Visa Inc. (V) Narrative

Fiscal year ends September 30. This narrative covers the quarter ended March 31, 2026 (fiscal 2026 second quarter) and the fiscal year ended September 30, 2025.

Primary sources:

• Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (accession 0001403161-25-000089)
• Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (accession 0001403161-26-000079)
• Current Reports on Form 8-K filed during and after the quarter, cited individually below

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Business

From the FY2025 Form 10-K, accession 0001403161-25-000089.

What Visa does

Visa is a global payments technology company. It provides transaction processing services, primarily authorization, clearing and settlement, among consumers, issuing and acquiring financial institutions, and sellers, in what the company calls the "four-party" model. That model has been broadened to include digital banks, digital wallets, fintechs, governments and NGOs. The core asset is VisaNet, Visa's proprietary transaction processing network, reaching more than 200 countries and territories.

Visa is explicit that it is not a financial institution: it does not issue cards, extend credit, or set rates and fees for account holders, and it does not earn revenue from or bear credit risk on those activities. Account holder and seller relationships generally belong to and are managed by Visa's financial institution clients.

Interchange reimbursement fees (IRFs) are paid by acquirers to issuers (the reverse for certain transactions such as ATM). Visa sets default IRFs that apply absent other settlement terms, but sets them independently from the revenue it receives from issuers and acquirers, so Visa's fees are not derived from IRFs or from the merchant discount rate (MDR) that acquirers charge sellers. IRFs nonetheless matter enormously to Visa because they are a competitive lever determining transaction volume, and they are the subject of the antitrust litigation and regulation described later.

Scale (fiscal 2025)

• 329 billion payments and cash transactions carrying the Visa brand were processed by Visa or other networks, an average of 901 million per day. Of those, 258 billion were processed by Visa.
• Total payments and cash volume of $17 trillion.
• Nearly 5 billion payment credentials issued, usable at more than 175 million merchant locations.
• Nearly 14,500 financial institution clients.
• Network connectivity to approximately 12 billion cards, bank accounts and digital wallets.
• More than 16 billion tokens provisioned through Visa Token Service as of September 30, 2025.
• Approximately 34,100 employees (up 8% from ~31,600 in fiscal 2024), located in 86 countries and territories, more than 60% outside the U.S.; rolling 12-month voluntary attrition approximately 6%.

Visa reports one operating segment, Payment Services. The chief operating decision maker (the CEO) manages the business as a single global business using consolidated net income.

How Visa makes money

Net revenue comes in four gross lines, less client incentives:

• Service revenue, earned for services provided in support of client usage of Visa products; principally driven by the prior quarter's nominal payments volume.
• Data processing revenue, authorization, clearing, settlement, network access and other maintenance and support services; principally driven by processed transactions.
• International transaction revenue, cross-border transaction processing and currency conversion.
• Other revenue, value-added services, license fees, certain card benefits and other.
• Client incentives, long-term contractual incentives to financial institutions, sellers and partners, recorded as a reduction of revenue.

Visa also processes non-Visa-branded card transactions via gateway routing services, sometimes earning data processing revenue only.

Strategy: three growth pillars

1. Consumer Payments (CP). Visa sizes addressable consumer spend at more than $40 trillion annually, excluding Russia and China. Core products are credit, debit and prepaid. Key enablers Visa is investing in:

• Tap to Everything. Tap to Pay is 79% of face-to-face transactions globally and 66% in the U.S. in fiscal 2025. More than 1,000 contactless public transport projects; more than 2.4 billion contactless transit transactions in fiscal 2025. Tap to Phone passed 20 million transacting devices. Tap to Add Card is live for more than 1.4 billion Visa credit and debit cards with more than 600 participating issuers. Tap to P2P and a Tap to Confirm pilot round out the set.
• Token technology. Visa Token Service replaces account numbers with tokens; the Cloud Token Framework extends tokens to wallets, ecommerce platforms and IoT; Visa Payment Passkey links the token to a device passkey; Click to Pay simplifies ecommerce checkout.
• Cross-border. Expanding travel corridors, acceptance, multi-currency credentials and authorization performance.
• Affluent/premium. The Infinite brand and experiential benefits; affluent cardholders generate materially higher cross-border, credit and ecommerce spend per cardholder than the average Visa cardholder.
• Credit. Dual-message technology; Visa Flex Credential (a single credential switching between funding sources) had more than 20 signed clients in more than 20 countries as of September 30, 2025. Visa notes that card-linked credit penetration of consumer spending outside the U.S. is less than half the U.S. level.
• Reach beyond cards. Visa Pay (launched 2025) connects digital wallets to Visa's network; Tink (acquired 2022) provides open banking and account-to-account (A2A) data and payment initiation in Europe and Latin America; Visa A2A launched in the UK in fiscal 2025.

2. Commercial & Money Movement Solutions (CMS). Addresses P2P, B2C, B2B and G2C flows, roughly $200 trillion of annual payment flows excluding Russia and China.

• Visa Commercial Solutions targets approximately $35 trillion of annual B2B opportunity via small business, corporate, purchasing and virtual cards.
• Visa Direct is the money movement platform, built from Visa's own network plus acquisitions (Earthport for account reach, Currencycloud, YellowPepper). It reaches more than 195 countries and territories, uses more than 90 domestic payment schemes and more than 60 card and wallet networks, and can reach approximately 12 billion endpoints. In fiscal 2025 it processed more than 12.5 billion transactions for more than 650 partners. Visa sizes the opportunity at approximately $55 trillion (P2P, B2C, G2C) plus approximately $25 trillion (B2B money movement).

