Visa $V Inc. is a U.S.-based payments technology company that operates a global electronic payments network connecting financial institutions, merchants, and cardholders. The company does not issue credit cards or extend credit to consumers — instead, it provides the infrastructure that allows banks and other financial institutions to issue Visa-branded cards and process transactions made with them. Visa earns revenue primarily by charging fees on the volume and number of transactions processed across its network.
Founded in 1958 by Bank of America $BAC, Visa began as the BankAmericard program, a consumer credit card launched in Fresno, California. In 1976, the network was rebranded Visa. The company restructured from a bank-owned cooperative into a publicly traded corporation in 2008, when it conducted one of the largest initial public offerings in U.S. history at the time. Visa is headquartered in San Francisco, California.
At its core, Visa operates what is known as an open-loop network. When a cardholder pays a merchant, Visa's network routes the transaction between the merchant's bank — called the acquiring bank — and the cardholder's bank, called the issuing bank. The issuing bank, not Visa, decides whether to approve the transaction and bears the credit or fraud risk. Visa handles the authorization, clearing, and settlement of the payment. This four-party model — cardholder, issuing bank, merchant, acquiring bank, and Visa as the network in the middle — distinguishes Visa