Visa 2014 Annual Report Download - page 43

could result in a degradation or disruption of our services or damage to our properties, equipment and
data. They could also compromise data security. See — Account data breaches involving card or other
data processed, stored or transmitted by third parties or by us could adversely affect our reputation and
revenues. If such attacks are not detected immediately, their effect could be compounded. Finally,
potential and actual attacks could also result in increased costs, both for recovery and for prevention
against future attacks.
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 operating results.
Account data breaches involving card or other data processed, stored or transmitted by third
parties or by us could adversely affect our reputation and revenues.
Our clients, merchants, other service providers and we process, store or transmit account holder
information in connection with Visa-branded cards and payment products. In addition, our clients may
use third-party processors to process transactions generated by cards carrying our brands. Breach of
the systems processing, storing or transmission of sensitive account holder data and other information
could lead to fraudulent activity involving Visa-branded cards, reputational damage and claims against
us. A breach may subject Visa to governmental or regulatory investigations, which could result in fines
or enforcement actions against the company. If we are sued in any lawsuit 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 profitability. In addition, any
reputational damage resulting from an account data breach at one or more of our clients, merchants or
other third parties could decrease the use and acceptance of Visa-branded cards, which could have a
material adverse impact on our payments volume, revenues and future growth prospects. Finally, any
data security breach could result in additional regulation, which could materially increase our
compliance costs.
An increase in fraudulent or other illegal activity involving Visa-branded cards or payment
products could lead to reputational damage to our brands and reduce the use and acceptance
of Visa-branded cards or payment products.
Criminals are using increasingly sophisticated methods to capture account holder information.
They use this information to conduct fraudulent transactions and to engage in other forms of illegal
activities involving our payment products. Outsourcing and specialization of functions within the
payments system are increasing. As a result, more third parties are involved in processing transactions
using Visa-branded cards or payment products. A rise in fraud levels and other illegal activities
involving Visa-branded cards or payment products could lead to reputational damage to our brands.
This could reduce the use and acceptance of Visa-branded cards and payment products, or lead to
greater regulation, which could increase our compliance costs and materially and adversely affect our
payments volume and revenues.
Failure to maintain interoperability with Visa Europe’s systems could damage the business and
global perception of the Visa brands.
Visa and Visa Europe maintain mostly separate authorization, clearing and settlement systems. As
a result, we have to ensure that the two systems can process every transaction involving both of our
territories, regardless of where it originates. Visa Europe’s independent system operations could
29