Underwriters of Visa's IPO have a day option to purchase up to 40,, additional shares, which would bring Visa an additional 1. Visa, which is owned by a consortium of banks, has planned the offering since October when it spun off Visa Europe as a separate entity. Visa, which touts itself as the world's largest electronic payment and credit card company, joins its rival MasterCard, which went public two years earlier.
But Visa's IPO appears headed into a financial market storm with investors battening down the hatches amid worries of a credit crunch that could hurt many firms, especially in the financial sector. At the same time, a softening US economy could hurt Visa and other credit card firms, which rely on consumer spending to drive profits.
With a housing crisis deepening, many consumers are having trouble paying their bills, including credit card debt. The move comes at a time when IPOs are few and far between, especially in the financial sector. Last June, private equity firm Blackstone Group raised 4. The financial analytics firm that provides data on indexes and risk for portfolio managers has managed to buck the trend and has risen 49 percent.
Only a behemoth such as Visa. Daily newsletter Receive essential international news every morning. Take international news everywhere with you! Download the France 24 app. The content you requested does not exist or is not available anymore. Add France 24 to your home screen. After the share split, a shareholder would have a total of eight shares of Visa. Visa's business model is similar to a tollbooth, where Visa makes money every time a consumer makes an electronic transaction.
This cost-efficient business model drives the impressive operating margin of In an effort to bolster margins, Visa recently announced an overhaul to the fee structure for U. This deal was well-timed as an increasing number of consumers are using fintech applications to transfer money between accounts.
Visa stated that one in four consumers use Plaid's service as over 11, financial institutions are connected to 2, fintech developers in the market. The acquisition is pending regulatory approval with an expected decision between March and June , and if approved, will strengthen Visa's position within the fintech sector. Visa's forward price-to-earnings ratio of Visa's heavy valuation is appropriate given the large profit margins and The low-cost tollbooth business model is a win for investors as the global economy transitions away from cash, providing plenty of growth for Visa during the transition.
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For the document needed to enter a country's territory, see Travel visa. For other uses, see Visa disambiguation. Traded as. Foster City ,  California. Operating income. Net income. Visa acceptance logo from early used only in certain Asian, American and European markets. The Chargex logo right used in Canada. This article contains content that is written like an advertisement.
Please help improve it by removing promotional content and inappropriate external links , and by adding encyclopedic content written from a neutral point of view. February Learn how and when to remove this template message. Main article: Visa Debit. Main article: Visa Electron.
Main article: Visa Cash. London: Springer. ISBN Available through SpringerLink. San Francisco Business Times. Retrieved February 27, SEC: Visa Inc. Form K". Securities and Exchange Commission. November 18, Archived from the original PDF on May 1, Retrieved April 25, Retrieved March 26, Retrieved May 1, New York: Routledge. May 29, USA Today. Retrieved February 20, London: Finextra Research Limited.
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Retrieved March 5, Business Insider. Retrieved October 31, Retrieved March 20, The Washington Post. Associated Press. January 3, Retrieved on February 2, Monday August 7, Then, two years ago, it began consolidating scattered sites throughout San Mateo in nearby Foster City with [ Austin American-Statesman.
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Finance Reuters SEC filings. Components of the Dow Jones Industrial Average. Credit , charge and debit cards. Cash advance Charge-off. Grace period Introductory rate Universal default. Card not present transaction Chargeback Controlled payment number Dispute.
Business may be great, but even Visa acknowledges substantial risks to investing in its shares. Chief among them is a pile of lawsuits. Since , merchants have filed some 50 suits for alleged overcharges. Discover and American Express sued, charging Visa with anticompetitive practices. Other risks include increasing regulatory scrutiny -- especially in matters of consumer privacy and identity theft. This could boost costs for the company. Another potential risk is further consolidation in the banking industry, which could shrink the market for Visa cards.
