While there has been a plenty written about the recent squabble between Visa and Amazon in the UK regarding Visa’s huge increase in card interchange, it struck me just how far the global networks have moved beyond card payments. Yes, cards still generate the lion’s share of their revenue for now, but consider these two recent announcements:
Mastercard announced that it purchased the firm Arcus and its Arcus Pay Network to enable bill pay through billers, retailers, and financial institutions in Mexico with expansion into Latin America. Additionally, Arcus has recently gained access to process transactions through Mexico’s real-time Interbank Electronic Payment System (Sistema de Pagos Electrónicos Interbancarios). The press release highlights Arcus’ mission:
Edrizio de la Cruz and I began this company to help immigrants like us have a proper way to track our finances and send money home. For nearly a decade, we have grown from those aspirations to help pave the way toward greater financial inclusion in Latin America,” said Iñigo Rumayor, co-founder at Arcus. “We’ve tapped into some of the region’s brightest minds, and built a world-class team alongside Marc Sacal, who has helped us expand beyond those initial cross-border payments to give people a greater control of their financial lives. Now, becoming part of the Mastercard family and a direct participant in the SPEI network expands what we can deliver to our customers.”
Additionally, in an article posted to The Paypers, Visa made public that it has invested in an Australian data start up firm Basiq, which captures bank data for fintechs. This appears to be an open banking play, which may augment Visa’s acquisition of Tink earlier this year. More on this:
Through a process known as screen scraping, Basiq allows fintech customers to access the data in their bank accounts. Basiq is accredited to operate in Open Banking, which regulates this process, and is providing data services under the new regime.
Visa’s investment in Basiq comes on the back of its global ‘network of networks’ strategy, under which Visa is investing beyond its core payments network, which processes global debit and credit card transactions. It wants to ensure its networks remain relevant as alternative payment infrastructure is built.
For example, if the federal government adds an ‘action initiation’ power to the Open Banking regime – as recommended to Treasury – this could see the Open Banking infrastructure (part of the consumer data right) be used to make payments in competition with Visa’s existing network.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
