Visa, the credit card network under fire for its high fees, is to end more than three decades as a private organisation and float on the stock market.
The organisation is a membership association of 20,000 banks around the world, but will go public next year to try to reduce their exposure to legal claims from disgruntled retailers and customers, who say they are being ripped off.
The European division, however, will keep its separate membership structure because that part of the business is not likely to be profitable while the European Commission demands investment in a Europe-wide payments system.
Visa's decision follows on the heels of its rival, Mastercard, whose shares have soared 84 per cent since their stock market debut in May.
"This is a great time in Visa's history to make this transition," William Campbell, the chairman of the board at Visa International, said. "We continue to be a leader in the payments industry, our growth and emerging market strategies are succeeding, and the growth potential in the global payments industry is tremendous."
The organisation was incorporated in Delaware in 1970 as National Bank-Americard and changed its name to Visa in 1976. It has grown to be twice the size of Mastercard, with 1.4 billion cardholders worldwide compared with Mastercard's 750 million. More than $4 trillion is spent on Visa cards every year.
However, Visa has become embroiled in lawsuits in the US. Federal authorities and the rival American Express claim its ownership structure is anti-competitive because it discourages member banks from issuing cards by other payment processors. Retailers and customers have launched class action suits claiming Visa and Mastercard are keeping transaction costs artificially high.
Like Mastercard, Visa's flotation will cut member banks' shareholding to below 50 per cent, reducing their legal risk.Reuse content