Today Visa announced a major expansion of Visa Direct called Visa +, with PayPal as the anchor launch partner. “help individuals move money quickly and securely between different person-to-person (P2P) digital payment apps” without requiring the recipient to have a Visa card.
Visa+ expands Visa’s role as the meta-directory of payments connecting consumers, wallets and accounts with a master “payname”. If I were to write the marketing one-liner for Visa+ it would be “pay people in the way they want to be paid”.
While P2P and wallet interoperability is the PR focus for the launch, disbursements may represent the largest volume
- Marketplace payouts – Small Merchants ($200B)
- International Payroll/Commissions ($400B+)
- Dividend Payments – Non-Bank International (~$50B-$100B)
- Healthcare/Insurance Disbursements
The case for PayPal is solid, as Visa+ interoperability allows consumers to keep their current relationship (ie wallet) and payout to any other connected wallet. It also expands the capabilities of Paypal in disbursements (ie hyperWALLET). I do wonder if Square Cash connects… P2P and perhaps allowing a SquareCash customer to pay with PayPal? LOL
Other wallets will be faced with a key decision on whether to open up their walled gardens. My guess is that they will selectively partner for interoperability cross border (where they don’t play) or for eCom (where they are not accepted). My recommendation for Visa would be to focus an Asia GTM on Visa+ as the marketplace interoperability platform. Allowing any wallet customer to pay any ecommerce merchant with the new “payname”.. AND integrate Visa’s fraud services (ie Cybersource) to drive GDV in AP eCom.
P2P Cross scheme interoperability among QR Wallets in Asia is significant, but central banks are heavily involved in wallet schemes and cross border interoperability (see effort by 5 SE Asia countries).
Page 19 of Visa’s rate table shows the pricing of Credit Transfer. Network fees and processing fees are not included here.
Visa Direct GDV growth has exceeded 44%, as I discussed in V/MA Moving Beyond Payments. While I see minimal near-term GDV (~<$2B) in cross scheme P2P wallet (ie no Zelle or SquareCash integration), I see significant disbursement volume (2%-10% Incremental Visa Direct) with a dependency on Asian Wallet integration.
More detail on the service here