Sumary of What Currencycloud adds to Visa’s diversification push:
- Visa has said its future relies on the development of new payment technologies and use of open banking to provide financial services beyond the point of sale.
- Its agreement to buy the cross-border payments software startup Currencycloud seems a step in that direction, potentially adding a service on the menu of options it offers fintechs, banks and merchants.
- The card brand on Thursday announced a $962 million deal (minus Visa’s existing $80 million stake) to acquire the London-based Currencycloud, which uses an application programming interface to provide payment technology for about 500 clients in more than 180 countries.
- Currencycloud’s clients include high-profile challenger banks such as Revolut, Starling, Monzo and Dwolla, which began in digital payments and have added into other financial services and and expanded into other countries.
- Revolut, for example, is adding travel booking to its range of financial services and also has an existing partnership with Visa, giving the card brand a greater share of its relationship with Revolut.
- Once the Currencycloud deal closes, which is expected later this year, Visa can use its existing international network of merchants and financial services to develop new business-to-business and consumer-facing technology in partnership with Currencycloud’s challenger bank customers.
- Visa refers to this as its “network of networks” strategy, or building open banking partnerships with third parties such as fintechs to develop technology-heavy revenue-generating services to augment traditional fee sources such as card interchange.
- Currencycloud’s services include lucrative digital cross-border payments, which would enhance Visa’s strength in this area following the card brand’s 2019 acquisition of Earthport, a peer-to-peer cross-border payments company.