While customers blissfully swipe their Visa cards, little do they know that a silent revolution is brewing within the bowels of this credit card giant. It’s not quite the stuff of grassroots movements when one of the world’s largest credit card issuers decides to shake things up. But that’s precisely what’s happening right now: Visa has unveiled what they tout as the “next step in modernizing cross-border payments.” Brace yourselves, because Visa is diving headfirst into the world of blockchain, harnessing the power of Solana to settle payments with its partners, Worldpay and Nuvei, through USDC.
According to Visa statement, when you make a payment with their card, you’re already basking in the glory of real-time transactions. What they conveniently omit is that you’re essentially playing with IOUs, as the actual money has to travel from your bank to the merchant’s bank. Visa’s treasury and settlement system may seem like a well-oiled machine on the surface, but it’s the result of tireless behind-the-scenes work.
Enter stablecoins like USDC and blockchain platforms like Solana or Ethereum, and according to Cuy Sheffield, Visa’s Head of Crypto, you’ve got a recipe for “improving the speed of cross-border settlements.” They tested the waters with Crypto.com, an online wallet offering Visa cards to customers, where payments to Australian cardholders were settled using USDC. Visa claims this move drastically slashed the time and complexity associated with exchange and transfer processes that used to take days.
Now, Visa is extending this stablecoin-driven transformation to major players like Worldpay and Nuvei. For those not in the know, acquirers like Worldpay and Nuvei are the payment intermediaries for merchants accepting credit cards. They’re essentially the endpoints in Visa’s settlement system, much like Layer2 in a blockchain, and now, they’re about to become part of Visa’s USDC ecosystem. Visa, with its very own Circle account, is all set to settle payments for these giants in USDC, which these acquirers can then funnel directly to their customers.
USDC isn’t just a sidekick in this story; it’s becoming an integral cog in the Visa machine, and blockchains like Solana are the glue holding this network together. Visa has had a cozy relationship with Ethereum, but now, they’re venturing into the realm of Solana. Why? Because Solana boasts lightning-fast block intervals of a mere 400 milliseconds and a capacity to handle 400-2,000 transactions per second. Decentralization might be a footnote in their decision-making process, but speed and scalability are clearly the stars of the show.
While Visa’s everyday customers and merchants might not feel a thing, beneath the surface, a revolution is brewing. Visa is cozying up to Web3, and the optimization of payment clearing is just the tip of the iceberg. Who knows what else they have up their sleeves? Visa’s journey into the blockchain world is only just beginning, and the financial landscape may never be the same again.