As it is, only a few financial powerhouses account for a significant share of Visa's revenues. But companies always belabor the risks in a prospectus. Investors will likely give as much credence to the performance of MasterCard shares since their debut in the spring of If you're bullish on MasterCard -- and many experts are -- there's no reason not to feel the same way about Visa. The good news for IPO fans is that, with an offering this size, there's a good chance that your broker will have some shares for you, if you want them.
Plus, some analysts who love the business think that MasterCard's shares are due for a breather. So expecting the same kind of meteoric gains for Visa may be just too much wishful thinking. Skip to header Skip to main content Skip to footer. Skip advert. Home Markets. February 28, Most Popular.
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Unlike American Express and Discover Card, Visa isn't the one lending money to cash-strapped consumers whose homes are worth a fraction of what they once were. Visa simply collects the fees every time someone swipes a Visa credit or debit card. And that happens way more often than it does with MasterCard, Visa's only true competitor.
Visa handled 44 billion transactions in , compared with 23 billion handled by MasterCard and just 4. The shift from paper to plastic is still in the early stages, especially in developing countries, Visa says in its prospectus. Business may be great, but even Visa acknowledges substantial risks to investing in its shares.
Chief among them is a pile of lawsuits. Since , merchants have filed some 50 suits for alleged overcharges. Discover and American Express sued, charging Visa with anticompetitive practices. Other risks include increasing regulatory scrutiny -- especially in matters of consumer privacy and identity theft. This could boost costs for the company. Another potential risk is further consolidation in the banking industry, which could shrink the market for Visa cards.
As it is, only a few financial powerhouses account for a significant share of Visa's revenues. But companies always belabor the risks in a prospectus. Investors will likely give as much credence to the performance of MasterCard shares since their debut in the spring of If you're bullish on MasterCard -- and many experts are -- there's no reason not to feel the same way about Visa.
The good news for IPO fans is that, with an offering this size, there's a good chance that your broker will have some shares for you, if you want them. Plus, some analysts who love the business think that MasterCard's shares are due for a breather. So expecting the same kind of meteoric gains for Visa may be just too much wishful thinking. Skip to header Skip to main content Skip to footer. Skip advert. There were already charge cards like Diners Club which had to be paid in full at the end of each billing cycle , and "by the mids, there had been at least a dozen attempts to create an all-purpose credit card.
The test at first went smoothly, but then BofA panicked when it confirmed rumors that another bank was about to initiate its own drop in San Francisco, BofA's home market. However, after Williams and some of his closest associates left, BofA management realized that BankAmericard was salvageable. The original goal of BofA was to offer the BankAmericard product across California, but in , BofA began to sign licensing agreements with a group of banks outside of California, in response to a new competitor, Master Charge now MasterCard , which had been created by an alliance of several regional bankcard associations to compete against BankAmericard.
BofA itself like all other U. Over the following 11 years, various banks licensed the card system from Bank of America, thus forming a network of banks backing the BankAmericard system across the United States. During the late s, BofA also licensed the BankAmericard program to banks in several other countries, which began issuing cards with localized brand names.
For example: [ citation needed ]. In , a manager at the National Bank of Commerce later Rainier Bancorp , Dee Hock , was asked to supervise that bank's launch of its own licensed version of BankAmericard in the Pacific Northwest market. Although Bank of America had cultivated the public image that BankAmericard's troubled startup issues were now safely in the past, Hock realized that the BankAmericard licensee program itself was in terrible disarray because it had developed and grown very rapidly in an ad hoc fashion.
For example, "interchange" transaction issues between banks were becoming a very serious problem, which had not been seen before when Bank of America was the sole issuer of BankAmericards. Hock suggested to other licensees that they form a committee to investigate and analyze the various problems with the licensee program; they promptly made him the chair of that committee. After lengthy negotiations, the committee led by Hock was able to persuade Bank of America that a bright future lay ahead for BankAmericard — outside Bank of America.
