ITEM 1A. Risk Factors
Regulatory Risks
We are subject to complex and evolving global regulations that could harm our business and financial results.
As a global payments technology company, we are subject to complex and evolving regulations that govern our operations. Such regulations may increase in quantity, complexity and scope in response to heightened geopolitical tensions. See Item 1 — Government Regulation for more information on the most significant areas of regulation that affect our business. The impact of these regulations on us, our clients, and other third parties could limit our ability to enforce our payments system rules; require us to adopt new rules or change existing rules; affect our existing contractual arrangements; and increase our compliance costs. As discussed in more detail below, we may face differing rules and regulations in matters like interchange reimbursement rates, preferred routing, domestic processing and localization requirements, currency conversion, point-of-sale transaction rules and practices, privacy, data use and protection, licensing requirements and associated product technology. As a result, the Visa operating rules and our other contractual commitments may differ from country to country, state to state, or product to product. Complying with these and other regulations increases our costs and operational complexity, and reduces our revenue opportunities.
If widely varying regulations come into existence worldwide, we may have difficulty rapidly adjusting our products, services, fees and other important aspects of our business to comply with the regulations. Our compliance programs and policies are designed to support our compliance with a wide array of regulations and laws, such as regulations regarding anti-money laundering, anti-corruption, competition, money transfer services, privacy and sanctions, and we continually adjust our compliance programs as regulations evolve. However, we cannot guarantee that our practices will be deemed compliant by all applicable regulatory authorities. In the event our controls should fail or we are found to be out of compliance for other reasons, we could be subject to monetary damages, civil and criminal penalties, litigation, investigations and proceedings, and damage to our global brands and reputation.
Increased scrutiny and regulation of the global payments industry, including with respect to interchange reimbursement fees, merchant discount rates, operating rules, risk management protocols and other related practices, could harm our business.
Regulators around the world have been establishing or increasing their authority to regulate various aspects of the payments industry. See Item 1—Government Regulation for more information . In the U.S. and many other jurisdictions, we have historically set default IRFs. Even though we generally do not receive any revenue related to IRFs in a payment transaction (in the context of credit and debit transactions, those fees are paid by the acquirers to the issuers; the reverse is true for certain transactions like ATM transactions), IRFs are a factor on which we compete with other payments providers and are therefore an important determinant of the volume of transactions we process. Consequently, changes to these fees, whether voluntarily or by mandate, can substantially affect our overall payments volume and net revenue.
Interchange reimbursement fees, certain operating rules and related practices continue to be subject to increased government regulation globally, and regulatory authorities and central banks in a number of jurisdictions have reviewed or are reviewing these fees, rules and practices. For example:
• Regulations adopted by the U.S. Federal Reserve cap the maximum U.S. debit interchange reimbursement rate received by large financial institutions at 21 cents plus 5 basis points per transaction, plus a possible fraud adjustment of 1 cent. Additionally, the Dodd-Frank Act limits issuers’ and payment networks’ ability to adopt network exclusivity and preferred routing in the debit and prepaid area, which also impacts our business. In response to seller requests, the Federal Reserve has recently taken actions to revisit its regulations that implement these aspects of the Dodd-Frank Act. For example, in October 2022, the Federal Reserve published a final rule effectively requiring issuers to ensure that at least two unaffiliated networks are available for routing ecommerce debit transactions by July 1, 2023. In October 2023, the Federal Reserve issued a proposal for comment that further lowers debit interchange rates, with a mechanism for automatic adjustment every two years. Finally, in August 2025, the District Court for the District of North Dakota ruled that the Federal Reserve exceeded its authori ty in implementing Regulation II, which sets debit card interchange fees. The court found the Federal Reserve improperly included various costs beyond what the Durbin Amendment allows, such as fraud losses, network fees and other fixed costs, when setting the debit interchange fee standard. As a result, the court vacated Regulation II’s debit interchange fee
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standard. Subsequently, however, the District Court in Kentucky ruled that the Federal Reserve acted within its discretion in setting the debit interchange cap. If the District Court of North Dakota’s decision is affirmed on appeal and ultimately prevails, it could potentially result in the Federal Reserve setting a significantly lower interchange cap for relevant debit transactions in the U.S. Separately, there continues to be interest in regulation of credit interchange fees and routing practices by members of Congress and state legislators. It is possible that the Credit Card Competition Act may be reintroduced in Congress or attempted to be offered as an amendment to unrelated legislation. Previous versions of the legislation were introduced in 2022 and 2023, and required among other things, that large issuing banks offer a choice of at least two unaffiliated networks over which electronic credit transactions may be processed. Finally, some states have passed or are considering passing laws that regulate how interchange can be set and assessed. For example, in May 2024, Illinois passed a law that restricts the assessment of interchange on the state tax and gratuity portions of a transaction, and restricts financial institutions and payment networks, among others, from using payment transaction data for any purpose other than facilitating or processing a transaction. While the Illinois law remains subject to legal challenge, if such laws are allowed to go into effect, they may also impose significant technical and compliance burdens on our business.
• In Europe, the EU’s IFR places an effective cap on consumer credit and consumer debit interchange fees for both domestic and cross-border transactions within the European Economic Area of 30 basis points and 20 basis points, respectively. EU member states have the ability to further reduce these interchange levels within their territories. The European Commission has announced its intention to conduct another impact assessment of the IFR, which could result in even lower caps on interchange rates and the expansion of regulation to other types of products, services and fees.
• Several countries in Latin America continue to explore regulatory measures against payments networks and have either adopted or are exploring interchange caps, including Argentina, Brazil, Chile and Costa Rica. In Asia Pacific, the Reserve Bank of Australia (RBA) which already regulates interchange, recently proposed reducing existing interchange caps on domestic credit and debit transactions and not allowing differential interchange treatment for consumer and commercial transactions. Similarly, in New Zealand, the Commerce Commission recently lowered existing caps on domestic credit transactions. Interchange is also regulated in certain countries in the Central and Eastern Europe, Middle East and Africa region, including the United Arab Emirates. Finally, many governments, including but not limited to governments in India, Costa Rica, and Turkey, are using regulation to further drive down MDR, which could negatively affect the economics of our transactions.
• While the focus of interchange and MDR regulation has primarily been on domestic rates, interest on cross-border rates has been growing. For example, we agreed to limit certain cross-border interchange rates in a settlement with the European Commission in 2019, which was extended through 2029. In 2020, Costa Rica became the first country to formally regulate cross-border interchange rates by regulation. In June 2022, the UK’s PSR initiated a market review focusing on post-Brexit increases in interchange rates for e-commerce transactions between the UK and Europe and is proposing to cap cross-border interchange on certain transactions in that geographic corridor. Most recently, in July 2025, New Zealand adopted interchange caps on cross-border transactions including commercial credit transactions. Australia has also proposed adopting caps for cross-border transactions. Cross-border MDR is also regulated in Costa Rica and Turkey.
