Visa’s fintech chief lays out how a new program to bring startups on board in just a few weeks will help tap a $185 trillion opportunity
- Visa’s Fast Track program, which allows fintechs to quickly get onto the payment giant’s network, has seen record interest as small companies look to stand up digital-payment capabilities amid the coronavirus pandemic.
- Terry Angelos, global head of fintech at Visa, told Business Insider the program can cut a process that can take over a year down to as short as a few weeks.
- The payment company also stands to benefit from the program, Angelos added, as it looks to tap into $185 trillion worth of payment flows, including $18 trillion in cash, it doesn’t participate in.
- The program includes a network of partners for fintechs to work with — such as Stripe, Marqeta, and Very Good Security — with “best-in-class” commercial agreements already negotiated by Visa.
- Fast Track also allows Visa to recognize major pain points in the fintech community that sometimes lead to investments for its venture capital arm.
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Visa is seeing a surge of interest in a program meant to help fintechs quickly onboard onto the payment giant’s network as companies scramble to setup digital channels for payment in light of the coronavirus pandemic.
Visa’s Fast Track, which was first established in June 2018 for non-US companies before expanding into the US in July 2019, allows companies to build payments stacks quickly. Thanks to a network of providers that cover every facet of the payments space — from card issuing to banking partners to security — onboarding times that could have taken over a year have been cut down to as short as a few weeks.
In less than a year, the Fast Track program has grown 280%, with 140 participating fintechs. However, recent months have seen interest reach record highs as companies scramble to quickly establish digital-payment capabilities, Terry Angelos, global head of fintech at Visa, told Business Insider.
And it’s not just the fintechs that benefit from a faster experience. The more companies Visa brings onto its network, the more transactions it facilitates, meaning more revenue through fees like interchange.
That speaks to Visa’s goal of expanding its reach beyond the $9 trillion in payment flow it already manages. There is $185 trillion worth of flow the company doesn’t participate in today, including $18 trillion of which is done in cash.
And while the program is open to any company that might have a need to integrate with Visa for some type of payment, Angelos sees real potential working on fintechs digitizing cash payments.
“If we just work with fintechs who are converting cash into digital forms of payment, we could double the Visa payment volume,” Angelos said. “We’re very interested in finding and working with fintechs who are converting cash to digital forms of payment.”
Fintechs can partner with the likes of Stripe and Marqeta
If anyone understands the struggles a small company might have navigating a larger organization, it’s Angelos. In 2015 he sold the startup he cofounded and ran, TrialPay, to Visa.
“One of my frustrations was always, ‘How do I get a hold of someone at Visa?'” Angelos said. “It’s a hard thing to do, because often the networks are focused on very large clients. It’s hard for a network to say, ‘Well, who is this company? What’s their use case? Have they launched yet?'”
Fast Track was made to streamline that process, in addition to providing what amounts to essentially a playbook of additional partners needed to standup a payment stack.
Visa offers a network of vetted, tech-enabled companies like Stripe, Marqeta, and Very Good Security that Fast Track fintechs can work with to build new products.
“We’ve put together all of the technology companies that you need to go live,” Angelos said.
“We vet them and we help create a standardized commercial agreement so that fintechs can choose which partner they want to work with and then very quickly get online,” he added.
Fintechs that apply for the program range from those just starting out to others that are adding on new products, Angelos said. Participants include delivery startups like Rappi and cryptocurrency players like Fold.
For startups like Rappi, the Fast Track program helped them add financial services products to their existing on-demand delivery tech. And for players like Fold, it enabled them to offer cards as a core piece of their business models.
Through Fast Track, fintechs also get licensed to issue Visa cards, a process that previously would have required getting in contact with Visa, filling out forms, and navigating the payments giant’s approval processes.
As of last year, the whole program is run online, which has proven even more important amid shelter-in-place conditions.
“We’re seeing the benefits of moving our commercial engagement and commercial agreements online, and our fintechs are responding to that in ways that we think are positive for the ecosystem,” said Angelos.
Fast Track lowers the cost to get started with payments
On top of streamlined access to payments tech, participating fintechs can enter into “best-in-class” commercial deals with Visa, said Angelos.
“If you are issuing a Visa credential and you qualify for the program, this would be the best commercial setup for you,” said Angelos.
By lowering the cost of starting out with Visa, fintechs can experiment with new payments use cases, Angelos said. Fast Track can facilitate a number of use cases, like a neobank rolling out a debit card or a delivery startup adding a digital wallet in its app, for example. And depending on how much support the startup needs, Fast Track can provide technical advice and guidance in addition to the partnerships with other fintechs like Stripe that enable those use cases.
Those that are successful and continue to grow can set up deals with Visa’s partners, though Visa does not dictate the terms of those agreements.
There’s a knock-on effect to that innovation, as it’s not only fintechs that stand to benefit. Visa earns revenue for all the payments that flow through its system, or “rails,” in industry lingo.
“From a Visa standpoint, we’re a net beneficiary,” Angelos said. “If fintechs are successful in finding new payment use cases, many of those flows are on our rails.”
Incumbents are eager to bring fintechs into their ecosystems
Visa isn’t the only incumbent player looking to engage with fintechs. Larger organizations are quickly recognizing the need to cut down on red tape and make it as easy as possible for startups to work with them.
Mastercard’s Accelerate program gives fintechs access to Mastercard’s network and also looks to get startups up and running in payments. And its StartPath program, which functions more like an incubator, offers more in-depth partnership to help startups build their businesses and, in some cases, get funding from Mastercard.
Big banks, have also looked to adjust their processes. JPMorgan cut the time it takes to evaluate a fintech from nine months to three weeks. Morgan Stanley, meanwhile, launched a formal program with venture capital firms to help better prepare fintechs for use cases they are interested in.
Fast Track doesn’t just help fintechs get onto Visa’s platform. The program also represents a way to suss out potential startups worth investing in through the payment giant’s venture capital arm.
Angelos said the program allows Visa to recognize needs in the ecosystem. Visa’s investment in January in data-security startup Very Good Security was an example of that.
Security was a constant stumbling block fintechs in Fast Track were facing. As a result, Angelos said Visa realized VGS fit the very need so many startups were struggling with.
“That came from an understanding and engaging with the fintechs that are in these programs,” he added.
SEE ALSO: JPMorgan slashed how long it takes to test out fintechs from 9 months to 3 weeks with a new process that could save it millions as it looks to buy, invest in, or work with more young companies