VISA the recursive acronym of a brand of credit card and debit card operated by the Visa International Service Association of San Francisco, California, USA, an economic joint venture of 21,000 financial institutions that issue and market Visa products.
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Meanwhile, banks outside of the United States also formed their own networks of licensees of the BankAmericard system. Each of those countries used the blue-white-gold motif used by BankAmericard, but gave the card its own name within each country. These include:
In 1970, Bank of America gave up control of the BankAmericard program. The various BankAmericard issuer banks took control of the program, creating National BankAmericard Inc. (NBI), an independent non-stock corporation which would be in charge of managing, promoting and developing the BankAmericard system within the United States, although Bank of America continued to issue and support the international licenses themselves. By 1972, licenses had been granted in 15 countries. In 1974, IBANCO, a multinational member corporation, was founded in order to manage the international BankAmericard program.
In 1976, the directors of IBANCO determined that bringing the various international networks together into a single network with a single name internationally would be in the best interests of the corporation; however in many countries, there was still reluctance to issue a card associated with Bank of America, even though the association was entirely nominal in nature. For this reason, in 1977 BankAmericard became the Visa card, retaining its distinctive blue, white and gold flag. NBI became Visa U.S.A., and IBANCO became Visa International.
The term Visa was conceived by the company's founder, Dee Hock. He believed that the word was instantly recognizable in many languages in many countries, and that it also denoted universal acceptance. Nowadays, the term VISA has become a recursive backronym for Visa International Service Association.
Visa offers through its issuing members the following types of cards:
Visa operates the PLUS ATM network and the Interlink EFTPOS network, which facilitate the "debit" protocol used with debit cards and prepaid cards.
Visa's corporate structure is regionally de-centralised, which is unique in the payment scheme industry.
Legally, Visa comprises four non-stock, separately incorporated companies that employ 6000 people worldwide: Visa International Service Association ("VISA"), the worldwide parent entity; Visa U.S.A. Inc.; Visa Canada Association; and Visa Europe Ltd. The latter three separately incorporated regions have the status of group members of Visa International Service Association, whereas the unincorporated regions (Visa Latin America [LAC], Visa Asia Pacific and Visa Central and Eastern Europe, Middle East and Africa [CEMEA]) are divisions within VISA.
The de-centralised nature of Visa allows it to respond to member needs and adapt the Visa International rules and products to suit the individual needs of their regional members. Regional banks therefore have a strong stake in the governance of their region.
The Visa International Board has the dual responsibilities of:
The Visa Association is not a profit- driven organisation and the four companies that make up Visa issue no cards and make no loans. Members (about 21,000 worldwide) fund day to day management and make the investments needed to maintain and develop the Visa payment system. Fees are levied according to the following formula:
Operating and Marketing costs + Investments in new products, platforms and systems + Increase in Reserves = Members annual fees
On October 11, 2006, VISA announced it will be eliminating its membership structure in most parts of the world, instead becoming a publicly-traded company. [2] This is being done in response to a similar move by MasterCard.
Even though the service is offered by thousands of banks, the end result is standardized for consumers by the Visa International Association. Two protocols are used, depending upon the type of card marketed, often called "credit" and "debit".
The debit protocol involves using the card at a point-of-sale terminal (POS) or ATM where the PLUS or Interlink logo is shown, with a Visa card that has the PLUS or Interlink logo on the back of the card. A PIN (personal identification number, known by its acronym) is used to identify the cardholder. The money is deducted from the attached checking account or prepaid account (which is similar with no paper check-writing capability) or, more commonly, from a current account).
The credit protocol involves using the card at a POS or a banking center where the Visa logo is shown. The cardholder's signature is generally used for identification, usually together with the cardholder's civic registration number or ID card/passport number. Holders of any Visa card may use the credit protocol even if the card is marketed as a debit card or prepaid card (basically since it has the Visa logo on the front of the card). One source of confusion is the merchant may ask "debit or credit?" even though the words are not defined that way in most dictionaries and even though the card may say "debit card" right on it, and still be available for "credit" transactions. In this way it is a misnomer that the credit cards are only for loans or that the debit protocol is only for checking accounts. Banks actually choose various backend methods of handling the accounts, making "debit" a generic synonym for "Plus/Interlink" (and the equivalent competitive networks), and "credit" a generic synonym for "Visa" (and MasterCard, American Express, Discover Card, which have similar systems).
