Visa 2015 Annual Report Download - page 35

• parties that process our transactions in certain countries may try to eliminate our position in
the payments value chain;
• we may be asked to develop or customize certain aspects of our payment services for use
by our customers, processors or other third parties;
• participants in the payments industry may merge, form joint ventures or enter into other
business combinations that strengthen their existing business propositions or create new,
competing payment services;
• competition may increase from alternate types of payment services, such as mobile payment
services, eCommerce payment services and services that permit direct debit of consumer
checking accounts or ACH payments;
• new players and intermediaries in the payments value chain may redirect transactions or
steer account holders away from our network; or
• new services and technologies that we develop may be impacted by industry-wide solutions
and standards set by organizations such as the International Organization for
Standardization, American National Standards Institute, as well as EMVCo, related to EMV-
chip payment technology, cloud-based payments, tokenization or other technologies.
Our failure to compete effectively in light of any such developments could harm our business and
prospects for future growth.
Disintermediation from the payments value chain could harm our business.
Our position in the payments value chain is key to our business. Some of our competitors,
including American Express, Discover, private-label card networks, virtual currencies and certain
alternate payments systems, operate closed-loop payments systems, with direct connections to both
merchants and consumers without any intermediaries. These competitors seek to derive competitive
advantages from this business model. Regulatory actions or initiatives such as the Dodd-Frank Act or
the Federal Reserve’s Faster Payments efforts may provide them with increased opportunity to do so.
In addition, although other competitors are pursuing similar lines of business or adopting similar
commercial models, they have not attracted the same level of legal or regulatory scrutiny of their
pricing and business practices as operators of multi-party payments systems such as ours.
We also run the risk of disintermediation due to factors such as emerging technologies including
mobile payments, and by virtue of increasing bilateral agreements between entities that prefer not to
use our payments network for processing payments. For example, merchants could process
transactions directly with issuers, or processors could process transactions directly with issuers and
acquirers.
Additional consolidation in the financial services industry could impact our revenues and harm
our overall business.
Additional consolidation in the financial services industry or the acquisition of one or more of our
largest clients by an institution with a strong relationship with one of our competitors may reduce the
overall number of our clients. This could result in the acquired financial institution’s Visa business
shifting to a competitor, resulting in a substantial loss of business to us.
Our existing clients may seek to obtain more favorable pricing agreements. We may also be
adversely affected by price compression should one of our clients absorb another financial institution
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