Interview Synopsis

Visa+: Mechanics, Economics & Interoperability

  • Public Equity
  • Financials
  • North America

In this Forum Interview, we asked a former VP at Visa for their first impressions of Visa+, which was announced in April 2023 and enables transfers and real-time payments between participating P2P payment apps. Designed based on feedback from P2P users, Visa+ is the next evolution in connectivity that Visa already has with its bank relationships and card networks, our specialist said.

Cross-border is Visa+’s biggest opportunity

As well as addressing pain points in P2P transfers, Visa+ offers Visa a way to syphon economics from increasingly popular closed-loop digital wallet systems, the expert said. “If you look at the wallets without this solution and without some of the other partnerships that Visa and other networks are pursuing, they could be a threat to those business models, to the core card business model.” At the same time, Visa+ should allow Venmo and PayPal to strengthen their user relationships. 

The former Visa VP expects Visa+ to follow the standard Visa Direct fee structure for transaction economics. While this will vary by region, it will generally be a few basis points up to USD 0.25, where USD 0.10 will be paid to the issuer, we were told. They also noted that the biggest opportunity with Visa+ is cross-border transactions, as these are “vastly more valuable on a per transaction basis than per dollar of payment value that’s transacted” – by about 10x.

While there are clear benefits of Visa+, the expert said it will require effort from the user to register a pay name and “use the app in a new way”. Marketing will therefore be critical to provide support and consult on the user experience. “It stands to be seen, do people, once they know that the service exists, do they use it? Only time will tell.”

Adoption rate will be the most important factor to monitor Visa+ success and accretion potential, we also heard. The specialist does not see any meaningful integration barriers because technical requirements – underlying account routing – have not changed.

Additionally, the expert does not believe Visa+ increases regulatory risk for the card network, as it is an extension of existing systems. On transaction security, the former Visa VP believes Visa+ is stronger than the status quo because the underlying payment credential is not visible to either the sender or recipient. 

Click here to access all the human insights in Third Bridge Forum’s Visa+: Mechanics, Economics & Interoperability Interview.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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