Funds disbursement via Visa: A bigger slice of the pie for ATMs?
"It's not about stealing a basis point of market share from one another, it's about expanding the pie. And fortunately there are a lot of fantastic segments still to go after — P2P, funds disbursement, debt repayment, rent, charitable and religious giving, education, parking, vending, etcetera."
Ironically (at least, if you're in the ATM industry), this statement comes from Visa, a company that has vowed over and over to crush cash.
And yet, it shows how intertwined cards and cash really are. Because almost all of those applications mentioned — P2P, funds disbursement, debt repayment, rent, charitable giving, education, parking and vending — will at some point, for a sizable number of consumers, end up at the ATM.
The speaker was Oliver Jenkyn, Visa executive vice president and group executive for North America. And the venue was this week's gargantuan financial services event, Money 20/20, in Las Vegas, a gathering of 11,000 stakeholders from every remote corner of the financial services realm.
From 100-year-old banks to 1-month-old blockchain startups, all were there looking for the same thing: Opportunity.
And that was what Jenkyn saw in abundance, across an almost endless list of segments, which he talked about in his keynote address, Why payments matter: Key trends in payments and commerce.
"Each of them is different, each is unique, each has different partners that we need to work with," Jenkyn said. "But all of them have been greatly impacted to the positive by new technology that's opening up these segments in new ways."
As a prime example, he pointed to the business of funds disbursement, a segment in which Visa is moving at a fast and furious pace, with dozens of projects in the works.
"Now usually in our network, money flows the other way," Jenkyn said. "Money leaves my account as a consumer and it goes to a business. But it's important to note that water can flow both ways in our pipes and once you know that a lot of new ideas come to mind. For example an insurance company can push money to a policyholder for a claim in the middle of a crisis just by pushing it to their debit card safely securely immediately."
We've seen very recently how this might work: in Sonoma County, California, where homes have been reduced to ashes by wildfires; in Puerto Rico, Houston and Southern Florida, where hurricanes have flattened or flooded countless homes and businesses.
And what we know about all of these situations is that money that gets pushed to a debit card over Visa's rails gets pulled from ATMs in the form of cash, the spending medium of demand in the midst of a natural disaster.
The one super-critical factor along the entire pathway disbursement to withdrawal is security, which Jenkyn described as "priority No. 1 at Visa."
By way of example, he referred to the migration of fraud now occurring in the United States now that EMV chip is beginning to drive down counterfeit fraud.
"[F]raudsters aren't going to throw in the towel and take a job at the local YMCA," he said. "They're going to go to the next weakest link. And as we've seen around the world, the next weakest link is card not present and online fraud. So we in the industry need to cut them off at the pass."
Jenkyn discussed three tools Visa provides in order to do just that:
1) Tokenization — "Without tokenization, we're not going to be able to capture that explosion in connected devices for payment. It's critical to our future of sustained growth."
2) 3D Secure 2.0 — "It's a really fancy name for a very simple idea: increasing the depth the richness, the quality and the quantity of information that's passed between a merchant and an issuer at the time of decisioning on a specific transaction, so that we can increase approvals and reduce fraud. It's as simple as that."
3) Visa ID Intelligence — "Fortunately, there are lots of great services that are out there to support us in identity protection and payment security. There's facial recognition, voice recognition, iris scans, document verification, device identification … [ID Intelligence provides] a simple, secure, seamless way through a single Visa connection to get access to those best of breed capabilities, across clients, FIs, merchants, acquirers or processors."
Jenkyn concluded with a prediction: "[M]ore is going to change over the next two years in payments than has changed over the past decade. And therefore, the decisions that we're making today will go a long way to shaping the environment within we operate for years to come."
It's all about expanding the pie … and, for the ATM industry, about being in the best possible position to score the biggest possible slice of it.
Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally. She is now the editor of ATMmarketplace.com and WorldofMoney.comwww