3. Value-Added Services (VAS). Visa sizes VAS at approximately a $520 billion annual revenue opportunity, split across Issuing Solutions (~$125B), Acceptance Solutions (~$95B), Risk and Security Solutions (~$150B) and Advisory and Other Services (~$150B). More than 200 products and services as of September 30, 2025.

• Issuing Solutions, cardholder engagement and benefits, loyalty, BNPL capabilities, issuer processing and core banking through Visa DPS and Pismo.
• Acceptance Solutions, the Visa Acceptance Platform, Cybersource, Authorize.net, Token Management Service, account verification, Account Updater, and Verifi/Visa Resolve Online for disputes.
• Risk and Security Solutions, the Visa Protect suite (Visa Consumer Authentication Service, Visa Advanced Authorization, Visa Provisioning Intelligence, Visa Deep Authorization, Visa Protect for A2A Payments), Visa Risk Manager, Cybersource Decision Manager, and Featurespace (acquired December 2024) for real-time behavioral analytics.
• Advisory and Other Services, Visa Consulting and Analytics, Visa Marketing Services, Data Solutions/Visa Analytics Platform, and Tink open banking.

Visa packages these capabilities as the "Visa as a Service" stack: a foundation layer (network infrastructure), a services layer (reusable components such as authentication, risk management, fraud detection), a solutions layer, and an access layer of on-demand APIs plus a Model Context Protocol (MCP) server that lets AI systems interface with Visa Intelligent Commerce APIs.

Emerging bets

• Agentic commerce. Visa Intelligent Commerce combines tokenization, authentication and predictive analytics into APIs for agent-driven transactions, accessible through the MCP server, together with a Trusted Agent Protocol to help sellers verify agents and screen malicious bots. A pilot processed live agentic token transactions in fiscal 2025.
• Stablecoins. Visa targets emerging markets with volatile local currency and cross-border money movement. Since 2020 Visa has facilitated purchases of over $100 billion of crypto and stablecoin assets and more than $35 billion of spend through crypto-linked credentials. Stablecoin settlement supports four stablecoins and four blockchains, and as of September 30, 2025 surpassed a $2.5 billion annualized run rate (versus more than 25 fiat settlement currencies). A stablecoin prefunding pilot for Visa Direct was announced in September 2025, and the Visa Tokenized Asset Platform lets banks issue and manage their own stablecoins.

Government regulation

Visa is regulated across essentially every jurisdiction it operates in. The 10-K identifies these as the most significant areas:

• Anti-corruption, AML, anti-terrorism and sanctions, FCPA, UK Bribery Act, U.S. Bank Secrecy Act, and OFAC sanctions programs (currently barring participation by entities in Cuba, Iran, North Korea, Crimea and the Donetsk/Luhansk regions of Ukraine).
• Government-imposed market participation restrictions, China, India, Indonesia, Thailand, Vietnam and South Africa have taken actions favoring domestic providers, local ownership, data localization or in-country processing.
• Interchange rates and fees, the U.S. Dodd-Frank Act, the EU Interchange Fee Regulation (IFR), and Reserve Bank of Australia regulation.
• Network exclusivity and routing, Dodd-Frank limits on exclusivity and merchant routing restrictions in U.S. debit and prepaid; the IFR's prohibition on restricting multiple brands on one card.
• No-surcharge rules, Visa's rules prohibiting merchant surcharging vary by market and product and continue to be reshaped by litigation, regulation and legislation.
• Privacy, data use, AI and cybersecurity, increasingly fragmented obligations on data collection, cross-border data flows and AI adoption.
• Supervisory oversight, in the U.S., the Federal Banking Agencies (Federal Reserve Board, OCC, FDIC, NCUA) supervise Visa as a technology service provider to financial institutions, and the CFPB may examine Visa as a service provider. Central banks in Canada, Europe, India, Ukraine and the UK have recognized or designated Visa as a retail payment system; Brazil and Hong Kong also exercise oversight.
• Europe and the UK, the IFR caps EEA interchange and requires Visa Europe to separate scheme from processing; PSD2 imposes account access and strong customer authentication requirements; the European Central Bank and national competent authorities supervise Visa Europe. In the UK, Visa Europe is a Recognized Payment System under Bank of England supervision and is regulated by the Payment Systems Regulator (PSR).
• Corporate responsibility and sustainability reporting, and a broad set of additional developments including open-banking-style access rights in Australia, Brazil, Canada, Hong Kong and Mexico, and the CFPB's October 2024 personal financial data rights rule (whose regulatory status the 10-K describes as uncertain).

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Risk factors

Condensed from the FY2025 Form 10-K, accession 0001403161-25-000089.

Regulatory

Interchange, MDR and network-fee regulation is expanding. Because Visa sets default IRFs and competes on them, mandated changes can substantially affect payments volume and net revenue even though Visa does not receive IRFs. Specific pressure points the 10-K identifies:

