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June 11, 2019, 7:00 a.m. EDT

Visa aims to expand beyond cards with launch of B2B Connect

Company is targeting high-value cross-border payments

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By Emily Bary

Krisztian Bocsi/Bloomberg
Visa is rolling out its B2B Connect product in 30 markets.

Visa Inc. on Tuesday announced the launch of its B2B Connect platform, part of the payments giant’s efforts to move beyond card-based transactions.

The company is trying to get a piece of the lucrative market for commercial cross-border transactions, which Visa /zigman2/quotes/203660239/composite V +0.98%  estimates could add about $12.5 trillion to its addressable opportunity.

The large market for high-value cross-border payments is “net new” to Visa, said Kevin Phalen, the company’s head of global business solutions, given that businesses have generally avoided using cards for these types of commercial transactions. Visa’s B2B Connect also bypasses cards, relying on bank-to-bank transfers and making use of hyperledger technology.

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Phalen said that B2B Connect will look to offer businesses an advantage in speed, with a goal of completing the funds transfer on the transaction day or the day after. In many cases, high-value cross-border transfers take three to five days using alternative methods, he said.

Visa hopes its hyperledger technology will also prove attractive in terms of security and transparency. The company has made B2B Connect a “permissioned” network, meaning that only approved parties can join. Phalen said that the platform’s infrastructure also allows financial institutions to transmit information about payments between one another so that companies can determine what a specific transfer is meant to cover.

Read: Visa is ‘the envy of the payments industry,’ Jefferies says

Chief Financial Officer Vasant Prabhu said at an investment conference last week that B2B Connect has generated “a lot of excitement from the banks” and that “a variety of banks already signed up for it.” Visa is launching the product in 30 major trade markets this week, with plans to reach to as many as 90 markets by the end of the year,

Visa shares have risen 29% so far this year, as the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.36%  has climbed 12%.

$ 195.67
+1.89 +0.98%
Volume: 6.30M
July 2, 2020 4:00p
P/E Ratio
Dividend Yield
Market Cap
$416.59 billion
Rev. per Employee
US : Dow Jones Global
+92.39 +0.36%
Volume: 350.29M
July 2, 2020 5:19p

Emily Bary is a MarketWatch reporter based in New York.

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