales volume of merchants who opted out of the Amended Settlement Agreement with the Damages Class plaintiffs
and on post IPO conspiracy claims described above apply to these Individual Merchant Actions In addition on October 9 2022 defendants motion for summary judgment regarding damages for EMV related chargebacks was denied On February 22 2024 defendants motion for summary judgment based on
standing was denied and the district court denied as moot certain plaintiffs motions for partial summary judgment On April 2 2024 the district court granted in part and denied in part defendants motion for summary judgment on certain plaintiffs monopolization claims
On May 28 2024 the district court found that merchants serviced by Intuit and Square are members of the MDL Damages Class and therefore granted defendants motion to enforce the Amended Settlement Agreement and denied a motion by Intuit Inc and Intuit Payment Solutions LLC Intuit for partial summary judgment regarding claims in the actions brought by Intuit and Block Inc Block in their capacity as payment facilitators On August 2 2024 defendants filed a pre motion letter setting forth bases for a proposed motion for injunction compelling dismissal of claims by Intuit and Block
In July 2024 the Judicial Panel on Multidistrict Litigation remanded three actions to the courts in which they were originally filed The action led by Grubhub Holdings Inc was remanded to the U S District Court for the Northern District of Illinois The actions led by Target Corporation and by 7 Eleven Inc were both remanded to the U S District Court for the Southern District of New York and the U S District Court for the Southern District of New York subsequently set a trial date for a subset of the plaintiffs in those actions
The Company believes it has substantial defenses to the claims asserted in the putative class actions and individual merchant actions but the final outcome of individual legal claims is inherently unpredictable The Company could incur judgments enter into settlements or revise its expectations regarding the outcome of merchants claims and such developments could have a material adverse effect on the Company s financial results in the period in which the effect becomes probable and reasonably estimable While the U S retrospective responsibility plan is designed to address monetary liability in these matters see
In 2022 a putative class action was filed in California state court against Visa Mastercard and certain financial institutions on behalf of all Visa and Mastercard cardholders in California who made a purchase using a Visa branded or Mastercard branded payment card in California from January 1 2004 Plaintiffs primarily allege a conspiracy to fix interchange fees and seek injunctive relief attorneys fees and damages as direct and indirect purchasers based on alleged violations of California law After plaintiffs filed an amended complaint asserting the same claims as asserted in the prior complaint Visa removed the action to federal court and the case was transferred to MDL 1720
On July 31 2024 the magistrate judge recommended that a motion by defendants to compel arbitration and stay litigation be denied and a motion by defendants to dismiss plaintiffs California law claims be granted On August 19 2024 plaintiffs filed an objection to the magistrate judge s recommendation
Since July 2013 proceedings have been commenced by more than 1 150 Merchants the capitalized term Merchant when used in this section means a Merchant together with subsidiary affiliate companies that are party to the same claim against Visa Europe Visa Inc and other Visa subsidiaries in the UK and other countries primarily relating to interchange rates in Europe and in some cases relating to fees charged by Visa and certain
Visa rules They seek damages for alleged anti competitive conduct in relation to one or more of the following types of interchange fees for credit and debit card transactions UK domestic other European domestic intra European Economic Area and or other inter regional As of the filing date Visa has settled the claims asserted by over 475 Merchants and there are approximately 600 Merchants with outstanding claims In addition over 30 Merchants have threatened to commence similar proceedings Standstill agreements have been entered into with respect to some of those threatened Merchant claims several of which have been settled While the amount of interchange being challenged could be substantial these claims have not yet been filed and their full scope is not yet known The Company anticipates additional claims in the future
n June 17 2020 with respect to claims asserted by one Merchant the Supreme Court of the United Kingdom found that Visa s UK domestic interchange restricted competition under applicable competition law On September 30 2021 Visa reached a confidential settlement agreement resolving the Merchant s claims
On November 26 2021 with respect to certain pending Merchant claims the UK Competition Appeal Tribunal CAT found that UK and certain other domestic and intra European Economic Area consumer interchange fees before the introduction of the Interchange Fee Regulation IFR were restrictive of competition but that the question of whether those fees are a restriction of competition after the introduction of the IFR along with inter regional and commercial interchange fees across all time periods would need to be resolved at trial Whether any interchange fees are exempt from the finding of restriction under applicable law and the assessment of damages if any will also need to be considered at trial On October 4 2022 the UK Court of Appeal affirmed the CAT s ruling From February 14 to March 28 2024 a trial occurred to consider whether certain interchange rates restrict competition in violation of UK antitrust law