• With increased lobbying by sellers and other industry participants, we are also beginning to see regulatory interest in network fees. For example, the UK’s PSR is conducting a market review into scheme and processing fees. In its interim report, the PSR indicated that it is reviewing possible remedies in the areas of governance, reporting and transparency, any of which, if adopted, could impose additional complexity and burdens on our business in the UK. Other regulators, for example, those in Australia, the EU, Chile and New Zealand have expressed an interest in network fees, including issues related to transparency. Finally, in 2024, the Greek Parliament limited acquirer fees for certain small ticket transactions in some seller categories for a period of three years.
• In addition, industry participants in some countries, including Argentina, Chile, Colombia, the Dominican Republic, Paraguay, Peru, South Africa and Turkey have sought intervention from competition regulators or filed claims relating to certain network rules, including Visa’s restrictions on cross-border acquiring. The Central Banks of Chile and the Dominican Republic recently enacted regulation that will permit cross-border acquiring for ecommerce transactions under certain conditions. Other countries, like Brazil, have adopted regulations that require us to seek government pre-approval for certain of our network rules, which could also impact the way we operate in those markets.
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• Government regulations or pressure may also impact our rules and practices and require us to allow other payments networks to support Visa products or services, to have the other networks’ functionality or brand marks on our products, or to share our intellectual property with other networks. In addition, the EU’s requirement to separate scheme and processing adds costs and impacts the execution of our commercial, innovation and product strategies.
• We are also subject to central bank oversight in a growing number of countries, including Brazil, India, the UK and within the EU. In several jurisdictions, we have been designated as a “systemically important payment system.” Some countries with existing oversight frameworks are looking to further enhance their regulatory powers, while regulators in other jurisdictions are considering or adopting approaches based on these regulatory principles. For example, in October 2023, VisaNet was designated as a prominent payment system in Canada. These types of designations generally result in oversight of authorization, clearing and settlement activities, including policies, procedures and requirements related to governance, client and seller access to our payment systems, reporting, cybersecurity, processing infrastructure, capital and/or credit risk management. We could also be required to adopt policies and practices designed to mitigate settlement and liquidity risks, including increased requirements to maintain sufficient levels of capital and financial resources locally, as well as localized risk management or governance.
• As innovations in payment technology have enabled us to expand into new products and services, they have also expanded the potential scope of regulatory influence. For instance, new products and capabilities, including tokenization, push payments and cross-border money movement solutions could bring increased licensing or authorization requirements in the countries where the product or capability is offered. Furthermore, certain portions of our business are regulated as payment institutions or as money transmitters, subjecting us to various licensing, supervisory and other requirements. As we continue to expand our capabilities and offerings in furtherance of our multi-year growth strategy, we will need to obtain new types of licenses. These licenses could result in increased supervisory and compliance obligations that are distinct from the obligations we are subject to in our capacity as a payment card network.
Regulators around the world increasingly take note of each other’s approaches to regulating the payments industry. Consequently, development in one jurisdiction may influence regulatory approaches in another. The risks created by a new law, regulation or regulatory outcome in one jurisdiction have the potential to be replicated and to negatively affect our business in another jurisdiction or in other product offerings. For example, our settlement with the European Commission on cross-border interchange rates has drawn attention from some regulators in other parts of the world. Similarly, new regulations involving one product offering may prompt regulators to extend the regulations to other product offerings. For example, credit payments could become subject to similar regulation as debit payments (or vice versa). The RBA initially capped credit interchange, but subsequently capped debit interchange as well.
When we cannot set default interchange reimbursement rates at optimal levels, issuers and acquirers may find our payments system less attractive. This may increase the attractiveness of other payments systems, such as our competitors’ closed-loop payments systems with direct connections to both sellers and consumers. We believe some issuers may react to such regulations by charging new or higher fees, or reducing certain benefits to consumers, which makes our products less appealing to consumers. Some acquirers may elect to charge higher MDR regardless of the Visa interchange reimbursement rate, causing sellers not to accept our products or to steer consumers to alternative payments systems or forms of payment. In addition, in an effort to reduce the expense of their payment programs, some issuers and acquirers have obtained, and may continue to obtain, incentives from us, including reductions in the fees that we charge, which directly impacts our net revenue. The evolving and increasing regulatory focus on the payments industry could negatively impact or reduce the number of Visa products our clients issue, the volume of payments we process, our net revenue, our brands, our competitive positioning, our ability to use our intellectual property to differentiate our products and services, the quality and types of products and services we offer, the countries in which our products and services are used, and the types of consumers and sellers who can obtain or accept our products and services, all of which could our business and financial results.
Finally, policymakers and regulatory bodies in the U.S., Europe and other parts of the world are exploring ways to reform existing competition laws to meet the needs of the digital economy, including restricting large technology companies from engaging in mergers and acquisitions, requiring them to interoperate with potential competitors, and prohibiting certain kinds of self-preferencing behaviors. While the focus of these efforts remains primarily on increasing regulation of large technology, ecommerce and social media companies, they could also have implications for other types of companies including payments networks, which could constrain our ability to
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effectively manage our business. Recent political developments around the world, including recent shifts in trade policy, have added additional uncertainty with respect to new laws and regulations or changes in the interpretations or enforcement of existing laws and regulations, and increased risk of financial regulatory fragmentation.
Government-imposed obligations and/or restrictions on international payments systems may prevent us from competing against providers in certain countries, including significant markets such as China and India.
Governments in a number of jurisdictions shield domestic payments providers, including card networks, brands, and processors, from international competition by imposing market access barriers and preferential domestic regulations. To varying degrees, these policies and regulations affect the terms of competition in the marketplace and impair the ability of international payments networks to compete. Public authorities may also impose regulatory requirements that favor domestic providers or mandate that domestic payments or data processing be performed entirely within that country, which could prevent us from managing the end-to-end processing of certain transactions.
In China, UnionPay remains the predominant processor of domestic payment card transactions and operates the predominant domestic acceptance market. Although we filed an application with the People’s Bank of China (PBOC) in May 2020 to operate a Bank Card Clearing Institution (BCCI) in China, the timing and the procedural steps for approval remain uncertain. There is no guarantee that the license to operate a BCCI will be approved or, if we obtain such license, that we will be able to successfully compete with domestic payments networks. Co-badging and co-residency regulations also pose additional challenges in markets where Visa competes with national networks for issuance and routing. Certain banks have issued dual-branded cards for which domestic transactions in China are processed by UnionPay and transactions outside of China are processed by Visa, UnionPay or other international payments networks. Although the PBOC has permitted Visa and UnionPay’s cooperation on upgrading magstripe dual-branded cards to chip cards, these modernization efforts are limited to existing cards and not new issuances. Looking forward, the PBOC is considering phasing out dual-branded cards over time as new licenses are issued to international companies to participate in China’s domestic payments market. In response, we have been working with Chinese issuers to issue Visa-only branded cards for international travel, and later for domestic transactions should we obtain a BCCI license. However, notwithstanding such efforts, these restrictions on dual-branded cards have decreased our payments volume and impacted the net revenue we generate in China.
UnionPay has grown rapidly in China and is actively pursuing international expansion plans, which could potentially lead to regulatory pressures on our international routing rule (which requires that international transactions on Visa cards be routed over VisaNet). Furthermore, although regulatory barriers shield UnionPay from competition in China, alternative payments providers such as Alipay and WeChat Pay have rapidly expanded into ecommerce, offline and cross-border payments, which could make it difficult for us to compete even if our license is approved in China. NetsUnion Clearing Corp, a Chinese digital transaction routing system, and other such systems could have a competitive advantage in comparison with international payments networks .
