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Settlement Guarantee Management
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2015
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| Settlement Guarantee Management [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Settlement Guarantee Management | Note 6—Settlement Guarantee Management The Company indemnifies its financial institution clients for settlement losses suffered due to failure of any other clients to fund its settlement obligations in accordance with Visa’s operating regulations. The 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. The exposure to settlement losses through Visa's settlement indemnification is accounted for as a settlement risk guarantee. The Company’s settlement exposure is limited to the amount of unsettled Visa payment transactions at any point in time. The Company requires certain financial institution clients that do not meet its credit standards to post collateral to offset potential loss from their estimated unsettled transactions. The Company’s estimated maximum settlement exposure was $58.6 billion for the quarter ended March 31, 2015, compared to $56.9 billion for the quarter ended September 30, 2014. Of these settlement exposure amounts, $2.8 billion and $3.2 billion were covered by collateral at March 31, 2015 and September 30, 2014, respectively. The Company maintained collateral as follows:
The total available collateral balances presented in the table above were greater than the settlement exposure covered by customer collateral held due to instances in which the available collateral exceeded the total settlement exposure for certain financial institutions at each date presented. The fair value of the settlement risk guarantee is estimated based on a proprietary probability-weighted model and was approximately $2 million at March 31, 2015 and September 30, 2014, respectively. These amounts are reflected in accrued liabilities on the consolidated balance sheets. |
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