Visa IPO seeks record 18.8 bln-dlr payoff

Visa Inc., the world's biggest electronic payment processing company, unveiled plans Monday for what could be a record US initial public offering (IPO), saying it hoped to raise 18.8 billion dollars.If the San Francisco-based company’s expectations are met, its planned IPO would easily overshadow the giant 10-billion-dollar IPO of AT & T Wireless in 2000.

Visa, which processes payments for credit and debit cards, said it plans to sell at least 406 million shares to public investors as soon as possible. It expects its shares to be priced at between 37 and 42 dollars per share.

“Visa operates the world’s largest retail electronic payments network and manages the world’s most recognized global financial services brand. We have more branded credit and debit cards in circulation, more transactions and greater total volume than any of our competitors,” the company said in a regulatory filing.

The company has hired a group of major investment banks to oversee its Wall Street IPO, including Goldman Sachs, JP Morgan and HSBC Securities (USA) Inc.

Visa claims that people using its branded cards can access cash in local currency in over 170 countries and that its brand is accepted at over one million automated teller machines (ATMs) around the world.

Visa unveiled its bid to transform itself from a private firm into a public company through a regulatory filing with the Securities and Exchange Commission.

The electronic payment facilitator makes money from the fees it charges clients to process their payments. Visa’s unaudited operating revenues for the three months ended December 31, 2007, were 1.5 billion dollars.

The company does not issue credit or debit cards, set fees or determine interest rates that cardholders are charged for using their bank cards.

Visa’s planned IPO comes amid a slowdown in such public listings, due in part to an ailing US economy and a credit crunch sweeping the financial markets.

Virgin Mobile USA’s IPO in October raised around 412 million dollars and the Blackstone Group, one of America’s biggest private equity firms, reaped around 4.13 billion dollars through a partial stock offering in June of last year.

Visa plans to launch its IPO amid a fundamental shift from paper-based payments, such as cash and checks, to card-based and other electronic payments. The company said this shift was being driven by “significant growth” in card-based payments globally.

US-based banks and finance companies are experimenting with key-fob payment cards and systems enabling people to manage their finances and pay bills with their cellphones amid other technological advances.

Visa’s chief executive, Joseph Saunders, is an industry veteran and gained the top job at Visa in May 2007 after overseeing key parts of the company’s international operations.

The payment processor traces its founding to the early 1970s. The company launched a global ATM network in the early 1980s and helped co-develop chip banking cards in the mid-1990s.

Visa’s payment brands include Visa, Visa Electron, PLUS and Interlink.