Ongoing regulatory initiatives in India, including data localization requirements which continue to evolve, have cost implications for us and could affect our ability to effectively compete with domestic payments providers. Furthermore, any inability to meet the requirements of the data localization mandate could impact our ability to do business in India. In Europe, the European Central Bank has announced initiatives to reduce reliance on international payment networks. For example, with the support of the European Central Bank, the European Payments Initiative (EPI), led by a group of European banks, launched a pan-European A2A payment system, Wero. More recently, the European Central Bank has embarked on a multi-year effort to explore a digital euro, an alternative to foreign digital currency and payment service providers. In addition, regional groups of countries, such as the Gulf Cooperation Council (GCC) and a number of countries in Southeast Asia (e.g., Malaysia), have adopted or may consider, efforts to restrict our participation in the processing of regional transactions. The African Development Bank has also indicated an interest in supporting national payment systems in its efforts to expand financial inclusion and strengthen regional financial stability. Finally, some countries such as Nigeria and South Africa are mandating on-shore processing of domestic transactions. Geopolitical events, including sanctions and trade tensions have intensified these activities, which could adversely affect our business. For example, some countries have expressed about their reliance on U.S. financial services companies, including payments networks, and have taken steps to bolster the development of domestic solutions, in light of U.S., European and UK sanctions Russia and the decision by U.S. payments networks, including Visa, to operations in the country. Separately, Russia has called for the BRICS countries (led by Brazil, Russia, India, China and South Africa, and which has recently expanded to include countries such as Egypt, Ethiopia, Iran, Saudi Arabia and the United
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Arab Emirates), to lessen dependence on the U.S. dollar and on Western payments systems by, among other things, integrating payments systems and cards across member countries.
Central banks in a number of countries, including those in Argentina, Australia, Brazil, Canada, Europe, India, Indonesia and Mexico, are in the process of developing or expanding national RTP networks and instant payment solutions with the goal of driving a greater number of domestic transactions onto these systems. In July 2023, the U.S. Federal Reserve launched its FedNow Service with core clearing and settlement functionality, and expects to add more features and enhancements over time. Some countries are also exploring cross-border connectivity of their respective RTP systems. Finally, an increasing number of jurisdictions are exploring the concept of building central bank digital currencies for retail payments, such as the European Central Bank’s digital euro initiative. If successfully deployed, these national payment platforms and digital currencies could have significant implications for Visa’s domestic and cross-border payments, including potential disintermediation.
Due to our inability to manage the end-to-end processing of transactions for cards in certain countries (e.g., Thailand, Mexico), we depend on our close working relationships with our clients or third-party service providers to ensure transactions involving our products are processed effectively. Our ability to do so may be adversely affected by regulatory requirements and policies pertaining to transaction routing or on-shore processing. In general, national laws that protect or otherwise support domestic providers or processing may increase our costs; decrease our payments volume and impact the net revenue we generate in those countries; decrease the number of Visa products issued or processed; impede us from utilizing our global processing capabilities and controlling the quality of the services supporting our brands; restrict our activities; limit our growth and the ability to introduce new products, services and innovations; force us to leave countries or prevent us from entering new markets; and create new competitors, all of which could harm our business.
Laws and regulations regarding the handling of personal data, including laws and regulations related to privacy, cybersecurity and AI, may impede our services or result in increased costs, legal claims or fines against us .
Our business relies on the processing of data across national borders. Legislators and regulators around the world are increasingly adopting or revising privacy, data protection, data management, data transfer, AI and cybersecurity laws and regulations. For example, our ongoing efforts to comply with complex U.S. and international privacy and data protection laws may increase the complexity of our compliance operations, entail substantial expenses, divert resources from other initiatives and projects, require us to modify our data processing practices, policies or services, and adversely impact our business. In addition, privacy laws in numerous jurisdictions, including but not limited to the U.S., China, India, Australia, New Zealand, Brazil, Kingdom of Saudi Arabia, Hong Kong and Japan, have established specific legal requirements for cross-border transfers of personal information and substantial compliance and audit obligations. Certain countries have also established specific legal requirements for data localization, such as where personal data must remain stored in the country. The global proliferation of new privacy and data protection laws may lead to inconsistent and conflicting requirements or legal interpretations, which create an uncertain regulatory environment. Noncompliance could also result in regulatory penalties and significant legal liability. Enforcement actions and by regulatory authorities into companies related to data security and privacy are generally increasing. In Europe, data protection authorities continue to apply and enforce the General Data Protection Regulation (GDPR), imposing record setting . As we develop integrated and personalized products and services and acquire new companies to meet the needs of a changing marketplace, we may expand our data profile through additional data types and sources, across multiple channels, and involving new partners. This potential expansion could amplify the impact of these various laws and regulations on our business. As a result, we are required to constantly monitor our privacy, data and cybersecurity practices and potentially change them when necessary or appropriate. We also may need to provide increased care in our data management, governance and quality practices, particularly as it relates to the use of data in products leveraging AI.
We are also subject to a variety of laws and regulations governing the development, use and deployment of AI technologies. These laws and regulations are increasingly complex, fragmented and still evolving, and there is no single global regulatory framework for AI. Our development, deployment and use of AI and machine learning is subject to various risks at each stage of use. In the context of AI development, risks include those related to intellectual property considerations, the collection and use of personal data, third party risks, technical limitations of algorithms and the accuracy of training data, and compliance with emerging AI legal standards. The increased risk of inadvertent disclosure of confidential information or personal data in connection with the utilization of AI technologies may result in stronger regulatory scrutiny, leading to legal and regulatory investigations and
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enforcement actions that may negatively affect our business, even if unfounded. In the context of use and deployment, risks include technical, operational and compliance considerations, and our ability to monitor and safely deploy AI systems throughout the organization with appropriate safeguards and in compliance with the various regulatory schemes related to AI technology.
In particular, the adoption of agentic commerce, in which autonomous AI agents initiate and execute transactions on behalf of users, presents novel and complex regulatory, privacy and cybersecurity risks. Legal frameworks governing such autonomous agents remain nascent, with limited direct guidance specific to payments. The interplay between payments regulations, data privacy laws and evolving AI regulations may create uncertainty around compliance obligations and potential liability exposure as more participants (including sellers, fintechs, AI developers and enablers) enter the agentic commerce ecosystem. The market is still assessing how regulators may apply existing consumer protection and other laws in the context of AI. For example, as agentic commerce solutions scale, we may see increased instances of erroneous or disputed payments, increased chargebacks and reputational harm. Furthermore, reliance on agentic AI introduces challenges in monitoring cross-border, prohibited or high-risk transactions, where conflicting regulatory requirements may apply. The fragmented regulatory landscape for emerging technologies such as AI and inconsistent requirements across legal frameworks may amplify difficulties in identifying, preventing or mitigating risk with a single global approach, potentially increasing our compliance costs or stratifying our ability to leverage certain data or technologies for . For instance, the EU has adopted a comprehensive AI Act that establishes harmonized rules across Europe, with key provisions for high-risk AI systems taking effect in August 2026. Meanwhile, several U.S. states, including California, Colorado and Utah, have adopted AI-specific frameworks or are considering applying existing consumer and data protection laws to regulate AI. Depending on how these different regulations are interpreted and enforced, they may limit the ability to develop and deploy AI systems or significantly increase associated compliance costs. Our development and implementation of governance frameworks aimed at complying with emerging laws and regulations applicable to our AI and machine learning systems may not be in mitigating all of these emerging risks.
