VISA a global leader in payments, announced its next step in modernizing cross-border money movement. Visa is expanding its stablecoin settlement capabilities to the high-performing Solana blockchain and is working with merchant acquirers Worldpay and Nuvei.
Through real-world testing with issuers and acquirers, Visa has successfully transferred millions of USDC (a stablecoin) across the Solana and Ethereum blockchain networks to settle payments denominated in fiat currencies that were authorized over VisaNet.
When consumers use their Visa cards for purchases at the vast network of Visa-accepting merchants worldwide, they enjoy the convenience of nearly instant payment authorizations. However, what goes on behind the scenes is the movement of funds between the consumer's bank (the issuer) and the merchant's bank (the acquirer). Visa's treasury and settlement systems play a pivotal role in facilitating this process, ensuring the clearing, settlement, and transfer of billions of transactions daily. This intricate operation operates seamlessly across almost 15,000 financial institutions and encompasses over 25 different global currencies.
Cuy Sheffield, Visa's Head of Crypto, stated, "By harnessing the power of stablecoins like USDC and utilizing robust blockchain networks such as Solana and Ethereum, we are contributing to the acceleration of cross-border settlement processes. We are also providing a modern solution for our clients to effortlessly send or receive funds from Visa's treasury. Visa remains dedicated to leading the charge in digital currency and blockchain innovation, leveraging these cutting-edge technologies to enhance the way money is moved.
Expanding on the Crypto.com Collaboration
In 2021, Visa embarked on an exploration of how USDC could be integrated into its treasury operations. This endeavor led to a pivotal pilot project with Crypto.com, marking Visa as one of the pioneering major payment networks to experiment with stablecoin settlements from the issuance perspective. This successful pilot involved the utilization of USDC and the Ethereum blockchain for receiving payments from Crypto.com, specifically for their cross-border card program in Australia. Today, Crypto.com relies on USDC for meeting its settlement obligations related to Visa cards in Australia and has intentions to extend this capability to other markets.
Before this groundbreaking pilot, settling cross-border transactions made with Crypto.com Visa cards entailed a cumbersome and time-consuming currency conversion process, often accompanied by costly international wire transfers. Now, Crypto.com can directly transmit USDC across borders via the Ethereum blockchain to a Circle-managed account within Visa's treasury, significantly streamlining the complexity and duration of international wire transfers.
Jeremy Allaire, Co-founder and CEO of Circle, expressed enthusiasm for Visa's exploration of USDC's potential, stating, "We are excited about the USDC use cases Visa and its partners are driving to create fundamental blockchain innovation. Circle built USDC to provide a functional digital dollar that could move at the speed of the internet to facilitate secure, reliable payments. Expanding the pilot exemplifies how pairing USDC with Visa's innovation opens up the future of payments, commerce, and financial applications."
Transitioning from Issuers to Acquirers
While Visa's treasury operation continues its on-chain experiments with multiple issuer partners for receiving funds, these novel settlement options empower Visa to transmit funds on-chain to acquirers such as Worldpay and Nuvei, ultimately expediting settlement processes for their merchants.
Worldpay and Nuvei are global acquirer entities serving merchants across various sectors worldwide. This includes an increasing number of merchants engaged in blockchain and cryptocurrency ecosystems, including on-ramp providers, gaming platforms, and NFT marketplaces, who may prefer receiving stablecoins instead of traditional fiat currencies for card-based payments. Utilizing Visa's Circle account, Visa can now efficiently manage settlement payouts in USDC to Worldpay and Nuvei, who can subsequently route these payments to their respective end merchants in USDC.
Embracing the Solana Blockchain Network
Recognizing the growing demand for leveraging newer, high-performance blockchain networks capable of swiftly sending and receiving stablecoins at lower costs, Visa has decided to incorporate support for Solana. This high-performance blockchain provides Visa's partners with the option to send or receive USDC settlement payments. This move positions Visa as one of the pioneering major payment companies to directly harness Solana for real-time settlement transactions between its clients. Solana boasts 400-millisecond block times, maintains an average of 400 transactions per second (TPS), and can handle surges of over 2,000 TPS in various use cases during peak demand periods.
Forging New Collaborations
With a forward-looking perspective in an increasingly digital financial landscape, Visa is forging ahead with innovative partnerships and embracing the potential of digital currencies. Visa's collaboration with Worldpay and Nuvei signifies a significant stride in this direction.
Jim Johnson, President of Worldpay Merchant Solutions at FIS, remarked on Visa's USDC settlement capability, stating, "Visa's USDC settlement capability enables Worldpay to bring more of our treasury operations in-house and allows us to offer merchants more choices for receiving funds. Diversifying funding options and increasing flexibility is critical to serving the changing needs of global merchants in today's rapidly evolving commerce landscape."
Philip Fayer, Chair and CEO of Nuvei, emphasized the impact of stablecoins on businesses and their potential to accelerate growth, stating, "Stablecoins like USDC are cutting-edge payments technology that can enable online businesses around the world to accelerate their growth. Optimizing cross-border transactions is only one use case where stablecoins can benefit businesses. As a leading global payments company, we are constantly focused on innovation, and we're excited to work with Visa to bring these capabilities to our partners."
Visa Expands Stablecoin Settlement Capabilities to Merchant Acquirers (2023) www.businesswire.com. Available at: https://www.businesswire.com/news/home/20230905549860/en/Visa-Expands-Stablecoin-Settlement-Capabilities-to-Merchant-Acquirers (Accessed: 6 September 2023).