VISA's Payment Revolution Marks the End of Credit Cards Era
🚨 Forget @Apple Pay 🚨
@Visa declares war on @Mastercard and @AmericanExpress
Visa’s blockchain payment will replace credit cards overnight 🧵 👇
🔷 Visa x USDC 🔷
Ground breaking for credit cards
On Tuesday, Visa announced new capabilities that allow it to settle payments between merchants and acquirers (payment processors) using USDC, a stablecoin cryptocurrency whose value is pegged to the US dollar.
Two major payment processors - @Worldpay_Global and @Nuvei.
👉 How does the transaction flow work?
Acquirers, basically collect card based payments which have been accepted from Retailers.
The card acquirer facilitates settlement of card payments between issuing banks and retailers via card network interchange. Settlement involves debiting cardholders and crediting retailer accounts through this four-party payment network.
The acquirer aggregates payments from retailers and separates them by card issuer. The acquirer then sends these payments via the card network (e.g. Visa) to the respective card issuing banks in a process called 'interchange'.
The issuing bank debits the payments from the cardholder's account and credits the acquirer's account through the card network. This completes the settlement cycle, with money flowing from the cardholder ultimately to the retailer's bank account.
The typical settlement timeline is 3-4 days but can be as fast as 12 hours depending on contracted arrangements.
This four-party payment model involves contractual relationships between:
Cardholder and issuing bank
Issuing bank and card network
Card network and merchant acquirer
Merchant acquirer and retailer
Cardholder and retailer (governed by consumer laws)
🔷 Visa x Solana 🔷
As part of pilot programs, Visa can now send USDC payouts over the @solana blockchain network to two major payment processors - @Worldpay_Global and @Nuvei.
Those companies can then convert the USDC into fiat currency and pay their merchant customers.
This is seen as a major milestone for business-to-business crypto payments. Thus far, crypto-native companies have been the earliest adopters of solutions like USDC settlement. However, major cross-border e-commerce players are now exploring blockchain payments to significantly improve speed and reduce costs.
This is where it gets interesting: potential compounding (or multiplier) effect. As more acquirers (payment processors) receive payouts in USDC, they are likely to offer USDC payouts to their merchants. And as more merchants get paid in USDC, they may in turn pay vendors and employees in USDC.
This top-down adoption of stablecoin payments could rapidly increase their share of global payment volumes. Overall, Visa's latest advancement signals growing traction for cryptocurrency in facilitating faster and cheaper real-world transactions.
🔷 Mass Adoption 🔷
Visa's crypto advancements signal that mainstream enterprise adoption of blockchain payments is accelerating. As global e-commerce players increasingly integrate stablecoin settlement, it could rapidly scale real-world crypto payment volumes.
Companies like Airbnb and Uber deal with massive payment volumes across dozens of countries and currencies.
Uber have already made strong commitments to accepting crypto as payment
By leveraging blockchain technology, companies could shave days or even hours off of time-intensive, expensive traditional settlement processes.
For example, Airbnb operates in over 220 countries/regions and processes approximately $80 billion annually in over 40 currencies. Solana's high transaction speeds and low fees could provide substantial advantages over traditional settlement rails.
According to experts, Visa's latest move perfectly caters to global businesses eager to optimize payments. By pioneering settlement in USDC on a high-performance blockchain like Solana, Visa is bringing the “future of france” to payments.
🔷 Expansion Plans (alpha) 🔷
Visa is expanding its crypto vision on various fronts to drive mainstream adoption on various fronts.
👉 Talent Acquisition
The hiring spree demonstrates Visa's commitment to executing on its crypto and future of payments strategy. And keep it crypto culture friendly:
Visa is hiring more software engineers for its crypto division to develop new products based on blockchain and stablecoin payments.
The job openings are for senior engineers based in London to work on Visa's "ambitious crypto roadmap."
Ideal candidates have experience with web3, Layer 1/Layer 2 solutions, smart contracts, and AI tools like Github Copilot.
Positions are hybrid with 2-3 days per week in the office.
Visa aims to further crypto adoption through partnerships enabling crypto payments and services.
👉 Pilot program
In March, Visa active partners with crypto companies and since then it was already mentioned “… build new products that can facilitate stablecoin payments in a secure, compliant, and convenient way.”
Twitter: https://twitter.com/arndxt_xo/status/1700117575257162081