Ryan McEndarfer:
So Vikram, thank you so much for joining me today. Now to start off our conversation here, can you give us an overview of Visa Direct and your role on the team?
Vikram Modi:
Yeah, hi. I would love to. So Visa Direct is Visa’s global real-time push payments platform. And let me amplify that a little bit. For many, many years, what we’ve been doing very successfully is allowing consumers to make payments to merchants. And that happens globally, it happens instantaneously, and it happens with a lot of convenience. However, what Visa Direct does is now switch that around on its head, and enable consumers to receive payments with much the same experience as they have while making payments, which is instantaneous; it’s across the world; it’s secure and convenient.
McEndarfer:
Excellent. Now, as we talk about the push payment space there, [in] your opinion, what’s beginning to ignite in the push payment space?
Modi:
So from where I sit, we see a couple of big trends going on. One is that, clearly, there is a huge focus now on this reverse transaction, which is the payout. For decades, I think the payment industry and Visa in particular, excelled in making payments from consumers to merchants. But as we get into the mobile economy and the app economy, what that spurred is the growth of the gig economy. And what that means is that people that we were so far thinking of as largely in payers are also payees, and as payees, they expect the same experience that they have as payers, which is, “Hey, I need to receive my money instantaneously. And I need to receive it easily. I don’t want to have to make an appointment with myself to set up how I need to receive money.”
And so that consumer groundswell is very, very apparent now. And what that’s driving is that consumer-centric merchants, technology processors, [and] fintech companies are all latching on to this trend and saying, “Okay, how do we deliver that kind of seamless, instantaneous experience to consumers?” So in industry after industry, we are seeing that now people are [focusing on] “how do we concentrate on the payout part of it [and] make it seamless? And what does Visa have to offer which helps us do that?”
McEndarfer:
Yeah, no, I certainly think it’s interesting as you said, the ground up here where the gig economy that kind of spurred a lot of this, saying that “hey, yes, I as an individual am also an individual business, and the way that I can pay other people and things seems to be very seamless” but that whole question of “why can’t I get paid in this seamless fashion” is certainly very interesting.
And you see a lot of players in the market trying to come up with the solutions to be able to provide for that, certainly Visa Direct [is] certainly an interesting option. So now if we could put a little bit of where the rubber meets the road here, what are some of the recent partnerships that highlight how Visa Direct is advancing the push payments landscape?
Modi:
Yeah, so on that same theme of consumers being very habituated to making payments in a really seamless manner. So you don’t think about when you make the Uber payment, or you make the Amazon payments, you know you’ve got your card linked over there and the payment happens pretty seamlessly. And if you look at some of the industries where, on the payout transaction on the receive side, given the maximum pain points, whether this was P2P payments, where, for the longest time in the United States, it was still a check and ACH payments, which were dominant. And clearly, the need to speed that up, to make it more convenient, that was one big segment.
So speaking specifically on B2B, we have now seven enormously successful mobile B2B services in the country. And each one of them has Visa Direct as a foundation. And I’m talking here of Facebook, Messenger, of Cash [App] from Square, PayPal, Venmo, Zelle, Apple based cash launched recently, and Google Pay. So with Visa, we have seven enormously popular services growing quickly, and all of them are partnering with us.
Moving to the gig economy space, Uber and Lyft, were a couple of the pioneers who said, “we’re not only going to make payments seamless for folks who want to ride, but the payouts to drivers who are providing those ride sharing services need to be as seamless.” And so that moved from “hey, you can receive your payout in a couple of weeks, once your minimum balance reaches a thousand bucks or something like that,” to saying, “hey, you can access your dues on demand and instantaneously.” So we have a number of partnerships in the gig economy space; Uber, Lyft, Task Rabbit, [and] Postmates being some of the prominent ones.
And then that brings us to a few more established industries; insurance claims. How do we make the whole claims process far more efficient? So, Allstate looked at how they can streamline their entire claims process and they partnered with Visa Direct.
And now the new emerging area is really how do we translate that not just in the domestic context, but [with] cross border as well. So we recently announced really exciting partnerships with some of the major cross border money transfer players; MoneyGram, Western Union, [and] Remitly. So that’s just a cross section of the kind of partnerships we have, and we have similar partnerships in all parts of the world.
McEndarfer:
Great, no, I certainly think it was interesting there that you brought up a couple of different verticals, and I’d like to get back to that in a second. But first, I’d like to know, what is the role of Visa Direct in advancing push payments forward?
Modi:
So the most valuable piece that we provide to our partners is a global, real time secure network. So access, to think of it, in a full version of 3 billion consumer and small business accounts all over the world, across 175 countries, across 200 currencies, in real time, being able to send payments to them, is pretty unparalleled. And to add to that, we recently announced our acquisition of Earthport. And what Earthport is going to do is extend this network footprint, if you like, to beyond cards to bank accounts as well. So if partners and payout providers and consumers who need to receive payments are looking for a comprehensive, secure, high quality solution, that’s the role Visa Direct and Visa plan to play in the space. It is to become the foundation for Google push payments, much as we are the foundation for a global ecommerce, or global merchant payments.
McEndarfer:
Excellent. All right. And now before we wrap up here, I’d like to take a jump back there, where you had talked about the different partnerships that Visa Direct is implementing there and some of those partnerships being the gig economy and within health healthcare. But I’d really like to kind of get a deeper dive into that in terms of talking about what are the benefits of some of those different verticals that we mentioned?
Modi:
I think it starts with the consumer experience. The way I like to think of it is it starts from the consumer. And if you’re an insurance company that’s seeking to make the claims experience available to your users through a mobile app, and think of it as a user being able to take a photograph of her damaged car and upload that as part of a claims form, the way to complete that experience is to also make sure that once the claim is approved, the payout can happen in real time and not take seven days for the check to arrive in the mail. Because there’s no point in having a really swishy mobile app for claims, and it’s breaking down once the payout happens. So it starts with the consumers.
And so merchant and industry after industry that are looking to reboot the consumer experience with respect to sending consumers and small businesses money are looking for makes this experience problem seamless. So I spoke about the P2P industry as being one of the early movers in this; digital wallets are looking for efficient ways to bring funds into the wallets and take funds out of the wallets. [These] are a huge segment. But I think these are the tip of the iceberg because in any market, you might have 10, 15, 20 P2P services of wallet services. But when it comes to claims, and when it comes to payouts and disbursements, there are literally thousands and thousands of potential partners that we have. Insurance claims is a big one. Merchant settlement, how acquirers settle with small merchants for whom cash flow is paramount important. That area is seeing disruption.
Earned wage access; how workers in the informal economy, again cash strapped, cash flow and liquidity is of huge importance to them. And they want to access the pay roll that has accrued to them in real time. So we’ve announced a partnership with PayActiv recently to make real time [payments] on wage access possible.
Cross border remittance; we have these huge industry partners that we’re working with. And as we’ve begun to roll out across the different segments, we now see that more traditional, more established players such as cash management divisions within banks, who do the disbursements, but they’ve been doing disbursements primarily through checks, or ACH or wires. [They] are now looking at cards and looking at Visa Direct and saying, “Hey, maybe there’s a solution to the platform out there which I need to integrate into [business]. So really, I can go on and on talking about all the different segments, but really think of it as, if I were to boil this down to any industry or segment that is processing low value payments through checks, ACH, and wires and seeking to make things faster, more convenient, more costeffective; they could all benefit from what we offer.