Digital-First Banking

Visa Expands Fast Track Program To Give FinTechs A Post-COVID Digital-First Edge

Visa’s goal of building what it has called a “network of networks” reflects its view of what adds value in a global financial services ecosystem where the shared interest in doing what’s best for consumers and businesses is what drives outcomes. Collaboration and not competition, Visa’s Senior Vice President, Global Head of FinTech Terry Angelos told Karen Webster in a discussion on the recent advancements and updates to Visa’s Fast Track program, is quite evident — particularly when one observes that a number of Visa’s partners are many that, on paper, might appear to be competitors. Among Visa's partners are Alipay, mPesa, Tencent, Bitcoin (and other cryptocurrencies).

But even though these FinTechs operate separate payment technologies that could compete with Visa, he said, what has become increasingly apparent from its deal list over the last several years is that globally, the perspective is shifting.

“I think many are discovering that what [Visa] does well is offer help where scale is something that they want to leverage and not necessarily build themselves,” Angelos said. “It becomes particularly evident when you're connecting across geographies and across networks that it's a very difficult footprint to recreate. Which is why we feel very confident that when we engage with FinTechs, we're expanding the pie rather than limiting our share.”

The COVID-19 pandemic has created many payments and financial challenges for businesses and consumers alike, Angelos said, and money movement is digitizing rapidly, largely driven by FinTechs that are driving that digital conversion among consumers. Visa’s rapidly growing Fast Track program, he noted, is designed to drive as many of those FinTechs into the Visa ecosystem as possible by building the digital payments onramp they need to power those digital shifts.

“We want Fast Track to be the easiest default choice for anybody who is an emerging FinTech,” Angelos said, noting that as of today (Nov 18), Visa is announcing two new features coming to its program. It is also announcing a new partner in Daylight, a digital bank working with Visa and Fast Track to recreate a community bank concept digitally.

Building A Faster Fast Track 

FinTech participation in the Fast Track program, Angelos told Webster, has increased 360 percent year-over-year. Literally, hundreds of new FinTechs have entered the program as the accelerant of the coronavirus pandemic has created an explosion of interest both among consumers and business regarding building digital payments — and FinTechs that want to satisfy those needs.

Meeting the emerging needs that go along with that growth, Visa is announcing two additions to the program to improve the experience for partners. The first is a new partner toolkit designed to help FinTechs accelerate their growth. That toolkit, Angelos said, will allow FinTechs to accomplish benchmarking analysis on their customers, launch their marketing programs and navigate complicated processes like card design.

The second add-on is a new program called Visa Ready for FinTech Enablers. It is created to make it easier for FinTechs to quickly connect with certified partners for digital issuance and other key services by offering a “certification process for FinTech enablers.”

“And that means that we go to principally two partners, processors and now bank sponsors — and we certify this FinTech to be part of the Visa Ready program,” Angelos said.

By verifying them, he said, they are validated with all of Visa’s technical and security standards and that the firm is “well suited to the FinTech category” and comes preloaded with a set of application programming interfaces (APIs) ready to roll. That certification, he said, can be critical, particularly when it comes to finding bank sponsorship, where banks are often hesitant to get on board with an innovative — but unfamiliar — new player.

“These firms need to find a bank sponsor. They need to get an external processor. Our Fast Track program allows them to engage through us. And every time we knock off a couple of weeks or a month on that cycle, we're encouraging more of these FinTechs by making it easier to onboard and compete vigorously built on our ability to help those companies to easily engage with us,” Angelos said.

An example of one such Fast Track FinTech is Daylight — a neo-bank designed to redefine the concept of community banking in the digital age.

Creating The Digital Community Bank

The historical concept of the community bank, Angelos said, meant that financial institutions defined themselves as prepared to meet their customers’ needs. That’s an issue Daylight is trying to address with its services specifically directed at and designed around the LGTBQ community's needs online.

“Daylight has owners who understand the LBGTQ community very well and sees a need for servicing that community in a better way. There're 30 million folks in that community and according to Daylight’s numbers, 20 percent of them are unbanked or underbanked. And collectively, this community represents a trillion dollars in U.S. spending. That's a pretty large, healthy community if you want to build a successful bank,” Angelos said.

And build a better bank that’s more directly responsive to the community's specific needs. In Daylight’s case, that means offering Visa-branded cards in the customer’s preferred name, even if it does not match their legal ID. It means financial tools to improve spending habits with the ability to customize goals and share them with the Daylight member community. It also means a personalized feed of expert financial advice and resources unique to the LGBTQ community and even opportunities to make direct donations within the platform to LGBTQ-aligned charities.

And while Daylight is pursuing one avenue of building an inclusive community bank, Angelos noted, there are options to do this in other historically underserved communities in the U.S. — and more generally around the globe.

“I think what many, many FinTechs are seeing is that at the end of the day, they're just trying to create the use case,” Angelos said. “We just happened to be a useful part of  pursuing that use case.”



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.