Visa Direct Payouts Pushes Payments To Cards, Two Billion Bank Accounts Globally

The check is in the mail just won’t cut it anymore.

As stated in the latest edition of the PYMNTS Disbursements Tracker, 67 percent of consumer and microbusinesses consider real-time payouts essential to their relationship with payors. The opportunity is now on the shoulders of the payments industry to improve the technology and experience behind those real-time payouts.

As the situation stands, businesses as well as consumers, have to contend with multiple payments networks across multiple geographies to make real-time payouts work. For example, payments networks can simplify payor integration complexities that offer real-time payments direct to bank accounts or via cards. It is this complexity that motivated Visa to announce Tuesday (March 30) the latest expansion of its real-time push payments platform Visa Direct with Visa Direct Payouts.

The new product, Senior Vice President and Global Head of Visa Direct Bill Sheley told Karen Webster, is designed to create a single point of connection to make it simple, secure and speedy for payors to push payments to any eligible card for domestic payouts, as well as eligible cards and/or accounts for cross-border payments.

“We’ve always had a focus on doing a truly integrated multi-rail network of networks and the heritage that Visa brings with a global acceptance footprint and a singular connection to simple settlement and back-office capabilities,” Sheley said. Visa Direct Payouts “is this the manifestation of that vision.”

Visa Direct Payouts will push to card payments in domestic and cross-border peer-to-peer (P2P), business-to-small business (B2SB) and business-to-consumer (B2C) use cases. Among them: insurance disbursements; marketplace seller payouts; faster access to workforce earnings; and payments for financial institutions (FIs), FinTechs, remittance providers and corporate banks.

All of it is accessible via an integrated front-end designed to be simple for clients to create and execute through. Sheley said Visa facilitates intelligent routing and message translation and a tool set that “creates a flexible capability to commercialize.”

The Earthport Connection

This expansion is made possible by Visa’s 2019 $257 million acquisition of Earthport, a U.K.-based FinTech known for cross-border payment services to banks, money transfer service providers and other businesses through its independent ACH network, Sheley said. At the time of the acquisition, a press release stated Earthport would “scale Visa Direct’s rapidly growing portfolio of use cases.”

It’s a prediction coming to fruition today as Sheley said the Earthport and VisaNet are acting “as two big nodes in a chain connecting a treasury bank on the front end.

“They send us a co-mingled file of accounts and cards,” he said. “We … route it to our series network and network connections. So, we do settlement with those particular entities, and then [Earthport flows] the money downstream. It’s a pretty simple waterfall when you put it in that supply chain perspective.”

A simple waterfall, but a powerful one, he said, taking the opacity out of the money movement process and making it possible to move funds in moments or hours compared to the course of days or even a week.

“And we’re going to continue to build on this as a key proof point of our value prop,” Sheley said. “We think it’s very differentiated in the marketplace, and it will be hard for anyone else to build and replicate. We’re going to continue to improve it with new flexibilities and liquidity capabilities regarding how we move money across the globe, leveraging our partners. We’re going to leverage different ways to receive money, different form factors and more customer flexibility in how they want to receive it. But it’s a good infrastructure to start with.”

And it is an infrastructure that creates interoperability between the various global real-time payment schemes, virtual and prepaid card products and any tokenized payment form factor, he said. Visa’s structure is uniquely built to provide that interoperability given scale and experience in routing payments all around the world in an instant.

Sheley said leveraging the card network will also build a “magnificent customer experience” and something that is actually “pretty revolutionary” in the payments world.

But more than what the Visa Direct Payouts will do on Day One is what it will do as it evolves. Sheley said it will move forward as the disbursement market continues to snap off the shackles of the slow payments past and embrace the power of the instant payments future.

“We’ve cleared transactions domestically and internationally for 65 years now,” Sheley said. “So, this is a natural extension of this particular network and this network of networks we’ve been building for the last few decades as well.”