Visa 2013 Annual Report Download - page 4

These two milestones brought scale, security, reliability, and
ubiquity to what was a fragile and fragmented business.
Visa continued to operate as a series of entities owned
regionally by banks across the world until 2007, when the
United States; Canada; Latin America and Caribbean; Asia Pacific;
and Central and Eastern Europe, Middle East and Africa regions
merged to form Visa Inc. This company went public in March
2008 in one of the largest and most successful IPOs in history.
The defining characteristics of our business during the past 50
years are the same ones that will enable our success for the
next 50:
1. We are a payments network.
2. We are a partner and enabler to those who have direct
relationships with consumers, businesses, merchants, and
now also those who can accelerate the electronification of
payments.
3. Superior technology and innovation are critical to our success.
4. We strive to always be the best way to pay and be paid for
everyone, everywhere.
Payments Network
We love the role that we play as a payments network. As a
business, we have wide profit margins, strong and consistent
revenue growth, and high returns on capital. We connect
billions of buyers and millions of sellers in more than 200
countries and territories by creating a secure environment
for them to exchange value without relying on cash and
checks. Our network has enormous advantages over the cash
transactions it replaces. We enable economies to grow faster
by giving people access to a line of credit, bank account,
or prepaid balance instantly at the point of sale, and Visa
transactions are safer for consumers and merchants of all sizes.
We run one of the world’s only real-time global networks
— VisaNet — which processes almost 12,000 transaction
messages per second during peak season and is capable of
processing almost four times that number. We run our network
to a standard of being fully operational 99.99999 percent of
the time. When someone wants to run a transaction over our
network, he or she expects it will work, and so do we.
Our network is much more than physical connections and a
processing infrastructure. We manage a network of partners
that derive value by accessing VisaNet. Globally, we have
14,600 financial institution clients — issuers and acquirers that
manage relationships they have with more than 2.1 billion
accountholders and more than 36 million merchant acceptance
locations. Our products can be used at a physical point of sale,
over the telephone, on the Internet, or using a mobile device.
Few have assets like ours and they are very hard to replicate.
We want to grow by increasing transactions over our network.
We strive to have the fastest, most secure, and most reliable
network in the industry, but more important for our growth is
making access to our network easier and making a transaction
that is run over our network more valuable for our clients than
any other method of payment.
In 2013, we sharpened our commitment to our role as a
network by doing the following:
• Weensuredourinvestmentswerefocusedonbuilding
network volume.
• Wereorientedourdataproductsinitiativestodeliver
analytics that directly support our clients’ needs and drive
their business. We already know that our data can be applied
to make payments safer and more seamless and, while we
will continue to enhance our risk and fraud management
solutions, we will use our skills to enhance client revenue
growth through offers, loyalty, and analytics. We will do this in
a way that is conscious of privacy concerns.
• Werefocusedourdigitalwallettosimplifyissuerand
merchant integration and processing flow, limit our direct
consumer interaction, and focus on our role of building
simple online acceptance on the Internet and mobile devices.
Partners — Creating the Right Balance
for Growth and Enabling Those Who Can
Accelerate Electronic Commerce
From the very beginning, Visa’s success has depended on the
strength of our relationships with our clients, whether they are
financial institutions that issue our products or acquirers that
work with merchants to accept our products. We value these
relationships and the role they play. The leverage we get in our
business is built on the relationships our partners maintain with
their millions of customers.
Our founder, Dee Hock, called Visa “an enabling organization.”
While our products are not unique to any one particular
segment of the population or the world, the way they can
be delivered is. Cash is the common enemy everywhere,
and our products enable our clients in this fight. Financial
institution clients issue our products and acquirer clients drive
acceptance of our products. But we also need the end users,
accountholders and merchants, to value them.
We have more work to do to create the correct balance among
all parties in our payments stream, especially in the developed
world. In the developing world and for small merchants globally,
we provide value that is quickly understood and endorsed, as it
was in the early days of the BankAmericard program. However,
our actions and, at times, our inactions have caused merchants
in some parts of the developed world to question the value
they receive from our services, leaving them skeptical that we
value their partnership as much as we actually do.
As a company and as an industry, we can change this. We
need to ensure we deliver solutions that provide tangible value
and help merchants grow their business so that the value of
acceptance clearly matches the costs that merchants pay.