Visa 2009 Annual Report Download - page 25

Table of Contents
Our perception in the marketplace may affect our brands and reputation, which are key assets of our business.
Our brands and their attributes are key assets of our business. The ability to attract and retain consumer cardholders and corporate clients to Visa-
branded products depends highly upon the external perceptions of our company and our industry. Our business may be affected by actions taken by our
customers that change the perception of our brands. From time to time, our customers may take actions that we do not believe to be in the best interests of our
brands, such as creditor practices that may be viewed as "predatory," which may materially and adversely affect our business. Further, Visa Europe has very
broad latitude to operate the Visa business in and use our brands and technology within Visa Europe's region and we have only limited control over the
operation of the Visa business there. Visa Europe is not required to spend any minimum amount of money promoting or building the Visa brand in its region,
and the strength of the Visa global brand is contingent, in part, on the efforts of Visa Europe to maintain product and service recognition and quality in
Europe. Finally, adverse developments with respect to our industry may also, by association, impair our reputation, or result in greater regulatory or legislative
scrutiny.
Global economic, political, health and other conditions may adversely affect trends in consumer spending and cross-border travel, which may
materially and adversely affect our revenues, operating results, prospects for future growth and overall business.
We depend heavily upon the overall level of consumer, business and government spending. 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. A significant portion of the revenues we earn outside the United States results from cross-border
business and leisure travel. In particular, revenues from processing foreign currency transactions fluctuate with cross-border travel and our customers' need for
transactions to be converted into their base currency. Cross-border travel may be adversely affected by world geopolitical, economic and other conditions.
These include the threat of terrorism and outbreaks of flu, such as H1N1 and avian flu, viruses, such as SARS, and other diseases.
In addition, as we are principally domiciled in the United States, a negative perception of the United States could harm the perception of our company,
which could materially and adversely affect our revenues, operating results, prospects for future growth and overall business.
We are exposed to a risk of loss or insolvency if our customers fail to fund settlement obligations we have guaranteed.
We indemnify Visa customers for any settlement loss suffered due to the failure of a customer 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. This indemnification creates settlement risk
for us due to the difference in timing between the date of a payment transaction and the date of subsequent settlement. The term and amount of the
indemnification are unlimited.
Concurrent settlement failures of more than one of our largest customers or of several of our smaller customers, or systemic operational failures that last
for more than a single-day, may exceed our available resources and could materially and adversely affect our business and financial condition. In addition,
even if we have sufficient liquidity to cover a settlement failure, we may not be able to recover the amount of such payment and may therefore be exposed to
significant losses, which could materially and adversely affect our results of operations, cash flow and financial condition.
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