On June 1 2022 two class action claims were filed against Visa with the CAT on behalf of UK businesses that accepted Visa branded payment cards at any time since June 1 2016 alleging that UK domestic intra European Economic Area and inter regional interchange fees on commercial credit cards and inter regional interchange fees on consumer cards are anti competitive The Europe retrospective responsibility plan covers liabilities and losses relating to the covered period which generally refers to the period before the Closing On June 8 2023 the UK Competition Appeal Tribunal initially denied class certification in the two class action claims However a class certification re hearing took place in April 2024 In June 2024 the CAT granted class certification in the claims regarding interchange fees on commercial cards In October 2024 the Court of Appeal refused permission to appeal the certification
The full scope of potential damages is not yet known because not all Merchant claims have been served and Visa has substantial defenses However the claims that have been issued served and or preserved seek several billion dollars in damages
On November 14 2021 a motion to certify a class action was filed against Visa and Mastercard in the Israel Central District Court The motion asserts that interchange fees on cross border transactions in Israel and the Honor All Cards rule are anti competitive and seeks damages and injunctive relief Visa filed its response on July 22 2024
On March 13 2012 the Antitrust Division of the U S Department of Justice Division issued a Civil Investigative Demand CID to Visa Inc seeking documents and information regarding a potential violation of Section 1 or 2 of the Sherman Act 15 U S C 1 2 The CID focused on PIN authenticated Visa Debit and Visa s competitive responses to the Dodd Frank Act including Visa s fixed acquirer network fee Visa has cooperated with the Division in connection with the CID
On March 26 2021 June 11 2021 January 4 2023 and May 2 2023 the Division issued CIDs to Visa seeking documents and information regarding a potential violation of Section 1 or 2 of the Sherman Act 15 U S C 1 2 The CIDs focused on U S debit and competition with other payment methods and networks
On September 24 2024 the U S Department of Justice filed a complaint in the U S District Court for the Southern District of New York against Visa alleging violations of the Sherman Act The complaint alleges Visa has monopolized and attempted to monopolize general purpose debit network services and card not present debit
network services in the United States through agreements with merchants acquirers and others and that certain agreements unreasonably restrain competition or trade in those markets The complaint seeks among other relief to enjoin Visa from engaging in the alleged anticompetitive practices
Beginning on October 1 2024 five putative class actions were filed in the U S District Court for the Southern District of New York against Visa Inc alleging that Visa has monopolized and attempted to monopolize general purpose debit network services and card not present debit network services in the United States through agreements with merchants acquirers and others and that certain agreements unreasonably restrain competition or trade in those markets One action was subsequently dismissed voluntarily An additional putative class action was filed in the U S District Court for the Northern District of California asserting similar allegations Each of the pending cases alleges violations of the Sherman Act and seeks damages among other relief Some of these cases assert violations of one or more state laws and seek injunctive relief Plaintiffs in these actions seek to represent one of the following classes i merchants or others that accepted general purpose Visa debit cards from certain dates in October 2020 ii persons who either purchased goods or services from a merchant that accepted Visa debit cards or who directly or indirectly paid interchange fees as debit card holders from October 20 2020 or iii persons business or entities that have paid Visa s fees for debit transaction routing services from September 24 2020
On November 4 2019 the Bureau of Competition of the U S Federal Trade Commission FTC requested that Visa provide on a voluntary basis documents and information relating to an investigation as to whether Visa s actions inhibited merchant choice in the selection of debit payments networks in potential violation of the Durbin Amendment to the Dodd Frank Wall Street Reform and Consumer Protection Act On June 9 2020 the FTC issued a CID to Visa requesting additional documents and information Visa has cooperated with the FTC in connection with the CID
In October 2011 the National ATM Council and thirteen non bank ATM operators filed a purported class action lawsuit against Visa and Mastercard in the U S District Court for the District of Columbia The complaint challenges Visa s rule and a similar Mastercard rule that if an ATM operator chooses to charge consumers an access fee for a Visa or Plus transaction that fee cannot be greater than the access fee charged for transactions on other networks Plaintiffs claim that the rule violates Section 1 of the Sherman Act and seek treble damages injunctive relief and attorneys fees On August 4 2021 the district court granted plaintiffs motion for class certification