• United States. Federal Reserve Regulation II caps large-issuer debit interchange at 21 cents plus 5 basis points plus a possible 1-cent fraud adjustment, and Dodd-Frank limits network exclusivity and routing. An October 2023 Federal Reserve proposal would lower debit rates further with automatic biennial adjustment. In August 2025 the District Court for the District of North Dakota held the Federal Reserve exceeded its authority in implementing Regulation II, improperly including fraud losses, network fees and other fixed costs, and vacated the debit interchange fee standard; a Kentucky district court subsequently ruled the Federal Reserve acted within its discretion. If the North Dakota decision is affirmed and prevails, it could result in a significantly lower U.S. debit interchange cap. Separately, the Credit Card Competition Act may be reintroduced, and states are legislating: Illinois passed a law in May 2024 restricting interchange on the tax and gratuity portions of transactions and restricting use of transaction data, currently subject to legal challenge.
• Europe. The IFR caps EEA consumer credit interchange at 30 bps and consumer debit at 20 bps, with member states able to go lower. The European Commission has announced another IFR impact assessment that could produce lower caps and broader scope. Visa's 2019 settlement with the European Commission limiting certain cross-border interchange rates has been extended through 2029.
• Rest of world. Argentina, Brazil, Chile and Costa Rica have adopted or are exploring interchange caps; the RBA has proposed reducing Australian credit and debit caps and removing differential consumer/commercial treatment; New Zealand lowered domestic credit caps and in July 2025 adopted cross-border caps including commercial credit; the UAE regulates interchange; India, Costa Rica and Turkey are driving down MDR. Costa Rica regulates cross-border interchange; the UK PSR is proposing caps on UK–Europe cross-border ecommerce interchange.
• Network fees. The UK PSR's market review into scheme and processing fees flagged possible governance, reporting and transparency remedies; Australia, the EU, Chile and New Zealand have expressed interest. Greece limited acquirer fees for certain small-ticket transactions for three years in 2024.
• Network rules. Competition regulators or claimants in Argentina, Chile, Colombia, the Dominican Republic, Paraguay, Peru, South Africa and Turkey have targeted network rules including cross-border acquiring restrictions; Chile and the Dominican Republic have enacted rules permitting cross-border acquiring for ecommerce; Brazil requires government pre-approval of certain network rules.
• Systemic designation. Visa is under central bank oversight in a growing list of countries and has been designated systemically important in several; VisaNet was designated a prominent payment system in Canada in October 2023. These designations bring requirements on governance, access, reporting, cybersecurity, capital and local risk management.

Government-imposed restrictions may prevent Visa from competing in major markets.

• China. UnionPay remains the predominant domestic processor. Visa applied to the People's Bank of China in May 2020 for a Bank Card Clearing Institution license; timing and approval remain uncertain. Restrictions on dual-branded cards have already reduced Visa's payments volume and net revenue in China. Alipay, WeChat Pay and NetsUnion Clearing Corp are competitive obstacles even if a license is granted.
• India. Evolving data localization requirements carry cost implications and, if unmet, could impair Visa's ability to do business there.
• Europe. The ECB has announced initiatives to reduce reliance on international networks; the European Payments Initiative launched the pan-European A2A system Wero; the ECB is exploring a digital euro.
• Other. GCC countries and parts of Southeast Asia have or may restrict Visa's participation in regional transactions; Nigeria and South Africa mandate on-shore domestic processing. Sanctions and trade tensions have accelerated these efforts, including BRICS-country initiatives to reduce dependence on Western payments systems. Central banks in Argentina, Australia, Brazil, Canada, Europe, India, Indonesia and Mexico are building or expanding real-time payment networks; the U.S. Federal Reserve launched FedNow in July 2023. Successful national platforms and CBDCs could disintermediate Visa.

Privacy, data, cybersecurity and AI regulation. Fragmented and conflicting cross-border transfer and localization rules; GDPR enforcement in Europe. AI regulation is nascent and inconsistent, the EU AI Act's high-risk provisions take effect August 2026, and California, Colorado and Utah have adopted AI frameworks. Agentic commerce specifically presents novel regulatory, privacy and cybersecurity exposure, with limited direct guidance for payments, potential for erroneous or disputed payments and increased chargebacks, and difficulty monitoring cross-border, prohibited or high-risk agent-initiated transactions.

Tax. Visa is under examination or in dispute with the IRS and other tax authorities. OECD Pillar Two global minimum tax and unilateral digital services taxes could affect the effective rate.

Litigation

Visa faces numerous antitrust, consumer protection, privacy and intellectual property actions. U.S. antitrust class claims can carry treble damages. Settlement terms, judgments and pressure from these actions have already required Visa to modify default interchange rates, operating rules, fees and business practices, and outcomes in one jurisdiction can influence regulators and litigants elsewhere. Visa is also contractually required in some cases to indemnify other entities for litigation brought against them even where Visa is not a defendant.

Critically: the two retrospective responsibility plans provide financial protection only for defined "covered" litigation. The failure of one or both plans to adequately insulate Visa from settlements, judgments, losses or liabilities could materially harm the company's financial condition or cash flows, "or even cause us to become insolvent." Neither plan protects against non-covered matters, fines or penalties in competition enforcement proceedings, or against judgments and settlements that force changes to business practices, rules or contractual commitments.

Competitive

The global payments space is intensely competitive. Visa competes with cash and checks, other global and regional networks, closed-loop systems (American Express, Discover, private-label networks, Alipay, WeChat Pay), digital wallets, real-time payment (RTP) networks, fintechs, technology platforms, and, increasingly, governments in the U.S., Brazil, India and elsewhere that develop, support or operate national schemes and RTP networks. Some competitors use existing payment rails without bearing the associated costs, and some benefit from government mandates that limit Visa's ability to compete.

Two specific competitive shifts flagged: AI (competitors enhancing products with AI faster, or obtaining proprietary rights that constrain Visa's own AI offerings), and stablecoins, the July 2025 U.S. GENIUS Act plus EU, UK, Japan, UAE, Hong Kong and Singapore frameworks mean that with greater regulatory certainty stablecoins "could potentially disrupt existing payment networks, including in cross-border and B2B transactions," could substitute for local currency where currencies are unstable, and could achieve broad adoption via regulated bank/fintech issuance or integration into large closed-loop digital ecosystems.

