Settlement Guarantee Management

12 Months Ended

Sep. 30, 2019

Settlement Guarantee Management [Abstract]

Note 11—Settlement Guarantee Management

The Company indemnifies its clients for settlement losses suffered due to failure of any other client to fund its settlement obligations in accordance with the Visa operating rules. This indemnification creates settlement risk for the Company due to the difference in timing between the date of a payment transaction and the date of subsequent settlement.

Historically, the Company has experienced minimal losses as a result of its settlement risk guarantee. However, the Company’s future obligations, which could be material under its guarantees, are not determinable as they are dependent upon future events.

The Company’s settlement exposure is limited to the amount of unsettled Visa payment transactions at any point in time, which vary significantly day to day. The Company’s maximum settlement exposure was $92.0 billion and the average daily settlement exposure was $57.1 billion during the year ended September 30, 2019.

The Company maintains and regularly reviews global settlement risk policies and procedures to manage settlement exposure, which may require clients to post collateral if certain credit standards are not met. At September 30, 2019 and 2018, the Company held the following collateral to manage settlement exposure:



	September 30, 2019		September 30, 2018
	(in millions)
Restricted cash equivalents	$	1,648	$	1,708
Pledged securities at market value	259		192
Letters of credit	1,293		1,382
Guarantees	477		860
Total	$	3,677	$	4,142