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Ruben Salazar On Visa’s Money Transfers Ambition

Ruben Salazar On Visa’s Money Transfers Ambition
Written by publishing team

The race is on to build a truly global payment network in real time. Banks, payment companies, SWIFT and card networks are building different offerings. Visa Direct, Visa’s offering, has been at the forefront of the package for a number of years.

Through the Visa Direct platform, organizations can send or receive money either locally or across borders for their customers globally to a range of card and non-card methods.

According to Robin Salazar, Global Head of Visa Direct, its offering is truly unique due to its “network reach,” which currently supports 174 countries for cross-border payments to a card or account, with 167 enabled for local payments.

It is also growing significantly. In all of 2021, Visa Direct passed 5 billion transactions globally, up from 3.5 billion transactions in all of 2020, and is now connected to more than 5 billion endpoints – with further growth planned.

“Today, what we do is technically enabling every Visa credential to become an endpoint, which means just using the 16-digit number on the card you can make a transaction from anywhere,” Salazar says.

“That immediately gives us a span of 3.6 billion credentials out there. But what we want to build is something that has become so ubiquitous that anyone can send money anywhere.”

The ultimate goal, he says, is for it to become “the most effective and safest money movement network on Earth.”

This will include not only Visa cards, but also Mastercard

– Cards issued, local market networks, or other payment methods such as wallets. And while some aspects of this goal are still under development, Visa’s broad range of partnerships, as well as its frequent mergers and acquisitions activity, keep it in sight.

Visa Direct: Dealing with a Fragmented Ecosystem

Salazar says, the primary focus of Visa Direct is moving the card payments experience into the money transfer space.

“[Card] Payments are now almost invisible, but there are 500 instructions that occur when you swipe or tap on any payment state.” “We want to apply the same logic to a money movement transaction.”

However, he highlights the fragmented nature of the ecosystem as a challenge, arguing that “there is no single business case or economic model,” which he says leads to the lack of a unified user experience.

Visa Direct combats this by enforcing standards across its network in a manner similar to those in its own payment network.

This is why Visa is in a better position to provide a better user experience. It comes with data, it comes with reports, it comes with SLAs, it comes with software, Salazar says, adding that this is especially true for near-real-time transaction processing.

“In most cases, it happens within seconds or minutes, but the maximum they have to apply is 30 minutes.

“This gives us confidence that the network provides a better user experience on our end, in the case of Visa Direct. In many ways, the user experience is closely related to the quality of the network.”

Diverse Use Cases: From Transfers to B2B

What is central to Visa Direct’s offering, however, is the fact that it does not focus on a single aspect of money transfers, such as remittances, but instead covers a wide range of use cases, from P2P consumer payments to B2B transfers.

This means that the company serves very different needs for different users, which Salazar highlights with access to consistent and detailed data – vital when a company has around 550 different enablers including acquirers, processors, banks and financial firms.

“In order to provide the best user experience, you need to rely on data,” he says, noting the variance in the needs the company sees from that data.

Speed, for example, is much more important for some customers, particularly those making P2P transfers, for whom “a transaction needs to arrive within minutes or seconds.” However, for others such as B2B clients, it is less important and therefore “can happen at the end of the day”. This is highlighted in the company’s Visa B2B Connect product, designed for large transactions, which prioritizes transparency and accuracy over speed.

Meanwhile, differences in the speed required create an opportunity for software monetization, while providing faster conversions for a premium.

Beyond Cards: Multiple Exchange

While Visa Direct has improved payments to the card, it is now focusing its attention on multiple payments, ensuring that its money transfer network supports payments for a wide variety of sources.

“Currently, we are delivering cards very efficiently; we have the accounts connection, and we are now working with a couple of partners to develop delivery to the wallet,” he says.

“We will start to access groups of banks that may not have a bank account, but may hold a wallet, either with prepaid money or crypto or some other capability in that wallet.”

He says that wallets are relatively easy to add to Visa Direct, as they are “just credentials” a company can effectively get a transaction with. However, more complex alias directories, for which Visa supports the increased development due to their complexity for banks.

“If banks want to create a multi-line approach, connect RTPs or ACH or Mastercard Send or Visa Direct or some other real-world capabilities, they will have to have multiple connections,” he explains.

One way Visa Direct is dealing with this issue is by acquiring YellowPepper, a company that uses APIs to enable real-time payments between cards, accounts and blockchain networks, which Visa Direct now uses to connect banks to all rails in a given market — not just its own service.

“We want to continue providing agnostic services to banks,” Salazar says. “There is value in interoperability and we want to access that interoperability.”

This multi-disbursement approach also extends to a variety of partnerships, reflecting a growing trend within the sector for companies to compete with and partner with one another simultaneously.

“For Visa Direct and Visa, collaboration is a competitive advantage. The more direct partnership we secure, the more we standardize Visa Direct as an operating system for the movement of money; as a ubiquitous network that can support remitters, banks, treasury banks, merchants and receivers.”

Merger and acquisition plans

While partnerships are key, mergers and acquisitions are a key part of Visa Direct’s ongoing strategy.

For example, in addition to YellowPepper, the acquisition of cross-border payments platform Earthport, which has now been combined to become Visa Direct Payments, has added an additional 2 billion bank accounts to the company’s reach.

More are awaiting approval, such as Currencycloud, which has been acquired to enhance FX and treasury capabilities, and Tink, which offers open banking capabilities.

Salazar explains that the company looks for two things when considering merger and acquisition opportunities.

“First, bring a competitive advantage through any existing technology that can help us serve our customers and partners,” he says.

“Secondly, we want to fill in any technology gaps we might have as we move to real-time payments. Our network needs to evolve and we need some technology pieces to help us accelerate that.”

Future Payments: Cryptography and Beyond

Looking to the future, Visa seeks to lead the payments landscape that is in the midst of development, and Salazar identifies a number of areas that it sees as having an impact on the sector.

One area is the rise of the gig economy, which he says will lead to a change in the way payroll systems work.

“Salaries on demand is going to be an important thing in the near future, and we are very involved in that,” he says.

“This permanent cycle for you on the 15th or at the end of the month decreases a bit. If you’re an Uber user

Driver, you want to get paid immediately after you finish your work; If you work as a freelancer, you’ll want to get paid once the design is done.

“Visa Direct has the opportunity to participate in a different type of payroll, which is upon request.”

At the same time, he also sees the two-sided nature of markets creating a growing need for more accurate payment solutions, including small and unilateral trade settlements.

The other big field he’s seeing is, perhaps not surprisingly, cryptocurrency and digital. Here Visa already has more than 50 different partnerships with crypto platforms, and has announced plans to support settlement transactions in the USDC stablecoin. But Salazar anticipates more opportunities for Visa Direct in this area.

The coding would be revolutionary in the sense that it would need a translator; He will need a bridge,” he says. “At the moment we are working as a bridge from a cryptocurrency or a digital point to a fiat point. Cryptocurrency for us is just another currency in the network: it’s just bits of it.”


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