Visa 2009 Annual Report Download - page 11

Table of Contents
Our merchant marketing activities bring added value to our merchant partners through the development of marketing programs customized for specific
merchants and industry segments. These programs, which we develop in conjunction with merchants, generate awareness for new acceptance channels and
locations and increase cardholder spending and merchant sales revenue through special offers and promotions.
Merchant Acceptance Initiatives
We aim to maintain and expand our merchant base by focusing on the needs of merchants and consumers and enhancing our programs to increase
acceptance in attractive and fast-growing segments, such as bill payment. Our efforts to address these needs include supporting the development of
technological innovations, delivering value-added information services, such as the Visa Incentive Network, and evaluating potential modifications to our
operating rules and interchange rates to enhance the value of our payments network compared to other forms of payment.
We enter into arrangements with certain merchants under which they receive monetary incentives and rebates for acceptance of products carrying our
brands and increasing their payments volume of products carrying our brands or indicating a preference for our cards.
Customer Standards
Our customers are generally required to be financial institutions or other deposit-taking institutions organized under local banking laws or wholly-
owned by such institutions. Certain of our customers participate in the full range of functions available to participants in the Visa network, such as soliciting
cardholders and issuing cards, soliciting and signing merchants and acquiring merchant transactions. These financial institutions may also sponsor other
financial institutions for more limited participation in our network.
Rulemaking and Enforcement
In general, our customers are granted licenses to use our brands and to access our transaction processing systems. Our customers are obligated to honor
our rules and standards through agreements with, and in certain cases non-equity membership interests in, our subsidiaries. These rules and standards relate to
such matters as the use of our brands and trademarks, the standards, design and features of payment cards and programs, merchant acquiring activities,
including acceptance standards applicable to merchants, use of agents, disputes between members, risk management, guaranteed settlement, customer
financial failures and allocation of losses among customers.
We establish dispute management procedures between customers relating to specific transactions. For example, after a transaction is presented to an
issuer, the issuer may determine that the transaction is invalid for a variety of reasons, including fraud. If the issuer believes there is a defect in a transaction,
the issuer may return, or charge back, the transaction to the acquirer. We enforce rules relating to chargebacks and maintain a dispute resolution process with
respect to chargeback disputes.
Credit Risk Management
We indemnify our customers for any settlement loss suffered due to another customer's failure to fund its daily settlement obligations. In certain
instances, we may indemnify customers even in situations in which a transaction is not processed by our system. No material loss related to settlement risk has
been incurred in recent years.
10