Visa 2014 Annual Report Download - page 36

Intense competition in our industry may cause our business, financial condition, results of
operations and prospects for future growth to suffer.
The global payments industry is intensely competitive and, as a result, our payment programs
compete against all forms of payment. These include cash, checks, electronic, eCommerce, and
mobile payments, as well as traditional general purpose card networks. In addition, our open-loop
payments network competes against other alternate payment systems such as closed-loop payment
systems. The Dodd-Frank Act increased this competitive pressure.
Some of our competitors may develop substantially better technology or have greater financial
resources. They may offer a wider range of programs, products and services than we do, including
more innovative ones. They may use advertising and marketing strategies that are more effective than
ours, achieving broader brand recognition and merchant acceptance. They may also develop better
security solutions or more favorable pricing arrangements.
Certain of our competitors operate with different business models, have different cost structures or
participate selectively in different market segments. These include domestic networks in the United
States, China, Canada and Australia. They may ultimately prove more successful or more adaptable to
new regulatory, technological and other developments. In many cases, these competitors have the
support of government mandates that prohibit, limit or otherwise hinder our ability to compete for or
otherwise secure transactions within those countries and regions.
Traditional or nontraditional competitors may put us at a competitive disadvantage by leveraging
services or products in areas in which we do not directly compete to win business in areas where we
do compete. Our clients can reassess their commitments to us at any time or develop their own
competitive services. The risk to maintaining or securing our clients’ long-term commitments to our
products increased with the Dodd-Frank Act’s restrictions on network exclusivity in the debit sector. We
do not have exclusivity with our largest clients such as JPMorgan Chase and Bank of America. In
certain circumstances, our clients may terminate these relationships on relatively short notice without
significant early termination fees. Because a significant portion of our operating revenues is
concentrated among our largest clients, our operating revenues would decline significantly if we lost
one or more of these clients. This could have a material adverse impact on our business, financial
condition and results of operations. See Note 13—Enterprise-wide Disclosures and Concentration of
Business to our consolidated financial statements included in Item 8 of this report.
We expect there to be changes in the competitive landscape in the future. For example:
• competitors, clients and others may develop products that compete with, impair or replace the
value-added services we provide to support our transaction processing;
• parties that process our transactions in certain countries may try to eliminate our position in the
payments value chain;
• we may be asked to develop or customize certain aspects of our payment services for use by
our customers, processors or other third parties;
• participants in the payments industry may merge, form joint ventures or enter into other
business combinations that strengthen their existing business propositions or create new,
competing payment services;
• competition may increase from alternate types of payment services, such as mobile payment
services, eCommerce payment services and services that permit direct debit of consumer
checking accounts or ACH payments;
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