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3.6.2. Operations

Visa offers through its issuing members the following types of cards:
• Debit cards (pay from a checking / savings account)
• Credit cards (pay monthly payments with interest)
• Prepaid cards (pay from a cash account that has no checkwriting privileges)
Visa operates the PLUS automated teller machine network and the Interlink EFTPOS point-of-sale network, which facilitate the "debit" protocol used with debit cards and prepaid cards. Corporate structure

Prior to October 3, 2007, Visa comprised four non-stock, separately incorporated companies that employed 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 had the status of group members of Visa International Service Association. The unincorporated regions (Visa Latin America [LAC], Visa Asia Pacific and Visa Central and Eastern Europe, Middle East and Africa [CEMEA]) were divisions within VISA. IPO and restructuring

On October 11, 2006, Visa announced that some of its businesses would be merged and become a publicly traded company, Visa Inc. Under the IPO restructuring, Visa Canada, Visa International, and Visa U.S.A. were merged into the new public company. Visa's Western Europe operation became a separate company, owned by its member banks who will also have a minority stake in Visa Inc. In total, more than 35 investment banks participated in the deal in several capacities, most notably as underwriters. The law firm Davis Polk & Wardwell served as counsel to the underwriters, while the law firm White & Case LLP served as counsel to Visa Inc. in the global restructuring process.

On October 3, 2007, Visa completed its corporate restructuring with the formation of Visa Inc. The new company was the first step towards Visa's IPO. The second step came on November 9, 2007, when the new Visa Inc. submitted its $10 billion IPO filing with the U.S. Securities and Exchange Commission (SEC). On February 25, 2008, Visa announced it would go ahead with an IPO of half its shares. The IPO took place on March 18, 2008. Visa sold 406 million shares at US$44 per share ($2 above the high end of the expected $37-42 pricing range), raising US$17.9 billion in the largest initial public offering in U.S. history. On March 20, 2008, the IPO underwriters (including JP Morgan, Goldman, Sachs & Co., Banc of America Securities LLC, Citi, HSBC, Merrill Lynch & Co., UBS Investment Bank and Wachovia Securities) exercised their overallotment option, purchasing an additional 40.6 million shares, bringing Visa's total IPO share count to 446.6 million, and bringing the total proceeds to US$19.1 billion. Visa now trades under the ticker symbol "V" on the New York Stock Exchange. Association rules

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 establish any minimum purchase, maximum purchase, or surcharge for any Visa (credit) transaction. They may establish surcharges for debit transactions (although lower fees on debit card transactions means that merchants typically encourage use of debit cards by surcharging more for credit cards, where allowed). However enforcement is by individual banks, who may not know the rules well; so a bank may initially uphold a surcharge or minimum, unless the consumer knows the association rules well. Other rules govern what creates an enforceable 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. Some countries have banned the no-surcharge rule, most notably the UK and Australia and retailers in those countries may apply surcharges to any credit-card transaction, Visa or otherwise. However, in the UK, this surcharge may not exceed the fee charged by the issuer of the credit card to the merchant, nor are merchants required to charge different prices for credit card transactions.

In ten US states, surcharges for the use of a credit card are forbidden by law (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas) but a discount for cash is permitted under specific rules. New services, security

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.

In September 2007, Visa introduced Visa payWave, a contact-less technology feature that allows cardholders to wave their card in front of contact-less payment terminals without the need to physically swipe or insert the card into a point-of-sale device.

In Europe, Visa has introduced the V PAY solution for chip-only, PIN-only cards.



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