We may be subject to tax examinations or disputes, or changes in tax laws.
The application of tax laws requires significant judgment and can be subject to uncertainty and differing interpretations. We are currently under examination by, or in disputes with, the U.S. Internal Revenue Service as well as tax authorities in other jurisdictions, and we may be subject to additional examinations or disputes in the future. We exercise significant judgment and make estimates that we believe to be reasonable in calculating our worldwide provision for income taxes and other tax liabilities. However, relevant tax authorities may disagree with our estimates, interpretations or tax treatment of certain material items. Failure to sustain our position in these matters could adversely affect our cash flows and financial position. In addition, changes in existing laws in the U.S. or foreign jurisdictions, including unilateral actions of foreign jurisdictions to introduce digital services taxes, or changes resulting from the Organization for Economic Cooperation and Development’s proposals for the international tax system, including the introduction of a global minimum tax with widespread implementation by member countries, may also materially affect our effective tax rate and could increase our tax payments. Please see Item 7 and Note 19—Income Taxes to our consolidated financial statements included in Item 8 of this report.
Litigation Risks
We may be adversely affected by the outcome of litigation or investigations.
We are subject to numerous litigation matters, investigations, claims, examinations, information gathering requests, subpoenas, government and regulatory proceedings asserted by civil litigants, governments and enforcement bodies investigating or alleging, among other things, violations of competition and antitrust law, consumer protection law, privacy law and intellectual property law (these are referred to as “actions” in this section). Details of the most significant actions we face are described more fully in Note 20—Legal Matters to our consolidated financial statements included in Item 8 of this report. These actions are inherently uncertain, expensive and disruptive to our operations. In the event we are found liable or reach a settlement in any action, particularly in a large class action lawsuit, such as one involving an antitrust claim entitling the plaintiff to treble in the U.S., or we incur liability arising from a government , we may be required to pay significant awards or judgments, settlements, costs or . In addition, settlement terms, judgments, orders, pressures or events in or resulting from actions have impacted and may continue to impact our business by creating uncertainty for our business or by influencing or requiring us to modify, among other things, the interchange reimbursement rates we set, the Visa operating rules or the way in which we enforce those rules, our fees or pricing, or the way we do business. These actions or their outcomes may also influence regulators, investigators, governments or civil in the same or other jurisdictions, which may lead to additional actions Visa. Finally, we are required
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by some of our commercial agreements to indemnify other entities for litigation brought against them, even if Visa is not a defendant. For certain actions like those that are U.S. covered litigation or VE territory covered litigation, as described in Note 5—U.S. and Europe Retrospective Responsibility Plans and Note 20—Legal Matters to our consolidated financial statements included in Item 8 of this report, we have certain financial protections pursuant to the respective retrospective responsibility plans. The two retrospective responsibility plans are different in the protections they provide and the mechanisms by which we are protected. The failure of one or both of the retrospective responsibility plans to adequately insulate us from the impact of such settlements, judgments, losses or liabilities could materially harm our financial condition or cash flows, or even cause us to become insolvent.
Business Risks
We face intense competition in our industry.
The global payments space is intensely competitive. As technology evolves and consumer expectations change, new competitors or methods of payment emerge, and existing clients and competitors assume different roles. Our products compete with cash, checks, electronic payments, virtual currency payments, global or multi-regional networks, other domestic and closed-loop payments systems, digital wallets and alternative payments providers primarily focused on enabling payments through ecommerce and mobile channels. As the global payments space becomes more complex, we face increasing competition from our clients, other emerging payment providers such as fintechs, other digital payments, technology companies that have developed payments systems enabled through online activity in ecommerce, social media, and mobile channels, other providers of CMS and VAS offerings, as well as governments in a number of jurisdictions (e.g., U.S., Brazil and India), that are developing, supporting and/or operating national schemes, RTP networks and other payment platforms. For more information, please see Item 1—Competition above.
Our competitors may acquire, develop or make better use of substantially better technology, have more widely adopted delivery channels, or have greater financial resources. They may offer more effective, innovative or a wider range of programs, products and services. They may use more effective advertising and marketing strategies that result in broader brand recognition and greater use, including with respect to issuance and seller acceptance. They may also develop better solutions or offer more favorable pricing. Moreover, even if we successfully adapt to technological change and the proliferation of alternative types of payment services by developing and offering our own services in these areas, such services may provide less favorable financial terms for us, which could hurt our financial results. We expect to face more competition as AI continues to advance and GenAI and agentic AI capabilities become integrated into payments and related services in two main ways: first, by competitors their products, services and external offerings with AI to and faster product adoption; and second, by competitors providing internal AI tools to upskill their employees for operational and impact. In addition, our competitors may have, or in the future may obtain, proprietary rights that would prevent, limit or with our ability to design, use or sell our own AI-based offerings or services to our clients and other third parties. If we do not continue to invest in developing and supporting our AI-based initiatives, we may fall behind technological developments and evolving industry standards, which would likewise our reputation and ability to effectively compete, retain clients or grow our business.
Certain of our competitors operate with different business models, have different cost structures or participate in different market segments. Many of these competitors are also able to use existing payment networks without being subject to many of the associated costs. Moreover, these competitors also occupy various roles in the payments ecosystem that enable them to influence payment choice of other participants. Some of our competitors, including American Express, Discover, private-label card networks, virtual currency providers, technology companies that enable the exchange of digital assets, and certain alternative payments systems like Alipay and WeChat Pay, operate closed-loop payments systems, with direct connections to both sellers and consumers. Those business models may ultimately prove more successful or more adaptable to regulatory, technological and other developments. In some cases, these competitors have the support of government mandates that prohibit, limit or otherwise hinder our ability to compete for transactions within certain countries and regions. For more information on government actions, initiatives or regulations that could impact competition, please see Item 1—Government Regulation and Item 1A—Regulatory Risks above.
We expect the competitive landscape to continue to shift and evolve. For example:
• We, along with our competitors, clients, network participants, and others are developing or participating in alternative payments systems or products, such as mobile payment services, ecommerce payment services, P2P payment services, real-time and faster payment initiatives, and payment services that permit
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ACH or direct debits from or to consumer checking accounts, that could either reduce our role or otherwise disintermediate us from the transaction processing or the value-added services we provide to support such processing. Examples include initiatives from The Clearing House, an association consisting of large financial institutions that has developed its own faster payments system; Early Warning Services, which operates Zelle, a bank-offered alternative network that provides another platform for faster funds or real-time payments across a variety of payment types, including P2P, corporate and government disbursement, bill pay and deposit check transactions; and cryptocurrency, including stablecoin-based payments initiatives.
