Visa 2010 Annual Report Download - page 29

Table of Contents
We, along with our clients, negotiate pricing discounts and other incentive arrangements with certain large merchants to increase acceptance and usage
of our payment cards. If merchants continue to consolidate, our clients and we may have to increase the incentives provided to certain larger merchants. This
could materially and adversely affect our revenues, results of operations, prospects for future growth and overall business. Competitive and regulatory
pressures on pricing could make it difficult to offset the cost of these incentives.
Certain financial institutions have exclusive, or nearly exclusive, relationships with our competitors to issue payment cards, and these relationships
may adversely affect our ability to maintain or increase our revenues.
Certain financial institutions have longstanding exclusive, or nearly exclusive, relationships with our competitors to issue payment cards. These
relationships may make it difficult or cost-prohibitive for us to conduct material amounts of business with them in order to increase our revenues. In addition,
these financial institutions may be more successful and may grow more quickly than our clients, which could put us at a competitive disadvantage.
Failure to maintain relationships with our clients and others and failure of clients to provide services on our behalf could materially and adversely
affect our business.
We depend and will continue to depend significantly on relationships with our clients and on their relationships with cardholders and merchants to
support our programs and services. We do not issue cards, extend credit to cardholders or determine the interest rates, if any, or other fees charged to
cardholders using cards that carry our brands. Each issuer determines these and most other competitive card features. In addition, we do not generally solicit
merchants to accept our cards, and we do not establish the discount rates charged to merchants for card acceptance, which rates are the responsibility of
acquirers. As a result, the success of our business significantly depends on the continued success and competitiveness of our clients and the strength of our
relationships with them.
In many countries outside the United States, our clients or other processors authorize, clear and settle most domestic transactions using our payment
cards without involving our processing systems. In addition, we do not generally have direct relationships with merchants and do not have direct relationships
with cardholders. Consequently, we depend on our close working relationships with our clients to effectively manage the processing of transactions involving
our cards, Our inability to control the end-to-end processing for cards carrying our brands in these countries may put us at a competitive disadvantage by
limiting our ability to ensure the quality of the services supporting our brands.
In addition, we depend on third parties to provide various services on our behalf, and to the extent that third-party vendors fail to deliver services, our
business and reputation could be impaired.
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 clients
that change the perception of our brands. From time to time, our clients may take actions that we do not believe to be in the best interests of our brands, such
as creditor practices that may be subject to challenge, 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, in which we have only limited control over the operation of the
Visa business. Visa Europe is not required to spend any minimum amount of money promoting or building the Visa brands
28