Visa (V) 10-K risk factor changes: FY2020 vs FY2019

We are subject to complex and evolving global regulations that could harm our business and financial [removed: results.][added: results.]

The impact of these regulations on us, our clients, and other third parties could limit our ability to enforce our payments system rules; require us to adopt new rules or change existing rules; affect our existing contractual arrangements; increase our compliance costs; require us to make our technology or [removed: intellectual property available to third parties, including competitors, in an undesirable manner; and reduce our revenue opportunities.]

Increased scrutiny and regulation of the global payments industry, including with respect to interchange reimbursement fees, merchant discount rates, operating rules, risk management protocols and other related practices, could harm our [removed: business.][added: business.]

[removed: Business] [added: See *Item 1*—*Business] —Government Regulation* for more information*.* In the U.S. and many other jurisdictions, we have historically set default interchange reimbursement fees.

Countries in other parts of the world, including the Latin America [removed: region] [added: region,] have either adopted or are exploring interchange caps.

Some acquirers may elect to charge higher merchant discount rates [added: (MDR)] regardless of the Visa interchange reimbursement rate, causing merchants not to [removed: accept our products or to steer customers to alternate payments systems or forms of payment.]

For example, many governments including, but not limited to governments in India and Turkey are using regulation to further drive down [removed: merchant discount rates,] [added: MDR,] which could negatively affect the economics of our transactions.

Some countries in Latin America, like Peru and Chile are relying on [removed: antitrust driven] [added: antitrust-driven] regulatory actions that can have implications for how the payments ecosystem and four party model operate.

The [removed: Payment System Regulator’s] [added: PSR’s] review of the acquiring market in the United Kingdom could lead to additional regulatory pressure on our business.

[removed: Finally, regulators] [added: Regulators] around the world increasingly take note of each other’s approaches to regulating the payments industry.

For example, our settlement with the European Commission on cross-border interchange rates [removed: could draw the] [added: has drawn some preliminary] attention of regulators in other parts of the world.

Government-imposed [added: obligations and/or] restrictions on international payment systems may prevent us from competing against providers in certain countries, including significant markets such as China, India and [removed: Russia.][added: Russia.]

[removed: In the future, public] [added: Public] authorities may impose regulatory requirements that favor domestic providers or mandate that domestic payments [added: or data] processing be performed entirely within that country, which [removed: would] [added: could] prevent us from managing the end-to-end processing of certain transactions.

Although we have filed an application with the People’s Bank of China (PBOC) to operate a Bank Card Clearing Institution (BCCI) in China, the timing and the procedural steps [added: for approval] remain uncertain.

[removed: Recent regulatory] [added: Regulatory] initiatives in India also suggest growing nationalistic priorities, including a data localization mandate passed by the government, which has cost implications for us and could affect our ability to effectively compete with domestic payment providers.

Furthermore, regional groups of countries, such as the Gulf Cooperation [removed: Countries in the Middle East] [added: Council (GCC)] and a number of countries in Southeast Asia, are considering, or may consider, efforts to restrict our participation in the processing of regional transactions.

Recently, with strong backing from China’s government, a new digital transaction routing system known as [removed: Netlink] [added: NetsUnion] was established.

The PBOC allowed Alipay and other digital payment providers to invest in [removed: Netlink.][added: NetsUnion.]

It and other such systems could have a competitive advantage in comparison with [removed: other] international payments networks.

In general, national laws that protect [added: or otherwise support] domestic providers or processing may increase our costs; decrease our payments volumes and impact the revenue we generate in those countries; decrease the number of Visa products issued or processed; impede us from utilizing our global processing capabilities and controlling the quality of the services supporting our brands; restrict our activities; limit our growth and the ability to introduce new products, services and innovations; force us to leave countries or prevent us from entering new markets; and create new competitors, all of which could harm our business.

The law requires companies to [removed: meet new] [added: comply with a broad range of] requirements regarding the handling of personal data.

Although we have [removed: an extensive] [added: a global] data privacy program that addresses the [removed: GDPR requirements,] [added: requirements applicable to] our [added: international business, our] ongoing efforts to comply with GDPR and [removed: other] [added: rapidly emerging] privacy and data protection laws (such as the [removed: new] California Consumer Privacy Act [removed: effective as of January 2020] and the Brazilian General Data Protection [removed: Law effective as of February 2020)] [added: Law)] may [added: increase the complexity of our compliance operations,] entail substantial expenses, [removed: may] divert resources from other initiatives and projects, and could limit the services we are able to offer.

[removed: In addition,] [added: For example,] India has adopted a data localization law that requires all payment system operators to store domestic transaction data only in India.

We may be subject to tax examinations or disputes, or changes in tax [removed: laws.][added: laws.]

In addition, changes in existing laws in the U.S. or foreign jurisdictions, [added: which may be more likely if there is a change in the U.S. administration,] or changes resulting from the [removed: Organization] [added: Organisation] for Economic Cooperation and [removed: Development Program] [added: Development’s Programme] of Work, related to the revision of profit allocation and nexus rules and [removed: global base-erosion proposal,] [added: design of a system to ensure multinational enterprises pay a minimum level of tax,] may also materially affect our effective tax rate.

We may be adversely affected by the outcome of litigation or investigations, despite certain protections that are in [removed: place.][added: place.]

We are involved in numerous litigation matters, investigations, and proceedings asserted by civil litigants, governments, and enforcement bodies [added: investigating or] alleging, among other things, violations of competition and antitrust law, consumer protection law, [added: privacy law,] and intellectual property law (these are referred to as “actions” in this section).

In the event we are found liable in any material action, particularly in a large class action lawsuit, such as one involving an antitrust claim entitling the plaintiff to treble [removed: damages,] [added: damages in the U.S.,] or we incur liability arising from a government investigation, we may be required to pay significant awards, settlements, or fines.

These actions or their outcomes may also influence regulators, investigators, governments, or civil litigants in the same or other jurisdictions, which may lead to additional actions [removed: against Visa.]

We face intense competition in our [removed: industry.][added: industry.]

As the global payments space becomes more complex, we face increasing competition from our clients, other emerging payment providers such as fintechs, [removed: and] other digital [removed: payments and] [added: payments,] technology companies that have developed payments systems enabled through online activity in ecommerce and mobile [removed: channels.][added: channels, as well as governments in a number of jurisdictions (e.g. Brazil, India and Russia), that are developing, supporting and/or operating national schemes, real time payment networks, and other payment platforms.]

They may use more effective advertising and marketing strategies that result in broader brand recognition, and greater [added: use, including with respect to] issuance and merchant acceptance.

[removed: Government actions or initiatives such as the Dodd-Frank Act or the U.S. Federal Reserve’s FedNow initiatives] [added: Brazil’s Pix system] may provide competitors with increased opportunities to derive competitive advantages from these business models, and may create new competitors, including in some cases the government itself.

[removed: | • | competitors, clients, network participants, and others are developing or participating in alternate payment networks or products, such as mobile payment services, ecommerce payment services, P2P payment services, real-time and faster payment initiatives and payment services that permit ACH or direct debits from consumer checking accounts, that could reduce our role or otherwise disintermediate us from the transaction processing or the value-added services we provide to support such processing.] Examples include initiatives from The Clearing House, an association consisting of large financial institutions that has developed its own faster payments system; Early Warning Services, which operates Zelle, a bank-offered alternative network that provides another platform for faster funds or real-time payments across a variety of payment types, including P2P, corporate and government disbursement, bill pay and deposit check transactions; and [removed: the Libra Association, which seeks to launch a new stablecoin] crypto-currency [removed: (Libra Coin) and global blockchain-based] [added: or stablecoin-based] payments [removed: network; |][added: initiatives.]

[removed: | • | similarly, many countries are developing or promoting domestic networks, switches and real-time payment systems.] To the extent these governments mandate local banks and merchants to use and accept these systems for domestic [removed: transactions and/or] [added: or other transactions,] prohibit international [removed: payment] [added: payments] networks, like Visa, from participating on those systems, [added: and/or impose restrictions or prohibitions, on international payments networks from offering payment services on such transactions,] we could face the risk of our business being disintermediated in those countries. [removed: Furthermore, in some regions, such as Southeast Asia, under the auspices of the Association of Southeast Asian Nations (ASEAN), some countries are looking into cross-border connectivity of such domestic systems; |]

[removed: | • |] [added: -] parties that process our transactions may try to minimize or eliminate our position in the payments value chain; [removed: |]

[removed: | • |] [added: -] parties that access our payment credentials, tokens and technologies, including clients, technology solution providers or others might be able to migrate account holders and other clients to alternate payment methods or use our payment credentials, tokens and technologies to establish or help bolster alternate payment methods and platforms; [removed: |]

[removed: | • |] [added: -] participants in the payments industry may merge, form joint ventures or enable or enter into other business combinations that strengthen their existing business propositions or create new, competing payment services; and [removed: |]

[removed: | • |] [added: -] new or revised industry standards related to [removed: EMV Secure Remote Commerce,] [added: online checkout and web payments,] cloud-based payments, tokenization or other payments-related technologies set by [added: individual countries, regions or] organizations such as the International Organization for Standardization, American National Standards Institute, World Wide Web Consortium, European Card Standards Group, PCI [removed: Co] [added: Co, Nexo] and EMVCo may result in additional costs and expenses for Visa and its clients, or otherwise negatively impact the functionality and competitiveness of our products and services. [removed: |]

Our revenues and profits are dependent on our client and merchant base, which may be costly to win, retain, and [removed: maintain.][added: maintain.]

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intellectual property available to third parties, including competitors, in an undesirable manner; and reduce our revenue opportunities.

The European Commission concluded its impact assessment of the IFR, indicating that while it does not intend to expand the legislation at this time, it will continue to monitor market dynamics.

In March 2018, Brazil adopted interchange caps on debit transactions and in March 2020, the Congress in Costa Rica passed legislation allowing the Central Bank to regulate interchange and other fees.

Finally, in Australia, the Reserve Bank is in the process of reviewing the country’s payment system regulations, which could potentially result in lower and/or additional interchange caps and other restrictions on our business.

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accept our products or to steer customers to alternate payments systems or forms of payment.

They could also include new criteria for member participation and merchant access to our payments system.

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In Europe, with the support of the European Central Bank, a group of European banks have announced their intent to launch a pan-European payment system, the European Payments Initiative or EPI, with the purported intent to reduce the risks of disintermediation by international technology companies and continued reliance on international payments networks for intra-Europe card transactions.

Finally, some countries such as South Africa are mandating on-shore processing of domestic transactions.

Finally, central banks, including those in Australia, Brazil and Russia, are in the process of developing or expanding national real-time payments networks with the goal of driving a greater number of domestic transactions onto these systems.

Similarly, an increasing number of jurisdictions are exploring the concept of building central bank digital currencies for retail payments.

If successfully deployed, these national payment platforms and digital currencies could have significant implications for Visa’s domestic and cross-border payments, including potential disintermediation.

For example, in July 2020 the Court of Justice of the European Union (CJEU) ruled to invalidate the U.S./EU Privacy Shield - a legal

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framework that allowed participating companies to transfer personal data from EU member states to the U.S. Visa has never used the Privacy Shield framework for its transfers, and relies instead on Standard Contractual Clauses.

However, the CJEU ruling made clear that these transfer mechanisms will be subject to additional scrutiny as well.

Inconsistent local and regional regulations restricting location, movement, collection, use and management of data may limit our ability to innovate or compete in certain jurisdictions.

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against Visa.

The extent to which the COVID-19 outbreak and measures taken in response thereto impact our business, results of operations and financial condition will depend on future developments, which are highly uncertain and are difficult to predict.

The global impacts of the COVID-19 outbreak and related government actions taken to reduce the spread of the virus have been weighing on the macroeconomic environment, and have significantly increased economic uncertainty and reduced economic activity.

The outbreak has resulted in authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place or total lock-down orders and business limitations and shutdowns that began in the second quarter of fiscal year 2020.