Client, seller and pricing

A significant portion of net revenue is concentrated among Visa's largest clients, who generally retain flexibility to issue non-Visa products and in some circumstances can terminate on relatively short notice without significant early termination fees. Consolidation of a large client or co-brand partner into an institution aligned with a competitor could shift business away. Pricing pressure, from RTP networks, lower-priced facilitators and government involvement, drives up-front cash payments, fee discounts, rebates, performance incentives and marketing support that reduce net revenue. Sellers and processors continue to lobby, litigate and in some cases surcharge or refuse Visa products to lower acceptance costs; success there could reduce issuance, cardholder benefits and volume.

Technology and cybersecurity

Rapid technology change (mobile and in-app payments, tokenization, cryptocurrencies, distributed ledger, cloud encryption, biometrics/FIDO 2.0/3D Secure 2.0) may outrun Visa's adaptation. GenAI and agentic commerce create both opportunity and unpredictable security risk, Visa notes its own deployment of GenAI "could expand our cybersecurity attack surface." Visa has been the target of malicious cyber activity in the normal course and has been affected by breaches at financial institutions, sellers and third-party service providers, including government-directed or sponsored attacks on clients. Cyber incident reporting rules across jurisdictions carry short deadlines that Visa may not be able to meet while it is still investigating an incident. As of September 30, 2025, Visa was not aware of any direct or third-party cybersecurity incident in the past three fiscal years that materially affected its business strategy, results of operations or financial condition. Visa's cybersecurity organization comprises approximately 1,000 professionals globally, operating three cyber fusion centers (U.S., UK, Singapore), with board oversight delegated to the audit and risk committee.

Structural

• Settlement indemnification. Visa indemnifies issuers and acquirers against settlement failures by other clients. Exposure is generally limited to unsettled transactions at a point in time, but concurrent failures or insolvencies of large clients, several smaller clients, or significant sponsor banks could create liquidity risk. Recent Brazilian regulatory developments imposing enhanced requirements on payment scheme operators may increase settlement-related risk and residual exposure.
• Acquisitions and joint ventures may not deliver anticipated benefits, and carry integration, control, retention, approval and litigation risks.
• Capital structure. Conversion of class B-1, B-2 and C common stock, or series A, B and C preferred stock, into class A common stock would dilute class A voting power and, if converted shares are sold in size, could pressure the class A price. Holders of those classes are current and former financial institution clients whose interests may diverge from class A shareholders on significant transactions. Delaware law, the certificate of incorporation, the bylaws and the capital structure could make a merger, takeover attempt or change of control difficult.

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Management's discussion and analysis, fiscal 2025

From the FY2025 Form 10-K, accession 0001403161-25-000089. Fiscal year ended September 30, 2025.

Headline results

The gap between GAAP and non-GAAP is dominated by the litigation provision: $2,562 million on a GAAP basis in fiscal 2025 versus $462 million in fiscal 2024, of which $2,533 million was excluded from non-GAAP (alongside $218 million of acquired intangible amortization, $213 million of severance, $97 million of acquisition-related costs, $39 million of lease consolidation costs and $87 million of equity investment losses).

Revenue drivers

U.S. net revenue was $15,633 million (+6%); international was $24,367 million (+15%). Exchange rate movements did not materially affect net revenue growth in fiscal 2025.

Operating drivers: nominal payments volume grew 7% (twelve months ended June 30, 2025: $13.9 trillion total nominal payments volume; $16.4 trillion total nominal volume including cash); processed transactions grew 10% to 257.5 billion; nominal cross-border volume excluding intra-Europe grew 13%. Value-added services revenue was $10.9 billion, up 24%, driven by Issuing Solutions, Advisory and Other Services and Acceptance Solutions.

Expenses

Personnel rose on headcount, compensation focused on growth areas including acquisitions, and severance to realign the organizational structure. G&A rose on travel-related card benefit usage, the absence of a prior-year indirect tax reserve release and higher indirect taxes. The litigation provision rose almost entirely on U.S. covered litigation accruals.

Non-operating income was $200 million (interest expense $589 million; investment income and other $789 million). The effective tax rate was 17%, including a $263 million benefit from a tax position taken on certain expenses. Visa notes OECD Pillar Two implementation had no material fiscal 2025 impact, and that U.S. tax legislation enacted in July 2025 (accelerated deductions for qualified property and research expenditures, plus international provisions effective from January 2025 through fiscal 2027) had no material fiscal 2025 impact and is not expected to have one.

Capital and liquidity (as of September 30, 2025)

• Operating cash flow $23,059 million; investing $708 million provided; financing $(18,963) million used.
• Cash and cash equivalents $17.2 billion; available-for-sale debt securities $2.4 billion (U.S. Treasury and government-sponsored agency securities), of which $1.6 billion current.
• Senior notes outstanding aggregate principal $25.4 billion; €3.5 billion ($3.9 billion) of euro-denominated notes issued in May 2025 with 3- to 19-year maturities. No commercial paper or revolving credit facility borrowings outstanding.
• Share repurchases of $18.2 billion (54 million class A shares) in fiscal 2025 under a $30.0 billion program authorized in April 2025; $24.9 billion remaining.
• Dividends declared and paid of $4.6 billion; quarterly dividend raised to $0.67 per class A share, declared October 28, 2025.
• $9.2 billion of available liquidity held to fund daily settlement in the event a financial institution client cannot settle.
• Client incentive liabilities of $10.4 billion short-term and $0.2 billion long-term.
• Featurespace acquired in December 2024 for purchase consideration of $946 million.
• $875 million deposited into the U.S. litigation escrow account; escrow balance $3.0 billion.
• In August 2025 Visa released $1.4 billion of as-converted value from series B and C preferred stock and issued 40,080 shares of series A preferred stock in connection with the ninth anniversary of the Visa Europe acquisition.

