Visa 2015 Annual Report Download - page 20
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On November 2, 2015, the Company and Visa Europe entered into a transaction agreement
pursuant to which the Company agreed to acquire Visa Europe. Closing of the acquisition is subject to
various conditions including regulatory approvals, and is expected to occur in the fiscal third quarter of
2016. See Note 2—Visa Europe to our consolidated financial statements included in Item 8 of this
report.
Nature of Operations
Visa’s mission is to accelerate the electronification of commerce. We operate an open-loop
payments network, VisaNet, through which Visa connects and manages the exchange of information
and value between: (i) issuers — financial institutions that issue Visa-branded cards or payment
products to account holders, and (ii) acquirers — financial institutions that contract with merchants to
accept Visa-branded cards or payment products. We do not earn revenues from, or bear credit risk
with respect to, interest or fees paid by account holders on Visa-branded cards or payment products.
The issuers have the responsibility for issuing cards and other payment products, and determining the
interest rates and fees paid by the account holders.
Interchange reimbursement fees represent a transfer of value between the financial institutions
participating in our open-loop payments network. On purchase transactions, interchange
reimbursement fees are paid by the acquirers to the issuers. We generally do not receive any revenue
related to interchange reimbursement fees. In addition, we generally do not earn any revenue from the
fees that merchants are charged for acceptance by the acquirers, including the merchant discount rate.
The acquirers are typically responsible for soliciting merchants, and establishing and earning these
fees.
A typical Visa transaction begins when the account holder presents his or her Visa-branded card
or payment product to a merchant as payment for goods or services. The transaction information is
then transmitted electronically to the acquirer and routed through VisaNet to the issuer for
authorization. Following authorization, a clearing file containing the final transaction data is submitted
from the acquirer and processed for final settlement between the issuer and acquirer. The following
diagram illustrates the processing steps involved in a typical transaction on VisaNet.
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