The spread of COVID-19 has caused us to modify our business practices (including restricting employee travel, implementing office closures, having our employees work remotely for the rest of 2020 and cancelling physical participation in meetings, events and conferences), and we may take further actions as may be required by government authorities or as we determine are in the best interests of our employees, customers and business partners.

The COVID-19 outbreak has also impacted scheduled events in which Visa is a sponsor as event organizers consult with health experts, government authorities and other stakeholders to prioritize the health and wellbeing of our global community.

This has caused us to make modifications to some of our planned activities and has impacted some of our marketing initiatives.

Cross-border volume continues to be heavily impacted by the decline in travel.

International cross-border transaction revenues represent a significant part of our revenue.

In addition, we may experience financial losses due to a number of operational factors, including:

- merchant, acquirer and issuer failures and credit settlement risk, particularly with respect to the retail, travel and hospitality industries which have been impacted especially hard by the pandemic, including airlines, cruise ships, hotels, restaurants and entertainment events.

The closings and/or failures of a large number of these businesses could result in financial stress on our acquiring partners, and potentially lead to settlement failures, triggering Visa’s indemnification obligations.

It could also lead to bankruptcies that may result in impairments to our assets or our receivables to be written-off;

- clients may re-negotiate existing agreements or seek early renewal of agreements due to the impact of the outbreak on their business, payments volume and incentives;

- the mix of Visa’s clients or the amount of business we do with certain clients may change;

- third party disruptions, including potential outages at network providers, call centers and other suppliers;

- increased cyber and payment fraud risk related to COVID-19, as cybercriminals attempt DDoS related attacks, phishing scams and other disruptive actions, given the shift to online banking, e-commerce and other online activity, as well as more employees working remotely as a result of the outbreak;

- challenges to the availability and reliability of our network due to changes to normal operations, including the possibility of one or more clusters of COVID-19 cases occurring at our data centers, affecting our employees, or affecting the systems or employees of our issuers, acquirers or merchants; and

- additional regulatory requirements, including, for example, government initiatives or requests to reduce or eliminate payments fees or other costs.

A number of countries have taken steps to temporarily cap

See *Item 1.

Furthermore, the European Commission is in the process of conducting an impact assessment of the IFR, which could potentially result in lower and/or additional interchange fee caps and restrictions.

In March 2018, Brazil adopted interchange caps on debit transactions.

Increased central bank oversight could also lead to new or different criteria for participation in and access to our payments system, including allowing non-traditional financial technology companies to act as issuers or acquirers.

| | |

| --- | --- |

The current trade environment reduces the likelihood of having our Bank Card Clearing Institution application in China approved.

As a result, we expect new services and technologies to continue to emerge and evolve.

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included [removed: in* *Item] [added: in Item] 8—Financial Statements and Supplementary [removed: Data* *of] [added: Data of] this report.*

Visa is a global payments technology company that enables [removed: fast,] [added: innovative,] secure and reliable electronic payments across more than 200 countries and territories.

We facilitate [removed: global commerce through the transfer of value and information among] [added: digital payments across] a global network of consumers, merchants, financial institutions, businesses, strategic partners and government [removed: entities.][added: entities through innovative technologies.]

Our advanced transaction processing network, VisaNet, enables authorization, clearing and settlement of payment transactions and allows us to provide our financial institution and merchant clients a wide range of products, platforms and [removed: value-added] [added: value added] services.

| | [added: | |] For the Years [removed: Ended September] [added: Ended September] 30, | | | | | | | | | | | | [added: | | | | | |] % Change(1) | | | | | [added: | | | |]

| | [added: | | 2020 | | | | | |] 2019 | | | | [removed: 2018] | | [added: 2018] | | [removed: 2017] | | | | [removed: 2019] [added: 2020] vs. [removed: 2018] [added: 2019] | | | [removed: 2018] [added: | | | 2019] vs. [removed: 2017] [added: 2018] | | [added: |]

| | [added: | |] (in millions, except percentages and per share data) | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Net income, as reported | [added: | |] $ | [removed: 12,080] [added: 10,866] | | | [added: | |] $ | [removed: 10,301] [added: 12,080] | | | [added: | |] $ | [removed: 6,699] [added: 10,301] | | | [removed: 17] | [added: | (10) | |] % | | [removed: 54] | [added: | 17 | |] % |

| Diluted earnings per share, as reported | [added: | |] $ | [removed: 5.32] [added: 4.89] | | | [added: | |] $ | [removed: 4.42] [added: 5.32] | | | [added: | |] $ | [removed: 2.80] [added: 4.42] | | | [removed: 20] | [added: | (8) | |] % | | [removed: 58] | [added: | 20 | |] % |

| Non-GAAP net income(2) | [added: | |] $ | [removed: 12,367] [added: 11,193] | | | [added: | |] $ | [removed: 10,729] [added: 12,274] | | | [added: | |] $ | [removed: 8,335] [added: 10,656] | | | [removed: 15] | [added: | (9) | |] % | | [removed: 29] | [added: | 15 | |] % |

| Non-GAAP diluted earnings per share(2) | [added: | |] $ | [removed: 5.44] [added: 5.04] | | | [added: | |] $ | [removed: 4.61] [added: 5.40] | | | [added: | |] $ | [removed: 3.48] [added: 4.58] | | | [removed: 18] | [added: | (7) | |] % | | [removed: 32] | [added: | 18 | |] % |

[removed: | (1) | Figures] [added: (1)Figures] in the table may not recalculate exactly due to rounding. [removed: Percentage changes are calculated based on unrounded numbers. |]

*Highlights for [removed: fiscal* *2019*.][added: fiscal 2020*.]

Exchange rate movements in fiscal [removed: 2019,] [added: 2020,] partially mitigated by our hedging program, negatively impacted our net revenues growth by approximately [removed: one-and-a-half] [added: half a] percentage [removed: points.][added: point.]

[removed: | *•* | *Charitable contributions* |][added: *•Charitable contributions*.]

[removed: | ▪ |] During fiscal 2018, we donated investment securities to the Visa Foundation and recognized a non-cash general and administrative expense of $195 million, before tax, and recorded $193 million of realized gain on the donation of these investments as non-operating income. [removed: Net of the related cash tax benefit of $51 million, determined by applying applicable tax rates, adjusted net income decreased by $49 million. |]

[removed: | *•* | *Remeasurement of deferred tax balances.*] During fiscal 2018, in connection with the Tax Cuts and Jobs Act (the “Tax Act”) reduction of the corporate income tax rate, we remeasured our net deferred tax liabilities as of the enactment date, resulting in the recognition of a non-recurring, non-cash income tax benefit of $1.1 billion. [removed: See *Note 19—Income Taxes* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data*. |]

[removed: | *•* | *Transition] [added: *•Transition] tax on foreign earnings.* During fiscal 2018, in connection with the Tax Act requirement that we include certain untaxed foreign earnings of non-U.S. subsidiaries in our fiscal 2018 taxable income, we recorded a one-time transition tax estimate of approximately $1.1 billion. [removed: See *Note 19—Income Taxes* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data*. |]

Non-GAAP operating expenses, [removed: operating margin,] non-operating income (expense), income [removed: before income taxes, income] tax provision, effective income tax rate, net income and diluted earnings per share should not be relied upon as substitutes for measures calculated in accordance with U.S. GAAP.

The following tables reconcile our as-reported financial [removed: measures] [added: measures,] calculated in accordance with U.S. [removed: GAAP] [added: GAAP,] to the respective non-GAAP financial [removed: measures for fiscal 2019, 2018 and 2017:][added: measures:]

| | [removed: Year ended] [added: | | For the Year Ended] September 30, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | |]

| | [added: | |] Operating Expenses | | | | [removed: Operating Margin (1),(2)] | | [removed: |] Non-operating Income (Expense) | | | | [removed: Income Before Income Taxes] | | [removed: | |] Income Tax Provision | | | | [added: | |] Effective Income Tax [removed: Rate(2)] [added: Rate(1)] | | | [added: | | |] Net Income | | | | [added: | |] Diluted Earnings Per [removed: Share(2)] [added: Share(1)] | | |

| | [added: | |] (in millions, except percentages and per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | |]

| As reported | [added: | |] $ | 7,976 | | | [removed: 65] | [removed: %] | [removed: |] $ | [removed: (117 | ) |] [added: (117)] | [removed: $] | [removed: 14,884] | | | $ | 2,804 | | | [added: | |] 18.8 | [added: |] % | | [added: | |] $ | 12,080 | | | [added: | |] $ | 5.32 | |

| Litigation provision | [removed: (370] | | [removed: )] [added: (370)] | | [removed: 2] | [removed: %] | | [added: |] — | | | | [removed: 370] | | [added: 83] | | [removed: 83] | | | | | | | [added: | | |] 287 | | | | [added: | |] 0.13 | | |

| | [removed: Year ended] [added: | | For the Year Ended] September 30, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | |]

| As reported | [added: | |] $ | 7,655 | | | [removed: 63] | [removed: %] | [removed: |] $ | [removed: (148 | ) |] [added: (148)] | [removed: $] | [removed: 12,806] | | | $ | 2,505 | | | [added: | |] 19.6 | [added: |] % | | [added: | |] $ | 10,301 | | | [added: | |] $ | 4.42 | |

| Charitable contribution | [removed: (195] | | [removed: ) |] [added: (195)] | [removed: 1] | [removed: %] | | [removed: (193] | | [removed: )] [added: (193)] | | [removed: 2] | | | | 51 | | | | | | | [removed: (49] | | [removed: )] | | [removed: (0.02] | [added: (49)] | [removed: )] | [added: | | | | (0.02) | | |]

| Litigation provision | [removed: (600] | | [removed: )] [added: (600)] | | [removed: 3] | [removed: %] | | [added: |] — | | | | [removed: 600] | | [added: 137] | | [removed: 137] | | | | | | | [added: | | |] 463 | | | | [added: | |] 0.20 | | |

| Remeasurement of deferred tax balances | [added: | |] — | | | | [added: | |] — | [removed: %] | | [removed: —] | | | [added: 1,133] | [removed: —] | | | | [removed: 1,133] | | | | | | | [removed: (1,133] [added: (1,133)] | | [removed: )] | | [removed: (0.49] | | [removed: )] [added: (0.49)] | [added: | |]

| Transition tax on foreign earnings | [added: | |] — | | | | [added: | |] — | [removed: %] | | [removed: —] | | | [added: (1,147)] | [removed: —] | | | | [removed: (1,147] | | [removed: )] | | | | | 1,147 | | | | [added: | |] 0.49 | | |

| | [removed: Year ended] [added: | | For the Year Ended] September 30, [removed: 2017] [added: 2020] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | |]

[removed: | (2) | Figures in the table may not recalculate exactly due to rounding. Operating margin, effective] [added: Effective] income tax rate, diluted earnings per share and their respective totals are calculated based on unrounded numbers. [removed: |]

See *Note 5—U.S. and Europe Retrospective Responsibility Plans* and *Note 20—Legal Matters* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary [removed: Data.*][added: Data* of this report.]

See *Note 5—U.S. and Europe Retrospective Responsibility Plans* and *Note [removed: 14—Stockholders’] [added: 15—Stockholders’] Equity* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary [removed: Data*.][added: Data* of this report.]

*Common stock repurchases.* In January [removed: 2019,] [added: 2020,] our board of directors authorized [removed: an additional $8.5] [added: a $9.5] billion share repurchase [removed: program.][added: program (the “January 2020 Program”).]

As of September 30, [removed: 2019, the program] [added: 2020, our January 2020 Program] had remaining authorized funds of [removed: $4.1] [added: $5.5] billion for share repurchase.

See *Note [removed: 14—Stockholders’] [added: 15—Stockholders’] Equity* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary [removed: Data*.][added: Data* of this report.]