Critical accounting estimates

Management identifies three: client incentives (estimated from forecasts of volume, transactions, card issuance and conversion, and adjusted as performance expectations change), legal and regulatory matters (probability and estimability of loss, informed by the retrospective responsibility plans' loss sharing arrangements), and income taxes.

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Current quarter, fiscal 2026 second quarter

From the Form 10-Q for the quarter ended March 31, 2026, accession 0001403161-26-000079.

Results

The 36% GAAP EPS jump versus 20% on a non-GAAP basis reflects a much lighter litigation provision than the prior-year quarter, plus a one-time deferred tax benefit in the six-month period.

Revenue

U.S. net revenue $4,319 million (+13%); international $6,911 million (+20%). Exchange rate movements added approximately one percentage point to net revenue growth.

Volume and transaction drivers:

• Nominal payments volume for the quarter ended December 31, 2025 (which drives the March quarter's service revenue) was $3,868 billion, up 10% nominal and 8% constant-dollar. U.S. $1,835 billion (+7%); international $2,033 billion (+13% nominal, +9% constant). Consumer credit +7%, consumer debit +11%, commercial +11% (Visa total, nominal).
• Processed transactions of 66,086 million, up 9%.
• Nominal cross-border volume excluding intra-Europe grew 17% in the quarter and 16% for six months.
• Value-added services revenue of $3.3 billion (+29%); $6.5 billion for six months (+31%). Client consulting engagements rose 32% in the quarter; payment credentials rose 6%.

Management attributes volume growth to "continued resilience in consumer spending and ongoing expansion in digital commerce," with cross-border supported by ecommerce and travel, and ecommerce continuing to grow faster than face-to-face spend. Visa expects the shift toward digital commerce and electronic payments to continue, but conditions its extent on consumer spending levels and broader macroeconomic conditions. International transaction revenue growth was partly offset by business mix and lower currency volatility, a reminder that a meaningful slice of Visa's cross-border revenue is volatility-sensitive.

Expenses

Marketing rose on the Olympic and Paralympic Winter Games Milano Cortina 2026 and the FIFA World Cup 2026. Professional fees rose on client engagements, Prisma/Newpay acquisition costs and higher legal fees. Exchange rates added roughly two percentage points to operating expense growth.

Non-operating expense was $(60) million for the quarter (interest expense $178 million; investment income $118 million). The effective tax rate was 16% for the quarter and 15% for six months, including a $217 million benefit from a tax position taken on certain expenses and, for the six months, a $333 million deferred tax benefit from a change in the U.S. taxation of certain foreign earnings.

Balance sheet, cash flow and capital returns (six months ended March 31, 2026)

• Operating cash flow $9,788 million (down from $10,091 million, on higher litigation payments, tax payment timing and higher incentive payments); investing $(517) million; financing $(15,396) million.
• Cash and cash equivalents $12,404 million (from $17,164 million at September 30, 2025). Restricted cash: U.S. litigation escrow $665 million, customer collateral $4,292 million.
• Total debt principal $24,261 million; carrying value $23,976 million ($1,559 million current, $22,417 million long-term).
• February 2026 senior notes: $3.0 billion aggregate principal issued in a public offering, maturities 3 to 10 years, coupons 3.80% to 4.70%, interest payable semi-annually from August 12, 2026; net proceeds approximately $3.0 billion for general corporate purposes including refinancing.
• $4.0 billion of 3.15% senior notes due December 2025 repaid at maturity. A €1.4 billion ($1.6 billion) principal payment was due June 2026.
• February 2026 acquisition: Visa acquired 100% of Prisma Medios de Pago S.A.U. (Prisma) and Newpay S.A.U. (Newpay) in Argentina for total purchase consideration of $1.5 billion in cash. Prisma provides credit, debit and prepaid card issuer processing; Newpay is a multi-network infrastructure provider operating real-time payments services, the Banelco ATM network and the PagoMisCuentas bill payment platform. Purchase price allocation: technology $184 million (3-year weighted-average life), customer relationships $405 million (6 years), deferred tax liabilities $(202) million, other net assets $57 million, goodwill $1,065 million, total $1,509 million. Goodwill is not deductible for tax purposes. The acquisition is subject to review by the Argentine competition authority.
• Share repurchases: 25 million class A shares for $7,894 million in the quarter (average $320.66); 36 million shares for $11,659 million over six months (average $327.29). Remaining authorization $13.2 billion at March 31, 2026 under the April 2025 $30.0 billion program.
• Dividends: $1,286 million declared and paid in the quarter; $2.6 billion over six months.
• Settlement exposure: maximum daily $168.6 billion and average daily $98.1 billion over the six months; total collateral held $9.5 billion (versus $8.8 billion at September 30, 2025).
• Deferred revenue $1.9 billion; remaining performance obligations $5.5 billion, roughly half expected to be recognized within two years.
• Visa early adopted ASU 2025-09 (hedge accounting) in the December 2025 quarter with no material impact.

