Visa 2013 Annual Report Download - page 16

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Although U.S. dollar settlements are settled within the same day and typically do not result in a
receivable or payable balance, settlement currencies other than the U.S. dollar generally remain
outstanding for one to two business days, resulting in amounts due from and to financial institution
clients. These amounts are presented as settlement receivable and settlement payable on our
consolidated balance sheets, respectively.
In order to maintain the integrity of and minimize disruptions to our payments network, we
indemnify our financial institution clients for settlement losses suffered due to the failure of any other
client to honor Visa-branded cards and payment products processed in accordance with our operating
regulations. The settlement indemnification applies to the amount of Visa payment transactions that
have occurred, but have not yet settled. We maintain and regularly review global settlement risk
policies and procedures to manage settlement exposure, which may require clients to post collateral if
certain credit standards are not met. Cash equivalents collateral is reflected in customer collateral on
our consolidated balance sheets as it is held in escrow in our name. All other collateral is excluded
from the consolidated balance sheets. During the past ten years, Visa has incurred only one settlement
indemnification loss for fifty thousand dollars in 2004.
Core Products and Services
Visa provides a wide variety of payment solutions that support payment products that issuers can
offer to their account holders: (i) pay now with debit; (ii) pay ahead with prepaid; or (iii) pay later with
credit products. Visa also offers a growing suite of innovative digital, eCommerce and mobile products
and services. These services facilitate transactions on our network among account holders, merchants,
financial institutions and governments in mature and emerging markets globally.
•Debit. Our debit payment solutions support issuers’ payment products that draw on demand
deposit accounts, such as checking accounts.
•Prepaid. Our prepaid payment solutions support issuers’ payment products that access a pre-
funded amount, allowing account holders to enjoy the convenience and security of a payment
card in lieu of cash or checks.
•Credit. Our credit payment solutions support issuers’ deferred payment and customized
financing products.
Our core processing services involve the routing of payment information and related data to
facilitate the authorization, clearing and settlement of transactions between our issuers and acquirers.
VisaNet is built on a centralized architecture, enabling us to view and analyze each authorization
transaction we process in real time and to provide value-added services, including information
products, such as risk scoring and loyalty applications, while the transaction data is being routed
through our network.
Visa’s processing services continue to expand to address the needs of all participants in the
evolving payments ecosystem, through such offerings as our merchant gateway and Visa Debit
Processing Services (“DPS”). Merchant gateway services provided through our CyberSource
subsidiaries enable gateway routing and other services that make it easier for eCommerce merchants
to accept, process and reconcile payments, manage fraud and safeguard payment security online.
DPS provides comprehensive issuer processing services for participating issuers of Visa debit, prepaid
and ATM payment products. These and other services support our financial institution clients and their
use of our products, and promote the growth and security of our payments network.
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