Visa 2015 Annual Report Download - page 40

amount of our indemnification obligations has no limit, our exposure under the indemnification is
restricted to the amount of unsettled Visa payment transactions at any point in time.
Concurrent settlement failures involving more than one of our largest clients, several of our smaller
clients or systemic operational failures lasting more than a single day could cause us to exceed our
available financial resources and impact our liquidity. Even if we have sufficient liquidity to cover a
settlement failure, we may be unable to recover the amount of such payment. This could expose us to
significant losses, and harm our business. See Note 11—Settlement Guarantee Management to our
consolidated financial statements included in Item 8 of this report.
Some of our clients are considered group members under the Visa Rules. As a result, some of
these group members have elected to limit their responsibility for settlement losses arising from the
failure of their constituent financial institutions in exchange for managing their constituent financial
institutions in accordance with our credit risk policy. To the extent that any settlement failure resulting
from a constituent financial institution exceeds the limits established by our credit risk policy, we would
have to absorb the cost of such settlement failure, which could impact our liquidity.
The use of our products and our revenues could decline if we cannot keep pace with rapid
technological developments to provide new and innovative payment programs and services or
comply with new laws and regulations.
Rapid, significant technological changes continue to confront the payments industry. These
include developments in mobile and other proximity payment and acceptance, eCommerce,
tokenization, crypto-currency and blockchain technologies. We cannot predict the effect of
technological changes on our business. In addition to our own initiatives and innovations, we work
closely with third parties, including some potential competitors, for the development of and access to
new technologies. We expect that new services and technologies applicable to the payments industry
will continue to emerge. These new services and technologies may be superior to, or render obsolete,
the technologies we currently use in our products and services. In addition, our ability to adopt new
services and technologies that we develop may be inhibited by industry-wide standards, new laws and
regulations, resistance to change from clients or merchants, or third parties’ intellectual property rights.
If we are unable to develop new technologies and adapt to technological changes and evolving
industry standards, it could reduce the use of our products and harm our business.
The perception of our brands and our business could be harmed if our transaction processing
systems are disrupted or compromised.
Processing or other technology malfunctions, fires, natural disasters, power losses, disruptions in
long-distance or local telecommunications access, fraud, military or political conflicts, terrorism, effects
of climate change or other catastrophic events may disrupt or compromise our transaction processing
systems. In addition, we may be susceptible to physical or computer-based attacks by terrorists or
hackers due to our role in the global payments industry. These concerns about security are increased
when information is transmitted over the Internet and new technologies are used to conduct financial
transactions. Threats include cyberattacks such as computer viruses, worms or other destructive or
disruptive software, process breakdowns, denial-of-service attacks, malicious social engineering or
other malicious activities, or any combination of the foregoing. Any of these incidents could result in a
degradation or disruption of our services or damage to our properties, equipment and data. They could
also compromise data security. If such attacks are not detected immediately, their effect could be
compounded. Finally, potential and actual attacks could also result in increased costs, both for
recovery and for prevention against future attacks.
Additionally, we rely on service providers for the timely transmission of information across our
global data network. If a service provider fails to provide the communications capacity or services we
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