• In July 2025, the U.S. enacted the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), establishing a comprehensive framework for regulating stablecoins. Similarly, the European Union has adopted its own legal framework for crypto assets. Many other countries, including the U.K., Japan, United Arab Emirates, Hong Kong and Singapore, are at varying stages of adopting stablecoin and digital assets-related regulatory frameworks. With more regulatory certainty and permissive or favorable regulations, stablecoins could potentially disrupt existing payment networks, including in cross-border and B2B transactions. In countries facing currency instability and controls, stablecoins could increasingly be used as an alternative to preserve and transfer asset value. In more mature markets, stablecoins could achieve broad adoption through regulated issuance by traditional banks, fintechs and other new entrants, as well as by being integrated in closed loop systems operated by large digital ecosystems and platforms.
• Parties that access our payment credentials, tokens and technologies, including clients, technology solution providers or others might be able to migrate or steer account holders and other clients to alternative payment methods or use our payment credentials, tokens and technologies to establish or help bolster alternate payment methods and platforms.
• Participants in the payments industry may merge, form joint ventures or enable or enter into other business combinations or bilateral agreements that strengthen their existing business propositions or create new, competing payment services. For example, parties may agree not to use our payments network for processing transactions resulting in sellers processing transactions directly with issuers, or processors processing transactions directly with issuers and acquirers.
• New or revised industry standards for or related to payments set by individual countries, regions or standard setting organizations may result in additional costs and expenses for Visa and its clients, or otherwise negatively impact the functionality and competitiveness of our products and services.
As the competitive landscape is quickly evolving, we may not be able to foresee or respond sufficiently to emerging risks associated with new businesses, products, services and practices. We may be asked to adjust our local rules and practices, develop or customize certain aspects of our payment services, adjust the economics or pricing for our offerings, or agree to business arrangements that may be less protective of Visa’s proprietary technology and interests in order to compete and we may face increasing operational costs and risk of litigation concerning intellectual property. Our failure to compete effectively in light of any such developments could harm our business and prospects for future growth.
Our net revenue and profits are dependent on our client and seller base, which may be costly to win, retain and develop.
Our financial institution clients and sellers can reassess their commitments to us at any time or develop their own competitive services. While we have certain contractual protections, our clients, including some of our largest clients, generally have flexibility to issue non-Visa products. In certain circumstances, our financial institution clients may decide to terminate our contractual relationship on relatively short notice without paying significant early termination fees. Because a significant portion of our net revenue is concentrated among our largest clients, the loss of business from any one of these larger clients could harm our business, results of operations and financial condition. For more information, please see Note 14—Segment Information to our consolidated financial statements included in Item 8 of this report. It may also be difficult or costly for us to acquire or conduct business with financial institutions or sellers that have longstanding exclusive, or nearly exclusive, relationships with our competitors. These financial institutions or sellers may be more successful and may grow more quickly than our existing clients or sellers. If there is a consolidation or acquisition of one or more of our largest clients or co-brand partners by a financial institution client or seller with a relationship with one of our competitors, it could result in our business shifting to a competitor, which could put us at a competitive and our business.
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In addition, we face intense competitive pressure on the prices we charge our financial institution clients. In certain regions, we are increasingly facing competition from RTP networks, other payment facilitators offering lower pricing, and government involvement in domestic and cross-border payments. In order to stay competitive, we may need to adjust our pricing or offer incentives to our clients to grow payments volume, enter new market segments, adapt to regulatory changes, and expand their use and acceptance of Visa products and services. These include up-front cash payments, fee discounts, rebates, credits, performance-based incentives, marketing and other support payments that impact our net revenue and profitability. In addition, we offer incentives to certain sellers and acquirers to encourage them to route transactions to Visa. Pressures on pricing, incentives, fee discounts and rebates could moderate our growth. If we are not able to implement cost containment and productivity initiatives in other areas of our business or grow our volume in other ways to offset or absorb the financial impact of these incentives, fee discounts and rebates, it may harm our net revenue and profits.
Sellers’ and processors’ continued push to lower acceptance costs and challenge industry practices could harm our business.
We rely in part on sellers and their relationships with our clients or their agents to maintain and expand the use and acceptance of Visa products. Certain sellers and seller-affiliated groups have been exerting their influence in the global payments system in certain jurisdictions, such as the U.S., Australia, Canada and Europe, to attempt to lower acceptance costs paid by sellers to acquirers or their agents to accept payment products or services, by lobbying for new legislation, seeking regulatory intervention, filing lawsuits and in some cases, surcharging or refusing to accept Visa products. If they are successful in their efforts, we may face increased compliance and litigation expenses, issuers may decrease their issuance of our products, and consumer usage of our products could be adversely impacted. For example, in the U.S., certain stakeholders have raised concerns regarding how payment security standards and rules may impact debit routing choice and the cost of payment card acceptance. U.S. seller-affiliated groups and processors have expressed concerns regarding the EMV certification process and the roles of industry bodies such as EMVCo and the Payment Card Industry Security Standards Council in the development of payment card standards. Moreover, many sellers have advocated for lower acceptance costs in the form of reduced interchange rates, which could result in some issuers eliminating or reducing their promotion or use of Visa’s products and services, eliminating or reducing cardholder benefits such as programs, or charging account holders increased or new fees for using Visa-branded products, all of which could impact Visa’s payments volume and related revenue. Finally, some sellers and processors have advocated for changes to industry practices and Visa acceptance requirements at the point of sale, including the ability for sellers to accept only certain types of Visa products, to mandate only PIN authenticated transactions, to differentiate or steer among Visa product types issued by different financial institutions, and to impose surcharges on consumers presenting Visa products as their form of payment. A number of the issues flagged in this risk factor are subject to pending . For more information, please see Note 20—Legal Matters to our consolidated financial statements included in Item 8 of this report. If , these efforts could impact consumers’ usage of our products and decrease our overall payments volume and net revenue, lead to regulatory enforcement and/or that increases our compliance and expenses, and ultimately our business.
We depend on relationships with financial institutions, acquirers, processors, sellers, payment facilitators, ecommerce platforms, fintechs and other third parties.
Our relationships with industry participants are complex and require us to balance the interests of multiple third parties. For instance, we depend significantly on relationships with our financial institution clients and on their relationships with account holders and sellers to provide our products and services, and thereby compete effectively in the marketplace. We offer incentives to sellers, acquirers, ecommerce platforms and processors to encourage routing preference and acceptance growth. We also engage in many payment card co-branding efforts with sellers, who receive incentives from us. As emerging participants such as fintechs enter the payments industry, we engage in discussions to address the role they may play in the ecosystem, whether as, for example, an issuer, seller, ecommerce platform or digital wallet provider. As these and other relationships become more prevalent and take on a greater importance to our business, our success will increasingly depend on our ability to sustain and grow these relationships. In addition, we depend on our clients and third parties, including network partners, vendors and suppliers, to submit, facilitate and process transactions properly, provide various services associated with our payments network on our behalf, and otherwise adhere to our operating rules and applicable laws. As our clients expand their global footprint, their legal and regulatory obligations can become even more complex. From time to time, our relationships may be affected by actions of our clients and industry participants that may materially and impact our business, products or services, and to the extent we or such parties to perform or deliver
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adequate services or comply with regulatory obligations, it may result in negative experiences for account holders or others when using their Visa-branded payment products, which could harm our business and reputation.