[removed: Nominal] [added: The decrease in nominal] international payments volume [removed: growth] of [removed: 3%] [added: 1%] for the 12 months ended June 30, [removed: 2019(1)] [added: 2020(1)] was negatively impacted by the overall strengthening of the U.S. dollar.

On a constant-dollar basis, which excludes the impact of exchange rate movements, our international payments volume growth [removed: rate] for the 12 months ended June 30, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] was [removed: 10%] [added: 2%] and [removed: 11%,] [added: 9%,] respectively.

*This section of this Form 10-K generally discusses fiscal 2020 compared to fiscal 2019.

Discussions of fiscal 2019 compared to 2018 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7.

Percentage changes are calculated based on unrounded numbers.

(2)For a full reconciliation of our non-GAAP financial results, see tables in *Non-GAAP financial results* below.

*Coronavirus.* COVID-19 continues to have an impact globally.

While we have been actively monitoring the worldwide spread of COVID-19, the extent to which COVID-19 will ultimately impact our business remains difficult to predict.

Our priority remains the safety of our employees, clients and the communities in which we live and operate.

We are taking a measured approach in bringing our employees back in the office and will continue to have most of our employees work remotely for the rest of 2020.

We continue to remain in close and regular contact with our employees, clients, partners and governments globally to help them navigate these challenging times.

Revenues in the latter half of fiscal 2020 were impacted by declines in volumes and transactions as a result of COVID-19, although we are exiting the year with improved results and most countries had stable to positive year-over-year domestic spending growth in the fiscal fourth quarter.

Cross-border volume however, remained depressed, led by travel spending, as the majority of borders remain closed.

While we have taken measures to modify our business practices and reduce operating expenses, including scaling back hiring plans, restricting travel, lowering marketing spend and the use of external resources, the impact that COVID-19 will have on our business remains difficult to predict due to numerous uncertainties, including the transmissibility, severity and duration of the outbreak, the effectiveness of social distancing measures or actions that are voluntarily adopted by the public or required by governments or public health authorities, the development and availability of effective treatments or vaccines, and the impact to our employees and our operations, the business of our clients, supplier and business partners, and other factors identified in Part I, Item 1A “Risk Factors” in this Form 10-K.

We will continue to evaluate the nature and extent of the impact to our business.

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Net revenues for fiscal 2020 were $21.8 billion, a decrease of 5% over the prior year, primarily due to the year-over-year changes payments volume, cross-border volume and processed transactions, which were impacted by the spread of COVID-19 globally starting in the latter part of March 2020.

Total operating expenses for fiscal 2020 were $7.8 billion on a GAAP basis, and decreased 3% over the prior year, driven by lower litigation provision and our overall cost reduction strategy, offset by higher personnel and depreciation and amortization from our ongoing investments in support of our strategy for future growth.

Total operating expenses for fiscal 2020 were $7.7 billion on a non-GAAP basis, and increased 1% over the prior year primarily driven by higher personnel, offset by our overall cost reduction strategy.

*Non-GAAP financial results.* We use non-GAAP financial measures of our performance which exclude certain items which we believe are not representative of our continuing operations, as they may be non-recurring or have no cash impact, and may distort our longer-term operating trends.

We consider non-GAAP measures useful to investors because they provide greater transparency into management’s view and assessment of our ongoing operating performance.

Starting in fiscal 2020, we revised our non-GAAP methodology to also exclude the impact of gains and losses on our equity investments, amortization of acquired intangible assets and acquisition-related costs for acquisitions that closed in fiscal 2019 and subsequent periods.

Prior year amounts have been restated to conform to our current presentation.

- *Gains and losses on equity investments.* Gains and losses on equity investments include periodic non-cash fair value adjustments and gains and losses upon sale of an investment.

These long-term investments are strategic in nature and are primarily private company investments.

Gains and losses and the related tax impacts associated with these investments are tied to the performance of the companies that we invest in and therefore do not correlate to the underlying performance of our business.

- *Amortization of acquired intangible assets.* Amortization of acquired intangible assets consists of amortization of intangible assets such as developed technology, customer relationships and brands acquired in connection with business combinations executed beginning in fiscal 2019.

Amortization charges for our acquired intangible assets are non-cash and are significantly affected by the timing, frequency and size of our acquisitions, rather than our core operations.

As such, we have excluded this amount and the related tax impact to facilitate an evaluation of our current operating performance and comparison to our past operating performance.

- *Acquisition-related costs.* Acquisition-related costs consist primarily of one-time transaction and integration costs associated with our business combinations.

These costs include professional fees, technology integration fees, restructuring activities and other direct costs related to the purchase and integration of acquired entities.

It also includes retention equity and deferred equity compensation when they are agreed upon as part of the purchase price of the transaction but are required to be recognized as expense post-combination.

We have excluded these amounts and the related tax impacts as the expenses are recognized for a limited duration and do not reflect the underlying performance of our business.

*•Litigation provision.* During fiscal 2019 and 2018, we recorded a litigation provision of $370 million and $600 million, respectively, and related tax benefits of $83 million and $137 million, respectively, associated with the interchange multidistrict litigation.

The tax impact is determined by applying applicable federal and state tax rates to the litigation provision.

Net of the related cash tax benefit of $51 million, determined by applying applicable tax rates, non-GAAP net income decreased by $49 million.

*•Remeasurement of deferred tax balances.* During fiscal 2020, in connection with the UK enacted legislation that repealed the previous tax rate reduction from 19% to 17% that was effective on April 1, 2020, we

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remeasured our net deferred tax liabilities as of the enactment date, resulting in the recognition of a non-recurring, non-cash income tax expense of $329 million.

See *Note 19—Income Taxes* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data* of this report.

See *Note 19—Income Taxes* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data* of this report.

- *Resolution of a tax item.* During fiscal 2020, we resolved a long-outstanding tax matter, dating back more than 12 years, relating to certain tax filing positions taken prior to our initial public offering.

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| --- | --- |

| (2) | Non-GAAP net income and non-GAAP diluted earnings per share in fiscal 2019, 2018 and 2017 exclude the impact of certain significant items that we believe are not indicative of our operating performance in these or future periods, as they are either non-recurring or have no cash impact. For a full reconciliation of our non-GAAP financial results, see tables in *Non-GAAP financial results* below. |

Our business is affected by overall economic conditions and consumer spending.

Our business performance during fiscal 2019 reflects continued global consumer spending growth amidst uneven global economic conditions.

We recorded net revenues of $23.0 billion for fiscal 2019, an increase of 11% over the prior year, primarily reflecting continued growth in nominal payments volume, nominal cross-border volume and processed transactions.

Total operating expenses for fiscal 2019 were $8.0 billion, compared to $7.7 billion in fiscal 2018.

The increase over the prior year was primarily driven by higher personnel and marketing as we continue to invest in growing our business, offset by a lower litigation provision.

*Non-GAAP financial results.* Our financial results for fiscal 2019, 2018 and 2017 reflect the impact of certain significant items that we do not believe are indicative of our ongoing operating performance in these or future periods, as they are either non-recurring or have no cash impact.

As such, we believe the presentation of our non-GAAP financial results excluding the following items provides a clearer understanding of our operating performance for the periods presented.

| • | *Litigation provision.* During fiscal 2019 and 2018, we recorded a litigation provision of $370 million and $600 million, respectively, and related tax benefits of $83 million and $137 million, respectively, associated with the interchange multidistrict litigation. The tax impact is determined by applying applicable federal and state tax rates to the litigation provision. Under the U.S. retrospective responsibility plan, we recover the monetary liabilities related to the U.S. covered litigation through a reduction to the conversion rate of our class B common stock to shares of class A common stock. See *Note 5—U.S. and Europe Retrospective Responsibility Plans* and *Note 20—Legal Matters* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data*. |

| ▪ | During fiscal 2017, associated with our legal entity reorganization, we recognized a non-cash general and administrative expense of $192 million, before tax, related to the charitable donation of Visa Inc. shares that were acquired as part of the Visa Europe acquisition and held as treasury stock. Net of the related cash tax benefit of $71 million, determined by applying applicable tax rates, adjusted net income increased by $121 million. |

| *•* | *Elimination of deferred tax balances.* During fiscal 2017, in connection with our legal entity reorganization, we eliminated deferred tax balances originally recognized upon the acquisition of Visa Europe, resulting in the recognition of a non-recurring, non-cash income tax provision of $1.5 billion. See *Note 19—Income Taxes* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data*. |

| Non-GAAP | $ | 7,606 | | | 67 | % | | $ | (117 | ) | | $ | 15,254 | | | $ | 2,887 | | | 18.9 | % | | $ | 12,367 | | | $ | 5.44 | |

| Non-GAAP | $ | 6,860 | | | 67 | % | | $ | (341 | ) | | $ | 13,408 | | | $ | 2,679 | | | 20.0 | % | | $ | 10,729 | | | $ | 4.61 | |

| As reported | $ | 6,214 | | | 66 | % | | $ | (450 | ) | | $ | 11,694 | | | $ | 4,995 | | | 42.7 | % | | $ | 6,699 | | | $ | 2.80 | |

| Charitable contribution | (192 | | ) | | 1 | % | | — | | | | 192 | | | | 71 | | | | | | | 121 | | | | 0.05 | | |

| Elimination of deferred tax balances | — | | | | — | % | | — | | | | — | | | | (1,515 | | ) | | | | | 1,515 | | | | 0.63 | | |

| Non-GAAP | $ | 6,022 | | | 67 | % | | $ | (450 | ) | | $ | 11,886 | | | $ | 3,551 | | | 29.9 | % | | $ | 8,335 | | | $ | 3.48 | |

| (1) | Operating margin is calculated as operating income divided by net revenues. |

*Interchange multidistrict litigation*.

During fiscal 2019, we recorded an additional accrual of $370 million to address claims associated with the interchange multidistrict litigation, resulting in an accrued litigation balance related to U.S. covered litigation of $1.2 billion at September 30, 2019.

We also deposited $300 million of operating cash into the U.S. litigation escrow account.

*Reduction in as-converted shares.* During fiscal 2019, total as-converted class A common stock was reduced by 58 million shares at an average price of $154.62 per share.

Of the 58 million shares, 56 million were repurchased in the open market using $8.6 billion of operating cash on hand.

Additionally, in September 2019, we deposited $300 million of operating cash into the litigation escrow account previously established under the U.S. retrospective responsibility plan.

Also, we recovered $8 million of VE territory covered losses in accordance with the Europe retrospective responsibility plan during fiscal 2019.

The deposit and recovery have the same economic effect on earnings per share as repurchasing our class A common stock because they reduce the class B common stock conversion rate and the UK&I and Europe preferred stock conversion rates and consequently, reduce the as-converted class A common stock share count.

All share repurchase programs authorized prior to January 2019 have been completed.

During the three months ended December 31, 2018, we updated our definition of payments volume to now include all disbursement volume related to Visa Direct, in addition to the funding volume previously included.

All prior periods presented have been adjusted accordingly.

Please refer to the Operational Performance Data section of Exhibit 99.1 on Form 8-K filed on January 30, 2019 for more details on the impact from this update in payments volume definition.

Nominal payments volume over the prior year posted low double-digit growth in the U.S. and in line with 2018 growth.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Consumer credit | $ | 1,540 | | | $ | 1,441 | | | 7 | % | | $ | 2,487 | | | $ | 2,457 | | | 1 | % | | $ | 4,027 | | | $ | 3,898 | | | 3 | % |

| Total nominal payments volume | $ | 3,875 | | | $ | 3,527 | | | 10 | % | | $ | 4,744 | | | $ | 4,612 | | | 3 | % | | $ | 8,619 | | | $ | 8,139 | | | 6 | % |

| Total nominal volume(5) | $ | 4,448 | | | $ | 4,089 | | | 9 | % | | $ | 7,004 | | | $ | 7,049 | | | (1 | )% | | $ | 11,452 | | | $ | 11,139 | | | 3 | % |

| | 2018 | | | | 2017 | | | | % Change | | | 2018 | | | | 2017 | | | | % Change | | | 2018 | | | | 2017 | | | | % Change | |

[removed: The] [added: At September 30, 2020 and 2019, the] aggregate notional amounts of our foreign currency forward contracts outstanding in our exchange rate risk management program, including contracts not designated for cash flow hedge accounting, were [removed: $3.1 billion and $3.7] [added: $3.9] billion [removed: at September 30, 2019] and [removed: 2018,] [added: $3.1 billion,] respectively.

