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Visa and Western Union are entering a strategic partnership that will allow Western Union to use Visa Direct, the card network’s push payment service, for cross-border transfers, according to a company press release.
The partnership will enable Western Union customers in 200 countries to send remittances in 130 currencies directly to Visa cards, effectively adding an option for transfers beyond cash or account-to-account.
The collaboration between the two giants will help streamline cross-border payments across business segments.Visa Direct could be used for a wide variety of transfers, ranging from employers paying an employee located in a different market to migrants sending money home, because Visa Direct supports transfers up to $100,000 according to PYMNTS.
Casting a wide net can help streamline some of the key pain points associated with account-to-account or cash-based transfers, including slow speeds, high costs, and security risks from middlemen.
And the tie-up ultimately helps both players advance in areas they’re targeting for growth.
- The move will advance Visa’s ongoing foray into both push payments and cross-border payments. Global remittances were worth $689 billion in 2018, but represent a sector that Visa has limited visibility into, since 85% of remittance transactions are in cash, and many others are sent via banks or wires rather than over card network rails. Partnering with Western Union can bring a share of remittance volume into Visa’s realm, ultimately growing volume and diversifying the company’s growth channels as the payments space evolves. In conjunction with the firm’s acquisition of Earthport, as well as a partnership with digital-first provider Remitly, Visa can make strong inroads to become a larger player in the industry segment, which in turn could also reaccelerate cross-border volume growth.
- Enabling Visa functionality will help Western Union maintain its dominance in the remittance space.Western Union’s industry dominance isn’t under short-term threat. But for customers seeking out digital transactions for the first time, the set of options is growing as digital-first providers that can undercut legacy players on speed and price, like WorldRemit and TransferWise, expand their reach. Expanding offerings for all types and values of payments, simplifying card-based sends through a partner with massive reach, and resolving key pain points could help the firm stay competitive in the digital space, in turn bolstering the customer acquisition pipeline.
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See Also:
- UnionPay is expanding its European offerings with a new fintech partnership
- Bank of America is entering the contactless card space with a fresh tactic
- Open banking concerns may hinder global adoption
Source: Business Insider – feedback@businessinsider.com (Jaime Toplin)