Visa Inc. is shaking things up. During the company’s second-quarter earnings call the CEO Charlie Scharf told analysts about the company’s upcoming changes.
To begin, Visa is lowering or eliminating several of its merchant acquirer fees for those who generate less than $15,000 in gross annual Visa sales. Also, the company will eliminate at least half of its operating rules.
Additionally, Visa is pushing for industry collaboration in regard to security and the transition to the use of EMV (Europay, MasterCard, and Visa). Over the next year, the company will also likely begin tokenization services with its issuing, processing, and acquiring partners.
Another segment of the call was focused on the current political situation in Russia. Visa executives are anticipating the fallout from Russia’s standoff regarding Ukraine.
The United States, having established economic sanctions against Russia, is forcing Visa to block transactions from two Russian banks. While those two banks only represent 1% of Visa’s volume in Russia, the company has 100 million cards in Russia.
The company will comply with any sanctions or laws in the U.S. though currently the card company still works with other clients in the affected area. Russian President Putin has expressed that by complying with the U.S. sanctions, card companies such as Visa are undermining trust among Russian citizens.
Meanwhile, Russian leaders have begun to initiate changes that could create problems for Visa. Domestic data processing within Russia could be impacted. All this happens as Russians work toward implementing a settlement center wholly owned by the Central Bank of Russia. Russia could also impose fines on foreign payment system providers.
While this news hasn’t been positive and Visa will reconsider its domestic processing opportunity in Russia, the company still hopes to be a part of the growth of electronic payments within Russia. If Russia decided to launch its own national payment system, it would be difficult for major card brands to compete.
Aside from these issues in Russia, Visa also plans to expand in Japan and has acquired 100% of GP Network Corp. The company specializing in front-end data capture and network services for credit card transactions also deals with the administration and maintenance of stored data in merchant terminals.
The company has posted good second-quarter results with U.S. debit revenue rising 6.4% to $408 billion and U.S. credit revenue going up by 10.2% to $281 billion from the previous year. Internationally, debit rose 6.4% to $574 billion, and international credit rose 4.9% to $463 billion from the previous year.
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