The aggregate notional amount outstanding at September 30, [removed: 2019] [added: 2020] is fully consistent with our strategy and treasury policy aimed at reducing foreign exchange risk below a predetermined and approved threshold.

The effect of a hypothetical 10% strengthening or weakening in the value of the functional currencies [added: at September 30, 2020] is estimated to create an additional fair value gain of approximately [removed: $245] [added: $210] million or loss of approximately [removed: $300] [added: $260] million, respectively, on our [added: outstanding] foreign currency forward [removed: contracts outstanding at September 30, 2019.][added: contracts.]

See *Note 1—Summary of Significant Accounting Policies* and *Note [removed: 12—Derivative and Non-derivative] [added: 13—Derivative] Financial Instruments* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data* of this report.

Resulting translation adjustments are reported as a component of accumulated other comprehensive income [removed: or loss] [added: (loss)] on the consolidated balance sheets.

A hypothetical 10% change in the euro against the U.S. dollar compared to the exchange rate at September 30, [removed: 2019,] [added: 2020,] would result in a foreign currency translation adjustment of [removed: $2.0] [added: $2.2] billion.

Neither our [removed: operating results] [added: statements of operations] or cash flows have been, nor are they expected to be, materially impacted by a sudden change in market interest rates.

The fair value [removed: balances] of our fixed-rate investment securities at September 30, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] were [removed: $1.8] [added: $4.0] billion and [removed: $5.1] [added: $1.8] billion, respectively.

The fair value [removed: balances] of our adjustable-rate debt securities were [removed: $4.6] [added: $2.0] billion and [removed: $3.5] [added: $4.6] billion at September 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

A hypothetical 100 basis point increase in interest rates would create an estimated decrease in fair value of approximately [removed: $9] [added: $3.5] million on our investment securities at September 30, [removed: 2019.][added: 2020.]

See *Note [removed: 12—Derivative and Non-derivative] [added: 13—Derivative] Financial Instruments* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data* of this report.

At September 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] our U.S. defined benefit pension plan assets were $1.1 billion [removed: at each year end,] and projected benefit obligations were $0.9 billion [removed: and $0.8 billion, respectively.][added: at each year end.]

A hypothetical 10% decrease in the value of pension plan assets and a 1% decrease in the discount rate [added: as of September 30, 2020] would result in an aggregate decrease of approximately [removed: $220] [added: $221] million in the funded status and an increase of approximately [removed: $43] [added: $44] million in pension cost.

At September 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] our non-U.S. defined benefit pension plan assets were $0.5 billion [removed: and $0.4 billion, respectively,] [added: at each year end] and projected benefit obligations were [removed: $0.5] [added: $0.6] billion [removed: at each year end.][added: and $0.5 billion, respectively.]

A hypothetical 10% decrease in the value of pension plan assets and a 1% decrease in the discount rate [added: as of September 30, 2020] would result in an aggregate decrease of approximately [removed: $182] [added: $194] million in the funded status and an increase of approximately [removed: $15] [added: $17] million in pension cost.

We will continue to monitor the performance of pension plan assets and market conditions as we evaluate the amount of our contribution to the pension [removed: plan] [added: plans] for fiscal [removed: 2020,] [added: 2021,] if any, which would be made in September [removed: 2020.][added: 2021.]

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A hypothetical 100 basis point decrease in interest rates would create an estimated increase in fair value of approximately $7.2 million on our investment securities at September 30, 2020.

Equity Investment Risk

As of September 30, 2020 and 2019, the carrying value of our non-marketable equity securities was $1.0 billion and $0.7 billion, respectively.

These investments are subject to a wide variety of market-related risks that could substantially reduce or increase the fair value of our holdings.

A decline in financial condition or operating results of these investments could result in a loss of all or a substantial part of our carrying value in these companies.

We regularly review our non-marketable equity securities for possible impairment, which generally involves an analysis of the facts and changes in circumstances influencing the investment, expectations of the entity’s cash flows and capital needs, and the viability of its business model.

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These assets are included in cash equivalents and short-term or long-term available-for-sale investments.

| | |

| --- | --- |

Visa is [added: one of] the world’s [removed: leader] [added: leaders] in digital payments.

We facilitate [removed: commerce] [added: digital payments] across more than 200 countries and territories among a global set of consumers, merchants, financial institutions, businesses, strategic partners and government [removed: entities.][added: entities through innovative technologies.]

With new ways to pay, we [removed: are evolving] [added: have evolved] into a [added: global] company that [removed: enables money movement] [added: is a Trusted Engine of Commerce, providing payment solutions] for everyone, everywhere.

[removed: To accomplish this, we] [added: We] are [removed: continually] focused on extending, enhancing and investing in our proprietary network, VisaNet, while seeking new ways to offer products and services and become a single connection point for [removed: initiating] [added: facilitating] any [added: payment] transaction, both on the Visa network and beyond.

[removed: | • | We] [added: - We] offer a wide range of Visa-branded payment products that our [removed: 15,500] [added: 15,400] financial institution clients use to develop and offer core business solutions, including credit, debit, prepaid and cash access programs for individual, business and government account holders. [removed: During fiscal year 2019, Visa’s total payments and cash volume grew to $11.6 trillion and more than 3.4 billion cards were available worldwide to be used at more than 61 million merchant locations. |]

[removed: | • | We] [added: - We] take an open, partnership approach and seek to provide value by enabling access to our global network, including offering our technology capabilities through application programming interfaces (APIs). [removed: Additionally, we enter into partnerships with both traditional and emerging players to innovate and expand the payments ecosystem. This approach helps our partners leverage the resources of our platform to scale and grow their businesses more quickly and effectively. |]

[removed: | • | We] [added: - We] provide [removed: value-added] [added: value added] services to our clients, including [removed: consulting] [added: issuer] and [removed: analytics,] [added: consumer solutions, merchant and acquirer solutions,] fraud management and security services, [removed: merchant] [added: data] solutions, [removed: processing capabilities] and [removed: digital services like tokenization. |][added: consulting through Visa Consulting & Analytics.]

[removed: | • | We] [added: - We] invest in and promote our brand to the benefit of our clients and partners through advertising, promotional and sponsorship initiatives with FIFA, the International Olympic [removed: Committee and] [added: Committee,] the International Paralympic [removed: Committee,] [added: Committee] and the National Football League, among others. [removed: We also use these sponsorship assets to showcase our payment innovations. |]

FISCAL YEAR [removed: 2019] [added: 2020] KEY STATISTICS

[removed: ][added: ]

[removed: |] (1) [removed: |] Please see *Item 7–Management’s Discussion and Analysis of Financial Condition and Results of Operations* for a reconciliation of our non-GAAP financial results. [removed: |]

[removed: ][added: ]

Visa earns revenue by facilitating [removed: commerce] [added: payments] across more than 200 countries and territories among a global set of consumers, merchants, financial institutions, businesses, strategic partners and government [removed: entities.][added: entities through innovative technologies.]

Interchange reimbursement fees represent a transfer of value between the financial institutions participating in our [removed: open-loop] payments network.

ACCELERATING OUR BUSINESS: FISCAL YEAR [removed: 2019] [added: 2020] KEY FOCUS AREAS

We are also building and acquiring new capabilities that can add value to our clients [removed: as we] [added: and] strengthen the foundation of our business: technology, security, brand and talent.

As the pace of change accelerates each year, helped by the advancement of technology and our focus on the user experience in [removed: payments,] [added: payments for both the face-to-face and ecommerce environments,] we see significant opportunity for continued growth.

We are accelerating efforts to move approximately [removed: $17] [added: $18] trillion in consumer spending [removed: and $15-20 trillion of B2B spending] still done in cash and check to cards and digital credentials on the Visa network.

[removed: ][added: ]

[removed: Business Solutions:] We offer a portfolio of business payment solutions, including small business, corporate (travel) cards, purchasing cards, virtual [removed: cards/digital] [added: cards and digital] credentials, non-card cross-border B2B payment options and disbursement accounts, covering most major industry segments around the world.

Credit: Credit cards and digital credentials are issued by [removed: financial institutions and used by co-brand partners] [added: Visa’s clients] and [removed: fintechs to] allow consumers and businesses to access credit to pay for goods and services.

Visa does not extend credit to account holders; however, we provide [removed: card benefits, including] technology, [removed: authorization,] [added: authorization services,] fraud tools and brand support that issuers use to enable their credit [removed: products.][added: programs.]

We also work with our clients on product design, consumer segmentation and consumer experience design to help [removed: our clients] [added: them] deliver products and services that match their [removed: consumers’] [added: customers’] needs.

Debit: Debit cards and digital credentials are issued by financial institutions [removed: to] [added: and] allow consumers and small businesses to purchase goods and services using funds held in their bank accounts.

Debit cards enable account holders to transact [removed: —] in person, online or via mobile [removed: —] without needing cash or checks and without accessing a line of credit.

Visa provides a strong brand, [removed: the] network infrastructure (which includes processing, acceptance, product features and support, risk tools and services) and industry expertise to help issuers optimize their debit offerings.

Prepaid: Prepaid [removed: products] [added: cards and digital credentials] draw from a designated balance funded by individuals, businesses or governments.

[removed: Prepaid] [added: Visa-branded prepaid] cards also play an important part in financial inclusion, bringing payment solutions to those with limited or no access to traditional banking products.

Global ATM: The Visa/PLUS Global ATM network provides account holders with cash [removed: access] [added: access, and other banking capabilities,] in more than 200 countries and territories worldwide through issuing and acquiring partnerships with both financial institutions and independent ATM operators.

Ecommerce has [removed: drastically] evolved since the first online purchase was made on the Visa network [added: more than] 25 years ago.

[removed: As a result, we] [added: We] are helping to transform the digital checkout experience by adding more security and removing friction with the launch of [removed: click] [added: Visa Click] to [removed: pay.][added: Pay.]

Enabled by the EMV® Secure Remote Commerce Specifications, [removed: click] [added: Click] to [removed: pay] [added: Pay] simplifies the checkout experience, eliminating the need for a consumer to enter payment details each time they are [removed: purchasing digital services or shopping] [added: paying] online.

Consumers can click to pay with [added: Visa with] confidence when they see [removed: a common checkout button with network logos and] [added: the Click to Pay icon,] a stylized depiction of a fast forward [removed: icon .][added: icon, where Visa is accepted.]

| (1) The SRC payment icon is available for use in connection with implementations of the EMV® Secure Remote Commerce Specification. [removed: The SRC payment icon image files are provided following execution of the EMVCo Trademark License Agreement for SRC Payment Icon and may only be used in conformance with the Secure Remote Commerce (SRC): Payment Icon Reproduction Requirements.] | | | | | [added: | | | |]

We continue to expand our acceptance footprint in both mature and emerging markets, [removed: and we remain committed to growing access and acceptance] so that businesses and devices are enabled to send and receive funds via the Visa [removed: network.][added: network in categories such as vending, laundry, gaming, parking, electric vehicle charging, rent and tuition.]

[removed: Enhancing] [added: Promote] inclusive financial access.

According to the World Bank, 1.7 billion [removed: people] [added: adults] worldwide still lack access to formal financial services, which means they do not have access to the services that can help facilitate the growth of their economic livelihood.

[removed: Our social impact] [added: We are continuing this] work [removed: also supports] [added: by supporting] women’s [removed: empowerment] [added: advancement, small businesses,] and the expansion of financial inclusion through programs that support [removed: skill-development] [added: skill development] and access to networks and financial services for under and unbanked populations.