Our business could be harmed if we are not able to maintain and enhance our brand, if events occur that have the potential to damage our brand or reputation, or if we experience brand disintermediation.
Our brand is globally recognized and is a key asset of our business. We believe that our clients and their account holders associate our brand with acceptance, security, convenience, speed and reliability. Our success depends in large part on our ability to maintain the value of our brand and reputation of our products and services in the payments ecosystem, elevate the brand through new and existing products, services and partnerships, and uphold our corporate reputation. The popularity of products that we have developed in partnership with technology companies and financial institutions as well as government actions that mandate other networks to process Visa-branded card transactions may have the potential to cause brand disintermediation at the point of sale, in ecommerce and mobile channels, and decrease the presence of our brand. Our brand reputation may also be negatively impacted by a number of factors, including authorization, clearing and settlement service disruptions; data security breaches; compliance failures by Visa, including by our employees, agents, clients, partners or suppliers; failure to meet expectations of our clients, consumers or other stakeholders; negative perception of our industry, the industries of our clients, Visa-accepting sellers, or our clients’ customers and agents, including third-party payments providers; -perceived actions or affiliations by clients, partners or other third parties, such as sponsorship or co-brand partners; and , or activities using our payment products or services, and which we may not always be in a position to detect and/or prevent from occurring over our network. Our brand could also be impacted when our products are used to facilitate payment for legal, but , products and services, including adult content, firearms and gambling activities. Additionally, these risks could be if our financial institution partners and/or sellers to maintain necessary controls to ensure the legality of these transactions, if any legal liability associated with such goods or services is extended to ancillary participants in the value chain like payments networks, or if our network and industry become entangled in political or social debates concerning such legal, but , commerce. If we are to maintain our reputation, the value of our brand may be , which could our relationships with clients, account holders, employees, prospective employees, governments and the public, as well as impact our business.
Global economic, political, market, health and social events or conditions may harm our business.
More than half of our net revenue is earned outside the U.S. In addition, international cross-border transaction revenue represents a significant part of our net revenue and is an important part of our growth strategy. Our net revenue is dependent on the volume and number of payment transactions made by consumers, governments, and businesses whose spending patterns may be affected by economic, political, market, health and social events or conditions. Adverse macroeconomic conditions within the U.S. or internationally, including but not limited to recessions, inflation, rising interest rates, increase in tariff rates, high unemployment, currency fluctuations, actual or anticipated large-scale defaults or failures, rising energy prices, a slowdown or disruption of global trade, trade retaliation, government shutdowns, and reduced consumer, small business, government, and corporate spending, have a direct impact on international commerce. Our business depends on the smooth functioning of international financial systems and the free flow of commerce across borders. Any restrictions on the activities of multinational businesses, to global trade, or in international relations could materially and affect our payments volume, transactions, client relationships, and net revenue. Any events or conditions that the functioning of the financial markets, tighten the credit market, or lead to a of our current credit rating could increase our future borrowing costs and our ability to access the capital and credit markets on terms, which could affect our liquidity and capital resources, or significantly increase our cost of capital. Furthermore, in efforts to deal with macroeconomic conditions, governments may introduce new or additional initiatives or requests to reduce or eliminate payment fees or other costs. In an overall soft global economy, such pricing measures could result in additional financial pressures on our business.
Geopolitical trends towards nationalism, protectionism and restrictive visa requirements, as well as continued activity and uncertainty around economic sanctions, tariffs or trade restrictions, including restrictions on the cross-border flow of data, the potential or threat of retaliatory international and domestic policies and actions, changing perceptions of U.S.-based companies in the regions where we operate or plan to operate, could impact the expansion of our business in certain regions and have resulted in us suspending our operations in other regions. In March 2022, we suspended our operations in Russia due to economic sanctions imposed on Russia, impacting Visa and its clients. As a result, we are no longer generating revenue from domestic and cross-border activities related to Russia. The war in Ukraine and the ongoing instability in the Middle East, and any resulting conflicts in the region,
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could have lasting impacts on the region and its economies, which could adversely affect our business. Changes in geopolitical conditions also increase the security risks described elsewhere in these risk factors.
In addition, outbreaks of illnesses, pandemics like COVID-19, or other local or global health issues, political uncertainties, international hostilities, armed conflicts, wars, civil unrest, climate-related events, including the increasing frequency of extreme weather events, impacts on or failures of the power grid, and natural disasters have to varying degrees negatively impacted our operations, clients, third-party suppliers, activities, and cross-border travel and spend. Any decline in cross-border travel and spend would impact our cross-border volume, the number of cross-border transactions we process and our currency exchange activities, which in turn would reduce our international transaction revenue. These events or conditions could impact our clients as well, and their decisions could reduce the number of cards, accounts, and credit lines of their account holders, and impact overall consumption by consumers and businesses, which would ultimately impact our net revenue. In addition, our clients may implement cost-reduction initiatives that reduce or eliminate marketing budgets, and decrease spending on our value-added services.
Our ability to adjust to evolving corporate responsibility and sustainability (CRS) matters and related regulations could adversely affect our business and financial results or negatively impact our reputation.
We are subject to dynamic, and sometimes conflicting laws, regulations and other directives that govern a wide array of issues, including some that extend beyond our core products and services. This includes, but is not limited to, matters that touch upon sustainability, climate change, people and talent management, equal opportunity and inclusion, supply chain management and human rights. A wide range of stakeholders, including governments, NGOs, consumers, partners, employees and investors, are increasingly attentive to these corporate responsibility matters and are developing expectations which at times may be discordant with each other and with Visa’s existing strategies and disclosure practices. For example, certain regulators have proposed or adopted, or plan to propose or adopt, rules or standards related to these matters that would apply to our business, including the EU’s Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive and the State of California’s legislation requiring broad disclosure of greenhouse gas emissions and other climate-related information.
Our ability to achieve, or make sufficient progress towards any of our CRS objectives is subject to numerous risks, many of which are outside of our control, including the evolving legal environment and regulatory requirements for the tracking and reporting of CRS standards or disclosures and the actions of suppliers, partners, and other third parties. Accordingly, our goals may evolve from time to time, implementation of these goals may require considerable investments, and ultimately, we cannot guarantee our ability to achieve or to make sufficient progress toward, any or all of our publicly stated goals. From time to time, we may restate previously reported data to reflect updated methodologies for reporting our CRS data, an improvement in the availability and quality of data, changing assumptions, changes in the nature and scope of our operations, or other changes in circumstances. This may result in a lack of consistent or meaningful comparative data from period to period or between us and other companies in the same industry. Furthermore, where new laws or regulations are more stringent than current legal or regulatory requirements, we may experience increased compliance and costs to meet such obligations. Because our stakeholders often hold differing views on our CRS-related goals and initiatives and we face directives from U.S. and international regulatory authorities, any , or perceived , to meet these evolving and varied stakeholder expectations and standards may result in attention in the media, reputational impacts, including an perception or of our actual CRS practices, of management’s attention and resources, and proxy fights, among other material impacts on our business. Additionally, the goals or initiatives themselves could potentially subject us to or initiated by government authorities or private actors that our activities related to CRS are anti-competitive, discriminatory or otherwise .
