Visa 2012 Annual Report Download - page 7

Table of Contents
certification process for regulated issuers. The program enables issuers to accurately register their exempt and
non-exempt portfolios and to certify their compliance with these rules and criteria. In July 2012, the Federal
Reserve announced its final fraud prevention standards, including clarifying the requirement that issuers notify their
payment networks of their compliance with the final fraud standard (rather than “certify” such compliance).
Industry Overview
We operate in the global payments industry, which is undergoing a powerful secular shift towards electronic payments,
whether delivered in physical, card
-based form or virtually via mobile or eCommerce platforms, and away from paper-based
payments, such as cash and checks. For more than 50 years, we have played a central role in driving this migration by providing
payment products and services that we believe deliver significant benefits to consumers, businesses, governments and merchants.
We believe that consumers are increasingly attracted to the convenience, security, enhanced services and rewards associated with
electronic payment forms. We also believe that corporations and governments are shifting to electronic payments to improve
efficiency, control and security, and that a growing number of merchants are accepting electronic payments to improve sales and
customer convenience.
The global payments industry consists of all forms of payment and value transfer, including:
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• Rule Changes. We implemented changes to our Operating Regulations to the extent necessary to support the
ability of issuers to enable unaffiliated payment card networks on Visa debit cards issued in the U.S. or U.S.
territories, as well as to enable Visa-owned debit networks on non-Visa debit cards.
• Fees . We restructured our acquirer pricing and implemented a fixed fee and lowered our variable per transaction
fees. These changes are intended to increase our competitiveness and incent merchants to route more
transactions over the Visa network.
• PAVD
: We implemented programs to ensure that Visa debit issuers were capable of validating and authorizing PIN
Authenticated Visa Debit transactions for any merchants choosing to route Visa Debit transactions to Visa using
PIN authentication.
• Merchant Litigation Settlement. We reached a reasonable outcome that ensures the long-term health and
competitiveness of the payments industry in the United States, subject to final court approval and the adjudication of
any appeals. Visa will prepare for implementation in the early part of 2013. See Item 1A—Risk Factors—Our
retrospective responsibility plan may not adequately insulate us from the impact of settlements or final judgments. and
Item 8—Financial Statements and Supplementary Data — Note 21—Legal Matters .
• Client Contracts. We continued to take steps to solidify our foundation for long-term growth by successfully executing
several major client contracts throughout the year.
• Ongoing Growth. The progress towards economic recovery and secular shift from cash and checks to electronic
payments helped to drive double-digit percentage growth across our three primary revenue drivers—
payments volume,
cross-border volume and Visa-processed transactions—which contributed to our 13% growth in year-over-year net
operating revenues for fiscal 2012.
• 2012 Olympic Games: For this year's Summer Olympic Games in London, Visa engaged a record number of clients in
its sponsorship program, with more than 1,000 financial institutions and merchants across more than 70 geographies
worldwide, activating Olympic
-related activities, including a large portion from priority growth markets.
• paper-based payments: cash, personal checks, money orders, government checks, travelers cheques and other paper-
based means of transferring value;
• card-based payments: credit cards, charge cards, debit cards, deferred debit cards, ATM cards, prepaid cards, private
label cards and other types of general-purpose and limited-use cards;
•
eCommerce payments: electronic payments through desktop and laptop computers, tablets and other devices with web
browsing capabilities;
• mobile payments: electronic payments through mobile phones and other handheld devices using a variety of
applications such as text messages, mobile billing, web browsers or applications, contactless readers, and other
means; and