Three years ago, Visa executives told investors that one of their goals was to enter new businesses, but Visa CEO Charlie Scharf, who joined the company in October, says that is no longer the case.
Instead, Visa is focused on extending its massive existing payments network while repairing its strained relationships with merchants.
"We love the business that we're in," said Scharf at the company's first investor day since 2010. "So it's not about entering new businesses. It's about trying to extend the network on the edge."
Much of today's presentation to investors focused on Visa's push into mobile payments technology and its focus on international growth.
Visa Global Executive William Sheedy cited Japan, Hong Kong and Canada as three countries where Visa has barely has any toehold in debit card payments. "There are very large developed markets where we haven't even really started," he said.
Visa is also working to improve its merchant relationships while also resolving a court battle over its pricing policies.
Though Visa and rival MasterCard agreed last year to pay merchants $7.25 million to settle a long-running dispute over interchange fees, these relationships remain frayed. Many merchants have opted out of the suit and last week several big retailers, including Target and Macy's, filed another suit against Visa and MasterCard alleging that the card networks violated federal antitrust laws in setting interchange rates.
At the investor day event, Wedbush Securities analyst Gil Luria asked Scharf whether the merchant relationships can be repaired.
"Absolutely it's not too late," Scharf said. "Is it easy? No, it's extremely hard to change the dialogue that we have."
Since becoming Visa's CEO, Scharf has repeatedly stressed the importance of improving collaboration with merchants, as well as the banks that issue Visa cards.
In February, the Foster City, Calif., company extended a small olive branch to merchants by lifting a ban on their offering special deals to customers that pay with a specific bank's credit or debit card. Still, many large retailers say they're paying Visa and MasterCard far too much for the right to accept plastic cards from their customers.
A federal judge in New York is currently deciding whether to approve the interchange-fee settlement, which analysts see as advantageous for Visa and MasterCard because it would allow them to control future pricing.
Asked to assess the efforts by Wal-Mart, Home Depot, and other retail giants to scuttle the deal, Scharf said that he believes around 25% of U.S. merchants by transaction volume opted out of the settlement prior to last month's deadline.
"And we don't think it changes the outcome of our position or the court's," he said.
Scharf and Sheedy also admitted that Visa has made missteps in its approach to dealing with lawmakers in Washington, D.C., where merchants prevailed in their 2010 push to cap interchange fees on debit card transaction.
Visa was hit harder than its rival card networks by the new law, known as the Durbin Amendment, since the company enjoyed a dominant position in the U.S. debit card market, and the law required that merchants be given more choices on how to route such transactions.
"I think we can all agree that the company and the industry got caught flat-footed," said Sheedy, acknowledging that the company's lobbying approach was too confrontational.
Scharf sought to put the fight over the Durbin Amendment in the larger context of Visa's fractured relationship with the merchants that accept its debit and credit cards.
"D.C. is not the cause," he said. "That's the effect of what the entire industry and our partners have done to each other."
Sheedy made the case that Visa that has the opportunity to provide value-added services to merchants, to help them reduce their costs, and to aid in their efforts to market themselves. But for all the talk about increasing collaboration with merchants, there is little sign that most retailers view reconciliation as a realistic possibility.
In addition to the ongoing and escalatinglitigation, leading merchants last August announced the formation of a new payments company, known as Merchant Customer Exchange, or MCX.
Scharf did not refer by name to the challenge from merchants, but in his prepared remarks he did say: "Over time, the only way we're going to be successful as a business is by putting customers first We're not interested in competing with them."