With cross-border payments increasing rapidly in our globalised economy, industry players are focused on speed, certainty and providing a smooth international payments experience. Financial services giant Visa sees collaboration underpinned by new technology as the right formula.
The volumes involved in cross-border payments are staggering. In 2018, for example, SWIFT gpi – the industry cooperative’s new global payments initiative – recorded $40 trillion in cross-border payments. This figure is expected to grow considerably as we enter a new decade.
Thanks to technological advances and innovative partnerships, today’s leading financial institutions are driving improvements in the sector, enhancing speed, transparency and efficiency. Visa is one such company that is seeing a huge opportunity to improve access and user experience in the cross-border payments landscape.
“There are countless cross-border payments that occur globally each year, mostly using aged and inefficient systems,” says David Josephs, Head of Visa Direct – Europe. “At Visa, we operate the world’s largest real-time payments network, not only facilitating the transfer of cross-border payments but providing a secure, reliable and transparent platform from which to extend our capabilities, products and access. With the strength and reach of our global network, Visa is well positioned to work with industry partners to extend the capabilities of our network and improve the cross-border payments landscape over the next few years.”
Creating an inclusive ecosystem
Developing easy, safe, transparent and reliable cross-border payment solutions is a key focus at Visa. In May 2019, it acquired Earthport, which provides cross-border payment services to banks, money transfer service providers and businesses via one of the world’s largest independent ACH (automatic clearing house) networks.
“Before Earthport, through our Visa Direct capabilities, our debit credentials, and ATM network, Visa could reach about half of the world’s bank accounts,” adds Josephs.
“Now with the addition of our recently acquired Earthport network, we expect that Visa Direct clients will soon be able to push payments to the majority of the world’s banked population. Our vision is to enable our clients to collectively reach bank accounts of consumers and small businesses in almost 200 countries, all via a single connection. Our integrated Visa/Earthport value proposition is expected to go live before the end of the calendar year, enabling Visa Direct payments through cards or accounts to reach over 95% of the banked adult population.”
This year, Visa also launched B2B Connect, a multilateral network of directly-connected member banks to support high-value B2B cross-border payments. Using technology based upon blockchain architecture, B2B Connect is designed to make it easier to send and receive cross-border business payments.
And In June 2019, Visa announced a new partnership with Currencycloud, aimed at further boosting innovation in cross-border payments. Visa’s clients now have the option to use Currencycloud’s platform to offer its customers in-demand services like multi-currency wallets and real-time notifications on foreign exchange transactions.
According to Josephs: “This global strategy reflects our goal to be the payments solution provider for our clients in support of new payment flows, connecting thousands of financial institutions and billions of user endpoints into one integrated ecosystem that payers and payees can access with the standards they expect from Visa – global reach, incredible reliability, best-in-class security - plus a robust set of capabilities, including dispute resolution, tokenisation, data analytics, and risk management.”
Embracing new technologies
Josephs believes there are three big areas where the industry will see a lot of innovation in the next decade.
“The first is improved payment experiences, which includes new ways to make paying, and being paid, easier and more frictionless. We’ll start to see this take place more through new technology and the continued adoption of what we’re starting to see in market, including things like contactless, mobile, and real-time payments.”
“The second key area where I think we will see a lot of focus is the expanded access of digital payments to more people and places who are currently without access, via things like prepaid, scan-to-pay and digital currency. Lastly, I think we will continue to see a lot of interest in enabling transactions beyond your traditional plastic card, using innovative new technologies to improve and enhance person-to-person, business-to-business and connected or IoT (Internet of Things) enabled payments.”
David Josephs will be discussing Visa’s role in the cross-border payments landscape at the 2019 IAMTN Global Summit, which takes place in London 2-3 October.
To find out more about the agenda and register, please visit the event website.