Visa and a consortium of Brazilian banks have postponed a
planned initial public offering (IPO) of the national VisaNet
system, according to a December 2008 filing with the country’s
securities regulator.

VisaNet issued a preliminary prospectus for the float in
September of 2008. The company, which is owned by Banco Bradesco,
Banco do Brasil, Visa International, and Banco ABN Amro Real, had
an estimated market value of around $18.3 billion as of March
2008.

Brazil: Payment card statisticsBanco Bradesco owns 39
percent of VisaNet while Banco do Brasil owns 32 percent and Banco
Real holds 14 percent. Visa International holds 10 percent,
according to VisaNet’s preliminary prospectus.

The offering was ‘interrupted’ at VisaNet’s request, according
to a 26 December statement on the website of the regulator,
CVM.

VisaNet now has an extended grace period of 60 days to turn
around the paperwork and price the issue, or let the offer lapse,
according to the regulator. The regulator added that VisaNet has
until 19 March 2009 to decide whether to go ahead with the IPO.

IPO numbers dwindling

The reason for the postponement is unclear, with VisaNet
refusing to comment, although VisaNet is believed to be still
interested in going ahead with the IPO despite a tough economic
climate.

Only four companies went public in Brazil in 2008, compared with
64 in 2007, reflecting the impact of the global economic slump on
potential investors, particularly when it comes to riskier emerging
markets such as Brazil.

VisaNet is the company in charge of merchant relations for Visa
System affiliates and has the exclusive rights to process every
domestic and international Visa card transaction conducted in
Brazil.

Brazil’s appetite for card payments has only intensified over
the last decade as evidenced by the rapid increase in card numbers
and payment volumes, which VisaNet is well-placed to take advantage
of.

US payment consultancy First Annapolis recently ranked VisaNet
as the 8th-largest card acquirer in the world, based on credit and
debit purchase transactions in 2007.

Over the last couple of years, VisaNet has also expanded the
range of services and technology on offer in Brazil, such as mobile
phone payment services and acquiring Visa payWave contactless card
transactions in conjunction with its bank partners.

VisaNet’s history

The origins of VisaNet go back to 1995 when Visa and Brazilian
banks Bradesco, Banco do Brasil, Real ABN Amro Bank and the former
Banco Nacional teamed up to design the structure of what would
become VisaNet, the trade name of the Companhia Brasileira de Meios
de Pagamento. Previously, Brazilian banks ran their own card
operations and had their own data capture solutions, merchants and
marketing.

VisaNet’s original purpose was to manage the relationship with
the network of merchants in Visa do Brasil’s system, as well as
unify and develop new capture solutions and provide financial
clearing services, enabling banks to focus on card issuance and
credit extension to customers.

Currently, in addition to managing the Visa acceptance network,
VisaNet also develops and offers monitoring, capture and processing
solutions for Visa Vale and private-label card and issuing banks.
As of the end of 2007, VisaNet had over 1 million affiliated
merchants.