Here’s a topic for debate. Resolved: The highest priorities for banks and credit card companies in today’s payments landscape are cross-border payments, relationships with FinTechs and cloud-based technology. It would be a spirited debate and one that frequently plays out among the executives that color the content of pages. However, it’s hard to believe Visa and its partner TransferWise would take the opposite side of the debate.
The reason? Its most recent announcement checks all those debate boxes. The companies said Wednesday (Jan. 27) that they have formed a global partnership that will deploy and expand TransferWise’s multi-currency debit cards and mark the first use of Visa Cloud Connect. Visa Cloud Connect is billed as a way for FinTechs and their corporate partners to securely connect to VisaNet, Visa’s global processing network, using the public cloud.
The partnership will enable TransferWise’s multi-currency debit cards to have expanded geographic reach across Europe, Asia Pacific, the Middle East, the United Kingdom and the United States. The announcement is significant for the priorities it addresses, and also because when it comes to global payments, crossing currencies and borders need global infrastructure. The topic was addressed in a PYMNTS interview with Terry Angelos, senior vice president and global head of FinTech at Visa and Venkatesh Saha, head of expansion (Middle East & APAC) at TransferWise. Both said that card issuance can be done more easily through the scale and reach accessed through a single point of integration.
As Angelos told PYMNTS, “it’s a way to help accelerate the rollout, especially for clients like TransferWise, who are looking to roll out their solutions in multiple markets … the impact on consumers is that they will be able to access the TransferWise products sooner.”
Global Scale – And Faster Times To Market
Cloud technology is a major factor in the TransferWise model. In terms of mechanics, and positive operational impact, without Visa Cloud Connect, TransferWise would have had to invest in local data centers and telecommunications infrastructure in those markets — stretching out rollout timeframes. Through the partnership, TransferWise is able to tap into Visa’s global network, infrastructure and services — including encryption and PIN key management.
TransferWise has said that its multi-currency accounts allow consumers and businesses to hold and convert 55 currencies at real exchange rates. The debit cards allow consumers to spend and withdraw directly from those multi-currency balances, said Saha, who said that the debit cards reach 10 million customers across the globe, sending the equivalent of $6 billion across borders every month.
Market By Market — Or A Concurrent Rollout?
Saha noted that TransferWise has trade permission to go into more than 40 markets across the world. But prior to being able to tap into the cloud, it would have had to establish local market presence (with technology, teams and sub-specialized payment hardware) — dragging the time out to bring cards to market by as long as six months to a year.
“This didn’t seem to make any sense because what we’re trying to do is bring the exact same [value] proposition to every country,” said Saha. “it’s not just the upfront investment of the local infrastructure, but also the ongoing maintenance costs both from a financial as well as the human resource perspective, which can then force a company like us [to] have to make the difficult choice of ‘do we really want to go to this market? Is this market opportunity large enough?’ We don’t want to be in that position.”
Angelos told PYMNTS that there’s a “global certification” framework tied to the Visa Cloud Connect infrastructure, which means that engineers in one market can test various card use cases in other markets, making sure that cross-market functionality exists and that launches can proceed smoothly. In other words, the engineer in Estonia can make sure a card launched in Singapore operates the way it’s supposed to.
And when that cross-market, cross-currency functionality is in place, debit accounts such as TransferWise’s, according to Saha, “let you get paid like a local.” That can help gig economy workers and freelancers get paid more quickly, in their currencies of choice. The U.S.-based freelancer, to name just one example, can, upon completing work for a U.K. client, have that client send payment (in pounds), receive dollars on their debit card.
As for other use cases, Angelos said that B2B payment flows are about $120 trillion, measured globally and annually, where paper dominates. A significant portion of that greenfield opportunity will shift to network rails such as Visa’s, which in turn can make those payments more efficient and cost-effective.
Looking ahead, said TransferWise’s Saha, the company is in the midst of “advanced regulatory conversations” with countries in Asia and Latin America.