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Interchange litigation and the retrospective responsibility plans

From the FY2025 Form 10-K (accession 0001403161-25-000089), the Form 10-Q for the quarter ended March 31, 2026 (accession 0001403161-26-000079), and the Current Reports on Form 8-K cited.

This is the single most consequential feature of Visa's structure for a shareholder to understand: the mechanism by which Visa transfers most of the economic cost of U.S. interchange antitrust litigation to its former bank owners.

How the U.S. retrospective responsibility plan works

The plan is a set of interlocking mechanisms covering defined "U.S. covered litigation", principally the Interchange Multidistrict Litigation (MDL 1720), any claim challenging Visa's reorganization or IPO that is consolidated into MDL 1720, and any case brought after October 22, 2015 by a merchant that opted out of the Rule 23(b)(3) settlement class on substantially similar facts.

1. U.S. litigation escrow account. Settlements of and judgments in U.S. covered litigation are paid from an escrow account. The board funds it upon request of a litigation committee whose members are all affiliated with, or act for, certain Visa U.S.A. members. The accrual for covered litigation may be higher or lower than the escrow balance.
2. The conversion feature. When Visa funds the escrow, the conversion rate at which class B common stock converts into class A common stock is adjusted downward. This has the same economic effect on earnings per share as repurchasing class A stock: it reduces the as-converted class A share count with each deposit. In substance, the class B holders, predominantly U.S. financial institutions, their affiliates and successors, bear the dilution.
3. Makewhole agreements, entered into by holders participating in the class B-1 exchange offer, requiring them to reimburse Visa in cash for the portion of future escrow deposits that would otherwise have been absorbed through a reduction in the class B-1 conversion rate. No further payment obligations arise once the class B-1 conversion rate reaches zero.
4. Indemnification obligations of Visa U.S.A. members for amounts exceeding the escrow and other plan mechanisms.
5. Interchange judgment sharing agreement, signatory Visa U.S.A. members pay their membership proportion of any final judgment not allocated to Mastercard's conduct.
6. Loss sharing agreement, several (not joint) indemnification of Visa U.S.A., Visa International and in some cases Visa by member banks, based on each bank's membership proportion.
7. Omnibus agreement with Mastercard, the monetary portion of any covered settlement or unallocated judgment is split Mastercard 33.3333% / Visa 66.6667%.

How the Europe retrospective responsibility plan works

The Europe plan covers "VE territory covered litigation", existing and potential litigation relating to the setting of multilateral interchange fee rates in the Visa Europe territory, generally for the period before the June 21, 2016 closing of the Visa Europe acquisition. It has no escrow account. Instead, Visa recovers covered losses through periodic downward adjustments to the class A conversion rates applicable to the series B and series C preferred stock. Adjustments may be made once in any six-month period unless a single loss exceeds €20 million.

Protection is limited: only 70% of liabilities are recovered where the claim relates to inter-regional multilateral interchange rates with an issuer outside and a merchant inside the Visa Europe territory. The plan does not cover all litigation types, nor remedies or fines imposed in competition law enforcement proceedings, only the specifically covered interchange litigation.

A UK loss sharing agreement with UK member financial institutions provides further several compensation, conditional on either losses exceeding the sterling equivalent at June 21, 2016 of €1.0 billion having arisen in UK covered claims, or the series B conversion rate having been reduced to zero.

A litigation management deed governs conduct of the litigation and requires anniversary release assessments. In August 2025, following the ninth-anniversary assessment, Visa released $1.4 billion of as-converted value from series B and C preferred stock and issued 40,080 series A preferred shares (the prior year's eighth-anniversary release was $2.7 billion and 99,264 shares). Each series A preferred share automatically converts into 100 class A common shares upon a sale to an eligible holder.

Conversion rates and share counts

As of March 31, 2026:

(Total as-converted was 1,930 million at September 30, 2025, when class B-1 stood at 1.5549 and class B-2 at 1.5223, series B at 0.6690 and series C at 0.7640.)

The class B conversion rate ratchet was exercised twice inside the quarter and the prior quarter, disclosed on Form 8-K:

• December 23, 2025, $500 million deposited into escrow; class B-1 conversion rate 1.5549 → 1.5491 and class B-2 1.5223 → 1.5108 effective December 23, 2025, reducing as-converted class B-1 shares by approximately 27,782 (7,518,496 → 7,490,714) and class B-2 by approximately 1,382,832 (183,187,821 → 181,804,989). (Accessions 0001403161-25-000134 and 0001403161-25-000137.)
• February 25, 2026, $125 million deposited; class B-1 1.5491 → 1.5475 and class B-2 1.5108 → 1.5075 effective February 26, 2026, reducing as-converted class B-1 by approximately 7,880 (7,490,714 → 7,482,834) and class B-2 by approximately 392,202 (181,804,989 → 181,412,788). (Accession 0001403161-26-000063.)

Those two deposits total the $625 million deposited into escrow in the six months. The weighted-average effective price per share across the six months' adjustments was $345.17, and the reduction in as-converted class A equivalent shares was 2 million.

The as-converted value of the series B and C preferred stock at March 31, 2026 was $1,131 million (series B $447 million, series C $684 million) at a class A closing price of $302.24, against book value of $123 million. Net of the $(44) million right-to-recover contra-equity balance, total recovery available for covered losses was $1,087 million on an as-converted basis.

