Visa Inc. ( V Quick Quote V - Free Report) has expanded its Visa Direct capabilities with the introduction of Visa Direct Payouts. This new solution uses a single point of connection for push payments to eligible cards with respect to domestic payouts and to eligible cards and/or accounts for cross-border payments for the sender’s clients and partners. The rollout of this service is to mobilize the digital economy wherein electronic payments gained precedence against the backdrop of the pandemic. The Visa Direct Payouts service is an extension of the company’s Visa Direct service, which is a global, real-time push payments platform. Visa Direct service revolutionized the traditional card payment flow by allowing payment originators through their acquirer to push funds directly to cards. The company advanced its Visa Direct capabilities with the acquisition of Earthport, which now allows it to push funds directly to 1.5 billion additional bank accounts.
Prior to the Earthport acquisition, Visa cards were primarily used to make or receive payments. With the launch of Visa Direct Payouts, the company will be able to expand its account-to-account capabilities to currently reach an additional 2 billion bank accounts around the world.
For Visa Direct transactions, Visa offers value-added services including security and tokenization, bringing peace of mind to SMBs and consumers as they pay and get paid, and move money internationally. The company’s Visa Direct service made an impression amid the pandemic, which is reflected by its blockbuster 650% transaction growth rate in the fourth quarter of 2020, driven by skyrocketing consumer demand for Visa’s digital P2P payment capabilities. Visa Direct Payouts application programming interfaces (APIs) are flexible and efficient enough to minimize complexity in moving funds across the globe covering multiple networks and intermediaries. Visa Direct Payouts supports real-time domestic and cross-border person-to-person (P2P), business-to-small business (B2SB) and business-to-consumer (B2C) use cases, such as insurance disbursements, marketplace seller payouts, providing workers faster access to their earnings as well as remittances. The market for consumer and business money flows is estimated to be $65 trillion and with Visa Direct Payouts, the company is targeting this vast opportunity. With Visa Direct Payouts, many of Visa’s clients and partners around the world are launching money-movement programs. Notably, Standard Chartered Bank (Hong Kong) Limited is enhancing its digital International Transfer services for its retail banking customers, MoneyGram is launching an enhanced money-movement optionality for its customers to remit money across borders, KyckGlobal, a Visa fintech partner, enables a variety of B2SB and B2C use cases through its payments engine including insurance claims payouts, fast fund settlement for SMB marketplaces and a quick access to earned wages for independent contractors and hourly workers. With the addition of Visa Direct Payouts, Visa Direct now provides multi-rail access to 5 billion cards and accounts in combination across more than 200 geographies, supporting 160 currencies, and connecting to 16 card-based networks, 65 domestic Automated Clearing House (ACH) schemes, seven Real-Time Payment (RTP) networks and five payment gateways. Visa is a leading payment processing company and marches ahead of the other payers in the same space including Mastercard Inc. ( MA Quick Quote MA - Free Report) , American Express Co. ( AXP Quick Quote AXP - Free Report) and Discover Financial Services ( DFS Quick Quote DFS - Free Report) among others. The volume of transactions processed on Visa’s network has grown annually over the past several years. In 2020, $140.8 billion transactions were processed on Visa network, which was up 1.8% year over year. During the fiscal year 2020, the company saw 204 billion payments and cash transactions with Visa’s brand, equating to 559 million transactions a day, on average. Of total transactions, 141 billion were processed by Visa. The company is accelerating efforts to move approximately $18 trillion in consumer spending still done in cash and check, to cards and digital credentials on the Visa network. Given the company’s robust reach with technology, its presence across the globe, a large client base, partnerships with several merchants, a strong brand name and reliability, the company will continue with its growth path tapping increasing market share. Year to date, the stock has declined 3.1% compared with its industry’s dip of 0.05%.
Visa carries a Zacks Rank #3 (Hold) at present. You can see
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