A bit more than a month ago, Visa debuted Visa Next, a platform that offers a growing menu of beta application programming interfaces (APIs) that can be (and are being) used by issuers and issuer processors to build and test new digital-first products. The platform also serves as a “new destination” for viewing new and upcoming solutions in Visa’s pipeline.
From the issuance of digital cards to consumers controlling those cards (with on-demand access to funds, dictating who can spend what, where, when and how), the roadmap is there, but the execution is a challenge — unless the right tools are in the developer’s toolkit.
In a PYMNTS interview with Karen Webster, Sam Shrauger, SVP of digital solutions at Visa, delved into what’s next at Visa Next. The focus is on giving providers a platform (or destination site) upon which they can quickly build new payment experiences.
First, what’s different: Though Visa has published APIs through the past few years, Shrauger said those past offerings were rooted in specific needs for developers within the financial services arena, targeted toward issuers or merchants. Now, there is a strong demand in the marketplace from issuing banks and partners for a broader range of solutions.
While the initial tailwind came from what might be called the “syntax” of the neobanks, for traditional players that have been in the payment and financial spheres for a long time, “there are a lot of new products, a lot of new experiences that all of these parties are trying to create,” Shrauger told Webster. “When push comes to shove, these parties are left having to assemble a lot of capabilities from a whole spectrum of the ecosystem.”
Such cross-pollination may mean that a FinTech wants to be able to issue a prepaid card, or is eyeing the ability to create direct deposit accounts down the line.
“But first, they want to get a card into peoples’ hands,” he said, and they want to do it simply and easily. Historically, in the payments industry, “that has not necessarily been the most straightforward task for any of these parties to complete.”
Companies have had to navigate any number of regulatory or operational hurdles, such as getting BIN sponsors, gaining access to payment networks or finding processors. The onus has been on the developer to solve those challenges, noted Shrauger, who added that Visa Next offers them all the capabilities for which the market has been looking.
“What's really the most important thing for those capabilities is that we package them and present them, and make them available, in the simplest possible way for developers,” he said — in some cases, through combined APIs.
Developers can cut the time and effort spent building payments into apps, and shepherding new products to market for issuers and processors, such as digital issuance and helping merchants facilitate installment lending. At present, he continued, what has been challenging to consumers is that any one of those behaviors is usually tied to individual cards within their wallets, but the siloed nature of those activities can change with the APIs that bundle functionality.
Today, most of the companies in the market to which Visa Next is talking, according to Shrauger, want to get a digital version of a card so customers can interact with those companies, and discover what's different and new about their models. “Payments, obviously, is a critical part of that,” he said, though most clients have ambitions to scale far beyond payments.
The combined APIs available through Visa Next are especially important, he added, as developers at issuers or processors are either creating software in the cloud or are already running programs to offer new services. Many of the capabilities desired by issuers and processors have already existed at Visa.
Shrauger noted that if developers were to attempt to solve those challenges themselves, they would wind up providing a less-elegant experience for their consumers.
Defining The Visa Next Ecosystem And Use Cases
Processors, acquirers and other companies have been serving the market and performing valuable functions that are going to persist, regardless of where the actual end-user payments experience may go, he said. That means payments, incorporated into new services and use cases, must be able to scale globally, too.
Against that backdrop, developers take on two roles as they work with Visa Next. One is to lead innovation as they design new experiences, and the other is to give Visa continuous feedback as to what they need next. In one example, a user could conceivably configure an account to act as, what Shrauger termed, a “travel account,” with set boundaries in place that dictate what currencies can be used, and how much can be spent per transaction.
Once digital and customizable cards are in consumers’ hands, said Shrauger, use cases evolve. Consumers, armed with payment accounts, may wish to share access to debit or credit cards, customizing who can tap into their spending power, how much and when. Amid the drive toward digital commerce, handing one's child $25 to go the movies may be done digitally, rather than with bills taken from a wallet.
“That's another big use case that we see [as either a] close follower to or [companion of as] we talk about the launch of the digital issuance itself,” he told Webster.
Shrauger noted that Visa Next aims to support the global trend toward a faster and more evolved set of payment offerings, spanning Asia, Europe, Africa and beyond.
“Where we are today in digital payments,” he said, “is not the end of where this evolution is going to go. Visa Next represents a platform with a statement to the market that we're here and open for business to provide simple capabilities that allow the ecosystem to flourish, … to build completely unexpected and delightful payment experiences, or customer experiences that may include payments.”