Small businesses power the U.S. economy, but for many, the access to reliable financing remains a persistent challenge.
To help close that gap, Visa has launched Visa & Main, a platform designed to centralize working capital and provide critical tools for smaller enterprises.
“Offering working capital and client acquisition tools are not new in the merchant space, acquirers and processors have been offering these tools for over 20 years,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “However, they are not available uniformly across the merchant market.”
“Some acquirers (like Square) have been very active in offering these tech and financing tools to merchants, while other acquirers don’t have them on their radar,” he said. “So, the play lines up with what Visa is doing. Rather than competing with our processor/acquirer customers, we will bring services to market that enable them.”
Walking a Fine Line
The growing small business market has become a central focus for many leading payments firms, fueling the launch of new point-of-sale systems, embedded finance platforms, and payments gateways.
“It’s an interesting move, although it tracks with their recent strategic moves in acquiring,” Apgar said “Within the last two years, Visa brought previous acquisitions Authorize.net and CyberSource together with VeriFi under the banner of Visa Acceptance Solutions (VAS). This strategy walks a very fine line between enabling your customers and competing with them.”
“Customers here are the banks and processors that deliver Visa services to merchants,” he said. “Visa is no longer relying on their distribution through customers to bring technology to merchants, it advertises VAS directly to merchants and then works in conjunction with the merchant’s named acquirer to implement the tech.”
Controlling the Narrative
Visa also aims to entrench its solution by delivering a holistic platform for smaller merchants that helps level the playing field. For example, Visa & Main includes cloud-system capabilities and fraud detection tools.
“Both VAS and Visa & Main are designed to provide Visa with more control over the narrative that merchants hear,” Apgar said. “In other words, they are taking their tech story direct to market rather than relying on their acquirer/processor distribution channel to tell it. But at the same time positioning their efforts as helping their distribution partners, rather than competing with them.”
