Visa has recently forged new partnerships with several fintech startups in a bid to increase its adoption of modern payment methods. The multinational credit and debit card company has come under pressure lately to integrate new technologies like virtual cards and mobile payments, as disruptive fintech developments threaten its market dominance.
Just one example of how card payments are being threatened is the checking account payment option recently introduced by online retail giant Amazon. With an online checking account linked directly to their bank account, Amazon customers no longer need to use cards to make payments. While mobile payment platforms like Apple Pay and Google Pay still largely integrate with physically issued cards, it's becoming increasingly clear that physical cards have a limited future.
In an effort to get a solid footing in this payments revolution, Visa kicked off 2020 with a massive $5.3 billion offer to acquire fintech startup Plaid. That offer quickly ran into issues, with the US Department of Justice (DoJ) filing a lawsuit to block the acquisition due to antitrust issues. The DoJ feels the merger would eliminate a competitive threat and negatively affect consumers, an argument that Visa strongly contests.
The offer received a more positive review across the pond where the UK’s Competition and Markets Authority approved the deal, revealing a less strict regulatory environment. Visa also contributed $80 million to the UK-based company Currencycloud, a fintech startup that simplifies the integration of money transfer services.
The acquisition of Plaid will allow Visa to move more easily into open banking services and offer non-carded transactions, a move that the DoJ feels will unfairly expand its market dominance. The challenge hasn’t decreased Visa’s fintech exploits, though, with the recent rollout of its European Fintech Partner Connect programme and the introduction of Corporate Virtual payments.
Visa Fintech Partner Connect
The Visa Fintech Partner Connect programme provides Visa customers with seamless access to 13 specially selected fintech service providers. Amongst these are credit scoring startup Aire, subscription manager Minna, ID verification service Onfido, risk analysis firm AccountScore, and CO2 footprint track Ecolytiq. The demand for online financial services that reduce the need for human interaction is growing rapidly, especially in light of the ongoing pandemic.
“The popularity and need for digital payments and online banking has never been greater with the global pandemic accelerating this shift in behaviour," said Mark Nelsen, Senior Vice President of Europe Product at Visa. He went on to explain how Visa’s collaboration with innovative fintechs will help to develop “next-generation digital solutions” to meet the needs of modern business.
The full list of companies in the Fintech Partner Connect programme include:
- 11:FS Pulse - a research and benchmarking platform.
- Aire - a credit scoring firm that offers new insight to lenders.
- AccountScore - an open banking transactions analytics service.
- ChargeAfter - a ‘buy now, pay later’ financing platform.
- Codat - an API-powered accounting solution that connects small businesses to banks.
- Snowdrop Solutions - a service to enable the display of simpler transaction details.
- ComplyAdvantage - an AI-driven database to combat financial crime.
- Ecolytiq - a sustainable banking solution.
- Minna Technologies - a simplified subscription management service.
- Onfido - a digital identity verification service.
- OpenWrks - an open banking app that offers budgeting services.
- Personetics - a customer engagement platform.
- Paycast - a marketplace solution to serve freelancers and gig-economy workers.
On November 23, 2020, Visa announced a partnership with Conferma Pay, a virtual payments fintech that provides modern ways to make contactless mobile payments. Together, the team has launched Visa Commercial Pay, a suite of apps designed to facilitate the use of corporate cards in a virtual format.
With an ever-increasing number of employers now working remotely, there is a pressing need for easier ways to pay for corporate expenses. The Visa Commercial Pay platform will make it possible for companies to issue on-demand virtual cards, removing the need for employees to share a physical card. In addition to the benefits of virtual cards for employees, companies will be able to track expenses more easily and ensure money is spent wisely.
“The launch of Visa Commercial Pay in partnership with Conferma Pay allows us to accelerate B2B money movement away from slow, outdated methods to fast, data-rich, secure digital payments and give businesses better control over their finances,” said Visa Business Solutions global head Kevin Phalen.
The three new services included in the Visa Commercial Pay platform include the Visa Commercial Pay Mobile app, Visa Commercial Pay Travel, and Visa Commercial Pay B2B.
Visa Commercial Pay Mobile is an app that allows the creation of virtual cards that are easily trackable and can be created or destroyed at will. This provides a far safer and more convenient way for companies to manage expenses while also supporting their employees.
Visa Commercial Pay Travel is a management service for travel expenses, such as air and hotel costs. It integrates into travel reservation platforms and provides both the employee and business with detailed spending information and automated reconciliation.
Visa Commercial Pay B2B is a service that improves cash flow management and provides reconciliation and reporting features, with a range of integration options that you can tailor to suit your business needs. It’s designed to suit small businesses that need more third-party support or larger businesses that require a more carefully curated platform.
“With the Visa Commercial Pay initiative, we are excited to partner with Visa and help businesses gain greater visibility and control over B2B spend whilst drastically improving the payment experience for buyers, suppliers, company contractors and employees,” said Conferma Pay CEO Simon Barker at the Visa Commercial Pay press release.
With virtual payment innovations from fintech startups growing ever more competitive by the day, traditional card providers like Visa and Mastercard are scrambling to maintain their market dominance. To stay relevant in this new financial environment, these firms must be ready to let go of old ideas and embrace modern technology.
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