Who is Visa?

Published by Thomas Herold in Banking, Corporate Finance, Investments

'Visa' is explained in detail and with examples in the Banking edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.

Visa Inc. proves to be an enormous American-based multinational financial services operation which is headquartered in Foster City, California. The corporation is a successor company to a pioneer organization in the world of all-acceptance credit cards. Its electronic fund processing and transference occurs all over the inhabited world, typically through the unmatched Visa-branded debit cards and credit cards.

Interestingly enough, unlike many of its smaller competitors, Visa does not issue any of its own cards, establish fees or interest rates for consumers or businesses, or even offer credit to anyone. Instead they simply deliver payment products which are Visa branded to financial institutions that then brand their own credit cards. This allows the third party financial institutions and banks to provide debit cards, credit cards, pre-paid credit cards, and cash accessing programs to their own various clients.

Nielson Report issued a 2015 report that followed the credit card industry. They determined that Visa Inc.’s worldwide network, called Visa Net, handled an incredible 100 billion transactions that year. These had a volume for the year of $6.8 trillion.

Visa maintains operations on every inhabited continent. It is accepted on all 6 continents and most inhabited islands of the world. Their impressive volumes of transactions process through Visa Net. They have two separate fortress-like secure facilities that process these global operations and transactions. These are the Operations Center East, found near Ashburn, Virginia; and the Operations Center Central, found in the area of Highlands Ranch, Colorado. Each of these two key data centers for world finance is massively fortified to protect against any combination of terrorism, crime, cyber-crime, and natural disasters. They are able to function independently of one another. The Visa Inc. company is even able to run them from externally placed utilities in an emergency.

Both of the centers are capable of running as many as 30,000 different transactions at the same time. They can process a staggering 100 billion computations per second. Naturally cyber-security and fraud are major issues to these two financial data center of the world. To this effect, each processed transaction is run against 500 independent variables. Among these are 100 different fraud-detection protocols. Examples of these are the individual spending patterns of the customer involved, the location of the merchant running the transaction, and the geographical location of the customer in question. Only after the 500 variables and 100 fraud protocols pass muster will any single transaction be accepted. This is an unparalleled level of financial security in the realm of credit and debit cards.

The name Visa came from the mind of corporate founder Dee Hock. Hock felt that the word Visa could be recognized around the globe instantly in a number of different languages throughout numerous countries. He believed it gave a connotation of universal acceptance as well.

Back on October 11th of 2006, the company Visa declared that it would merge businesses and transform into a publically held company via an initial public offering. For the restructuring to work as an IPO, Visa decided to merge several of its sister outfits Visa USA, Visa International, and Visa Canada into a single company. Meanwhile, they spun off Visa of Western Europe into an individual standalone company. Its member banks own this European operation and also gained a minority stake in the newly-issued shares of Visa Inc.

The IPO deal was so massive that over 35 different investment banks worked on the offering, many of them as underwriters of this huge Initial Public Offering. This IPO became the single biggest Initial Public Offering in the history of the United States when it initially raised $17.9 billion at once. When the underwriters of the IPO decided to exercise overallotment options, they bought another 40.6 million shares in total. This increased the aggregate number of IPO shares to an astonishing 447 million. The final proceeds amount from the IPO then amounted to $19.1 billion. Today Visa trades on the prestigious New York Stock Exchange NYSE with the stock symbol of V.

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The term 'Visa' is included in the Banking edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.