Payment Schemes explained: gtnews invited Visa to describe their structured products and processes. With 21,000 member financial institutions, more than 20 million merchants, one billion cardholders and annual worldwide sales volume of more than $3 trillion, Visa is the most widely used form of electronic payment in the world.
Visa’s vision is to be ‘the way the world pays’. Visa is working towards that vision by creating payment products and services that allow buyers and sellers to conduct commerce with choice, ease and confidence in both the physical and virtual worlds.
As Visa pursues this vision, it is guided by three defining concepts:
- For millions of cardholders and merchants, Visa offers a robust payment system. A need for flexible access brings customers and merchants together and helps people gain access to a banking system they might have otherwise had little contact with.
- Visa is committed to innovation and to making buying and selling as safe and secure as possible. Visa’s advances in technology are improving the way people pay and are paid, while meeting the world’s growing demand for accuracy and security.
- Visa’s financial tools and knowledge help to fuel economic growth. Every time someone pays with a Visa product, the transaction creates economic benefits. From a satisfied shopper to a successful merchant to a more robust banking system, electronic transactions can contribute to economic growth.
Organisation
Visa is a privately held association owned by more than 21,000 member financial institutions from around the world. These members enable Visa to meet the needs of local markets. This strategy of “localisation” is supported by a highly decentralised organisation with most resources and decision-making occurring at the regional and local operations. Visa comprises six regional operating organisations and a corporate headquarters that develops products, manages the brand, monitors global risks and ensures implementation of technical standards. The regions are:
- Asia Pacific Region
- Canada
- Central and Eastern Europe, Middle East and Africa
- Europe
- Latin America and Caribbean
- USA
Technology
Visa works with the world’s leading network operators, consumer electronic companies and semiconductor manufacturers to explore a world beyond physical cards and invest in new payment technology solutions. Technological advances have allowed Visa to move payment off plastic cards, as contactless chip, infrared and mobile telephony are driving rapid advances in the cardholder experience and the acceptance infrastructure.
Visa provides an extensive network of fraud detection and prevention systems. Member banks can be notified of suspicious transactions instantly-sometimes before a transaction is completed. In addition, services such as Verified, by Visa, which authenticates online transactions and assures both merchant and cardholder that a transaction is valid, lead to increased security and confidence in the payment system.
In addition, Visa partners with global technology leaders to provide efficiency for businesses around the world. For instance, in 2004 Visa forged partnerships with ERP providers SAP and PeopleSoft to streamline operations across the supply chain and standardise processes with solutions that integrate with both front-end procurement and back-office financial systems.
Brand
The Visa brand’s leading acceptance, reliability and convenience enable people to entrust their paymentsto Visa products and services. No other payment brand, and few other brands anywhere, enjoys the level of recognition and appeal that Visa holds around the world. Studies show that Visa has the highest unaided brand awareness.
Organisation, Technology, Brand
Together, these three concepts drive Visa’s ability to deliver an ever-expanding suite of payment solutions.
- Debit Products. Growing numbers of consumers and businesses find Visa debit products to be a convenient and secure alternative to cash and a compelling way to “pay now”. Debit products now account for more than half of Visa’s global sales volume. Visa’s debit solutions also help banks build stronger customer relationships.
- Consumer Credit Products. Visa credit products offer the convenience and security that are the foundation of the Visa brand, plus the “pay later” flexibility that allows cardholders to effectively manage their resources. Visa offers several categories of consumer credit products: Visa Classic, Visa Gold, Visa Platinum, and premium products, which include Visa Signature and Visa Infinite.
- Prepaid Products. Prepaid products represent Visa’s newest category and offer the convenience and security of electronic payment in situations where one might otherwise use cash. For example, Visa Buxx, a pre-paid card for teens, enables parents to load money onto the card and monitor their teen’s spending, while Visa Payroll helps employers reduce the cost of processing pay cheques and allows unbanked workers to receive their salary without carrying cash.
- Travel Products. Through Visa, international travelers have access to more than 945,000 ATMs in over 150 countries. Visa TravelMoney is a prepaid, PIN-protected card that allows cardholders to make purchases or access funds in any local currency, while also offering protection from theft or loss.
- Commercial Solutions. Businesses need to purchase supplies, pay their employees, manage travel and entertainment expenses, monitor cash flow, and maintain accurate records. Visa delivers payment and information management solutions that can be tailored to meet the needs of large corporations or sole proprietors.
- Visa Corporate allows businesses-from medium-sized companies to multinational corporations-to track and report T&E expenses, monitor vendor charges, pre-set individual employee spending limits with budget forecasts and provide greater cash flow control.
- Visa Purchasing helps clients reduce operational costs by simplifying the purchasing and expense procurement process for small and medium value commercial expenditures. For some businesses, Visa Purchasing can also reduce invoice and expense processing costs by as much as 70%.
- Visa Business gives small businesses and sole proprietors the power to manage expenses more effectively. Small businesses enjoy convenience, cost control, security, eased cash flow and separation of business and personal expenses.
- Visa Distribution offers corporations a tool to outsource accounts receivable for deliveries of merchandise to retailers. By replacing cash and cheques for payment on deliveries, Visa Distribution facilitates purchases in the direct goods and inventory sectors.
- Visa Commerce is a new commercial payment platform designed to address the need for a large value, global business-to-business payment and settlement service. This new solution targets commercial transactions that historically have not utilised Visa payment solutions.
- Government Programmes. Countries around the world use Visa to pay government workers, deliver pensions and benefits, and enable their procurement process. Visa’s technologies help them manage risk, increase transparency and reduce the risk of corruption. Visa solutions are now used by more than 2,000 departments and agencies in governments in over 20 countries. For example, the Moscow Social Card is a smart card with payment, transportation and payroll applications that have provided savings of US$30m and a revenue increase of 20% to the Moscow Metro system.
Conclusion
Every time someone pays with a Visa product, they are making a statement of trust. They trust the world’s largest electronic payments network will link the cardholder, the merchant and their respective banks. They trust the network will work whether they are in a big city department store or on a remote island-whether they are making the transaction in person, over the internet or with a mobile phone. And, they trust their transaction will be handled securely and reliably. Visa earns that trust by delivering value to each individual participant in the payment chain.