Our indemnification obligation to fund settlement losses of our clients exposes us to significant risk of loss and may reduce our liquidity.
We indemnify issuers and acquirers for settlement losses they may suffer due to the failure of another issuer or acquirer to honor its settlement obligations in accordance with the Visa operating rules. This indemnification creates settlement risk for us due to the timing difference between the date of a payment transaction and the date of subsequent settlement. Our indemnification exposure is generally limited to the amount of unsettled Visa card payment transactions at any point in time and any subsequent amounts that may fall due to adjustments for previously processed transactions. In addition, changes in the credit standing of our clients or concurrent settlement failures or insolvencies involving more than one of our largest clients, several of our smaller clients, significant sponsor banks through which non-financial institutions participate in the Visa network, or systemic operational
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failures could expose us to liquidity risk, and negatively impact our financial position. In certain instances, we may indemnify issuers or acquirers in situations in which a transaction is not processed by our system. Even if we have sufficient liquidity to cover a settlement failure or insolvency, we may be unable to recover the amount of such payment. This could expose us to significant losses and harm our business. See Note 12—Settlement Guarantee Management to our consolidated financial statements included in Item 8 of this report.
Technology and Cybersecurity Risks
Failure to anticipate, adapt to, or keep pace with, new technologies in the payments industry could harm our business and impact future growth.
The global payments industry is undergoing significant and rapid technological change, including increased proliferation of mobile and other proximity and in-app payment technologies, ecommerce, tokenization, cryptocurrencies, distributed ledger and blockchain technologies, cloud-based encryption and authorization, and new authentication technologies such as biometrics, FIDO 2.0, 3D Secure 2.0 and dynamic cardholder verification values or dCVV2. As a result, we expect new services and technologies to continue to emerge and evolve. For example, GenAI and agentic commerce solutions have emerged as an opportunity for Visa, its clients, suppliers, sellers and partners to innovate more quickly and better serve consumers. Rapid adoption and novel uses of GenAI and agentic commerce across the marketplace may also introduce unique and unpredictable security risks to our systems, information, and the payments ecosystem. In addition to our own initiatives and innovations, we work closely with third parties, including potential competitors, for the development of, and access to, new technologies. It is difficult, however, to predict which technological developments or innovations will become widely adopted and how those technologies may be regulated. Moreover, some of the new technologies could be subject to intellectual property-related lawsuits or , potentially impacting our development efforts and/or requiring us to obtain licenses, implement design changes or our use. If we or our partners to adapt and keep pace with new technologies in the payments space in a timely manner, it could our ability to compete, decrease the value of our products and services to our clients, impact our intellectual property or licensing rights, our business and impact our future growth.
A disruption, failure or breach of our networks or systems, including as a result of cyber incidents or attacks, could harm our business.
Our cybersecurity and processing systems, as well as those of financial institutions, sellers and third-party service providers, have experienced and may continue to experience errors, interruptions, delays or damage from a number of causes including but not limited to, hardware, software and network failures, computer viruses, ransomware, malware or other destructive software, use of AI technologies by bad actors, internal design, manual or user errors, advanced or persistent cyber attacks, social engineering threats, such as phishing or deepfake schemes, including those using synthetic media, insider threats, terrorism, political tensions, war or other military conflicts, or civil unrest, security breaches of our physical premises, workplace or , events, natural , weather conditions and other effects from climate change. Because the tactics, techniques and procedures used to obtain access, or to disable or systems change frequently, have become increasingly more complex and sophisticated, and may be to detect for periods of time, we may not anticipate these acts or respond or timely. For example, have increasingly demonstrated advanced capabilities, such as use of zero-day , and rapid integration of new technology such as GenAI are being used by actors to create sophisticated attacks that are increasingly automated, targeted and more to . Our own use and deployment of GenAI technologies could expand our cybersecurity attack surface, increasing exposure to , , transactions and other . In addition, third-party suppliers of hardware and infrastructure that operate our data centers and support employee productivity could be impacted by supply chain , such as manufacturing, shipping , and service due to cyber attacks. An extended supply chain or service could also impact processing or delivery of technology services. Moreover, due to the interconnectivity and complexity of information systems and their reliance on common systems, software and vendors, or have had, and will likely continue to have, wide-reaching consequences, including the potential to the overall financial system and other key systems in the global economy. Such attacks and have resulted and may continue to result in activity and financial to Visa’s financial institution clients, sellers or third-party service providers.
Our visibility and role in the global payments industry also puts our company at a greater risk of being targeted by hackers. In the normal course of our business, we have been the target of malicious cyber activity. We have been, and may continue to be, impacted by attacks and data security breaches of financial institutions, sellers, and
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third-party service providers. We are also aware of instances where governments have directed or sponsored attacks against some of our financial institution clients, and other instances where sellers and issuers have encountered substantial data security breaches affecting their customers, some of whom were Visa account holders. Given the increase in payments through ecommerce, social media and mobile channels, we continue to see increased cyber and payment fraud activity, as cybercriminals attempt phishing and social engineering scams, distributed denial of service attacks and other disruptive actions.
The security measures and procedures we, our financial institution and seller clients, other sellers and third-party service providers in the payments ecosystem have in place to protect sensitive consumer data and other information may not be implemented effectively, may differ in scope and complexity across different ecosystem participants, or may not be successful or sufficient to counter all data security breaches, cyber incidents and attacks or system failures. In some cases, the mitigation efforts may be dependent on third parties who may not follow the required contractual standards, who may not be able to timely patch vulnerabilities or fix security defects, or whose hardware, software or network services may be subject to error, defect, delay, outage or lack appropriate security measures to prevent breaches or data exfiltration . Cyber and attacks can have cascading impacts that unfold with increasing speed across our internal networks and systems and those of our partners and clients.
Furthermore, as a global financial services company, Visa is increasingly subject to complex, varied, and rapidly evolving cybersecurity regulations and cyber incident reporting requirements across numerous jurisdictions. For example, governments around the world have recently passed or are considering new critical infrastructure cybersecurity laws and regulations, some of which may apply to Visa. With the often short timeframes required for cyber incident reporting, there is a risk that Visa or its third-party service providers will fail to meet the reporting deadlines for any given incident. It may take considerable time for us to investigate and evaluate the full impact of cyber incidents, particularly for sophisticated attacks. These factors may inhibit our ability to provide prompt, full and reliable information about the cyber incident to our clients, partners and regulators, as well as to the public. In the event we are found to be out of compliance, we could be subject to monetary damages, civil and criminal , , and proceedings, and to our reputation and brand.
Any of these events, individually or in the aggregate, could significantly disrupt our operations; impact the availability and integrity of our systems, applications, or the systems of our third-party service providers; result in the unauthorized disclosure, release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary, sensitive and personal information (including account data information) or data security compromises; impact our clients and consumers; increase the risk of fraudulent transactions; damage our reputation and brand; result in litigation or claims, violations of applicable privacy and other laws, and increased regulatory review or scrutiny, investigations, actions, fines or penalties; result in or changes to our business practices; decrease the overall use and acceptance of our products; decrease our volume, net revenue and future growth prospects; financial to Visa’s financial institution clients, sellers or third-party service providers, and be , time consuming and to remedy. There can be no assurance that our efforts will prevent all such . In the event of or to our business due to these occurrences, we may not be to and quickly recover all of our business functions, assets, and data through our business continuity program and we may not be to notify affected third parties when appropriate. Furthermore, while we maintain insurance, our coverage may not sufficiently cover all types of or that may arise. In addition, in the case of any cyber-attack or other security information or security or technology arising from third-party systems impacting us, any third-party indemnification may not be applicable or sufficient to address the impact of such .
