Visa 2011 Annual Report Download - page 32

Table of Contents
our credit risk policy. To the extent that any settlement failure resulting from a constituent financial institution exceeds the limits established by our credit risk
policy, we would have to absorb the cost of such settlement failure, which could materially and adversely affect our cash flow and, potentially, our results of
operations.
If our transaction processing systems are disrupted or we cannot process transactions efficiently, the perception of our brands and our revenues or
operating results could be materially and adversely affected.
Our transaction processing systems may experience service interruptions or degradation because of processing or other technology malfunction, fire,
natural disasters, power loss, disruptions in long distance or local telecommunications access, fraud, terrorism, climate change or accident. Our visibility in the
global payments industry may attract terrorists and hackers to conduct physical or computer-based attacks, leading to an interruption in service, increased
costs or the compromise of data security. If such attacks are not detected immediately, their effect could be compounded. Although we maintain a business
continuity program and an information security program to address these risks, we cannot be sure that they will be effective.
Additionally, we rely on service providers for the timely transmission of information across our global data network. If a service provider fails to
provide the communications capacity or services we require because of a natural disaster, operational disruption, terrorism or any other reason, the failure
could interrupt our services. Because of the centrality of our processing systems to our business, any interruption or degradation could adversely affect the
perception of our brands' reliability and materially reduce our revenues or profitability.
If we cannot keep pace with rapid technological developments to provide new and innovative payment programs and services, the use of our cards
could decline, reducing our revenues and net income.
Rapid, significant technological changes are confronting the payments industry. These include developments in smart cards, eCommerce, mCommerce
and radio frequency and proximity payment devices, such as contactless cards. We cannot predict the effect of technological changes on our business. We rely
in part on third parties, including some of our competitors and potential competitors, for the development of and access to new technologies. We expect that
new services and technologies applicable to the payments industry will continue to emerge. These new services and technologies may be superior to, or render
obsolete, the technologies we currently use in our card products and services. In addition, our ability to adopt new services and technologies that we develop
may be inhibited by industry-wide standards, by resistance to change from clients or merchants or by third parties' intellectual property rights. Our success
will depend in part on our ability to develop new technologies and adapt to technological changes and evolving industry standards.
Account data breaches involving card data stored, processed or transmitted could adversely affect our reputation and revenues.
Our clients, merchants, others and we store, process and transmit cardholder account information in connection with our payment cards. In addition, our
clients may use third-party processors to process transactions generated by cards carrying our brands. Breach of the systems storing, processing or
transmitting sensitive cardholder data and account information could lead to fraudulent activity involving Visa-branded cards, to reputational damage and to
claims against us. If we are sued in connection with any material data security breach, we could be involved in protracted litigation. If unsuccessful in
defending such lawsuits, we may have to pay damages or change our business practices or pricing structure, any of which could have a material adverse effect
on our revenues and
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