[removed: Open] [added: Fintech/Open] Partnership Model

New [removed: Payment] Flows

- We facilitate secure, reliable and convenient transactions between financial institutions, merchants and consumers. We traditionally have referred to this as the “four-party” model.

As the payments ecosystem continues to evolve, we have broadened this model to include digital banks, wallets and a range of financial technology companies (fintechs), governments and non-governmental organizations.

We provide transaction processing services (primarily authorization, clearing and settlement) to our financial institution and merchant clients through VisaNet.

During fiscal year 2020, we saw 204 billion payments and cash transactions with Visa’s brand, equating to an average of 559 million transactions a day.

Of the 204 billion total transactions, 141 billion were processed by Visa.

During fiscal year 2020, Visa’s total payments and cash volume was $11.3 trillion, and 3.5 billion credentials were available worldwide to be used at nearly 70 million merchant locations.

We partner with both traditional and emerging players to innovate and expand the payments ecosystem, allowing them to leverage the resources of our platform to scale and grow their businesses more quickly and effectively.

It also creates a more inclusive ecosystem with products that could reach the under and unbanked populations.

- We are accelerating the migration to digital payments and evolving Visa to be a “network of networks” to enable the movement of money on VisaNet and beyond.

Visa’s network of networks approach creates opportunities by facilitating person-to-person (P2P), business-to-consumer (B2C), business-to-business (B2B), business-to-small business (B2b) and government-to-consumer (G2C) payments.

We also use these sponsorship assets to showcase our payment innovations.

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Fiscal year 2020 and COVID-19 have brought unprecedented challenges and widespread economic and social change.

At the same time, the past fiscal year demonstrated the strength and resiliency of our strategy and the meaningful role we play at the center of the payments ecosystem.

It has also accelerated progress, including accelerating the shift to ecommerce and the demand for contactless payments, providing significant opportunities for Visa that are aligned with our strategy.

As we look to be a single point of connection for money movement globally, there are three primary levers to that growth — consumer payments, new flows and value added services.

Consumer Payments

Credit cards are affiliated with programs operated by financial institution clients, co-brand partners, fintechs and affinity partners.

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Engagement

In fiscal year 2020, due in part to the COVID-19 pandemic, there was a significant acceleration in the shift away from cash to digital forms of payment.

Ecommerce represents only about 14% of global retail spending, so there is still substantial opportunity for ecommerce growth.

During fiscal year 2020, Click to Pay went live with select merchants and payment processors and platforms in the U.S., and was enabled in new geographies, including Australia, Canada, China, Colombia, Hong Kong, Malaysia, Mexico, New Zealand, Poland, Qatar, Singapore, South Africa, Ukraine, United Arab Emirates and the United Kingdom*.*

As we seek to improve the user experience in the face-to-face environment, tap to pay, which is tapping a contactless card or mobile device on a terminal to make a payment, has emerged as the preferred way to check out amongst consumers in many markets around the world.

Contactless penetration grew to 43% of all face-to-face transactions around the world in fiscal year 2020.

In addition, Visa has worked with payments industry partners and governments to support raising contactless payments limits in markets around the world that require cardholder verification on tap to pay transactions.

More than 50 markets across Europe, the Middle East, Africa and Canada have taken this step to help more individuals utilize this way to pay in fiscal year 2020.

The U.S. is one of the most significant opportunities for growth in tap to pay.

Tap to pay awareness and adoption accelerated in the U.S. this year, and we expect that demand to continue to grow.

More than 70% of face-to-face transactions at checkout in the U.S. occur at a merchant that has the ability to accept contactless payments, and more than 80 of the top 100 merchants by transactions are enabled for tap to pay.

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Acceptance

For example, in emerging markets, while 40% of the national GDP is contributed by small and micro-sellers, fewer than 10% of these sellers currently accept digital payments.

In January 2020, Visa announced Tap to Phone technology to help sellers accept digital payments without any additional hardware.

This technology allows micro-businesses to use smartphones to accept digital payments instead of a software terminal.

This has enabled Visa to become one of the world’s largest electronic payments networks based on payments volume and number of transactions.

Our fundamental business model is based on the following:

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| • | We facilitate secure, reliable and convenient transactions between financial institutions, merchants and account holders. We traditionally have referred to this as the ‘four party’ model. As the payments ecosystem continues to evolve, we are continuing to broaden this model to include digital banks, wallets and a range of financial technology companies (fintechs), governments and non-governmental organizations. We provide transaction processing services (primarily authorization, clearing and settlement) to our financial institution and merchant clients through VisaNet, our global processing platform. During fiscal year 2019, we saw 201.9 billion payments and cash transactions with Visa’s brand, equating to an average of 553 million transactions a day. Of the 201.9 billion total transactions, 138.3 billion were processed by Visa. |

| • | We are accelerating the migration to digital payments by enabling new types of transactions beyond the core consumer-to-business (C2B) payments. These include person-to-person (P2P), business-to-consumer (B2C), business-to-business (B2B) and government-to-consumer (G2C) payments. |

(2) Please see *Note 3—Revenues* *t*o our consolidated financial statements included in *Item 8.

Financial Statements and Supplementary Data* for the impact of the new revenue standard.

As technology evolves from wired to wireless solutions — driven by technology developments such as the expansion of mobile technology and the rise of 5G networks — there are significant opportunities to grow digital payments.

To capture this growth, we are strengthening our core business while simultaneously evolving our organization to seize opportunities to open new payment flows, expand access, build our acceptance footprint and grow our base of partners and clients.

Core Products

Contactless payments — or when a consumer taps to pay at checkout with a contactless card or mobile phone — continues to see strong adoption around the world.

In 2019, excluding the United States (“U.S.”), tap to pay had surpassed 50 percent of face-to-face transactions that ran over the Visa network.

This is up from less than 30 percent just two years ago.

There are now more than 50 countries where tapping to pay represents at least a third of all domestic face-to-face transactions processed on our network, up from 35 countries at the end of last fiscal year.

The U.S. is starting to catch up to this global adoption rate.

In 2019, U.S. financial institutions began issuing contactless cards to customers nationwide.

There are now more than 100 million Visa contactless cards in the U.S., and we expect that number to grow to 300 million by the end of 2020.

Contactless payments can also open up new payment experiences, such as transit.

Transit continues to be an important use case for introducing consumers to the benefits of tapping to pay.

In 2019, Visa helped launch contactless transit solutions in cities around the world, including Belarus, Edinburgh, Florence, Manchester, Miami, Milan, New York, Rio de Janeiro, Singapore, São Paulo and more — making it easier for people to get around while reducing operating costs for private and public transport operators.

Digital commerce growth is outpacing physical retail growth, and we expect this to continue.

This presents an opportunity to evolve both the security and consumer experience around ecommerce.

In October 2019, click to pay went live with select merchants in the U.S., and we expect full commercial migration of Visa Checkout to happen in early 2020.

(1)

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Growing Access and Acceptance

For example, Visa has grown acceptance in the U.S. vending machine category by enabling more than two million devices as new acceptance locations, which still leaves an estimated 50 percent of vending machines available for upgrade.

Street parking represents a similar opportunity.

Ensuring seamless experiences for cross-border transactions. As commerce continues to flow across borders, we are simplifying and streamlining how funds flow for both consumers and businesses.

Cross-border ecommerce is also a growing opportunity.

Consumers purchasing something from a foreign website are expected to account for $900 billion in gross merchandise volume by 2020, representing an estimated 22 percent share of the global ecommerce market.(2)

As part of the World Bank’s goal of Universal Financial Access by 2020, in 2015 we committed to reaching 500 million consumers by 2020.

At the end of 2018, we reached 396 million consumers worldwide with first-time access to a digital payment product through a Visa-branded account in partnership with local financial institutions.

Our scan to pay service has emerged as one of our most successful low-cost acceptance solutions for merchants, enabling the growth of digital payments in developing economies and remote locations.

In some countries, the infrastructure for traditional payments technology simply may not exist.

With scan to pay, a business needs only to display a QR code to accept digital payments, saving the cost, time and complexity of installing a terminal and telecommunications wiring.

Scan to pay is already live in parts of Africa, Eastern Europe, the Middle East and Asia, with plans to expand into emerging markets of all sizes and regions.

In India, we continue to work with local acquirers to expand access and strengthen consumer demand for electronic payments.

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[removed: FORM 10-K][added: FORM 10-K]

| ☑ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year [removed: ended September] [added: ended September] 30, [removed: 2019][added: 2020]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

Commission file [removed: number 001-33977][added: number 001-33977]

[removed: ][added: ]

| Delaware | | | [added: | | | | | |] 26-0267673 | [added: | |]

| (State or other [removed: jurisdiction of] [added: jurisdiction of] incorporation or organization) | | | [added: | | | | | |] (IRS [removed: Employer Identification] [added: Employer Identification] No.) | [added: | |]

| P.O. Box 8999 | | | [added: | | | | | |] 94128-8999 | [added: | |]

| San Francisco, | [added: | |] California | | | [added: | | | | | |]

| (Address of principal executive offices) | | | [added: | | | | | |] (Zip Code) | [added: | |]

[removed: (650) 432-3200][added: (650) 432-3200]

| Title of each class | | [added: | | | |] Trading Symbol | | [added: | | | |] Name of each exchange on which registered | [added: | |]

| Class A Common Stock, par value $0.0001 per share | | [added: | | | |] V | | [added: | | | |] New York Stock Exchange | [added: | |]

[removed: See the definitions of “large accelerated filer”] “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

| Large accelerated filer | [added: | |] ☑ | | [added: | | | |] Accelerated filer | [added: | |] ☐ | [added: | |]

| Non-accelerated filer | [added: | |] ☐ | | [added: | | | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| | | | [added: | | | | | |] Emerging growth company | [added: | |] ☐ | [added: | |]

The aggregate market value of the registrant’s class A common stock, par value $0.0001 per share, held by non-affiliates (using the New York Stock Exchange closing price as of March [removed: 29, 2019,] [added: 31, 2020,] the last business day of the registrant’s most recently completed second fiscal quarter) was approximately [removed: $272.0] [added: $272.7] billion.

As of November [removed: 8, 2019,] [added: 13, 2020,] there were [removed: 1,712,677,044] [added: 1,692,383,762] shares outstanding of the registrant’s class A common stock, par value $0.0001 per share, 245,513,385 shares outstanding of the registrant’s class B common stock, par value $0.0001 per share, and [removed: 11,133,345] [added: 10,684,539] shares outstanding of the registrant’s class C common stock, par value $0.0001 per share.

Portions of the Registrant’s Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein.

Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the Registrant’s fiscal year ended September 30, [removed: 2019.][added: 2020.]