Structural and Organizational Risks
We may not achieve the anticipated benefits of our acquisitions, joint ventures or strategic investments, and may face risks and uncertainties as a result.
As part of our overall business strategy, we make acquisitions and strategic investments, and enter into joint ventures. We may not achieve the anticipated benefits of our current and future acquisitions, joint ventures or strategic investments and they may involve significant risks and uncertainties, including:
• disruption to our ongoing business, including diversion of resources and management’s attention from our existing business;
• greater than expected investment of resources or operating expenses;
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• failure to adequately develop or integrate our acquired entities or joint ventures;
• the data security, cybersecurity and operational resilience posture of our acquired entities, joint ventures or companies we invest in or partner with, may not be adequate and may be more susceptible to a system failure, service disruption or cyber incident or attack;
• difficulty, expense or failure of implementing controls, procedures and policies at our acquired entities or joint ventures;
• challenges of integrating new employees, business cultures, business systems and technologies;
• failure to retain employees, clients or partners of our acquired entities or joint ventures;
• in the case of foreign acquisitions, risks related to the integration of operations across different cultures and languages;
• disruptions, costs, liabilities, judgments, settlements or business pressures resulting from litigation matters, investigations or legal proceedings involving our acquisitions, joint ventures or strategic investments;
• the inability to pursue aspects of our acquisitions or joint ventures due to outcomes in litigation matters, investigations or legal proceedings;
• failure to obtain the necessary government or other approvals at all, on a timely basis or without the imposition of burdensome conditions or restrictions;
• the economic, political, regulatory and compliance risks associated with our acquisitions, joint ventures or strategic investments, including when entering into a new business or operating in new regions or countries. For more information on regulatory risks, please see Item 1—Government Regulation and Item 1A—Regulatory Risks above;
• discovery of unidentified issues and related liabilities after our acquisitions, joint ventures or investments were made;
• failure to mitigate the deficiencies and liabilities of our acquired entities or joint ventures;
• dilutive issuance of equity securities, if new securities are issued;
• the incurrence of debt;
• negative impact on our financial position and/or statement of operations; and
• anticipated benefits, synergies or value of our acquisitions, joint ventures or investments not materializing or taking longer than expected to materialize.
In addition, we may pursue additional strategic objectives, such as additional exchange offers, which can divert resources and management’s attention from our existing business and, if unsuccessful, may harm our business and reputation.
We may be unable to attract, hire and retain a highly qualified workforce, including key management.
The talents and efforts of our employees, particularly our key management, are vital to our success. The market for highly skilled workers and leaders in our industry, especially in fintech, technology, AI, cybersecurity and other specialized areas, is extremely competitive. Our management team has significant industry experience and would be difficult to replace. We may be unable to retain them or to attract, hire or retain other highly qualified employees, particularly if we do not offer employment terms that are competitive with the rest of the labor market. Ongoing changes in laws and policies regarding immigration, travel and work authorizations have made it more difficult for employees to work in, or transfer among, jurisdictions in which we have operations and could continue to impair our ability to attract, hire and retain qualified employees. Failure to attract, hire, develop, motivate and retain highly qualified employee talent, especially in light of changing worker expectations and talent marketplace variability; to adequately address potential increased scrutiny of our talent-related programs and initiatives; to develop and implement an adequate succession plan for the management team; or to maintain our corporate culture of fostering and could impact our workforce development goals, impact our ability to our business objectives, and affect our business and our future .
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The conversions of our class B-1, B-2 and class C common stock or series A, B and C preferred stock into shares of class A common stock would result in voting dilution to, and could adversely impact the market price of our existing class A common stock.
The market price of our class A common stock could fall as a result of many factors. The value of our class B-1, B-2 and C common stock and series A, B and C preferred stock is tied to the value of the class A common stock. Under our U.S. retrospective responsibility plan, upon final resolution of our U.S. covered litigation, all class B-1 and B-2 common stock will become convertible into class A common stock. Under our Europe retrospective responsibility plan, Visa will continue to release value from the series B and series C preferred stock in stages based on developments in current and potential litigation. The series B and series C preferred stock will become fully convertible to series A preferred stock or class A common stock no later than 2028 (subject to a holdback to cover any pending claims). Conversion of our class B-1, B-2 and C common stock into class A common stock, or our series A, B and C preferred stock into class A common stock, would increase the amount of class A common stock outstanding, which would dilute the voting power of existing class A common shareholders. In addition, the sale of significant portions of converted class A common stock could adversely impact the market price of our existing class A common stock.
Holders of our class B-1, B-2 and C common stock and series A, B and C preferred stock may have different interests than our class A common shareholders concerning certain significant transactions.
Although their voting rights are limited, holders of our class B-1, B-2 and C common stock and, in certain specified circumstances, holders of our series A, B and C preferred stock, can vote on certain significant transactions. With respect to our class B-1, B-2 and C common stock, these transactions include a proposed consolidation or merger, a decision to exit our core payments business and any other vote required under Delaware law. With respect to our series A, B and C preferred stock, voting rights are limited to proposed consolidations or mergers in which holders of the series A, B and C preferred stock would receive shares of stock or other equity securities with preferences, rights and privileges that are not substantially identical to the preferences, rights and privileges of the applicable series of preferred stock; or, in the case of series B and C preferred stock, holders would receive securities, cash or other property that is different from what our class A common shareholders would receive. Because the holders of classes of capital stock other than class A common stock are our current and former financial institution clients, they may have interests that diverge from our class A common shareholders. As a result, the holders of these classes of capital stock may not have the same incentive to approve a corporate action that may be favorable to the holders of class A common stock, and their interests may otherwise conflict with interests of our class A common shareholders.
Delaware law, provisions in our certificate of incorporation and bylaws, and our capital structure could make a merger, takeover attempt or change in control difficult.
Provisions contained in our certificate of incorporation and bylaws and our capital structure could delay or prevent a merger, takeover attempt or change in control that our shareholders may consider favorable. For example, except for limited exceptions: (1) no person may beneficially own more than 15 percent of our class A common stock (or 15 percent of our total outstanding common stock on an as-converted basis), unless our board of directors approves the acquisition of such shares in advance; (2) no competitor or an affiliate of a competitor may hold more than 5 percent of our total outstanding common stock on an as-converted basis; (3) the affirmative votes of the class B-1, B-2 and C common stock and series A, B and C preferred stock are required for certain types of consolidations or mergers; (4) our shareholders may only take action during a shareholders’ meeting and may not act by written consent; and (5) only our board of directors, Chair, or CEO or any shareholders who have owned continuously for at least one year not less than 15 percent of the voting power of all shares of class A common stock outstanding may call a special meeting of shareholders.
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