Visa Racks Up Fintech Investments in 2019

Visa Racks Up Fintech Investments in 2019

by September 3, 2019
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Visa, the world’s second-largest card payment organization, has turned to fintech acquisitions, investments and strategic investments to further expand its payments capabilities and reach.

At the firm’s Q3’2019 earnings conference call on July 23, Visa’s CEO Alfred F. Kelly, noted the company’s delay in responding to the rise of fintech but stressed that it had made some serious strategic moves over the past year to expand its network, grow its services portfolio, and overall, keep up with the rapidly evolving landscape.

“We’ve gotten our act together as it relates to fintechs,” Kelly said. “I’d be the first to admit that we are a little bit slow out of the chute a year and a half ago, but over the last five quarters or so, we’ve been very, very focused on fintechs and making sure that we are easy to do business with, easy to integrate with, easy to get on-boarded.”

 

Visa’s fintech acquisitions

Since the beginning of the year, Visa has announced several acquisitions and investments set to accelerate the company’s “progress in capturing new payment flows and extend the boundaries of our capabilities and our network,” Kelly said.

In May, Visa acquired control of UK-based Earthport, and in July, it obtained full legal ownership. Earthport provides cross-border payment services provider to banks, money transfer service providers and businesses via the world’s largest independent ACH network.

By acquiring Earthport, Kelly said Visa has become “a network of networks and extended our reach to over 99% of bank accounts in the 88 countries, including the top 50 markets.” He said the company is now actively working to launch its “first fully integrated experience” before the end of the calendar year. The move aims to provide a single connection for clients to push funds to cards via Visa’s global network, VisaNet, and bank accounts via Earthport.

Another of Visa’s acquisition is Verifi, a “best-in-class dispute resolution tool” that enables issuers to connect with merchant’s data immediately when a consumer calls to dispute a transaction, so that the issue can be settled quickly and fairly.

Verifi’s suite of dispute resolution tools will be added to existing Visa tools, extending the firm’s chargeback and dispute resolution capabilities while reducing customer friction across the entire payment experience.

Visa has also signed an agreement to acquire the tokenization services from Rambus. Kelly said the acquisition will help Visa develop network agnostic services, and extend tokenization to all types of transactions, including the ability to support domestic card networks, account-based and real-time payment systems.

Finally, Visa acquired in July Munich-based Payworks, a provider of payment gateway software for point-of-sale (POS) terminals. Visa said it will bring Payworks’ cloud-based solution for in-store payment processing together with its CyberSource digital payment management platform to create a fully integrated payment acceptance solution for merchants and acquirers. The joint offering will provide acquirers and payment service providers with a white-labeled omnichannel payment management platform.

 

Visa’s fintech investments and partnerships

Besides acquisitions, Visa has also invested in and inked partnerships with numerous fintech startups from around the globe.

In Southeast Asia, Visa has invested in Go-Jek, an Indonesia startup unicorn and a super-app that started as a ride-hailing platform before expanding into many other verticals, including payments, food delivery, laundry services, and more. The Go-Jek app records 108 million downloads, and half have been used in the payment service Go-Pay.

Kelly said Visa is working with Go-Jek to “make digital payments easier for both Go-Pay and Visa users, while expanding to new used cases.”

In India, Visa has invested in Paymate. Paymate is a B2B payment startup that operates a portal connecting 35,000 buyers and suppliers to provide buyers with a consolidated view of their accounts payable across all payment types. Visa will give better reconciliation data for buyers’ accounts-payable divisions.

Finally, in Europe, Visa has partnered with Setoo, an insurance-as-a-service provider, and SafeCharge, a global payment service provider, to use Visa’s real-time push payments platform, Visa Direct, to settle and pay claims quickly.

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