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| Item 1 | [removed: [Business](#s00A1913427AC52F58E31C6C6BDDFE539)] | [removed: [4](#s00A1913427AC52F58E31C6C6BDDFE539)] | [added: [Business](#i5da09256dd9a42a6bab5fdd22d11dccc_13) | | | [4](#i5da09256dd9a42a6bab5fdd22d11dccc_13) | | |]

| Item 1A | [added: | |] [Risk [removed: Factors](#s80E0C0BD39815BC0A12076D9026C2BD2)] [added: Factors](#i5da09256dd9a42a6bab5fdd22d11dccc_16)] | [removed: [19](#s80E0C0BD39815BC0A12076D9026C2BD2)] | [added: | [19](#i5da09256dd9a42a6bab5fdd22d11dccc_16) | | |]

| Item 1B | [added: | |] [Unresolved Staff [removed: Comments](#s854F489A7F945BC187315B6F73626717)] [added: Comments](#i5da09256dd9a42a6bab5fdd22d11dccc_19)] | [removed: [30](#s854F489A7F945BC187315B6F73626717)] | [added: | [33](#i5da09256dd9a42a6bab5fdd22d11dccc_19) | | |]

| Item 2 | [removed: [Properties](#s0EFB20B648CE5C1DB305D7F1488D07A3)] | [removed: [30](#s0EFB20B648CE5C1DB305D7F1488D07A3)] | [added: [Properties](#i5da09256dd9a42a6bab5fdd22d11dccc_22) | | | [33](#i5da09256dd9a42a6bab5fdd22d11dccc_22) | | |]

| Item 3 | [added: | |] [Legal [removed: Proceedings](#s4308966C4D6E577CBD2E6CBB8903EB8C)] [added: Proceedings](#i5da09256dd9a42a6bab5fdd22d11dccc_25)] | [removed: [30](#s4308966C4D6E577CBD2E6CBB8903EB8C)] | [added: | [33](#i5da09256dd9a42a6bab5fdd22d11dccc_25) | | |]

| Item 4 | [added: | |] [Mine Safety [removed: Disclosures](#s3784F4A428005B84B837474EB94D0586)] [added: Disclosures](#i5da09256dd9a42a6bab5fdd22d11dccc_28)] | [removed: [30](#s3784F4A428005B84B837474EB94D0586)] | [added: | [33](#i5da09256dd9a42a6bab5fdd22d11dccc_28) | | |]

| Item 5 | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sA719F6D898D7570D8036D987A0581F36)] [added: Securities](#i5da09256dd9a42a6bab5fdd22d11dccc_34)] | [removed: [31](#sA719F6D898D7570D8036D987A0581F36)] | [added: | [34](#i5da09256dd9a42a6bab5fdd22d11dccc_34) | | |]

| Item 6 | [added: | |] [Selected Financial [removed: Data](#sC39FBE68C51555B0A00A220E37DAEFAB)] [added: Data](#i5da09256dd9a42a6bab5fdd22d11dccc_37)] | [removed: [33](#sC39FBE68C51555B0A00A220E37DAEFAB)] | [added: | [36](#i5da09256dd9a42a6bab5fdd22d11dccc_37) | | |]

| Item 7 | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s369592BFBF86574F8E596B6D56C83FA0)] [added: Operations](#i5da09256dd9a42a6bab5fdd22d11dccc_40)] | [removed: [34](#s369592BFBF86574F8E596B6D56C83FA0)] | [added: | [37](#i5da09256dd9a42a6bab5fdd22d11dccc_40) | | |]

| Item 7A | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s9066E85DE5B15523B6857E06A3F8CC9C)] [added: Risk](#i5da09256dd9a42a6bab5fdd22d11dccc_73)] | [removed: [50](#s9066E85DE5B15523B6857E06A3F8CC9C)] | [added: | [52](#i5da09256dd9a42a6bab5fdd22d11dccc_73) | | |]

| Item 8 | [added: | |] [Financial Statements and Supplementary [removed: Data](#s2BD20D4EE74551348A8E6B69968ED2B3)] [added: Data](#i5da09256dd9a42a6bab5fdd22d11dccc_76)] | [removed: [52](#s2BD20D4EE74551348A8E6B69968ED2B3)] | [added: | [54](#i5da09256dd9a42a6bab5fdd22d11dccc_76) | | |]

| Item 9 | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s04306DCCC70251D69A4BF133E7348001)] [added: Disclosure](#i5da09256dd9a42a6bab5fdd22d11dccc_202)] | [removed: [112](#s04306DCCC70251D69A4BF133E7348001)] | [added: | [112](#i5da09256dd9a42a6bab5fdd22d11dccc_202) | | |]

| Item 9A | [added: | |] [Controls and [removed: Procedures](#s804988C2FECC56C88CE80E3CDDDFB66F)] [added: Procedures](#i5da09256dd9a42a6bab5fdd22d11dccc_205)] | [removed: [112](#s804988C2FECC56C88CE80E3CDDDFB66F)] | [added: | [112](#i5da09256dd9a42a6bab5fdd22d11dccc_205) | | |]

| Item 9B | [added: | |] [Other [removed: Information](#s62438489C80B59B39CF09791876B5929)] [added: Information](#i5da09256dd9a42a6bab5fdd22d11dccc_208)] | [removed: [112](#s62438489C80B59B39CF09791876B5929)] | [added: | [112](#i5da09256dd9a42a6bab5fdd22d11dccc_208) | | |]

| [PART [removed: III](#s2E9D1A03EC7A58B9BC689F0F547BEA52)] [added: III](#i5da09256dd9a42a6bab5fdd22d11dccc_211)] | | | [added: | | | | | |]

| Item 10 | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#sCFF5FEB035645C8595EB4DEC1A82EC4E)] [added: Governance](#i5da09256dd9a42a6bab5fdd22d11dccc_214)] | [removed: [113](#sCFF5FEB035645C8595EB4DEC1A82EC4E)] | [added: | [113](#i5da09256dd9a42a6bab5fdd22d11dccc_214) | | |]

| Item 11 | [added: | |] [Executive [removed: Compensation](#s06A50564BE535D7FB23B74CBE7EF6EE2)] [added: Compensation](#i5da09256dd9a42a6bab5fdd22d11dccc_217)] | [removed: [113](#s06A50564BE535D7FB23B74CBE7EF6EE2)] | [added: | [113](#i5da09256dd9a42a6bab5fdd22d11dccc_217) | | |]

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See the definitions of “large accelerated filer”

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| [PART I](#i5da09256dd9a42a6bab5fdd22d11dccc_10) | | | | | | | | |

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| [PART II](#i5da09256dd9a42a6bab5fdd22d11dccc_31) | | | | | | | | |

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| [PART IV](#i5da09256dd9a42a6bab5fdd22d11dccc_229) | | | | | | | | |

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[Table](#i5da09256dd9a42a6bab5fdd22d11dccc_7) [](#i5da09256dd9a42a6bab5fdd22d11dccc_7) [of Content](#i5da09256dd9a42a6bab5fdd22d11dccc_7)[s](#i5da09256dd9a42a6bab5fdd22d11dccc_7)

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| [PART I](#sD84F2F05C5ED5160A14A8895C57A9A7D) | | |

| [PART II](#s0AC2757B1A45519296D1D830D7671C57) | | |

| [PART IV](#sC15A852DF8E85D99B0768250570ED56C) | | |

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At September 30, [removed: 2019,] [added: 2020,] we owned or leased [removed: 131] [added: 125] offices in [removed: 76] [added: 78] countries around the world.

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At November [removed: 8, 2019,] [added: 13, 2020,] we had [removed: 348] [added: 338] stockholders of record of our class A common stock.

There were [removed: 1,397] [added: 1,309] and [removed: 509] [added: 467] holders of record of our class B and C common stock, respectively, as of November [removed: 8, 2019.][added: 13, 2020.]

On October [removed: 22, 2019,] [added: 23, 2020,] our board of directors declared a quarterly cash dividend of [removed: $0.30] [added: $0.32] per share of class A common stock (determined in the case of class B and C common stock and series [added: A,] B and C preferred stock on an as-converted basis) payable on December [removed: 3, 2019,] [added: 1, 2020,] to holders of record as of November [removed: 15, 2019] [added: 13, 2020] of our common and preferred stock.

The table below sets forth our purchases of common stock during the quarter ended September 30, [removed: 2019.][added: 2020:]

| Period | | [added: | | | |] Total Number [removed: Of Shares] [added: of Shares] Purchased | | | [added: | | |] Average [added: Purchase] Price [removed: Paid Per] [added: per] Share | | | | [added: | |] Total Number [removed: Of] [added: of] Shares Purchased As Part [removed: Of] [added: of] Publicly Announced Plans [removed: Or Programs(1),(2)] [added: or Programs(1),(2)] | | | [added: | | |] Approximate Dollar Value [removed: Of] [added: of] Shares That May Yet Be Purchased Under The Plans [removed: Or] [added: or] Programs(1),(2) | | |

[removed: | (1) | The figures in the table reflect transactions according to the trade dates.] For purposes of our consolidated financial statements included in this Form 10-K, the impact of these repurchases is recorded according to the settlement dates. [removed: |]

[removed: | (2) | Our] [added: (2)Our] board of directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit. [removed: In January 2019, our board of directors authorized a share repurchase program for $8.5 billion. This authorization has no expiration date. All share repurchase programs authorized prior to January 2019 have been completed. |]

The table below presents information as of September 30, [removed: 2019,] [added: 2020,] for the Visa 2007 Equity Incentive Compensation Plan (the “EIP”) and the Visa Inc. Employee Stock Purchase Plan (the “ESPP”), which were approved by our stockholders.

For a description of the awards issued under the EIP and the ESPP, see *Note [removed: 16—Share-based] [added: 17—Share-based] Compensation* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data* of this report.

| Plan Category | | [removed: (a) Number] [added: | | | | (a) Number] Of [removed: Shares Of] [added: Shares of] Class A Common Stock Issuable Upon Exercise [removed: Of Outstanding] [added: of Outstanding] Options And Rights | | | [added: | | |] Weighted-Average Exercise Price [removed: Of] [added: of] Outstanding Options | | | | [added: | |] Number [removed: Of] [added: of] Shares [removed: Of] [added: of] Class A Common Stock Remaining Available [removed: For] [added: for] Future Issuance Under Equity Compensation Plans (Excluding Shares Reflected In Column (a)) | | | [added: | | |]

[removed: | (1) | The] [added: (1)The] maximum number of shares issuable as of September 30, [removed: 2019] [added: 2020] consisted of [removed: 5,714,658] [added: 6 million] outstanding options, [removed: 5,166,759] [added: 5 million] outstanding restricted stock units and [removed: 1,070,690] [added: 1 million] outstanding performance shares under the EIP and [removed: 378,611] [added: less than 1 million outstanding] purchase rights [removed: outstanding] under the ESPP. [removed: |]

[removed: | (2) | The] [added: (2)The] weighted-average exercise price is calculated based solely on the exercise prices of the outstanding stock options and does not reflect the shares that will be issued upon the vesting of outstanding restricted stock units and performance shares, which have no exercise price. [removed: Additionally, it excludes the weighted-average exercise price of the outstanding purchase rights under the ESPP, as the exercise price is based on the future stock price, net of discount, at the end of each monthly purchase over the offering period. |]

[removed: | (3) | As] [added: (3)As] of September 30, [removed: 2019, 142] [added: 2020, 139] million shares and 16 million shares remain available for issuance under the EIP and the ESPP, respectively. [removed: |]

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| | | | | | | (in millions, except per share data) | | | | | | | | | | | | | | | | | | | | |

| July 1-31, 2020 | | | | | | 2 | | | | | | $ | 192.83 | | | | | 2 | | | | | | $ | 6,646 | |

| August 1-31, 2020 | | | | | | 2 | | | | | | $ | 195.97 | | | | | 2 | | | | | | $ | 6,153 | |

| September 1-30, 2020 | | | | | | 4 | | | | | | $ | 201.33 | | | | | 4 | | | | | | $ | 5,389 | |

| Total | | | | | | 8 | | | | | | $ | 197.73 | | | | | 8 | | | | | | | | |

(1)The figures in the table reflect transactions according to the trade dates.

In January 2020, our board of directors authorized a share repurchase program for $9.5 billion.

This authorization has no expiration date.

All share repurchase programs authorized prior to January 2020 have been completed.

[Table](#i5da09256dd9a42a6bab5fdd22d11dccc_7) [](#i5da09256dd9a42a6bab5fdd22d11dccc_7) [of Content](#i5da09256dd9a42a6bab5fdd22d11dccc_7)[s](#i5da09256dd9a42a6bab5fdd22d11dccc_7)

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| | | | | | | (in millions, except per weighted-average exercise price) | | | | | | | | | | | | | | | | | |

| Equity compensation plans approved by stockholders | | | | | | 12 | | | (1) | | | $ | 114.61 | | (2) | | | 155 | | | (3) | | |

Additionally, it excludes the weighted-average exercise price of the outstanding purchase rights under the ESPP, as the exercise price is based on the future stock price, net of discount, at the end of each monthly purchase over the offering period.

