Visa 2013 Annual Report Download - page 33

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unstable, arising from the real prospect of debt defaults. If such defaults occur, or if the measures
taken to avert such defaults create their own instability, economic turmoil is likely to result, and the
impact is likely to be global and highly significant.
The volatility of the current economic environment in advanced and emerging economies and the
responses by financial institutions and governments may create new risks or increase the impact of
existing ones. These include the following:
• Depressed consumer and business confidence may continue to decrease account holder
spending.
• Uncertainty and volatility in the performance of our clients’ businesses may reduce the
accuracy of our estimates of our revenues, rebates, incentives and realization of prepaid
assets.
• Our clients may implement cost-reduction initiatives that reduce or eliminate payment card
marketing budgets or increase requests for greater incentives or reduced fees from us, which
may reduce our revenues.
• Our clients may decrease spending for optional or enhanced services, affecting our revenue
and reducing account holders’ desire to use these products.
• Our clients may increase account holder fees as a cost-recovery initiative, or as a result of
regulatory action, decreasing their value proposition to consumers and reducing consumers’
desire to use our products.
• Government intervention or investments in our clients may negatively affect our business with
those institutions or otherwise alter their business decisions.
• Tightening of credit availability could affect the ability of participating financial institutions to
lend to us under the terms of our credit facility.
• The U.S. government’s inability to meet its obligations or a possible further downgrade in the
U.S. debt rating could adversely affect the liquidity of our investments, a substantial portion of
which are in U.S. treasury and government securities.
• Our clients may default on their settlement obligations, including for reasons unrelated to
payment card activity, such as mortgage loan commitments.
• Adverse fluctuations in foreign currency exchange rates could negatively affect the dollar
value of our revenues and payments in foreign currencies.
• The current economic environment could lead some clients to curtail or postpone near-term
investments in growing their card portfolios, limit credit lines, modify fees and loyalty
programs, or take other actions that adversely affect the growth of our volume and revenue
streams from these clients.
• Declines in stock prices or significant instability could cause consumer spending to decline
materially.
Any of these developments could have a material adverse impact on our prospects, growth,
revenue, profitability and overall business.
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