Visa 2008 Annual Report Download - page 53

Table of Contents
New product development is a critical business priority for Visa. It enables us to maintain our industry leader position by capitalizing on the payment
industry's growth opportunities and to execute our business strategy in the long term. More broadly, new product development encourages economic growth
and enhances the trust and integrity of electronic payments. The following business initiatives expand the scope of payment solutions to benefit existing
customers and position Visa to serve more and different constituencies. Although the short term volume expected from these initiatives is relatively small in
comparison to total Visa volume today, we believe they are the foundation which will fuel incremental volume on our payments network in the long term.
• Prepaid. By offering consumers an option to "pay ahead", we are able to reach new demographics, particularly the unbanked or underbanked
consumers in the United States and globally. Prepaid products allow us to expand our business relationships with new clients such as those in the
government and healthcare sectors, while increasing our brand presence across different market segments. We continue to identify opportunities
to deliver prepaid products to meet the needs of specific local and regional markets.
• Mobile and eCommerce. As the internet and mobile phones become increasingly accessible around the world, they provide ideal platforms for us
to expand our network capabilities to deliver not only payment solutions but also related information services – such as cardholder account
activity, targeted merchant offers, or instant ATM locator. We have launched a suite of pilot consumer and commercial programs and intend to
continually invest in related technologies, either through strategic investments or other partnerships, to help enhance Visa's brand position as
global commerce and information sharing are increasingly conducted over internet and mobile platforms.
• Money Transfer. Individual and business consumers across the globe transfer money daily to conduct day-to-day business. Our Money Transfer
product provides a secure, convenient and person-to-person platform to transfer money between Visa cardholders around the world. Money
Transfer is a relevant product that meets current market needs particularly in countries outside the United States.
Our business is affected by overall economic conditions and consumer spending patterns. Many of our financial institution customers are facing
increased financial strain due to current turbulence in the financial and credit markets. Should financial institutions face limited access to credit, this may in
turn constrain their ability to extend credit, ultimately impacting overall economic spending. Current economic conditions have also led to consolidation in the
financial sector. Should the trend toward consolidation in the financial sector continue, this may have the effect of slowing our rate of revenue growth in the
future, should one of our customers be acquired by a financial institution which is aligned with one of our competitors. Our rate of revenue growth may also
be impacted by price compression should one of our financial institution customers absorb another financial institution and qualify for higher volume-based
discounts on the combined volumes of the merged business.
We expect that continued turbulence in overall economic conditions will moderate consumer and commercial discretionary spending, and our rate of
credit payments volume growth, in the near term. However, we believe that the continued secular shift to debit payment products for non-discretionary
spending will buffer the near term impact to our overall payments volume growth.
There is no historical combined statement of operations of Visa Inc. prior to October 1, 2007, because Visa Inc. did not have any operations prior to the
reorganization. In order to provide insight into our operating results and trends affecting our business, this management's discussion and analysis of our
operating results includes a comparison of the results of operations for fiscal 2008 to the pro forma results of operations for fiscal 2007, as if the
reorganization had occurred on October 1, 2006. This pro forma information is derived from our audited consolidated financial statements, and
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