Visa 2015 Annual Report Download - page 36

and qualify for higher volume-based discounts on the combined volumes of the merged businesses.
Pressure on the fees we charge our clients caused by such consolidation could impact our revenues
and harm our overall business.
Merchants’ continued focus on the costs associated with payment card acceptance exposes us
to additional risks.
We rely in part on merchants and their relationships with our clients to maintain and expand the
acceptance of Visa-branded payment cards. Consolidation in the retail industry is producing a group of
larger merchants that is having a significant impact on all participants in the global payments industry.
Some merchants have sought to reduce their costs associated with payment card acceptance by
lobbying for new legislation and regulatory enforcement and by filing lawsuits. If they continue, we may
face increased compliance and litigation expenses.
Additionally, some merchants have pushed for changes to the Visa Rules which govern Visa
acceptance at the point of sale, including the ability to accept only certain types of Visa-branded cards
(e.g., credit or debit) and impose account holder surcharges. If successful, where applicable, these
efforts could adversely impact consumers’ usage of Visa-branded payment products.
We also face competitive pressures on pricing. We and our clients negotiate pricing discounts and
other incentive arrangements with certain large merchants to increase acceptance and usage of Visa-
branded payment cards. If merchants continue to consolidate, we and our clients may have to increase
the incentives provided to certain large merchants. Some merchants also continue to invest in their
own payment solutions, using both traditional and new technology platforms. Examples include closed-
loop payment systems that are specific to a single merchant or multi-merchant solutions like the
Merchant Customer Exchange, which is designed for a mobile platform utilizing alternative payment
systems and has many merchant participants. Such programs may offer unique or specialized benefits
to consumers, including discounts or customized offers. If merchants are able to drive broad consumer
adoption and usage, it could harm our business.
We may not be able to grow or maintain our business due to certain financial institutions or
merchants’ exclusive, or nearly exclusive, relationships with our competitors.
Certain financial institutions or merchants have longstanding exclusive, or nearly exclusive,
relationships with our competitors to issue or accept payment cards. These relationships may make it
difficult or cost-prohibitive for us to conduct material amounts of business with them. In addition, these
financial institutions or merchants may be more successful and may grow more quickly than our
existing clients or merchants, which could put us at a competitive disadvantage and prevent us from
growing our business.
Our success depends on our relationships with our financial institution clients, acquirers,
merchants, account holders and other third parties.
We depend and will continue to depend significantly on relationships with our financial institution
clients and on their relationships with account holders and merchants to support and to compete
effectively for our programs and services. We do not issue cards, extend credit to account holders or
determine the interest rates or other fees charged to account holders using cards that carry our
brands. Each issuer determines these competitive card features for their customers. Account holders,
however, may associate these features with our brands and if they are dissatisfied, our business may
be harmed.
As a result of the Dodd-Frank Act’s network exclusivity regulations, we have engaged and will
continue to engage in significantly more discussions with merchants, acquirers and processors to
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