Visa 2009 Annual Report Download - page 38

Table of Contents
Results of Operations
Operating Revenues
Our operating revenues are primarily generated from payment volume on Visa-branded cards for goods and services, as well as the number, size and
type of transactions processed on our VisaNet system. We do not earn revenues from, or bear credit risk with respect to, interest and fees paid by cardholders
on Visa-branded cards. Our issuing customers have the responsibility for issuing cards and determining interest rates and fees paid by cardholders, and most
other competitive card features. We do not earn revenues from the fees that merchants are charged for card acceptance, including the merchant discount rate.
Our acquiring customers, which are generally responsible for soliciting merchants, establish and earn these fees.
The following sets forth the components of our operating revenues:
Service revenues are earned from customers for their participation in card programs carrying marks of the Visa brand. Service revenues are assessed
using a calculation of pricing applied to the prior quarter's payments volume.
Data processing revenues are earned for authorization, clearing, settlement, transaction processing services and other maintenance and support services
that facilitate transaction and information processing among our customers globally and Visa Europe. Data processing revenues are based on information we
accumulate from VisaNet, our secure, centralized, global processing platform, which provides transaction processing services linking issuers and acquirers.
International transaction revenues are assessed to customers on transactions where the cardholder's issuer country is different from the merchant's
country. International transaction revenues are generally driven by cross-border payments volume, which includes single currency transactions, and currency
conversion activities for transactions involving more than one currency.
Other revenues consist primarily of optional service or product enhancements, such as extended cardholder protection and concierge services,
cardholder services and fees for licensing and certification. Other revenues also include revenues earned from Visa Europe in connection with the Visa Europe
Framework Agreement.
Volume and support incentives represent contracts with financial institution customers, merchants and other business partners for various programs
designed to build payments volume and to increase product acceptance. These incentives are accounted for as reductions of operating revenues.
Operating Expenses
Personnel includes salaries, stock-based compensation, incentives and various fringe benefits.
Network, EDP and communications primarily represents expenses for the operation of our electronic payments network, including maintenance,
equipment rental and fees for other data processing services.
Advertising, marketing and promotion includes expenses associated with advertising and marketing campaigns, sponsorships, and other related
promotions to promote the Visa brand.
Visa International fees represents fees that Visa U.S.A. paid to Visa International prior to our reorganization for services primarily related to global
brand management, global product enhancements, management of global system development and interoperability, and corporate support to the entire Visa
enterprise. These fees ceased as a result of our reorganization.
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