Estimated reading time: 7 minutes
In an era defined by lightning-fast technological advancements and an increasingly interconnected global economy, the cross-border payments market is undergoing a radical overhaul.
New technologies, new entrants, and new consumer demands have created a golden opportunity to think ambitiously and enhance cross-border payment models.
Chris Newkirk, Global Head of Commercial & Money Movement Solutions at Visa, spoke at Sibos 2023 to give insights into the latest innovations in cross-border payment models, Visa’s strategic vision for its brand influence, and key considerations for organisations to thrive in such a rapidly evolving market.
Beyond the card: Expanding commercial solutions
Renowned globally for its brand synonymous with consumer payments Visa’s reach extends far and wide.
With an extensive presence in over 200 countries and territories, Visa has established itself as a prominent payment brand that links millions of merchants and consumers worldwide.
Beyond its iconic presence in consumer payments, Visa sets its sights on extending its brand into all types of payment flows, including B2B, cross-border payments, and various disbursements, including earned wage access, gig economy payouts, and government disbursements.
In delineating Visa’s objectives to broaden its brand beyond consumer payments, Newkirk stated, “We’re looking to expand, and help our clients to support their end users and bring speed, transparency, reliability, security, cost transparency to all those flows the way we have on the consumer side.”
This strategic vision, he accentuated, aims to propel their business to new heights, all while championing their clients on a global scale.
Furthermore, acknowledging the challenges of aligning stakeholders with rapid technological advancements, Newkirk not only affirmed that clients realise the necessity of embracing these changes but also explained the ensuing challenge of translating recognition into actions stating, “I think clients see that’s where the winning position will be. But seeing it and saying it is not the hard part. You have got to figure out what you’re going to do with your product and go after that.”
“It’s early days on the commercial side and I think the consumer retail side is a little bit more advanced, but it still has a long way to go,” Newkirk reflected, spotlighting a substantial opportunity for innovation and progress in the commercial payments space.
Similarly, amidst continuous technological advancements, companies must simultaneously re-evaluate their internal strategies to stay ahead in this dynamic digital landscape.
Newkirk, in emphasising the critical role of team management, highlighted the importance of operating at the pace of the 21st century, supercharging cutting-edge ideas and cultivating an environment conducive to effective decision-making.
“You’ve got to run the engine—that’s your core business—in a way that’s increasingly efficient and effective. But you’ve got to be able to move at the fastest pace of your competitors and challenge yourself in the world,” he reiterated, affirming the need for a dual-pronged approach to ensure both efficiency and adaptability.
Transforming the future of cross-border payments
In today’s interconnected global economy, the efficiency and seamlessness of cross-border payments have taken centre stage. Since G20 leaders endorsed the Roadmap for Enhancing Cross-border Payments in 2020, the ecosystem has been shaken up by new initiatives and technologies.
In addition, the increased pace of change in the cross-border payments industry is highly connected to fast-changing consumer demands who are seeking a streamlined, transparent, and 24/7 real-time experience across borders.
With an eye on the ambitious goals set by the G20, Newkirk emphasised the need for a holistic approach to improve cross-border payments beyond cost considerations.
He pointed out, “Cost is incredibly important. But you need to think about value, which has multiple components to it. It includes cost but is not limited to it. So security, reliability, redeemability, data integrity are key [as well].”
For instance, he noted that Visa invested heavily in bolstering its cybersecurity measures. This substantial investment has not only strengthened the company’s own defences but has also enabled it to combat fraudulent activities, protecting the interests of both Visa and its clients.
According to Newkirk, “It would be very easy to skip past the security, but instead, we’ve invested $4 billion in cybersecurity over the last several years.”
In addition, one of the noteworthy innovations discussed was Visa B2B Connect.
An initiative born out of extensive consultations with clients, addressing their pain points within correspondent banking. Transparency, the number of intermediaries, and ambiguity around payment status and amounts emerged as main concerns.
In response, Visa leveraged cutting-edge technology, incorporating human-centred design principles to create Visa B2B Connect—a groundbreaking solution focused on modernising high-value B2B flows across borders.
While this endeavour is still in its early stages, Visa is laying the groundwork for a network spanning 100 countries, with clients providing commendable feedback on its potential, showcasing Visa’s capabilities to drive innovation from within, ultimately aiming to revolutionise the landscape of cross-border payments.
Besides, the recently announced collaboration with Swift signifies Visa’s commitment to enhancing the capabilities of Visa B2B Connect. This move, according to Newkirk, is a strategic step towards open and connected futures.
He said, “I absolutely think the future is open and connected, and we’ve got to figure out, with a lot of discipline, what are we going to build, and what are we going to buy? With increasing importance, where do we partner and how do we do that in a way that’s win-win?”
On the other hand, referencing an example of Visa’s ‘buy’ approach, Newkirk mentioned Visa’s acquisition of ‘Currencycloud’, a global platform enabling banks to provide foreign exchange (FX) solutions for cross-border payments, which aims to enhance Visa’s FX capabilities in the cross-border domain.
He said, “We really wanted to bring Currencycloud’s capabilities into Visa so that we could bring a stronger, better and more modern FX capability into the cross-border flows.”
Looking ahead, Newkirk envisioned a landscape where cross-border transactions seamlessly integrate into daily experiences, becoming second nature.
For those seeking more control and customisation, intuitive options will be readily available, defining the evolution of cross-border payments in the coming decade. “I think that cross-border payments will be fast, ubiquitous, and embedded in people’s experiences whether they’re purchasing or they’re on a social media app or whatever the future of that looks like,” he added.
How leaders are adapting to rapid change: Navigating challenges and seizing opportunities
Shifts within the cross-border payments industry offer a myriad of opportunities alongside fierce competition. Consequently, such a complex market presents multiple challenges for incumbents, new entrants, and investors alike.
In this regard, Newkirk shared his views on essential strategies for organisations to stay ahead of the curve in a highly competitive market.
First, he underscored the importance of attracting and nurturing top-tier talent. He stressed the need for an environment where individuals are not only accountable but also empowered to innovate and take risks.
This fosters a culture of adaptability, acknowledging that not every endeavour will yield immediate results.
He said, “You’ve got to attract the top talent you possibly can. People want to work in a place where they’re empowered but held accountable. Empowered to go fast and to build things and to have tolerance for understanding that not everything we try is going to work.”
Additionally, he drew attention to the accelerated pace of change and the importance of prioritising customer experience.
Having witnessed the rise and fall of trends, from data and analytics to the advent of generative AI over the years, Newkirk stressed the importance of maintaining focus on customer experience- an aspect he remarked has been long undervalued.
Reflecting on this, he noted, “Now that I’ve been through multiple horizons of growth, I see the power of human-centred design and its power from customer experience.”
Furthermore, Newkirk highlighted the need to be vigilant about falling into the trap of assuming “we’re already doing that.”
He urged a critical examination of deeply held beliefs and preconceptions, recognising that in a highly dynamic market, complacency can lead to falling behind.
He cautioned, “The most dangerous words in business are ’we’re already doing that’. New ways of working, new technologies and new ways of thinking about how to solve problems and how to grow your business, will always come along.”
The industry is on a journey to reach the next phase of evolution within cross-border payments and the intense competition between service providers is no surprise.
As the industry propels forward, it becomes imperative for organisations to not only adapt but to lead, shaping the narrative and setting the standards for the next-gen model of cross-border payments.