Visa sees a “payments avenue boom” to 2022
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Visa sees a “payments avenue boom” to 2022

Global cashless payments giant Visa foresees an explosion in the ways people can pay – or be paid – for goods and services in the future. According to the card provider, accelerations in artificial intelligence (AI), the Internet of Things (IoT), and other technological wizardry, will lead to a vastly increased number of ways people can conduct transactions without cash. By 2022, Visa says that there will be 30 billion different ways to pay, and 400 million ways to be paid.

The cashless transaction providers held in Dominion’s Ecommerce Fund are having a great year so far!

graph 1306 visa

SOURCE: Yahoo Finance

Visa is working with a number of third parties to make sure that its customers (3 billion card holders and 46 million merchants) are at the forefront of this revolution. These third parties include financial institutions, fintech firms, and startups around the world. And the company is also exploring ways to work with Big Tech (Google, Amazon, Alibaba, Tencent, and the rest).

One big concern for this cashless future is security. According to Ellen Richey, vice-chairman and chief of risk at Visa, cybercriminals are becoming better organised and funded. The risk they pose is exacerbated by the nature of technological advancements themselves: “The explosion of digital payments is creating new security vulnerabilities as personal data is exposed.”

As a result, Ms. Richey says, Visa is experimenting with new methods of “tokenization” which, she claims “will expand beyond plastic cards to wearable devices and others and it will discourage data compromise.”

Visa is working hard to ensure security because it’s worth it – the payout could be enormous. The company says that there will be 3.2 billion cards with payment volume reaching 7.6 trillion this year. In 1973, those figures were 28 million (cards) and 8 billion (transactions). That’s an enormous leap – but it could just be the start.

Chris Clark, Visa’s regional president of Asia-Pacific, sees a multi-trillion dollar opportunity in the east. According to him, half of Asia-Pacific’s population lives in towns and cities, and 1.3 billion of its 1.9 billion-strong internet users go online via smartphones. Total payments in Asia-Pacific amount to $11 trillion – and more than 55% of them are made with cash or check. Clark says that the $6.1 trillion in cash transactions in Asia-Pacific (as well as a further $1 billion in Southeast Asia) is an opportunity that cannot be missed.

Disclosure

Dominion holds Visa (as well as Mastercard, Paypal, and a number of other companies with a stake in the cashless transaction space) in its Global Trends Ecommerce Fund.


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The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.