Visa Partner Launch Eyes $17T Digital Payments Opportunity For FinTechs

As the second decade of the 21st century heads into its last quarter, some might say that the world’s digital transformation is mostly complete — or at well on its way. Today more people on Earth use the internet and own a smartphone than don’t, and global eCommerce topped $29 trillion in 2017 according to the UN.

However, appearances can be deceiving. For all the progress that’s been made, the world still has 1.7 billion unbanked consumers who remain nearly wholly paper-dependent when it comes to making payments, totaling $17 trillion worth of consumer payments still made with checks and cash each year.

“What we see, around the world, is that the digitization of the consumer is complete,” Matt Dill, Visa‘s Global Head of Strategic Partnerships and Venture told Karen Webster in a recent conversation. “The digitization  of payments, on the other hand, is not.”

Closing that gap is the goal of a new initiative launched by Visa today called Visa Partner. Now live today worldwide, Dill said that Visa Partner is a digital hub that gives FinTechs and other payments ecosystem players worldwide the chance to jump start their payments journey by streamlining access to Visa’s technologies, network, solutions and licensing requirements.

The goal, he said, is to make Visa a first stop destination for growth-stage firms as they contemplate how payments fit strategically into their business.

“We want to help start-ups in payments worldwide see that Visa isn’t their competition — but instead their possible partner in building a genuinely scalable innovative solution that can scale, globally.”

The Fragmented State Of The Global Digital Payments Markets

Visa Partner, Dill told Webster, speaks to three different, but essential, trends in the global digital transaction landscape.

The first is the emergence of digital challenger banks, a particularly important force in the European Union.

Mobile wallets are a global phenomenon, but are also becoming increasingly central to the payments processes in developing nations in Latin America, Southeast Asia and Africa and offered via a number of players from FIs to FinTechs to telos. And lastly, alternative financing schemes — separating the card from the credit, are emerging on a global basis in a variety of configurations.

For all of their newness and technological innovations, Dill remarked there’s a bit of deja vu in the story of their start and their evolution.

Today, many of these new solutions are built as one-offs, a bit like what the banks in the U.S. did in the 1960s when creating their card programs. In some markets today, there may be five different QR codes for payments, or three terminals to enable separate payments types sitting on merchant counters. Moreover, although the digital banks, alt credit providers and digital wallet providers may not be thinking about cards, like the U.S. banks a half-century ago, they are thinking about how to scale their solutions beyond their domestic markets — how to make them interoperable on a global stage.

Setting the stage for that interoperability is at the core of Visa Partner, Dill explained, through the Visa Partner portal, innovators can access a single application for the relevant online licenses for their market instead of drowning in a sea of paperwork. A series of  “how-to” modules offer straightforward advice on complex topics like payments products, the importance of tokenized credentials and ability to instantly issue card credentials, the payments transaction lifecycle and a guide to launching a payment program.

What those modules can offer Visa’s partners insight into is what it is they need to be able to offer when they walk into a market — from both a regulatory and consumer expectations point of view. For example, he noted, if a FinTech is looking at a payments processor that can not instantly issue a digital payment credential to a digital wallet, or tokenize transactions, they probably aren’t the right partners offering a deep enough base of services.

The Visa Partner portal offers access to Visa partners for expediting relationships with banking identification number (BIN) sponsors, issuer processors, payment card industry (PCI) compliance and know your customer/anti-money laundering (KYC/AML) solutions, among others.

“We are beginning to see that no one wants to build a full global payment network from the ground up — why would they — but they want to build their differentiating proposition on top of one that already exists,” Dill said. “Making [Visa] services more consumable gives those startups, and startups inside of established companies,  more time to focus on creating those better value propositions.”

The Global Tipping Point

Skeptics might think that bringing up and coming payments disruptors onboard and giving them access to Visa’s tools, is a little like inviting the fox into the hen house. Dill noted that within Visa, they view it quite differently. A better strategy for Visa, he said, is to continue doing what they’ve historically done best — moving money around the world quickly and securely, and finding ways to leverage that ability so that potential rivals prefer instead to become future collaborators.

It’s a way of thinking that many of the most successful FinTechs in the space, firms like Stripe, Square and Marqeta, have already embraced — and a trend that Visa hopes to push forward with the release of Visa Partner.

“What we now see emerging is a tipping point where players in the ecosystem understand that they can move up and out of their market of origin and really scale by tapping into the advances that networks have already made and they can leverage.”