Visa 2007 Annual Report Download - page 115

Table of Contents
VISA U.S.A. INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1—Organization
Visa U.S.A. Inc. (Visa, Visa U.S.A., or the Company) consists of Visa U.S.A. and its wholly-owned subsidiaries: Inovant, Inc., International Anasazi,
Inc., Interlink Network, Inc., Integrated Solutions Concepts, Inc., Debit Processing Services, Inc., Plus System, Inc., and Advanced Resolution Services, Inc.
The Company also has a 69% ownership interest in Inovant LLC.
In June 2006, the Company dissolved its wholly-owned subsidiary, Merchant Processing Holdings, Inc. (MPH). MPH held the Company's joint venture
interest in Vital Processing Services LLC, which was sold in March 2005.
In June 2005, the Company incorporated Advanced Resolution Services, Inc., a Delaware corporation, as a wholly-owned subsidiary of Visa U.S.A. in
order to provide various fraud-prevention and security-related services to Visa members.
Prior to the October 2007 reorganization, the Company along with Visa International (comprising the operating regions of Asia Pacific (AP), Latin
America and Caribbean (LAC) and Central and Eastern Europe, Middle East and Africa (CEMEA)), Visa Canada Association (Visa Canada) and Visa Europe
Limited (Visa Europe) operated as one of five entities related by ownership and membership to Visa. Each of Visa U.S.A., Visa Canada, Visa Europe, Visa
AP, Visa LAC and Visa CEMEA operated as a separate geographic region, serving its member financial institutions and administering Visa programs in its
respective region. After the reorganization, Visa U.S.A., Visa International and Visa Canada became subsidiaries of Visa Inc., a Delaware stock corporation.
See Note 21—Subsequent Event.
Visa U.S.A. operates a payments system that enables consumers and businesses to conduct their financial transactions using efficient, secure and
guaranteed payment products in lieu of cash, checks, and other forms of payment. The Company's customers are financial institutions and merchants that
participate in the payment system in the normal course of business.
Visa U.S.A.'s products and services enable its members to participate in an international payment system that none could offer individually. Visa
U.S.A. does not issue cards, set fees, or determine the interest rates consumers will be charged on Visa-branded cards. Visa U.S.A.'s issuing members have the
independent responsibility individually to determine these and most other competitive card features. These functions are performed by Visa member financial
institutions in competition with one another.
Membership in Visa U.S.A. is composed of financial institutions participating in this payments system. At its April 2006 Annual Meeting, the
Company adopted an amended Certificate of Incorporation and amended bylaws which changed the composition of the Board of Directors and clarified
dividend, dissolution, membership interest and voting rights. In accordance with the Company's Certificate of Incorporation and bylaws, members pay service
fees each quarter based on payments volume for the preceding quarter. Payments volume is defined as total monetary value of transactions for goods and
services purchased, initiated with Visa products, including PIN-based debit volume, and excluding cash volume. Members' dividend and dissolution rights,
membership interests in the corporation and voting rights are based on the members' respective cumulative portions of the total of all of certain fees paid to
the Company up to the most recent Reference Date as defined in the amended Certificate of Incorporation. The initial Reference Date was May 1, 2006 and
members' proportions will be adjusted at each third anniversary of that date. Prior to the October 2007 reorganization, the Board of Directors included
independent Directors who met eligibility requirements set forth in the Certificate of Incorporation, including the definition of independence from the
Company and its members. The chief executive officers of the Company and of Visa International Service Association (Visa International) served as ex officio
non-voting
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