NBI , an independent Delaware corporation which would be in charge of managing, promoting and developing the BankAmericard system within the United States. In other words, BankAmericard was transformed from a franchising system into a jointly controlled consortium or alliance, like its competitor Master Charge. However, Bank of America retained the right to directly license BankAmericard to banks outside the United States and continued to issue and support such licenses. By , licenses had been granted in 15 countries.
The international licensees soon encountered a variety of problems with their licensing programs, and they hired Hock as a consultant to help them restructure their relationship with BofA as he had done for the domestic licensees.
In , the directors of IBANCO determined that bringing the various international networks together into a single network with a single name internationally would be in the best interests of the corporation; however, in many countries, there was still great reluctance to issue a card associated with Bank of America, even though the association was entirely nominal in nature. For this reason, in , BankAmericard, Barclaycard, Carte Bleue, Chargex, Sumitomo Card, and all other licensees united under the new name, " Visa ", which retained the distinctive blue, white and gold flag.
The term Visa was conceived by the company's founder, Dee Hock. He believed that the word was instantly recognizable in many languages in many countries and that it also denoted universal acceptance. Following the Russian invasion of Ukraine , in March , Visa announced that it would suspend all business operations in Russia. The latter three separately incorporated regions had the status of group members of Visa International Service Association.
Initially, signed copies of sales drafts were included in each customer's monthly billing statement for verification purposes—an industry practice known as "country club billing" [ citation needed ]. By the late s, however, billing statements no longer contained these enclosures, but rather a summary statement showing posting date, purchase date, reference number, merchant name, and the dollar amount of each purchase.
Initially, a "previous balance" method was used—calculation of finance charge on the unpaid balance shown on the prior month's statement. Later, it was decided to use "average daily balance" which resulted in increased revenue for the issuers by calculating the number of days each purchase was included on the prior month's statement.
Several years later, "new average daily balance"—in which transactions from previous and current billing cycles were used in the calculation—was introduced. By the early s, many issuers introduced the concept of the annual fee as yet another revenue enhancer. On October 11, , Visa announced that some of its businesses would be merged and become a publicly traded company , Visa Inc. Visa's Western Europe operation became a separate company, owned by its member banks who will also have a minority stake in Visa Inc.
On October 3, , Visa completed its corporate restructuring with the formation of Visa Inc. The new company was the first step towards Visa's IPO. Visa Europe Ltd. Visa Europe was a company entirely separate from Visa Inc. On November 5, , the United States Department of Justice filed a lawsuit seeking to block the acquisition, arguing that Visa is a monopolist trying to eliminate a competitive threat by purchasing Plaid. Visa said it disagrees with the lawsuit and "intends to defend the transaction vigorously.
On February 3, , Visa announced a partnership with First Boulevard, a neobank focused on building generational wealth for Black Americans. The partnership would allow their users to buy, sell, hold, and trade digital assets through Anchorage Digital.
Registered in the United States as a c 3 entity , the Visa Foundation was created with the mission of supporting inclusive economies. In particular, economies in which individuals, businesses and communities can thrive with the support of grants and investments. Supporting resiliency, as well as the growth, of micro and small businesses that benefit women is a priority of the Visa Foundation. Furthermore, the Foundation prioritizes providing support to the community from a broad standpoint, as well as responding to disasters during crisis.
In December , Visa Announced the launch of a new accelerator program across Asia Pacific to further develop the region's financial technology ecosystem. As of , the company ranked st on the Fortune list of the largest United States corporations by revenue. Visa Europe began suspending payments to WikiLeaks on December 7, The lawsuit was filed by the National ATM Council and independent operators of automated teller machines.
The suit says that this price-fixing artificially raises the price that consumers pay using ATMs, limits the revenue that ATM-operators earn, and violates the Sherman Act 's prohibition against unreasonable restraints of trade. Johnathan Rubin, an attorney for the plaintiffs said, "Visa and MasterCard are the ringleaders, organizers, and enforcers of a conspiracy among U. In , a class of U. Over 4 million class members were represented by the plaintiffs. Visa's share of this settlement is reported to have been the larger.
