Visa: Lawsuit Risks

Perhaps the stickiest concern has to do with lawsuits, as Visa puts it, over the amount of money the credit-card companies charge merchants.

This has been a long-running feud. In preparation for an eventual settlement, Visa has put aside $3 billion of the $17.3 billion raised in the IPO to pay any possible claims. But (boilerplate alert!) the company acknowledges even that mightn't be enough.

But legal risks are only part of the story. When Visa states that its "operating results may suffer because of intense competition in the global payments industry," it isn't kidding. There are the usual competitors, but "the Achilles' heel," says David Robertson, publisher of the Nilson Report, a newsletter that tracks the credit-card industry, is that roughly half its revenue comes from the U.S.

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Visa: Beware of potholes - MarketWatch