Litigation accruals

U.S. covered litigation accrual specifically: $2,698 million at September 30, 2025, plus $894 million of interchange MDL provision, less $2,977 million of payments, leaving $615 million at March 31, 2026. The U.S. litigation escrow ran from $2,990 million to $665 million over the same six months, absorbing $625 million of deposits and $2,950 million of net payments to opt-out merchants. VE territory covered accrual was $21 million at March 31, 2026 (from $9 million; $21 million provision, $9 million payments).

The state of the interchange litigation

Damages Class. The 2018 Amended Settlement Agreement superseded the 2012 settlement, received final district court approval in December 2019 and Second Circuit affirmation in March 2023. Approximately $5.3 billion had been deposited by defendants under the 2012 agreement, plus an additional $900 million settlement payment (Visa's share $600 million). $700 million was returned to defendants based on opt-out volume, with Visa's approximately $467 million takedown deposited back into escrow.

Injunctive Relief Class. Certified without opt-out rights in September 2021 for all merchants accepting Visa or Mastercard credit or debit cards in the U.S. between December 18, 2020 and entry of final judgment. A March 2024 settlement was denied preliminary approval in June 2024. On November 10, 2025 Visa and Mastercard entered into a superseding and amended settlement agreement to resolve the Injunctive Relief Class claims, and plaintiffs moved for preliminary approval. Its terms (Form 8-K, accession 0001403161-25-000093):

• Credit surcharging, merchants get more options to surcharge, including where they do not surcharge other credit networks.
• Honor All Cards, merchants will be able to choose whether to accept U.S. credit cards in distinct categories: commercial, premium consumer and standard consumer.
• Lower interchange, a 10 basis point reduction in the U.S. combined average effective credit interchange rate for five years.
• Rate certainty, posted U.S. credit interchange rates capped for five years, with standard U.S. consumer credit rates capped at 125 basis points through the term.
• Merchant education, a new program on payment acceptance and cost management.

The settlement remains subject to court approval.

Individual merchant actions (opt-outs). More than 50 cases filed since May 2013 by hundreds of merchants. As of the FY2025 10-K, Visa had settled with merchants representing approximately 82% of the Visa-branded payment card sales volume of opt-outs; as of the March 2026 10-Q that figure had risen to approximately 94%, and as a result of settlements reached during the March 2026 quarter all actions scheduled for trial beginning April 2026 in the Southern District of New York were resolved. An action led by Grubhub Holdings remains scheduled in the Northern District of Illinois for September 2026.

The company's disclosed estimate of interchange reimbursement fees at issue in unresolved U.S. covered litigation damages claims has fallen sharply: approximately $49.6 billion as of October 1, 2023, approximately $39.4 billion as of October 1, 2025, and $17.4 billion as of May 11, 2026 (Form 8-K, accession 0001193125-26-219432). Visa cautions the figure excludes claims in certain purported indirect purchaser class actions and opt-outs that have not asserted damages claims, and that the interchange at issue for unresolved claims will continue to increase.

That decline matters mechanically, because a successive class B exchange offer is conditioned on the estimated interchange at issue having fallen by 50% or more since October 1, 2023. On February 13, 2026 Visa announced its board had authorized proceeding with a successive exchange offer once the conditions were met (Form 8-K, accession 0001403161-26-000049); the offer subsequently launched and closed, as described under Subsequent events.

Europe. More than 1,150 merchants have commenced proceedings against Visa entities since July 2013 over European interchange; Visa had settled claims from over 950 merchants with over 100 outstanding as of the 10-K filing date, and anticipates additional claims. On June 25, 2025 the UK Competition Appeal Tribunal found certain interchange rates restrict competition under UK law; on March 17, 2026 the UK Court of Appeal granted Visa permission to appeal that decision. On February 18, 2026 the CAT issued a decision finding that, except in certain merchant categories, interchange was not passed on by merchants, a favorable pass-on ruling that Visa has nonetheless sought permission to appeal. A December 2024 UK Court of Appeal decision restricts merchant damages to six years preceding the claim filing. Class claims are pending before the CAT (commercial credit interchange certified), in the Netherlands (Dutch merchants, damages from 1992 to present, Visa filed a jurisdictional challenge on December 17, 2025), in Israel, and in Switzerland (Swiss merchants, Zurich Commercial Court, damages from June 1, 2022).

Other significant matters.

• U.S. Department of Justice. On September 24, 2024 the DOJ filed a Sherman Act complaint in the Southern District of New York alleging Visa monopolized and attempted to monopolize general purpose debit network services and card-not-present debit network services through agreements with merchants, acquirers and others. Visa's motion to dismiss was denied on June 23, 2025. This is not covered litigation.
• U.S. debit class actions. Putative classes of merchants and cardholders filed from October 2024 on parallel allegations; Visa's motions to dismiss were granted in part and denied in part on October 29, 2025, and further amended consolidated complaints adding class representatives were filed on February 27, 2026. Visa has appealed to the Second Circuit a separate August 20, 2025 denial of its motion to compel dismissal of certain claims.
• U.S. securities class action. Filed November 20, 2024 in the Northern District of California on behalf of purchasers between March 2, 2023 and September 23, 2024, alleging failure to disclose the practices underlying the DOJ suit. The court granted Visa's motion to dismiss the amended complaint with leave to amend on December 10, 2025; plaintiff filed a second amended complaint January 9, 2026 and Visa moved to dismiss on January 23, 2026. Three related shareholder derivative actions are stayed pending resolution.
• ATM access fee litigation. The National ATM Council class action continues (cross-motions for summary judgment filed February 18, 2026); Visa and Mastercard settled the Mackmin consumer class (final approval June 23, 2025) and Burke (preliminary approval motion filed December 18, 2025); Cardtronics USA filed an opt-out complaint in August 2025.
• EMV chip liability shift. Visa and Mastercard's class settlement received preliminary approval October 17, 2025; plaintiffs moved for final approval on February 19, 2026, along with the separate Discover and American Express settlements.
• Debit surcharge class action dismissed without further leave to amend December 12, 2025, appeal dismissed by plaintiff. MiCamp Solutions dismissed without further leave to amend December 11, 2025. Mirage Wine + Spirit's (Apple Pay conspiracy claim) dismissed with prejudice August 2025.
• European Commission opened a preliminary investigation into Visa's acquirer fees on August 30, 2024.
• German ATM litigation, jurisdictional challenges pending in the German Federal Court of Justice.
• U.S. income tax litigation, Visa sued the United States in the Court of Federal Claims on June 21, 2024 challenging IRS denial of certain 2008–2015 deductions related to U.S.-developed software used by Visa clients.