In , the Department of Justice sued Visa over rules prohibiting its issuing banks from doing business with American Express and Discover. The Department of Justice won its case at trial in and the verdict was upheld on appeal. American Express and Discover filed suit as well. Justice Department in another antitrust case. The companies agreed to allow merchants displaying their logos to decline certain types of cards because interchange fees differ , or to offer consumers discounts for using cheaper cards.
In , the European Commission exempted Visa's multilateral interchange fees from Article 81 of the EC Treaty that prohibits anti-competitive arrangements. In the United Kingdom, Mastercard has reduced its interchange fees while it is under investigation by the Office of Fair Trading. In January , the European Commission issued the results of a two-year inquiry into the retail banking sector. The report focuses on payment cards and interchange fees.
Upon publishing the report, Commissioner Neelie Kroes said the "present level of interchange fees in many of the schemes we have examined does not seem justified. On March 26, , the European Commission opened an investigation into Visa's multilateral interchange fees for cross-border transactions within the EEA as well as into the "Honor All Cards" rule under which merchants are required to accept all valid Visa-branded cards.
The antitrust authorities of EU member states other than the United Kingdom also investigated Mastercard's and Visa's interchange fees. In December , Visa reached a settlement with the European Union in yet another antitrust case, promising to reduce debit card payments to 0. On November 27, , a federal judge entered an order granting preliminary approval to a proposed settlement to a class-action lawsuit  filed in by merchants and trade associations against Mastercard and Visa.
The suit was filed due to alleged price-fixing practices employed by Mastercard and Visa. About one-quarter of the named class plaintiffs have decided to opt "out of the settlement". Opponents object to provisions that would bar future lawsuits and even prevent merchants from opting out of significant portions of the proposed settlement.
Plaintiffs allege that Visa and Mastercard fixed interchange fees , also known as swipe fees, that are charged to merchants for the privilege of accepting payment cards. In their complaint, the plaintiffs also alleged that the defendants unfairly interfere with merchants from encouraging customers to use less expensive forms of payment such as lower-cost cards, cash, and checks.
Very high interchange fee for Visa 1. Visa objected saying that consumers should not be dragged into a dispute between the companies. In March , U. In March , the United States Justice Department announced its investigation with Visa to discover if the company is engaging in anticompetitive practices in the debit card market.
The main question at hand is whether or not Visa is limiting merchants' ability to route debit card transactions over card networks that are often less expensive, focusing more so on online debit card transactions. The probe highlights the role of network fees, which are invisible to consumers and place pressure on merchants, who mitigate the fees by raising prices of goods for customers. The probe was confirmed through a regulatory filing on March 19, , stating they will be cooperating with the Justice Department.
In , Visa moved its corporate headquarters back to San Francisco when it leased the top three floors of the Market Street office building, although most of its employees remained at its Foster City campus. In December , Visa Inc. On November 6, , Visa announced plans to move its headquarters back to San Francisco by upon completion of a new "story, ,square-foot building".
Visa operates the Plus automated teller machine network and the Interlink EFTPOS point-of-sale network, which facilitate the "debit" protocol used with debit cards and prepaid cards. They also provide commercial payment solutions for small businesses, midsize and large corporations, and governments. Visa has a set of rules that govern the participation of financial institutions in its payment system. Acquiring banks are responsible for ensuring that their merchants comply with the rules.
Rules address how a cardholder must be identified for security , how transactions may be denied by the bank, and how banks may cooperate for fraud prevention, and how to keep that identification and fraud protection standard and non-discriminatory. Other rules govern what creates an enforceable proof of authorization by the cardholder.
The rules prohibit merchants from imposing a minimum or maximum purchase amount in order to accept a Visa card and from charging cardholders a fee for using a Visa card. In the UK the law was changed in January to prevent retailers from adding a surcharge to a transaction as per ' The Consumer Rights Payment Surcharges Regulations '.