were also filed in October 2011 in the same federal court naming Visa Mastercard and three financial institutions as defendants Plaintiffs seek treble damages restitution injunctive relief and attorneys fees where available under federal and state law including under Section 1 of the Sherman Act and consumer protection statutes On August 4 2021 the district court granted class certification in each case On August 8 2022 the district court in
granted plaintiffs motion for final approval of a class action settlement with the three financial institution defendants and entered final judgments of dismissal as to those institutions On May 2 2024 Visa and Mastercard entered a definitive class settlement agreement with plaintiffs in
Following their initial complaint filed on March 8 2016 B R Supermarket Inc d b a Milam s Market and Grove Liquors LLC filed an amended class action complaint on July 15 2016 against Visa Inc Visa U S A Mastercard Discover American Express EMVCo and certain financial institutions in the U S District Court for the Northern District of California The amended complaint asserts that defendants through EMVCo conspired to shift liability for fraudulent faulty or otherwise rejected payment card transactions from defendants to the purported class of merchants defined as those merchants throughout the U S who have been subjected to the Liability Shift since
EMVCo and the financial institution defendants were dismissed and the matter was subsequently transferred to the U S District Court for the Eastern District of New York The district court clarified that this case is not part of MDL 1720 and on August 28 2020 granted plaintiffs motion for class certification On November 30 2022 Visa and other defendants served motions to decertify and for summary judgment which the court subsequently denied
On December 8 2023 a complaint was filed in the U S District Court for the Northern District of California by MiCamp Solutions LLC against Visa on behalf of a purported class of Independent Sales Organizations ISOs and their merchant customers and a purported subclass of ISOs The complaint alleges violations of federal and state antitrust laws state data privacy laws and the constitution based on among other things Visa s interchange fees and its assessment of fees for non compliance with its surcharge rules The complaint seeks to recover damages and to enjoin the enforcement of Visa s default interchange and surcharge rules among other things On March 5 2024 MiCamp Solutions filed an amended complaint on behalf of the same purported class and subclass and containing similar allegations as in the original complaint and on March 19 2024 Visa filed a motion to dismiss that amended complaint
On December 14 2023 a putative class action was filed in the U S District Court for the Southern District of Illinois by Mirage Wine Spirit s Inc against Apple Inc Apple Visa Inc and Mastercard Incorporated on behalf of certain merchants in the United States that accepted Apple Pay as a method of payment at the physical point of sale from December 14 2019 Plaintiff alleges a conspiracy under which Apple agreed not to enter a purported market for point of sale payment card networks services and seeks damages injunctive relief and attorneys fees based on alleged violations of Section 1 of the Sherman Act After various orders that resulted in the case being maintained in its originally filed court plaintiffs filed an Amended Class Action Complaint on August 5 2024 Thereafter the district court set a trial date in 2026 On September 26 2024 defendants filed a motion to dismiss the Amended Class Action Complaint
On June 21 2024 the Company filed a complaint against the United States in the U S Court of Federal Claims The complaint challenges the denial by the Internal Revenue Service of certain income tax deductions from 2008 through 2015 related to software that the Company developed in the United States for utilization by Visa clients
On December 2 2022 the European Commission EC informed Visa that it had opened a preliminary investigation into Visa s incentive agreements with clients On October 1 2024 the EC informed Visa that it has closed the matter
Beginning in December 2021 Visa was served with claims in Germany brought by German banks against Visa Europe and Visa Inc The banks claim that Visa s ATM rules prohibiting the charging of access fees on domestic cash withdrawals are anti competitive and the majority seek damages Visa has filed challenges to the jurisdiction of the German courts to hear these claims Jurisdictional challenges have been granted in some claims and denied in other claims and these decisions have been appealed
We maintain a system of disclosure controls and procedures as defined in the Rules 13a 15 e and 15d 15 e under the Securities Exchange Act of 1934 Exchange Act that is designed to ensure that information required to be disclosed in our Exchange Act reports is recorded processed summarized and reported within the time periods specified in the SEC s rules and forms and that such information is accumulated and communicated to our management including our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosures
Under the supervision and with the participation of our management including our Chief Executive Officer and Chief Financial Officer we conducted an evaluation of our disclosure controls and procedures Based on this evaluation our Chief Executive Officer and our Chief Financial Officer concluded that as of September 30 2024 our disclosure controls and procedures were effective at the reasonable assurance level
