Visa 2009 Annual Report Download - page 40

Table of Contents
Operating revenues globally reflect the impact of pricing modifications made on various services as a result of innovations in our product line and
improvements in our service model. U.S. revenues also reflect volume and support incentives incurred on initiation or early renewal of significant long term
customer contracts. We regularly review our pricing strategy to ensure that it competitively aligns with the value and growth opportunities provided to our
customers.
A significant portion of the revenues we earn outside the United States results from cross-border business and leisure travel, which has moderated in the
current economic environment. Revenues from processing foreign currency transactions for our customers fluctuate with cross-border travel and the extent to
which Visa-branded products are utilized for travel purposes.
Our operating revenues are impacted by fluctuations in foreign currency rates. Operating revenues are impacted by the overall strengthening or
weakening of the U.S. dollar compared to local or regional currencies in which our payments volumes are denominated. The strengthening of the U.S. dollar
in fiscal 2009 over the prior year resulted in a 3% decline in total operating revenues, including the impact from our hedging activities. The decline primarily
impacted service and international transaction revenues.
The following table sets forth the components of our total operating revenues:
Fiscal Year ended
September 30, $ Change % Change(1)
Visa Inc.
2009
Visa Inc.
2008
Visa
U.S.A.
2007
2009
vs.
2008
2008
vs.
2007
2009
vs.
2008
2008
vs.
2007
(in millions, except percentages)
Service revenues $ 3,174 $ 3,061 $ 1,945 $ 113 $ 1,116 4% 57%
Data processing revenues 2,430 2,073 1,416 357 657 17% 46%
International transaction revenues 1,916 1,721 454 195 1,267 11% 279%
Other revenues 625 569 280 56 289 10% 104%
Volume and support incentives (1,234) (1,161) (505) (73) (656) 6% 130%
Total Operating Revenues $ 6,911 $ 6,263 $ 3,590 $ 648 $ 2,673 10% 74%
(1) Percentage change calculated based on whole numbers, not rounded numbers.
Revenue growth in fiscal 2009 primarily reflects a moderate increase in nominal payments volume, solid growth of processed transactions and strategic
pricing modifications. Operating revenues increased during fiscal 2008 from fiscal 2007, primarily due to the inclusion of operating revenues from acquired
regions, double digit growth in nominal payments volume, processed transactions and cross-border nominal payments volume, combined with competitive
pricing adjustments. The discussion below comparing fiscal 2008 and 2007 focuses on factors other than the inclusion of $2.4 billion of the acquired regions'
operating revenues in fiscal 2008.
• Service revenues increased in fiscal 2009 primarily due to strategic pricing modifications implemented in the second half of the year, combined
with modest growth of 1% in nominal global payments volume. Service revenues increased during fiscal 2008 compared to 2007 primarily
reflecting nominal U.S. payments volume growth of 11%. We expect that soft economic conditions will continue to moderate consumer and
commercial spending, and our rate of nominal payments volume growth, in the near term.
• Data processing revenues increased in fiscal 2009 due to growth in the number of transactions processed of 8% during the year, combined with
strategic pricing modifications. Data processing revenues increased during fiscal 2008 compared to fiscal 2007 primarily due to a growth of 12%
in transaction volumes, coupled with competitive pricing adjustments related to the Interlink Network. We believe that the secular shift to
electronic payments will continue on a global basis.
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