VISA is in trouble and might seek goverment bailout.

Discussion in 'Multinational HQ' started by Devil_Dog, Sep 30, 2008.

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  1. What you are about to read is unsourced so please don't quote me.

    Apparently, most Visa creditcard holders are in the doldrums and can't meet their monthly payments. So VISA might in the next few days seek a Wall Street-type bailout.

    For a company that holds about 40% of the world's credit card value, this is truly disturbing indeed for VISA.

    It is no secret that the First World (and a lot of the rest of the world, most of whom rely on mortgage companies to service their housing debt) depend on credit to survive in the middle class lifestyle. It also means that the First World is f.ucked.

    Take the average American family for example:

    http://abcnews.go.com/GMA/Consumer/story?id=5045343&page=1

    If that is the case then it means that the housing market slump is a walk down a flower laden country lane on a Sunday afternoon.

    Afterall, would you rather pay your mortgage and have a roof on your head or would you rather pay off on a handbag purchase you made three months ago as you wined and dined a lady. Who insisted, after a few drinks, on having the latest in Haute couture as the financial world fell around you? These ladies are in most cultures called fiances.

    But that is neither here, nor there.

    Me thinks the housing crisis is a non-starter as far as the rest of the credit crunch is concerened.

    That is why I am so glad the bill to push a 700 billion US dollar bill on the US tax payer failed. All this this because we as capitalists failed to remember the first rule of holes:

    When you are in one, stop digging.

    Unless you are having sex ofcourse.
     
  2. you dont half post some drivel on here!!!!!
     
  3. Eat my dick, will ya?

    What is it about me humble post did you miss?
     

  4. not for me chef!!!
     
  5. Utter guff.

    VISA does not 'hold 40% of the world's credit card value', that would run into billions, if not trillions, of dollars.
    The VISA symbol on a credit or debit card ensures that a credit card bearing the symbol will be acepted by any authorised merchant, wherever they may be in the world.
    Having the VISA symbol also offers the card holder a centralised service providing some card services (such as a centralised lost and stolen reporting facility) and some fraud protection.

    Credit however is NOT provided by Visa but by the issuing banks such as Barclays, Llloyds, Citibank, whoever. The Credit risk is borne by the issuing bank not by VISA. In fact until the IPO in 2006 VISA was to all intents and purposes a non-profit organisation funded by its member banks, who pay for the right to use the VISA logo.

    The only case that I know off the top of my head (and as you may have gathered, I am not just on here spouting, I actually have more than just a clue about what I speak of) where VISA took a liability hit was when BCCI collapsed (1991?). At that time many holders of BCCI travellers cheques were stranded around the world with, essentially, valueless pieces of paper. Like a credit card a travellers cheque is issued by a bank, not by VISA. However it was considered prudent for the good of the VISA brand to honour travellers cheques belonging to people who had been generally caught out by the situation (not just those who had a pile of cheques sitting at home unused) in order that they could continue with their holidays or return home etc. VISA then became a creditor of BCCI and had to sue to reclaim funds along with all of the other creditors.

    If an issuing bank goes bust and you hold a credit card from that bank you will be liable to be sued for repayment by the administrators of the bank, just as the bank, and not VISA, will come after you if you fail to pay your credit card bill.

    Hope this all makes sense. I am not having a go at you but it is really beginning to annoy me that people (the media) are up in arms about this whole, admittedly very serious, global credit crisis without having the first idea what they are actually talking about.
     
  6. Not to mention VISA and MasterCard are raping merchants/consumers (at least in the US) for using credit cards by having interchange rates as high as 2-3 percent of the transaction amount. They have monies to spare.