Visa 2009 Annual Report Download - page 23

Table of Contents
Our customers can reassess their commitments to us at any time or develop their own competitive services. Most of our larger customer relationships
(including those with our largest customers, JPMorgan Chase and Bank of America) are not exclusive and in certain circumstances (including, in some cases,
on relatively short notice) may be terminated by our customers. Because a significant portion of our operating revenues are concentrated among our largest
customers, our operating revenues would decline significantly if we lost one or more of our largest customers for any reason, which could have a material
adverse impact on our business.
We also expect that there may be changes in the competitive landscape in the future, including:
• Competitors, customers and other industry participants may develop products that compete with or replace value-added services we currently
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.
• Participants in the payments industry may merge, create joint ventures or form other business combinations that may strengthen their existing
business propositions or create new payment services that compete with our services.
• Competition may increase from alternative types of payment services, such as online payment services and services that permit direct debit of
consumer checking accounts or ACH payments.
Our failure to compete effectively against any of these threats, could materially and adversely affect our revenues, operating results, prospects for future
growth and overall business.
Consolidation of the banking industry could result in our losing business and may create pressure on the fees we charge our customers, which may
materially and adversely affect our revenues and profitability.
The banking industry has recently undergone substantial, accelerated consolidation, which is likely to continue. Significant ongoing consolidation in the
banking industry may result in one or more of our largest customers being acquired by an institution that has a strong relationship with a competitor, resulting
in a substantial loss of business. In addition, one or more of our customers could seek to merge with or acquire one of our competitors, and any such
transaction could have a material adverse effect on our business and prospects.
Continued consolidation in the banking industry would also reduce the overall number of our customers and potential customers and could increase the
bargaining power of our remaining customers and potential customers. This consolidation could lead financial institutions to seek greater pricing discounts or
other incentives with us. In addition, consolidation could prompt our existing customers to seek to renegotiate their pricing agreements with us to obtain more
favorable terms. We may also be adversely affected 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 businesses. Pressure on the fees we charge our customers caused by
such consolidation could materially and adversely affect our revenues, operating results, prospects for future growth and overall business. In addition, the
current economic environment could lead some customers to curtail or postpone near-term investments in growing their card portfolios, limit credit lines, or
take other actions that affect adversely the growth of our volume and revenue streams from these customers.
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