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Subsequent events

Events after March 31, 2026, disclosed in the Form 10-Q for the quarter ended March 31, 2026 (accession 0001403161-26-000079) and in subsequently filed Current Reports on Form 8-K.

Disclosed in the Form 10-Q:

• Commercial paper. In April 2026 Visa issued and fully repaid $500 million of commercial paper. The program authorizes up to $3.0 billion outstanding with maturities up to 397 days; nothing was outstanding at March 31, 2026 or September 30, 2025.
• New share repurchase authorization. In April 2026 the board authorized a new $20.0 billion share repurchase program with multi-year flexibility and no expiration date, on top of the $13.2 billion remaining under the April 2025 $30.0 billion program at March 31, 2026.
• Dividend. On April 28, 2026 the board declared a quarterly cash dividend of $0.67 per class A share (on an as-converted basis for all other outstanding common and preferred stock), payable June 1, 2026 to holders of record as of May 12, 2026.
• Europe interchange litigation. On April 20, 2026 a group of merchants from across Europe filed a claim in the UK High Court against several Visa entities alleging that European interchange fees are an unlawful restriction of competition, seeking damages from January 1, 2019 to present.
• Potayto-Potahto interchange litigation. On April 21, 2026 Potayto-Potahto, LLC and two other merchants filed a class action complaint in the U.S. District Court for the Southern District of New York against Visa Inc., Visa U.S.A., Visa International, Mastercard Incorporated and Mastercard International Incorporated, asserting federal antitrust violations consistent with the allegations in MDL 1720, on behalf of merchants that have accepted Visa and/or Mastercard credit cards since January 25, 2019 and seeking damages from that date.
• Challenge to the Damages Class release. On April 21, 2026 three merchants that are members of the Damages Class moved for partial summary judgment in MDL 1720 seeking a declaration that the forward-looking release in the Amended Settlement Agreement resolving the Damages Class claims is invalid and unenforceable under federal law.

Disclosed in Current Reports on Form 8-K after the quarter:

• Class B exchange offer completed. Visa's exchange offer for class B-1 and class B-2 common stock expired May 8, 2026. Visa accepted approximately 2.7 million class B-1 shares and approximately 119.8 million class B-2 shares, approximately 98% of outstanding class B-1 and B-2 shares in aggregate, representing approximately 55% of class B-1 and over 99% of class B-2. In exchange Visa issued approximately 60.6 million shares of class B-3 common stock and approximately 23.3 million shares of class C common stock, plus cash in lieu of fractional shares based on the May 8, 2026 class A closing price of $318.79. At expiration the applicable conversion rates were 1.5475 (class B-1), 1.5075 (class B-2) and 4 (class C). Class B-3 shares remain subject to transfer restrictions under Visa's certificate of incorporation; class C shares are freely transferable. A form of Makewhole Agreement was filed with the settlement report. (Accessions 0001193125-26-215875 and 0001193125-26-219432.)
• Interchange at issue. The estimated interchange reimbursement fees at issue in unresolved claims for damages in the U.S. covered litigation was $17.4 billion as of May 11, 2026, down from approximately $39.4 billion as of October 1, 2025 and approximately $49.6 billion as of October 1, 2023. The figure excludes fees attributable to claims in certain purported indirect purchaser class actions and to opt-outs that have not asserted damages claims, and Visa notes the interchange at issue for unresolved claims will continue to increase. (Accession 0001193125-26-219432.)
• Further escrow deposit and conversion rate adjustment. On June 24, 2026 Visa authorized a $250 million deposit into the U.S. litigation escrow account. Effective June 25, 2026, the class B-1 conversion rate decreased from 1.5475 to 1.5445, the class B-2 rate from 1.5075 to 1.5014, and the class B-3 rate from 1.5075 to 1.4953. As-converted share counts fell by approximately 6,658 for class B-1 (3,373,814 → 3,367,156), approximately 2,973 for class B-2 (733,661 → 730,688), and approximately 740,184 for class B-3 (91,340,149 → 90,599,965). Calculations used the volume-weighted average price over the two-day pricing period from June 24 through June 25, 2026. (Accession 0001403161-26-000086.)
• Bylaw amendment. Effective July 14, 2026 the board amended Visa's Amended and Restated Bylaws to designate the Delaware Court of Chancery (or, absent subject matter jurisdiction, other Delaware state courts) as the exclusive forum for certain actions against the company, and the U.S. federal district courts as the exclusive forum for Securities Act of 1933 claims, in each case unless Visa consents in writing to an alternative forum. (Accession 0001403161-26-000096.)

No formal quantitative financial guidance is provided in Visa's periodic reports or earnings releases.