Visa’s entry into open banking in the Middle East and North Africa—a sprawling region known as MENA—is a splashy one.
After taking part in a $32 million round of fundraising by open-banking platform Tarabut Gateway, the card network is joining up with the company on developing products and solutions.
According to the news release on the Tarabut Gateway site, the partnership will focus initially on such data-driven offerings as credit risk assessments, advanced analytics, and insights. Solutions involving cross-border payments and lending are also anticipated.
“Together with Visa, we will leverage our data infrastructure to bring new and improved products to customers,” Abdulla Almoayed, the founder and CEO of Tarabut Gateway, said in the release.
All About Partnership
Two recent Javelin Strategy & Research reports—Open Banking Pushes Interoperability to the Payments Forefront, by Marco Salazar, and The Case for Card Networks’ Embrace of Interoperability, by Matthew Gaughan—dove into the factors driving partnerships like the one struck by Visa and Tarabut Gateway.
It’s a new day in payments. The rise of open banking—predicated on seamless connectivity between technology systems—is driving a cooperative environment in product development and giving customers more satisfying journeys through financial services. Meanwhile, even the dominant card networks, like Visa, are seeing some of their long-held advantages erode as payment rails become commoditized. The situation is prompting Visa and others to seek alliances as they navigate the changing environment.
“Today, consumers are able to transact with an innumerable set of instruments, many of which are alternatives to cards,” Salazar said. “While cards won’t be going away anytime soon, alternative instruments will continue to chip away at card-based market share, prompting card networks to diversify. … It’s no longer a zero-sum game as it pertains to card-based payments.”
Back to MENA
The news release announcing the Visa-Tarabut Gateway cast the move as the natural progression of Visa’s approach to open banking: It’s looking for partners and investments in companies that can spur the development of new products and solutions. Last year, Visa acquired Tink, another open-banking platform, to extend its reach in Europe.
Now it’s looking to the Middle East and North Africa.
“The future of financial services is being shaped by next-gen digital innovation, with open banking and data sharing serving as a significant driver to help consumers better manage and access their finances,” said Otto Williams, Senior Vice President and Head of Product, Partnerships, and Digital Solutions for Visa Central and Eastern Europe, Middle East, and Africa.
“As we look to the future of digital financial services, it is clear that the key drivers of growth will be innovation and openness.”