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting Management assessed the effectiveness of our internal control over financial reporting as of September 30 2024 using the criteria set forth in Internal Control
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework Based on management s assessment management has concluded that our internal control over financial reporting was effective as of September 30 2024
The effectiveness of our internal control over financial reporting as of September 30 2024 has been audited by KPMG LLP an independent registered public accounting firm as stated in their report which is included in
Our internal control over financial reporting is designed to provide reasonable but not absolute assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U S generally accepted accounting principles There are inherent limitations to the effectiveness of any system of internal control over financial reporting These limitations include the possibility of human error the circumvention or overriding of the system and reasonable resource constraints Because of its inherent limitations our internal control over financial reporting may not prevent or detect misstatements and instances of fraud In addition because we have designed our system of controls based on certain assumptions which we believe are reasonable about the likelihood of future events our system of controls may not achieve its desired purpose under all possible future conditions Accordingly our disclosure controls and procedures provide reasonable assurance but not absolute assurance of achieving their objectives Projections of any evaluation of effectiveness to future periods are subject to the risks discussed in
In preparation for management s report on internal control over financial reporting we documented and tested the design and operating effectiveness of our internal control over financial reporting There have been no changes in our internal controls over financial reporting that occurred during our fourth quarter of fiscal 2024 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting
We will file a definitive proxy statement pursuant to Regulation 14A under the Exchange Act Proxy Statement no later than 120 days after the end of the fiscal year ended September 30 2024 The information required by this item will be included in our Proxy Statement and is incorporated herein by reference
Amended and Restated Global Restructuring Agreement dated August 24 2007 by and among Visa Inc Visa International Service Association Visa U S A Inc Visa Europe Limited Visa Canada Association Inovant LLC Inovant Inc Visa Europe Services Inc Visa International Transition LLC VI Merger Sub Inc Visa USA Merger Sub Inc and 1734313 Ontario Inc
Amended and Restated Five Year Revolving Credit Agreement dated as of May 31 2023 by and among Visa Inc Visa International Service Association Visa U S A Inc and Visa Europe Limited as borrowers Bank of America N A as administrative agent JPMorgan Chase Bank N A as syndication agent and the lenders referred to therein
Omnibus Agreement dated February 7 2011 regarding Interchange Litigation Judgment Sharing and Settlement Sharing by and among Visa Inc Visa U S A Inc Visa International Service Association Mastercard Incorporated Mastercard International Incorporated and the parties thereto
Amendment dated August 26 2014 to the Omnibus Agreement regarding Interchange Litigation Judgment Sharing and Settlement Sharing by and among Visa Inc Visa U S A Inc Visa International Service Association Mastercard Incorporated Mastercard International Incorporated and the parties thereto
Settlement Agreement dated October 19 2012 by and among Visa Inc Visa U S A Inc Visa International Service Association Mastercard Incorporated Mastercard International Incorporated various U S financial institution defendants and the class plaintiffs to resolve the class plaintiffs claims in the matter styled In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation No 05 MD 1720
Superseding and Amended Settlement Agreement dated September 17 2018 by and among Visa Inc Visa U S A Inc Visa International Service Association Mastercard Incorporated Mastercard International Incorporated various U S financial institution defendants and the damages class plaintiffs to resolve the damages class plaintiffs claims in the matter styled In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation No 05 MD 1720
Litigation Management Deed dated as of June 21 2016 by and among the VE Member Representative Visa Inc the LMC Appointing Members the UK I DCC Appointing Members the Europe DCC Appointing Members and the UK I DCC Interested Members
Schedules have been omitted pursuant to Item 601 b 2 of Regulation S K A copy of any omitted schedule will be furnished supplementally to the SEC upon request provided however that the parties may request confidential treatment pursuant to Rule 24b 2 of the Exchange Act for any document so furnished
Pursuant to the requirements of Section 13 or 15 d of the Securities Exchange Act of 1934 the Registrant has duly caused this Annual Report on Form 10 K to be signed on its behalf by the undersigned thereunto duly authorized
Pursuant to the requirements of the Securities Exchange Act of 1934 this Annual Report on Form 10 K has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated

Company Name	VISA INC. Vist SEC web-site
Category	SERVICES-BUSINESS SERVICES, NEC
Trading Symbol	V