VP at Visa Inc
- Mechanics of Visa’s (NYSE: V) Visa+ interoperability layer for P2P transfers and how it fits into payment flow layers
- Economics of the interoperability layer, discussing network and processing fees
- Integration of digital wallets and other players
- Interoperability impact and volume opportunities across P2P networks, disbursements, cross-border, remittance and other areas
What are your initial impressions of the Visa+ product announcement earlier in April 2023? How do you think about it from the perspective of addressing pain points in the current payments ecosystem?
To your point, Visa+ is the next evolution in the connectivity layer that Visa already has with its bank relationships and card networks. How do you see this being appropriate for the new digital age and the more ubiquitous nature of P2P networks and other digital money transfer services?
Could you give us a refresher on the various layers of a P2P transaction and put the Visa+ roll-out in this context? I know PayPal and Venmo are the initial roll-out partners, so thinking about a transfer of USD 10 between two PayPal accounts, what does that look like in terms of identification, debit push, credit pull and so on?
Could I conceptualise Visa+ as almost an extension of the identification numbers that I already have on my bank account or the debit card that I use corresponding to that bank account? Is this an additional alias identification layer for these different interoperability transfers?
Does Visa+ maintain the status quo on transaction security or enhance it?
How does Visa+ relate to Visa Direct? How does it work in tandem with that system?
How should we think about fee structuring for the Visa+ layer? How is it similar or different to that in Visa Direct, and would the company be likely to tack on additional economics or transaction fees to these types of transactions?
Is it safe to assume that there will be a no- or low-fee structure for Visa+ upfront to encourage adoption and usage? Will those fees then be hiked gradually when usage reaches an inflection point or critical mass?
How will Visa drive adoption and usage or Visa+? Will it mostly just lean on its integrated partners and leverage this network to increase usage? Could the company use its own bespoke marketing and sales efforts to drive adoption?
How should we think about the relevance of FedNow given the increasing focus on real-time payments? From what I understand, there are two layers to the real-time payment system, and it seems that interoperability is a huge topic specifically related to the FedNow launch.
How should we think about the technical requirements for merchants or digital wallets to integrate and onboard the Visa+ layer? Can we draw any parallels with the Visa Direct integration?
We’re in the early stages of Visa+ – it was just announced a few weeks ago – but there were some notable exceptions from the announced partnerships, particularly Apple Pay, Google Pay and Cash App. Is it inevitable that these players will look to integrate or onboard Visa+ products? Are there any notable advantages or disadvantages to onboarding or not onboarding? I guess it’s a function of what their customers demand.
How do you see Visa+ affecting competitive dynamics for P2P networks? I could see it going either way in terms of enhancing or diminishing customer loyalty or usage of specific apps.
How would you rank the use cases for Visa+, considering cross-border and wage access, digital banking and disbursements? What could have the most payment volumes or most favourable economics?
Where does interoperability activation leave the other players in the cross-border market? Could this just be more of an impetus for these transactions to occur on a digital wallet or P2P basis and leave the conventional model? It seems that this would be fairly detrimental to the economics of those conventional businesses.
How do you think Visa+ affects Visa’s competitive positioning against Mastercard? Is it safe to assume that this product can be replicated by an extension to Mastercard Send? How do you think about this now and longer term?
Could Visa+ increase the threat of regulatory intervention around Visa and its dominance in the payments ecosystem? Another piece of this was why I was asking about the credit card rails specifically before – there was the recent proposal by US Senator Durbin around credit card competition and proposed interchange rules. Would this affect the economics of this business at all?
Is anything else worth highlighting that we haven’t already discussed around Visa+? What would you encourage us to take a second look at? Are there any management assumptions around the product roll-out that we should second-guess?
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