In this excerpt from The Connected Economy’s Power Source – CEO Edition, Bill Sheley, senior vice president and global head of Visa Direct, shares why global money movement is key to the success of the newly connected economy. “As an industry, we need to be committed to mitigating any complications of global money movement,” he says. “This is the future of the connected economy.”
We have reached a watershed moment, as we now live in an economy increasingly driven by digital, with access to modern payment infrastructure as the catalyst for change. This transformation has opened the door for innovation that reimagines how we can best operationalize the world through global money movement.
In our new normal, with the rapid globalization and scale of mobile commerce, social networks, marketplaces, gig economy and payroll, for example, borders don’t exist, time constraints are no longer an issue and payments can be delivered to any store of value driven by the recipient’s choice. Flexibility, optionality, speed and reach are the driving forces, shaped by the needs and demands of businesses and consumers. This digital-first shift has resulted in new expectations for high-quality, uniform ways to pay and be paid, and in turn is driving financial institutions, remitters, FinTechs and new economy platforms to create customer experiences that are innovative, convenient, fast and streamlined.
We’re seeing this manifest across multiple global use cases – two of which are merchant/seller settlement and cross-border. Faster merchant settlement and payouts have experienced strong growth, particularly as small businesses expand their operations online to global marketplace platforms.
In fact, more than four in five surveyed small businesses have adjusted the way they operate their businesses, and 43 percent are now actively engaged in selling products online. In addition, 99 percent of surveyed marketplace sellers would consider an alternative marketplace that offered faster payments. Businesses can no longer afford to wait for a two-week payout in order to run their businesses smoothly. There’s a tremendous opportunity to better provide them with quick access to cash flow to, for example, refresh their inventory or make necessary equipment repairs.
Cross-border payments, such as global remittances or payouts to small, mid-sized or large businesses, have also seen an increase in demand due to the ability to make funds readily and broadly available. There’s an important growth and innovation opportunity to resolve the many challenges and frictions when making and receiving cross-border payments from other businesses – from paper workflows to delays, as well as lack of faster payment options, fraud concerns and limited transparency. For example, it takes an average of 55 percent longer for surveyed U.S. and U.K. businesses to receive cross-border payments than it takes them to receive domestic payments.
What has emerged across these two use cases is an apparent, immediate need for the modernization of global money movement to simplify the complexities associated with legacy systems and processes, and to better serve customers. As we facilitate global, digital commerce in a whole new way, it’s imperative to invest in innovations that enable faster domestic and cross-border payments and payouts at scale.
As an industry, we need to be committed to mitigating any complications of global money movement. This is the future of the connected economy.