The names of the two protocols use the arbitrary "debit" and "credit" from accounting meaning left and right, and they originally had the meanings (and still do to many people) that with credit the cardholder pays later for the purchase, and with debit the cardholder pays immediately. The truth today is that they are merely two different protocols, with which there is still considerable confusion, and even lawsuits over the definitions of products for purposes of antitrust law. Banks can use independent methods to actually recover the money paid for purchases, regardless of which protocol is used. For example, the debit protocol can be used to incur a debt to the bank, and the credit protocol can be used to take money from a checking account.
Some outstanding rules of the association include rules about how a cardholder must be identified for security, how transactions may be denied by the bank and how banks may cooperate for fraud prevention, and how to keep that identification and fraud protection standard and non-discriminatory. One notable rule is that no merchant accepting Visa, whether a mom-and-pop store or a government body like a university, may estabish any minimum purchase, maximum purchase, or surcharge for any Visa (credit) transaction (except for Australian markets where recent changes by the Reserve Bank have allowed retailers to apply a surcharge on any credit card transaction, VISA or otherwise). They can establish surcharges for debit. Enforcement of the rules, however, is by individual banks, and they may or may not know the rules well. So, a restaurant may charge a surcharge or minimum, which may at first be upheld by the bank in many cases, unless the consumer knows the association rules well. Other rules govern what creates an enforcable proof of authorization by the cardholder (starting from a signature or PIN), and continuing to lower levels of proof such as a shipment accepted or a statement by the consumer.
Recent complications include the addition of exceptions for non-signed purchases by telephone or on the Internet, and an additional security system called "Verified by Visa" for purchases on the internet.
Some merchants, primarily small businesses, still systematically establish minimum purchases or surcharges and get away with it because individual consumers often do not care enough about the small amount, or are unfamiliar with the rules. In some countries this is backed by legislation, eg. in the UK and Australia a retailer is perfectly within his/her rights to impose a surcharge for paying by credit card, and the bank/payment system cannot forbid retailers from so doing. Others deny use of the system to cardholders with foreign banks. If these are non-signed transactions, the discretion may be allowed by the merchant (for example, the merchant may say they only accept phone orders on Visa cards from domestic banks); however, if it is a signed or PIN-based transaction, then it is probably against the rules. A large and growing problem exists with account balance ownership - the cardholder's right to be able to keep track of his balance. Automatic charges based on complex if-then statements and contingencies, such as deep contract clauses which grant a merchant the right to collect any due amounts through a Visa transaction without any signature, the association's heretofore refusal to grant future prices on foreign exchange rates (they could be published on the internet from a newspaper standard of the previous business day, or they could be ultimately calculated on the receipt itself) and merchant charges for "any denial" of a transaction, contribute to this lack of ownership. Innovations to solve this problem include the dropping of over-the-limit fees (such as with Citibank), and a standard system of requiring check-type information for every transaction: name of payee, amount, date, permission of cardholder. A similar system is needed for automatic charges by merchants.
The blue and gold in Visa's logo were originally chosen to represent the blue sky and golden-colored hills of California, where Bank of America was founded.
The Visa Flag Symbol is used by merchants to denote the acceptance of Visa credit cards.
JPMorgan Chase became the world's largest Visa card issuer after acquiring Bank One, which was the largest Visa card issuer.
Since the 1988 Calgary Winter Olympic Games, as a worldwide Olympic partner, Visa is the only form of electronic payment accepted at all venues and Olympic-related transactions. Its current contract with the IOC as the exclusive payment card will continue through 2012.
VISA is currently the shirt sponsor for the Argentina national rugby union team, nicknamed the Pumas. Also, VISA sponsors the Copa Libertadores and the Copa Suramericana, the most important football club tournaments in South America.
Until 2005, VISA was the exclusive sponsor of the Triple Crown thoroughbred tournament.
On October 11, 2006, Visa announced that some of its businesses would be merged and become a publicly traded company, Visa Inc.[4][5]
As of August 2005, the following banks are represented on Visa's U.S.A. board of directors:
de:VISA International Service Association es:Visa (tarjeta de crédito) fr:VISA International Service Association nl:VISA (creditcard) ja:ビザ no:Visa pl:VISA ru:VISA (платёжная система) fi:VISA sv:VISA vi:VISA (thẻ tín dụng) zh:威士