[Table](#i5da09256dd9a42a6bab5fdd22d11dccc_7) [](#i5da09256dd9a42a6bab5fdd22d11dccc_7) [of Content](#i5da09256dd9a42a6bab5fdd22d11dccc_7)[s](#i5da09256dd9a42a6bab5fdd22d11dccc_7)

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| July 1-31, 2019 | | 3,680,103 | | | $ | 179.32 | | | 3,680,103 | | | $ | 5,502,430,029 | |

| August 1-31, 2019 | | 4,064,795 | | | $ | 176.17 | | | 4,064,795 | | | $ | 4,786,268,909 | |

| September 1-30, 2019 | | 4,479,497 | | | $ | 176.61 | | | 4,479,497 | | | $ | 3,995,051,745 | |

| Total | | 12,224,395 | | | $ | 177.28 | | | 12,224,395 | | | | | |

| | |

| --- | --- |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Equity compensation plans approved by stockholders | | 12,330,718 | | (1) | $ | 90.18 | | (2) | 158,435,270 | | (3) |

| | [added: | |] For the Years Ended September 30, | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | |]

| [removed: Statement of Operations Data:] | [removed: 2019(1)] | | [added: 2020] | | [removed: 2018(1)] | | | | [removed: 2017(1)] [added: 2019] | | | | [removed: 2016(1)] | | [added: 2018] | | [removed: 2015] | | | [added: | 2017 | | | | | | 2016 | | | | | |]

| | [added: | |] (in millions, except per share data) | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | |]

| Net revenues | [added: | |] $ | [removed: 22,977] [added: 21,846] | | | [added: | |] $ | [added: 22,977 | | | | | $ |] 20,609 | | | [added: | |] $ | 18,358 | | | [added: | |] $ | 15,082 | | | [removed: $] | [removed: 13,880] | [removed: |]

| Operating expenses | [added: | |] $ | [removed: 7,976] [added: 7,765] | | | [added: | |] $ | [added: 7,976 | | | | | $ |] 7,655 | | | [added: | |] $ | 6,214 | | | [added: | |] $ | 7,199 | | [removed: (2) | $] [added: (1)] | [removed: 4,816] | |

| Operating income | [added: | |] $ | [removed: 15,001] [added: 14,081] | | | [added: | |] $ | [added: 15,001 | | | | | $ |] 12,954 | | | [added: | |] $ | 12,144 | | | [added: | |] $ | 7,883 | | | [removed: $] | [removed: 9,064] | [removed: |]

| Net income | [added: | |] $ | [removed: 12,080] [added: 10,866] | | [added: (2)] | [added: | |] $ | [added: 12,080 | | | | | $ |] 10,301 | | (3) | [added: | |] $ | 6,699 | | (4) | [added: | |] $ | 5,991 | | | [removed: $] | [removed: 6,328] | [removed: |]

| Basic earnings per share—class A common stock | [added: | |] $ | [removed: 5.32] [added: 4.90] | | | [added: | |] $ | [added: 5.32 | | | | | $ |] 4.43 | | | [added: | |] $ | 2.80 | | | [added: | |] $ | 2.49 | | | [removed: $] | [removed: 2.58] | [removed: |]

| Diluted earnings per share—class A common stock | [added: | |] $ | [removed: 5.32] [added: 4.89] | | | [added: | |] $ | [added: 5.32 | | | | | $ |] 4.42 | | | [added: | |] $ | 2.80 | | | [added: | |] $ | 2.48 | | | [removed: $] | [removed: 2.58] | [removed: |]

| | [removed: At September] [added: | | September] 30, | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | |]

| [removed: Balance Sheet Data:] | [removed: 2019(1)] | | [added: 2020] | | [removed: 2018(1)] | | | | [removed: 2017(1)] [added: 2019] | | | | [removed: 2016(1)] | | [added: 2018] | | [removed: 2015] | | | [added: | 2017 | | | | | | 2016 | | | | | |]

| Total assets | [added: | |] $ | [removed: 72,574] [added: 80,919] | | | [added: | |] $ | [added: 72,574 | | | | | $ |] 69,225 | | | [added: | |] $ | 67,977 | | | [added: | |] $ | 64,035 | | | [removed: $] | [removed: 39,367] | [removed: |]

| Accrued litigation | [added: | |] $ | [removed: 1,203] [added: 914] | | [added: | | | $ | 1,203 | |] (5) | [added: | |] $ | 1,434 | | (5) | [added: | |] $ | 982 | | | [added: | |] $ | 981 | | | [removed: $] | [removed: 1,024] | [removed: |]

| Long-term debt | [added: | |] $ | [removed: 16,729] [added: 21,071] | | [added: (6)] | [added: | |] $ | [added: 16,729 | | | | | $ |] 16,630 | | | [added: | |] $ | 16,618 | | (6) | [added: | |] $ | 15,882 | | (6) | [removed: $] | [removed: —] | [removed: |]

| Total equity | [added: | |] $ | [removed: 34,684] [added: 36,210] | | | [added: | |] $ | [added: 34,684 | | | | | $ |] 34,006 | | | [added: | |] $ | 32,760 | | | [added: | |] $ | 32,912 | | | [removed: $] | [removed: 29,842] | [removed: |]

| Dividend declared and paid per common share | [added: | |] $ | [removed: 1.000] [added: 1.200] | | | [added: | |] $ | [added: 1.000 | | | | | $ |] 0.825 | | | [added: | |] $ | 0.660 | | | [added: | |] $ | 0.560 | | | [removed: $] | [removed: 0.480] | [removed: |]

[removed: | (2) | During] [added: (1)During] fiscal 2016, upon consummation of the Visa Europe acquisition, we recorded a non-recurring loss of $1.9 billion, before tax, in operating expense resulting from the effective settlement of the Framework Agreement between us and Visa Europe. [removed: |]

[removed: | (3) | During] [added: (3)During] fiscal 2018, as a result of the U.S. tax reform legislation, our net income reflected a lower statutory tax rate, a non-recurring, non-cash income tax benefit of approximately $1.1 billion from the remeasurement of our deferred tax liabilities, and a one-time transition tax of approximately $1.1 billion. [removed: |]

[removed: | (4) | During] [added: (4)During] fiscal 2017, in connection with our legal entity reorganization, we eliminated deferred tax balances originally recognized upon the acquisition of Visa Europe, resulting in the recognition of a non-recurring, non-cash income tax provision of $1.5 billion. [removed: |]

[removed: | (5) | During fiscal 2018, pursuant to an amended settlement agreement that superseded the 2012 Settlement Agreement related to the interchange multidistrict litigation, we recorded an accrual of $600 million. During fiscal 2019, related to the interchange multidistrict litigation, we made payments of $600 million, partially offset by an additional accrual of $370 million.] See *Note 5—U.S. and Europe Retrospective Responsibility Plans* and *Note 20—Legal Matters* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data* of this report. [removed: |]

[removed: | (6) | During] [added: (6)During] fiscal [added: 2020,] 2017 and [removed: fiscal] 2016, we issued fixed-rate senior notes in an aggregate principal amount of [added: $7.3 billion,] $2.5 billion and $16.0 billion, respectively. [removed: See *Note 9—Debt* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data* of this report. |]

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Statement of Operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | (in millions, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance Sheet: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

(2)During fiscal 2020, in connection with the UK enacted legislation, we remeasured our net deferred tax liabilities resulting in the recognition of a non-recurring, non-cash income tax expense of $329 million.

See *Note 19—Income Taxes* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data* of this report.

See *Note 19—Income Taxes* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data* of this report.

(5)During fiscal 2019, related to the interchange multidistrict litigation, we made payments of $600 million, partially offset by an additional accrual of $370 million.

During fiscal 2018, pursuant to an amended settlement agreement that superseded the 2012 Settlement Agreement related to the interchange multidistrict litigation, we recorded an accrual of $600 million.

See *Note 10—Debt* to our consolidated financial statements included in *Item 8—Financial Statements and Supplementary Data* of this report.

[Table](#i5da09256dd9a42a6bab5fdd22d11dccc_7) [](#i5da09256dd9a42a6bab5fdd22d11dccc_7) [of Content](#i5da09256dd9a42a6bab5fdd22d11dccc_7)[s](#i5da09256dd9a42a6bab5fdd22d11dccc_7)

Selected Financial Data

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| --- | --- |

| (1) | Our results of operations and the financial position beginning with the last quarter of fiscal 2016 include Visa Europe’s financial results. |

| | [added: | |] Page | [added: | |]

| As of September 30, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] and for the years ended September 30, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] | | [added: | | | |]

| [Report of Independent Registered Public Accounting [removed: Firm](#sBBACE4DD89E150D4BF4A433F668B5A5E)] [added: Firm](#i5da09256dd9a42a6bab5fdd22d11dccc_79)] | [removed: [53](#sBBACE4DD89E150D4BF4A433F668B5A5E)] | [added: | [55](#i5da09256dd9a42a6bab5fdd22d11dccc_79) | | |]

| [Consolidated Balance [removed: Sheets](#s7645E4AE8D065E49B856BC782EFD1854)] [added: Sheets](#i5da09256dd9a42a6bab5fdd22d11dccc_82)] | [removed: [56](#s7645E4AE8D065E49B856BC782EFD1854)] | [added: | [58](#i5da09256dd9a42a6bab5fdd22d11dccc_82) | | |]

| [Consolidated Statements of [removed: Operations](#s68769417EAFD523CA9DD337C7275A72C)] [added: Operations](#i5da09256dd9a42a6bab5fdd22d11dccc_88)] | [removed: [57](#s68769417EAFD523CA9DD337C7275A72C)] | [added: | [59](#i5da09256dd9a42a6bab5fdd22d11dccc_88) | | |]

| [Consolidated Statements of Comprehensive [removed: Income](#s7BDB52AD1D8551A2841A334B90B8FA40)] [added: Income](#i5da09256dd9a42a6bab5fdd22d11dccc_91)] | [removed: [58](#s7BDB52AD1D8551A2841A334B90B8FA40)] | [added: | [60](#i5da09256dd9a42a6bab5fdd22d11dccc_91) | | |]

| [Consolidated Statements of Changes in [removed: Equity](#s74373C0B019856B890C5EC10BC2B3F7E)] [added: Equity](#i5da09256dd9a42a6bab5fdd22d11dccc_94)] | [removed: [59](#s74373C0B019856B890C5EC10BC2B3F7E)] | [added: | [61](#i5da09256dd9a42a6bab5fdd22d11dccc_94) | | |]

| [Consolidated Statements of Cash [removed: Flows](#s2184AB37D06D590E8D0B687D4A1AB936)] [added: Flows](#i5da09256dd9a42a6bab5fdd22d11dccc_100)] | [removed: [62](#s2184AB37D06D590E8D0B687D4A1AB936)] | [added: | [64](#i5da09256dd9a42a6bab5fdd22d11dccc_100) | | |]

| [Notes to the Consolidated Financial [removed: Statements](#s893DBEC6CA815CBE9F30E97210A90EC1)] [added: Statements](#i5da09256dd9a42a6bab5fdd22d11dccc_103)] | [removed: [63](#s893DBEC6CA815CBE9F30E97210A90EC1)] | [added: | [65](#i5da09256dd9a42a6bab5fdd22d11dccc_103) | | |]

We have audited the accompanying consolidated balance sheets of Visa Inc. and subsidiaries (the Company) as of September 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended September 30, [removed: 2019] [added: 2020] and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of September 30, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the years in the three-year period ended September 30, [removed: 2019,] [added: 2020,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2019,] [added: 2020] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

As discussed in Note 1 to the consolidated financial statements, the Company [removed: has] changed its method of accounting for revenue from contracts with customers in [removed: fiscal] [added: the] year [added: ended September 30,] 2019 due to the adoption of [added: Financial] Accounting Standards [added: Board (FASB) Accounting Standards] Update [added: (ASU)] 2014-09 “Revenue from Contracts with Customers (Topic 606)”.

