International payments giant Visa has expanded its Fintech Partner Connect program — which allows banks and credit unions to a access a pre-vetted roster of fintechs — into the United States. In doing so, it hopes to funnel more than $105 billion worth of technology into the financial services ecosystem.
“We’ve assembled a community of payment and banking technology platforms to streamline the discovery and procurement process for our clients — with the ultimate goal of accelerating adoption of digital-first innovations,” Senior Vice President and Global Head of Fintech Terry Angelos said in a statement.
Visa, which calls itself “the world’s leader in digital payments,” first launched Fintech Partner Connect in Europe in November 2020. The company has since stretched the program across the globe, getting fintech services into the hands of banking providers in Latin America, the Caribbean, Europe, the Middle East and Africa.
One advocate of the program — ICBA — argues community banks specifically can benefit from the Fintech Partner Connect program. President and CEO of ICBA Bancard, Tina Giorgio, says banks can only evolve if they “embrace the latest digital tools and technologies while also staying true to their relationship banking roots.”
Since the initial launch, Visa has lined up a range of fintechs offering various services — including consumer data platforms, compliance services, digital identity verification, and risk and fraud mitigation tools. All of these IDC analyst Aaron Press considers among the most competitive fintech markets.
The Visa website shows 23 fintechs in its U.S. roster. The payments company says it heavily screened the fintechs listed to guarantee they would be fast and stable for Visa’s clients and would be prepared to handle a load of new leads. Among those listed are Global Data Consortium, Jumio, Neuro ID, Personetics, Skyflow and Very Good Security.
The Leader in Fintech Investments
Although Visa emphasized Fintech Partner Connect is not designed as an investment platform, the company has been making cash infusions into fintech companies. Visa has invested in at least 46 fintech companies according to Crunchbase, including industry leaders like payments platform Square.
And it doesn’t stop there. Aside from the expanded Fintech Partner Connect program, Visa offers additional solutions for the fintech industry, including its Accelerator and Fast Track programs, which both focus on providing resources to global fintechs to launch their solutions.
Fintel Connect — a technology marketing company serving fintechs and financial institutions — also announced it would be working with Visa to further build out the Fintech Partner Connect program.
“Partnership is at the core of what we do, and Visa’s Fintech Partner Connect program expands our reach and enables us to support Visa’s clients and partners in achieving next-level customer growth,” Nicky Senyard, Founder and CEO of Fintel Connect, stated.
What’s In It For Visa?
Visa representatives say the company looks forward to getting the latest fintech tools into the hands of banking providers, helping them expedite the process. “Our goal is that all of our clients are in a position to build better digital experiences for their consumers,” Terry Angelos told TechCrunch.
Angelos says the financial industry today is spending too much time on the disruptive narrative of “traditional banking providers versus the rising fintechs,” with each trying to outsmart and outgame their competitors. Visa, he explains, is trying to reverse the dynamic.
“What we’re realizing is there is a significant opportunity to pair up a lot of venture-backed companies with our existing clients,” Angelos says. “It runs a little bit against the ‘us versus them’ approach you typically hear about.”
Freedom of Choice:
Visa says it isn’t in the business of picking winners, and would rather have a set of partners that clients can use than just a single fintech for each service.
There may be an ulterior motive to Visa’s program, however. In an interview, Aaron Press argues the program is not just a charitable venture. “There’s something in it for Visa. Ultimately, the goal is always more accounts,” he states.
“This isn’t really about profitability of the program itself,” Press maintains. ” It’s ‘How does this program drive more transactions through the network?'” He believes the company is also trying to innovate so banks keep issuing cards through Visa’s brand instead of through another credit card company.
Mastercard Provides Another Option
Industry experts credit Visa for spearheading the race to corral fintechs and add them to a consolidated network. Yet, it is not the only player in the space. Mastercard teamed up with Marqeta to grow its Fintech Express platform, which it says provides “payment innovators” tools to scale up their business by leveraging Mastercard’s fintech partnerships.
While other third-party vendors could design similar programs for banking providers, Press thinks another venue could open up for banks and credit unions to integrate fintechs into their existing platforms.
“I think the closest thing would be something like an app marketplace,” Press explains. “I could see something like a core banking platform going down that route and having modules available on a service or app basis.”