Visa permits merchants to ask for photo ID, although the merchant rule book states that this practice is discouraged. As long as the Visa card is signed, a merchant may not deny a transaction because a cardholder refuses to show a photo ID. The Dodd—Frank Act allows U. Recent complications include the addition of exceptions for non-signed purchases by telephone or on the Internet and an additional security system called " Verified by Visa " for purchases on the Internet.
In September , Visa Inc, launched a new service to replace account information on plastic cards with "token" — a digital account number. Depending on the geographical location, Visa card issuer issue the following tiers of cards, from the lowest to the highest: . A Visa-branded debit card issued worldwide since the s.
Its distinguishing feature is that it does not allow "card not present" transactions while its floor limit is set to zero, which triggers automatic authorisation of each transaction with the issuing bank and effectively makes it impossible for the user to overdraw the account. The card has often been issued to younger customers or those who may pose a risk of overdrawing the account.
Since mids, the card has mostly been replaced by Visa Debit. A Visa-branded stored-value card. In September , Visa introduced Visa payWave , a contactless payment technology feature that allows cardholders to wave their card in front of contactless payment terminals without the need to physically swipe or insert the card into a point-of-sale device. All three use the same symbol as shown on the right.
This QR code payment method was first introduced in India in It was later expanded to a number of other countries, including in Africa and South East Asia. In , Visa launched Visa Checkout, an online payment system that removes the need to share card details with retailers. The Visa Checkout service allows users to enter all their personal details and card information, then use a single username and password to make purchases from online retailers.
The service works with Visa credit, debit, and prepaid cards. On November 27, , V. The blue and gold in Visa's logo were chosen to represent the blue sky and gold-colored hills of California , where the Bank of America was founded. In , Visa changed its logo, removing the horizontal stripes in favor of a simple white background with the name Visa in blue with an orange flick on the 'V'.
In , the gold and blue stripes were restored as card branding on Visa Debit and Visa Electron , although not as the company's logotype. In , most Visa cards around the world began to feature a hologram of a dove on its face, generally under the last four digits of the Visa number. This was implemented as a security feature — true holograms would appear three-dimensional and the image would change as the card was turned. At the same time, the Visa logo, which had previously covered the whole card face, was reduced in size to a strip on the card's right incorporating the hologram.
This allowed issuing banks to customize the appearance of the card. Similar changes were implemented with MasterCard cards. Today, cards may be co-branded with various merchants, airlines, etc. On older Visa cards, holding the face of the card under an ultraviolet light will reveal the dove picture, dubbed the Ultra-Sensitive Dove,  as an additional security test. Beginning in , the Visa standard was changed to allow for the hologram to be placed on the back of the card, or to be replaced with a holographic magnetic stripe "HoloMag".
Visa made a statement on January 12, , that the signature requirement would become optional for all EMV contact or contactless chip-enabled merchants in North America starting in April It was noted that the signatures are no longer necessary to fight fraud and the fraud capabilities have advanced allowing this elimination leading to a faster in-store purchase experience. The first to eliminate the signature was MasterCard Inc.
From Wikipedia, the free encyclopedia. American multinational financial services corporation. For the document needed to enter a country's territory, see Travel visa. For other uses, see Visa disambiguation. Traded as. Foster City ,  California. Operating income. Net income. Visa acceptance logo from early used only in certain Asian, American and European markets. The Chargex logo right used in Canada. This article contains content that is written like an advertisement.
Please help improve it by removing promotional content and inappropriate external links , and by adding encyclopedic content written from a neutral point of view. February Learn how and when to remove this template message. Main article: Visa Debit. Main article: Visa Electron. Main article: Visa Cash. London: Springer. ISBN Available through SpringerLink. San Francisco Business Times. Retrieved February 27, SEC: Visa Inc. Form K". Securities and Exchange Commission. November 18, Archived from the original PDF on May 1, Retrieved April 25, Retrieved March 26,