Visa 2014 Annual Report Download - page 30

Some elements of the Dodd-Frank Act lack definition and create the potential for networks to
pursue different strategies subject to their interpretation of the rules. Our interpretation may result in a
pursuit of strategies that may be less effective than those of our competitors. Overall, the regulations
and developments arising from the Dodd-Frank Act could have a material, adverse effect on our
financial condition, revenues, results of operations, prospects for future growth and overall business.
New laws or regulations in one jurisdiction or of one product offering may lead to new laws or
regulations in other jurisdictions or of other product offerings.
Regulators around the world increasingly note each other’s approaches to the regulation of the
payments industry. Consequently, a development in one country, state or region may influence
regulatory approaches in another. The Dodd-Frank Act and the European Union Commission’s draft
interchange regulation are developments with such potential. See Note 20—Legal Matters to our
consolidated financial statements included in Item 8 of this report.Similarly, new laws and regulations
involving one product offering may cause lawmakers there to extend the regulations to other product
offerings. For example, regulations affecting debit payments could eventually spread to credit
payments.
The risks created by a new law or regulation have the potential to be replicated and to negatively
affect our business in another region or in other product offerings. As a result, we may face differing
rules and regulations in matters like interchange reimbursement rates, network exclusivity, preferred
routing, dynamic currency conversion, point of sale transaction rules and practices, and operating
regulations that may differ from country to country or by product offering.
If widely varying regulations come into existence worldwide, we may have difficulty rapidly
adjusting our product offerings, services and fees, and other important aspects of our business in the
various regions. In addition, adverse developments, regulations and litigation with respect to our
industry or another industry may also, by association, negatively impact our reputation, or result in
greater regulatory or legislative scrutiny or litigation against us. Any of these factors could materially
and adversely affect our business, financial condition and results of operations.
Government actions may prevent us from competing effectively against providers of domestic
payments services in certain countries, which may materially and adversely affect our ability to
maintain or increase our revenues and extend our global brands.
Governments in some countries provide resources to or protection for their domestic payment card
networks, brands and processors. These governments may impose regulatory requirements that favor
domestic providers or that mandate domestic payments processing be done entirely in that country. In
China, for example, UnionPay continues to enjoy advantages over international networks, remains the
sole processor of domestic transactions and operates the sole domestic acceptance mark. In light of
the U.S. and EU sanctions targeting Russia’s financial sector, the Russian government has modified its
National Payments Systems laws that require, among other things, the creation of a national payment
system and local storage of certain transaction data. As a result, international payment brands could
be mandated to process Russian domestic transactions on the government-owned payment system.
Additional laws or mandates may be put into place without sufficient notice which may increase our
costs and decrease the number of Visa-branded cards issued or processed in Russia. These actions
could impede us from utilizing our global processing capabilities for our financial institution clients in
those countries and substantially restrict our activities there. These actions could also force us to leave
countries where we presently have activity and keep us from entering new markets. Although we are
trying to effect change in these countries, we may not succeed. This could adversely affect our ability
to maintain or increase our revenues and extend our global brands.
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