For Visa, A Whole Year Boils Down To 45 Days; Processing Becomes Increasingly High-Tech and Real-Time

SOMEWHERE IN THE MID-ATLANTIC STATES – Science fiction fans would love it. Perched at different stations around a darkened room, casually dressed men and women peer carefully into various screens and monitors. A couple of them wear headsets that they speak into every once in a while in low tones and the lack of any discernible odors in the air argues for a carefully monitored and purified atmosphere. But the staff watching the screens so carefully does not work for the National Air and Space Administration nor track the movement of satellites or lunar explorers. They work in the Eastern Operations Center for Visa USA, where they monitor, manage and react in real time to changes on VisaNet, the system of computer connections and communication switches which arguably serves as the backbone of much of the world’s credit and debit cards systems. Credit Union Times recently toured the facility and found the atmosphere to be, if not tense, very focused and aware. The screens in front of the staff tracked, in real time, a system which has been tested to handle as many as 8,300 transactions per second but which Visa expected to peak at 6,000 transactions per second this holiday season. Retailers having problems processing transactions can reach the Operations Center staff directly, without going through a screening telephone tree or help desk, so important does the card brand consider its role in the U.S. retail system, particularly in December. Richard Knight, senior vice president for the card brand, pointed to a blue light that continually flashes above the doors leading into the room, indicating that the operations floor, as he called it, unless by special permission, was to remain free of anyone not directly involved in the work. “This is the time we have been planning and working for each year,” Knight said. “This is where it all comes together.” Security a Fact of Center’s Life Visa does not advertise the location of its Eastern Operations Center, which sits in a pair of nondescript buildings at the end of a nondescript street in a subdivision which could be outside any city in the U.S. Reporters have to formally agree to keep the exact location of the center secret and Visa employees are careful not to reveal too much information before the proper authority, in this case Knight, is on the scene. At first the security can be off-putting, appearing to be little more than silly overkill, until Knight explains the role the center plays in Visa’s worldwide network. Essentially, Knight explained, this center is one of four in the world. Two are in the United States, one on the East Coast and one on the West; additional centers are in the United Kingdom and Japan. The Eastern Operations Center handles credit traffic from the Eastern half of the U.S., Mexico, Central and South America along with Central Europe, the Middle East and Africa, as well as all of the world’s debit traffic. The Western Operations Center, handles credit traffic from the Western U.S. primarily, but can pick up the entire Eastern Operations traffic load on a second’s notice if it had to do so. The Operations Center in the U.K. handles all the credit traffic for the European Union and the Operations Center in Japan monitors the flow of credit transactions through the Pacific Rim as well as China and the Indian Subcontinent. No matter where in the world you swipe your card, or which processor the retailer uses, Knight explained, if the card has a Visa logo on it, its going to come through VisaNet at some point, and when it does VisaNet will be ready for it. The center’s key nature helps explain the security, as well as why the center maintains four huge generators in the back which can run on the thousands of gallons of stored fuel for at least a week, and why the two buildings that house the center have been built to an earthquake tolerance suitable more to the West Coast than the East. VisaNet’s sheer statistics can almost overwhelm. Twenty-one thousand financial institutions in 200 countries and territories worldwide issue Visa cards, which are carried by 1.3 billion cardholders and accepted at 20 million merchant locations in 172 currencies. Yearly that means VisaNet clears $1.7 trillion in transactions annually, processes 100 million transactions daily and each of those at an average speed of 1.4 seconds, round trip, from the moment when the card was swiped to the moment when the transaction is approved, denied or the cardholder is signaled for more information. The reason cardholders don’t experience this more directly, Knight explained, is because Visa transactions process more quickly than the communication lines can carry the information, Knight explained. Further Knight explained that VisaNet increasingly strives to process transactions real time. “I can go upstairs and grab a sandwich in the cafeteria, come back down to my office, log onto my checking account and there it will be,” Knight said. “We want our ability to process information and post it to be as close to real time as possible,” he added. This real-time effort extends to fraud prevention as well, explained another Visa executive. “One of the problems we have noted with existing fraud prevention efforts was that they occur after the fact,” said Elvira Swanson, director of corporate relations for Visa. “Quickly after the fact, but still after the fact. Right now we are working on a fraud prevention solution which will be able to deliver a fraud decision as the transaction is going through.” Swanson stressed that the card brand was not yet ready to make a formal announcement of the anti-fraud innovation, but said that Visa expected to make one in the first quarter of 2005. Visa Key To Card World, Exec Says This real time effort and global reach, Swanson pointed out, extends even to being able to stand in for financial institutions or even other processors who may not able to keep up with the transaction pace, particularly during December. In those instances, Swanson said, Visa can take on the processing requirements for financial institutions or other processors to handle the transactions they cannot. “We think that is very important for people to understand,” said Swanson. “People complain about interchange and that it is too expensive, but people do not as often understand the value this network brings. If a financial institution, or even another big processor like First Data goes down, we can pick up the slack so that those transactions keep going through. But if we go down, no one else can pick up the slack,” she said. Visa decided now would be a good time to open its doors and make its point about size and scope because the 45 days between November 17 and December 31st each year, arguably the time when merchants need them the most, are the focus of much of the card brand’s efforts, Knight explained. The work begins each November 17, when Visa freezes its processing procedures and generally does not change them unless they have to do so because of emergency. This is the time when the card brand gathers information about how its processing systems operate, how heavy the transaction flow is and what changes might need to be made. From January to March of the following year, Visa examines the data from the previous year and plans the additional capacity it will need for that year. From March though June, Visa designs and funds those hardware and software changes and from June through October Visa implements and tests those changes. Everything must be ready, Knight says, for November 17 when the card brand must be ready for prime time. “This is the time we have been planning and working for each year,” Knight said. “This is where it all comes together.” [email protected]