*Critical Audit [removed: Matters*][added: Matter*]

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the consolidated financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that: (1) [removed: relate] [added: relates] to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of [added: a] critical audit [removed: matters] [added: matter] does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matters] [added: matter] below, providing [added: a] separate [removed: opinions] [added: opinion] on the critical audit [removed: matters] [added: matter] or on the accounts or disclosures to which [removed: they relate.][added: it relates.]

*Assessment of the accrued litigation liability for class members opting out of the Damages Class [removed: settlement*][added: settlement in the Interchange Multidistrict Litigation (MDL)*]

As discussed in Note 20 to the consolidated financial statements, the Company is involved in various legal [removed: proceedings,] [added: proceedings] including the *Interchange Multidistrict Litigation (MDL) - Individual Merchant Actions*, and has recorded an accrued litigation liability of [removed: $1,203] [added: $914] million as of September 30, [removed: 2019.][added: 2020.]

In preparing its consolidated financial statements, the Company is required to assess the probability of loss associated with each legal proceeding and [removed: the] amount of such loss, if any.

The outcome of [removed: the] legal proceedings to which the Company is a party is not within the complete control of the Company or may not be known for prolonged periods of time.

We identified the assessment of the accrued [removed: litigation] liability for class [removed: members] [added: matters] opting out of the Damages Class settlement, also [removed: know] [added: known] as the *MDL - Individual Merchant Actions,* as a critical audit matter.

Changes to the [removed: outcomes] [added: outcome] could have a significant effect on the estimated amount of the liability.

The [added: following are the] primary procedures we performed to address this critical audit [removed: matter included the following.][added: matter.]

We [added: evaluated the design and] tested [added: the operating effectiveness of] certain internal controls over the Company’s litigation [removed: assessment] [added: accrual] process, including internal controls over the Company’s litigation accrual process for the *MDL - Individual Merchant Actions*.

| | [removed: September 30, 2019] | | [added: 2020] | | [removed: September 30, 2018] | | | [added: | 2019 | | | | | | 2018 | | |]

| | [added: | |] (in millions, except par value data) | | | | | | | [added: | |]

| Assets | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Cash and cash equivalents | [added: | |] $ | [removed: 7,838] [added: 16,289] | | | [added: | |] $ | [added: 7,838 | | | | | $ |] 8,162 | |

| Restricted cash equivalents—U.S. litigation escrow [removed: (Note 4 and Note 5)] | [removed: 1,205] | | [added: 901] | | [removed: 1,491] | | | [added: | 1,205 | | |]

| Investment securities [removed: (Note 6)] | [removed: 4,236] | | [added: 3,752] | | [removed: 3,547] | | | [added: | 4,236 | | |]

| Settlement receivable | [removed: 3,048] | | [added: 1,264] | | [removed: 1,582] | | | [added: | 3,048 | | |]

| Accounts receivable | [removed: 1,542] | | [added: 1,618] | | [removed: 1,208] | | | [added: | 1,542 | | |]

| Customer collateral [removed: (Note 4 and Note 11)] | [removed: 1,648] | | [added: 1,850] | | [added: | | | | 1,648 | | | | | |] 1,324 | | |

| Current portion of client incentives | [removed: 741] | | [added: 1,214] | | [removed: 340] | | | [added: | 741 | | |]

| Prepaid expenses and other current assets | [removed: 712] | | [added: 757] | | [removed: 562] | | | [added: | 712 | | |]

| Total current assets | [removed: 20,970] | | [added: 27,645] | | [removed: 18,216] | | | [added: | 20,970 | | |]

| Investment securities [removed: (Note 6)] | [removed: 2,157] | | [added: 231] | | [removed: 4,082] | | | [added: | 2,157 | | |]

| Client incentives | [removed: 2,084] | | [added: 3,175] | | [removed: 538] | | | [added: | 2,084 | | |]

| Property, equipment and technology, net [removed: (Note 7)] | [removed: 2,695] | | [added: 2,737] | | [removed: 2,472] | | | [added: | 2,695 | | |]

| | | | | | |

To assess the estimated monetary exposure in the Company's analysis, we compared such amounts to the complete population of amounts attributable to opt-out merchants.

We also performed sensitivity analysis over the Company's monetary exposure calculations.

| Goodwill | | | 15,910 | | | | | | 15,656 | | |

| Current maturities of debt | | | 2,999 | | | | | | — | | |

| Series A convertible participating preferred stock, less than one and no shares issued and outstanding at September 30, 2020 and 2019 (the “series A preferred stock”), respectively | | | 2,437 | | | | | | — | | |

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| Balance as of September 30, 2018 | | | 2 | | | | | | 3 | | | | | | 1,768 | | | | | | 245 | | | | | | 12 | | | | | | $ | 5,470 | | | | | | | | | | | $ | (7) | | | | | $ | 16,678 | | | | | $ | 11,318 | | | | | $ | 547 | | | | | $ | 34,006 | |

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| | | | | | | Preferred Stock | | | | | | | | | | | | | | | | | | Common Stock | | | | | | | | | | | | | | | | | | Preferred Stock | | | | | | | | | | | | Right to Recover for Covered Losses | | | | | | Additional Paid-In Capital | | | | | | Accumulated Income | | | | | | Accumulated Other Comprehensive Income (Loss), Net | | | | | | Total Equity | | |

| | | | | | | Series A | | | | | | Series B | | | | | | Series C | | | | | | Class A | | | | | | Class B | | | | | | Class C | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance as of September 30, 2019 | | | | | | — | | | | | | 2 | | | | | | 3 | | | | | | 1,718 | | | | | | 245 | | | | | | 11 | | | | | | $ | 5,462 | | | | | | | | | | | $ | (171) | | | | | $ | 16,541 | | | | | $ | 13,502 | | | | | $ | (650) | | | | | $ | 34,684 | |

| Adoption of new accounting standards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25 | | | | | | (25) | | | | | | — | | |

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| Issuance of series A preferred stock | | | | | | — | | | (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (5) | | |

| Conversion of series A preferred stock upon sales into public market | | | | | | — | | | (1) | | | | | | | | | | | | | | | 3 | | | | | | | | | | | | | | | | | | (207) | | | | | | | | | | | | | | | | | | 207 | | | | | | | | | | | | | | | | | | — | | |

| Repurchase of class A common stock | | | | | | | | | | | | | | | | | | | | | | | | (44) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (473) | | | | | | (7,641) | | | | | | | | | | | | (8,114) | | |

| Balance as of September 30, 2020 | | | | | | — | | | (1) | | | 2 | | | | | | 3 | | | | | | 1,683 | | | | | | 245 | | | | | | 11 | | | | | | $ | 5,086 | | | | | | | | | | | $ | (39) | | | | | $ | 16,721 | | | | | $ | 14,088 | | | | | $ | 354 | | | | | $ | 36,210 | |

(1)Increase, decrease or balance is less than one million shares.

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VISA INC.

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We assessed the Company’s analysis of the estimated monetary exposure by checking that it included a complete population of opt-out merchants and performing sensitivity analysis over the Company’s monetary exposure calculations.

*Evaluation of the revenue recognition for incentive arrangements with certain strategic partners upon adoption of ASC Topic 606*

As discussed in Note 1 to the consolidated financial statements, the Company enters into long-term contracts with financial institution clients, merchants, and strategic partners for various programs.

The determination of whether incentive payments to certain strategic partners should be recorded as an operating expense or a reduction to operating revenues is dependent upon the application of the consideration payable to a customer guidance within ASC Topic 606.

We identified the evaluation of the revenue recognition for incentive arrangements with certain strategic partners upon adoption of ASC Topic 606 as a critical audit matter.

A higher degree of auditor judgment was required to evaluate the application of the consideration payable to customer guidance due to the unique nature and complexity of the Company’s open-loop payment network.

We tested certain internal controls over the Company’s revenue recognition process, including controls related to the accounting for incentive payments to strategic partners and the application of the consideration payable to a customer guidance.

We evaluated a sample of arrangements with certain strategic partners that participate in the Company’s open-loop payment network to understand the rights and obligations of the strategic partners, and how the Company earns revenue from and incentivizes the strategic partner.

We selected a sample of certain strategic partner contracts and independently assessed the application of the consideration payable to a customer guidance, and compared our assessment to that of the Company’s.

November 14, 2019

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| Deferred purchase consideration | — | | | | 1,300 | | |

| Series A convertible participating preferred stock, none issued (the “class A equivalent preferred stock”) (Note 14) | — | | | | — | | |

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| Balance as of September 30, 2016 | 2 | | | 3 | | | 1,871 | | | 245 | | | 17 | | | $ | 5,717 | | | $ | (170 | ) | | $ | (34 | ) | | $ | 17,395 | | | $ | 10,462 | | | $ | (458 | ) | | $ | 32,912 | |

| Charitable contribution of Visa Inc. shares | | | | | | | 2 | | | | | | | | | | | | | 170 | | | | | | | | | | | | | | | | | | | | 170 | | |

| Treasury stock appreciation, net of tax | | | | | | | | | | | | | | | | | | | | | | | | | | | | 14 | | | | | | | | | | | | 14 | | |

| Repurchase of class A common stock (Note 14) | | | | | | | (77 | ) | | | | | | | | | | | | | | | | | | | | (817 | | ) | | (6,074 | | ) | | | | | | (6,891 | | ) |

| (1) | Series B and C preferred stock are alternatively referred to as UK&I and Europe preferred stock, respectively. |

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| Balance as of September 30, 2017 | 2 | | | 3 | | | 1,818 | | | 245 | | | 13 | | | $ | 5,526 | | | $ | (52 | ) | | $ | 16,900 | | | $ | 9,508 | | | $ | 878 | | | $ | 32,760 | |

| Charitable contribution of Visa Inc. shares (Note 19) | — | | | | — | | | | 192 | | |

| Proceeds / distributions from other investments | 12 | | | | 2 | | | | 4 | | |

| Debt issuance costs | — | | | | — | | | | (15 | | ) |

See *Note 6—Fair Value Measurements and Investments.* The classification of the Company’s financial assets and liabilities within the hierarchy is as follows:

The Company’s Level 1 assets include money market funds, marketable equity securities and U.S. Treasury securities.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

*Level 2*—Inputs to the valuation methodology can include: (1) quoted prices in active markets for similar (not identical) assets or liabilities; (2) quoted prices for identical or similar assets in non-active markets; (3) inputs other than quoted prices that are observable for the asset or liability; or (4) inputs that are derived principally from or corroborated by observable market data.

The Company’s Level 2 assets and liabilities include U.S. government-sponsored debt securities, and derivative instruments.

*Level 3*—Inputs to the valuation methodology are unobservable and cannot be corroborated by observable market data.

The Company’s Level 3 assets include non-marketable equity investments and investments accounted for under the equity method.

Marketable equity securities.

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Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of September 30, [removed: 2019,] [added: 2020,] our disclosure controls and procedures were effective at the reasonable assurance level.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, [removed: 2019.][added: 2020.]

Based on management’s assessment, management has concluded that the Company’s internal control over financial reporting was effective as of September 30, [removed: 2019] [added: 2020] using the criteria set forth in Internal Control*—*Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

The effectiveness of our internal control over financial reporting as of September 30, [removed: 2019,] [added: 2020,] has been audited by KPMG LLP, an independent registered public accounting firm and is included in *Item 8* of this report.

There [removed: were] [added: have been] no [removed: other] significant changes in our internal controls over financial reporting that occurred during [removed: the year ended September 30, 2019,] [added: our fourth quarter of fiscal 2020] that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial [removed: reporting.][added: reporting despite most of our staff working remotely due to the COVID-19 pandemic.]

During fiscal 2019, the Company implemented a new client incentives accounting system along with enhancements and modifications to existing internal controls and procedures to comply with the new revenue standard.

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