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Visa Inc.
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== Risk == '''Regulatory risk:''' ''1.Evolving business regulations:'' Visa is subject to a number of regulatory risks including the anti-corruption and anti money laundering laws and regulations such as the U.S. Foreign Corrupt Practices Act (FCPA), the UK Bribery Act, the U.S. Bank Secrecy Act and the economic and trade sanctions programs administered by the Office of Foreign Assets Control (OFAC), that prohibit the company from offering improper payments to foreign government officials and political figures and serving population that is domiciled in countries subject OFAC trade sanctions (currently, Cuba, Iran, North Korea, Syria and Crimea). Additionally, certain governments, including China, India, Indonesia, Thailand and Vietnam, have taken actions to promote domestic payments systems by imposing regulations that favour domestic providers, local ownership requirements on processors, require data localization and mandate that domestic processing be done in that country Many jurisdictions have adopted regulations that require payment system participants to monitor, identify, filter, restrict or take other actions with regard to certain types of payment transactions on the Internet, such as gambling, digital currencies, the purchase of cigarettes or alcohol and other controversial transaction types. As well, there are an increasing number of jurisdictions around the world that regulate or influence debit and credit interchange reimbursement rates in their regions. Complying with these and other regulations increases Visa costs and reduces the company revenue opportunities. '''Business Risk''' ''1. Competition'' Visa is facing an intense competition as technology evolves and new payment methods emerge. Some of the competitors include 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. In some cases, the competitors have the support of government mandates that limit or otherwise hinder Visa's ability to compete for transactions within certain countries and regions. The company revenues and profits are dependent on the client and merchant base, which may be costly to win, retain or develop given the competitive landscape. ''2. Macroeconomic conditions'' Additionally, international cross-border transaction revenues represent a significant part of the company revenue and are an important part of the growth strategy. Based on the annual report more than half of the net revenues are earned outside the U.S. Revenues are 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, high unemployment, currency fluctuations, actual or anticipated large-scale defaults or failures, rising energy prices, or a slowdown of global trade, and reduced consumer, small business, government, and corporate spending, have a direct impact on our volumes, transactions and revenues. Covid-19 pandemic and ongoing Ukraine war as an example. '''Litigation Risk:''' Visa Inc can be adversely affected by the outcome of litigation or investigations. The company is involved in numerous litigation matters, investigations, and 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 actions are inherently uncertain, expensive and disruptive to Visa operations and the liabilities could materially harm the financial condition or cash flows, or even cause insolvency.
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