Visa is set to enter the cryptocurrency market as the payments processor looks to capitalize on the sector’s growth and expand its worldwide business, a report on business outlet Moneycontrol said Tuesday.
Visa moves into the Bitcoin and crypto world
The firm has so far strayed far from the crypto sector but the latter is now too big to ignore. Data from markets tool CoinGecko pegs the entire sector at over $1.7 trillion, or over 15% the size of the gold market.
It’s a space that Visa is looking to capture. “We’re trying to do two things. One is to enable the purchase of bitcoin on Visa credentials,” said CEO Al Kelly in a statement.
“And secondly, working with bitcoin wallets to allow the bitcoin to be translated into a fiat currency and therefore immediately be able to be used at any of the 70 million places around the world where Visa is accepted,” he added.
Bitcoin purchases via a Visa card have so far been limited to crypto exchanges or wallets that instantly convert a user’s payment from fiat-to-crypto using their centralized, third-party service. This means that for Visa, it’s no different than any other transaction that involves the exchange of fiat money for a product.
But the new upgrade would take things up another notch. Visa would directly work with the crypto wallet companies to allow a user to technically pay with crypto worldwide—there would be no “unsupported” errors (except if there are legal regulations that forbade such use).
As per Kelly, cryptocurrencies have a “strong potential” to become new payment vehicles in both emerging and developed markets. He also believes “stablecoins”—a type of cryptocurrency pegged on a 1:1 basis with a fiat currency—would soon make their mark on the world.
“These are currencies that are fiat-backed, but we’re allowing this translation, if you will, into a fiat currency and in a wallet where there’s a Visa card and again that Visa card can be used with the translated digital currency over to the fiat currency to purchase at any one of our 70 million locations,” he said.
The statements come a month after Visa announced a partnership with crypto-friendly neobank First Boulevard. The bank would be the first to pilot Visa’s new suite of crypto APIs.
Meanwhile, other payment processors are jumping on the crypto bandwagon as well. Mastercard, which enjoys a near duopoly of the global payments processing market with Visa, also announced its crypto plans last month February that could soon support cryptocurrencies directly on the Mastercard network. The institutions are clearly coming.
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