Need to Know
- Thanks to relationships with top money transfer firms including Western Union and MoneyGram, Visa Direct transactions have grown by 60% year over year.
- The rise in contactless payments and the need for digital remittances led to a spike in the use of Visa Direct.
- Visa anticipates this growth will continue due to the increasing popularity of peer-to-peer payments and Visa Direct’s own geographic expansion.
- Two-thirds of Visa’s face-to-face transactions in 2020 were contactless, excluding the US as it has not fully adopted chip and contactless standards.
As more individuals and businesses have shifted their payments processes to contactless, Visa Direct has reported a significant spike in use, with transactions using the service increasing 60% year over year, according to a recent earnings call.
Visa Direct can facilitate domestic and cross-border payments in more than 160 currencies and offers services for both businesses and individual consumers looking to issue peer-to-peer payments. The payments tool currently reaches 200 countries and has account and card delivery capacity to roughly 99% of bank accounts. For these reasons, Visa Direct is a tool well-suited for the pandemic, when digital, contactless remittances have become a priority for businesses, while individuals seek new ways to send and receive money during periods of financial change and instability.
Speaking on an earnings call, Visa CEO Al Kelly says he believes Visa Direct has huge growth potential. “Peer-to-peer, which represents 20 trillion of the flows was Visa Direct’s first use case, and continues to grow substantially,” he said, adding that “a key area of future growth” for the company is cross-border P2P payments and remittances.
Kelly also noted that four of the world’s top five money-transfer companies—TransferWise, Western Union, Remitly, and MoneyGram—were onboarded by Visa Direct in 2020; the company saw a 500% increase in real-time transfers in December alone.
Visa Direct launched a number of strategic partnerships in 2020, including signing on as a direct business prepaid card for DoorDash, the food courier company, in the US; in Canada, Skip the Dishes rolled out its Visa Direct-enabled courier payouts in August.
“Gig economy payouts and earned wage access continue to grow meaningfully in the wake of COVID,” Kelly said of the partnerships, adding that two-thirds of face to face transactions in 2020, excluding the US, were contactless.
Visa has been working to make payment processes more seamless for businesses and individuals throughout the pandemic. In addition to Visa Direct, the company launched Visa Commercial Pay, a partnership with Conferma Pay that acts as a virtual credit card and is designed to make B2B payments easier for remote workers, buyers, and suppliers. Visa also recently expanded its partnership with TransferWise to connect fintechs to VisaNet, Visa’s global processing network, via Visa Cloud Connect.